US: Abercrombie & Fitch Q4 profit slumps on charges
- Q4 net income down 58% to US$66.1m
- Sales fall 12% to $1.299bn
- Gilly Hicks closure to complete in Q1
Apparel retailer Abercrombie & Fitch reported a slump in fourth quarter profit, impacted by a series of charges related to asset impairments and the closure of its Gilly Hicks chain.
Sales were also down, with US revenues falling 13% in the quarter, and international sales declining 9%, while direct-to-consumer revenues rose 18%.
Gross profit fell 440 basis points to 59% in the three months to 1 February, thanks mainly to increased promotional activity.
For the full year, net profit was down 77% to $54.6m and sales fell 9% to $4.117bn.
CEO Mike Jeffries said it was a “challenging year, with sales and earnings falling well short of the objectives we set at the beginning of the year”.
He added: “After three years of positive growth in our combined US chain stores plus direct-to-consumer comparable sales metric, that metric turned negative in 2013 against the backdrop of a challenging retail environment, particularly in the teen space.”
Abercrombie & Fitch said the closure of its 24 Gilly Hicks stores was due to be completed by the end of the first quarter, with total charges of $90m, the remaining $8.5m of which will be incurred in the first quarter.
Despite the negative figures, analyst FBR Research highlighted a better than expected performance from the company, including expense reductions and better than expected international results.
“We would be buyers of ANF, as the company demonstrates that it can right-size its cost structure and there likely additional upside for 2014,” FBR said.
Canadean's "Abercrombie & Fitch Co. : Retailing - Company Profile, SWOT & Financial Analysis" contains in depth information and data about the company and its operations. The profile contains a compan...
Teen apparel retailer Abercrombie & Fitch Co is using the Demandware Commerce platform to power the expansion of its digital retail operations across Asia....
Apparel sales increased in 2013, mainly driven by increased consumer confidence and expenditure. This positive growth was also largely due to the increasing popularity of outdoor wear and sportswear. ...
Menswear recorded value growth of 12%, reaching HKD$24 billion in 2013. Better economic development resulted in stronger consumer confidence. Eventually, it became the contributory factor that raised ...
- Speed to market key to Adidas 2020 growth plan
- SOURCING: Production problems weigh on Pakistan
- Cutting-edge companies focus on consumer needs
- SuperGroup to adapt sourcing model for speed
- What next for smart fabrics and garments?
- Swedish textile water project to expand globally
- Organic cotton assessment tool launches
- PVH “pleased” after swinging to Q4 profit
- Apparel and textiles rank high on EU alert system
- Lululemon Athletica on “strong growth” track
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Apparel Retail: Top 5 Emerging Markets Industry Guide
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead
- Outdoor performance apparel: peaks, valleys, and green fields
- Global market review of swimwear - forecasts to 2019