Another tough quarter for teen apparel retailer

Abercrombie’s efforts to revive its namesake brand still have a ways to go judging by its fourth quarter performance. But Hollister is on the upswing.



Abercrombie & Fitch Co.’s total revenue in the quarter, ended Jan. 28, fell 7% to $1.04 billion, slightly below expectations.



Total same-store sales fell 5%, the fourth consecutive quarter of declines. Comparable sales at the namesake brand fell 13% amid weak traffic at key flagship and tourist locations. But same-store sales rose 1% at Hollister, which makes up about 57% of the company’s total sales.



Net income in the quarter fell to $48.8 million, or 71 cents per share, down from $57.7 million, or 85 cents per share, in the year-ago period. Excluding one-time items, the company earned 75 cents per share, in line with estimates.



Abercrombie is working to revive and reposition its namesake brand with a more inclusive identity that is reflected in both its marketing and new store environment.



"Results for the quarter reflect a still challenging and competitive retail environment, however we continue to make progress on our strategic priorities,” said Fran Horowitz, who was recently promoted to CEO. “Hollister, our largest brand, achieved positive comp sales and the Abercrombie brand renewal continues, although it is a work in progress. International markets improved measurably from last quarter, for both Abercrombie and Hollister brands, and the direct-to-consumer business continued to deliver positive comparable sales in both the U.S. and international markets. However, the competitive environment resulted in more promotional activity and a lower gross margin rate than planned.”



Abercrombie plans to open eight new stores in fiscal 2017, and close 60 by as the leases expire.



The company forecast overall comparable sales to improve in the year ending January 2018, with Hollister expected to maintain or improve sales and Abercrombie expected to improve.