Abercrombie & Fitch's turnaround continues
Abercrombie & Fitch's efforts to attract more shoppers are paying off, as the company reported an increase in same store sales for the fourth quarter.
The teen retailer announced adjusted earnings of $1.08 a share for the period ended Jan. 30. Net sales were $1.11 billion. Same store sales jumped 1%, the first gain in overall same store sales since the third quarter ended October 29, 2011, according to Bloomberg.
"We were pleased to deliver results in line with our expectations against the backdrop of a challenging environment that included currency, traffic and weather headwinds," said Arthur Martinez, executive chairman. "Our results for the fourth quarter reflect continued progress on a number of fronts and included a return to positive comparable sales, higher average unit retails as promotional activity was moderated, and meaningful improvement in adjusted operating income on a constant currency basis. In addition, inventory continued to be well managed and we generated strong free cash flow for the year."
During the year, the company opened 30 new stores, including 15 international full-price, 6 U.S. full-price and 9 U.S. outlet stores. The company also closed 59 stores, primarily in the U.S.
"2015 was a year of tremendous change for us," Martinez added. "We completed our move to a branded structure, strengthened our teams and improved our core processes. More importantly, we evolved our assortment and we refocused our attention on our customer through greater accountability and empowerment at the store level, and through changes in our in-store experience. In addition, we continued to invest in direct-to-consumer and omnichannel and execute our aggressive store closure program. While we accomplished a lot, there is much more progress we need to make to fulfill the potential of our brands.As we look ahead to 2016, it is likely to remain a challenging environment, but we believe we are on the right track and we will continue to focus on delivering a customer-centric shopping experience and compelling assortments based on clearly defined brand positions."
For fiscal 2016, the company expects:
Flat to slightly positive comparable sales
Adverse effects from foreign currency on sales of approximately $50 million
The company plans to open approximately 15 full-price stores in fiscal 2016, including approximately 10 in international markets, primarily China, and approximately five in the U.S. The company also plans to open approximately 10 new outlet stores, primarily in the U.S. In addition, the company anticipates closing approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.
The company operates 754 stores in the United States and 178 stores across Canada, Europe, Asia, and the Middle East.