Abercrombie & Fitch Co. reported fourth-quarter earnings and sales that beat Wall Street expectations as it continued to trim its store portfolio.
The apparel retailer said it closed eight “tourist-dependent” flagships during 2020, leaving it with seven operating flagships. It also shuttered 129 non-flagship locations, resulting in 137 total store closures in fiscal 2020, for a 17% reduction in gross square footage. Abercrombie opened 15 stores, remodeled four existing locations and “right-sized” an additional six locations last year.
“The company continues to thoughtfully open new stores and invest in smaller omni-enabled store experiences that align with local customer shopping preferences as stores are a critical part of the omnichannel brand experience,” Abercrombie stated.
Abercrombie’s net income totaled $82.4 million, $1.27 per share, for the quarter ended Jan.30, down from $83.1 million, or $1.29 per share, in the year-ago period. Adjusted EPS of $1.50 beat analysts’ estimates of $1.22.
Net sales fell 5% to $1.122 billion, just ahead of estimates. By division, Hollister sales fell 8% to $655.4 million. Abercrombie’s sales were down 2% to $466.6 million.
Digital net sales rose 34% during the quarter and comprised 54% of full-year revenue.
For the full year, Abercrombie posted a loss of $114 million, compared to a profit of $39.4 million in 2019. Net sales fell 14% to $3.1 billion.
“As we enter 2021, we are pleased with our start to the first quarter and have proven strategies in place to build on recent successes in product, marketing and digital,” said Fran Horowitz, CEO. “Our solid foundation and strong liquidity position enable us to be on the offense as we continue to focus on profitable topline growth, square footage optimization, digital transformation and global market share gains. While the landscape remains uncertain, I am excited about the future and more confident than ever in our ability to drive sustainable long-term operating margin expansion.”