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‘Disappointing’ 2Q Results For Abercrombie

(Filed Under Financial and General Interest News). In August Abercrombie & Fitch, which operates over a thousand apparel shops, including a small number of Gilly Hicks lingerie stores, reported poor results for the second quarter of 2012. The lingerie portion of its business was not, however, cited as a problem area. Indeed Abercrombie raised the number of lingerie shops it operates by four between March and August, increasing the total to 25.

According to the Abercrombie release, unaudited results ”reflected net income of $15.5 million and net income per diluted share of $0.19 for the thirteen weeks ended July 28, 2012, compared to net income of $32.0 million and net income per diluted share of $0.35 for the thirteen weeks ended July 30, 2011.”

“Mike Jeffries, CEO and chairman stated the second quarter results “are disappointing and below our expectations coming into the quarter. In particular, we saw a further deceleration in the trend in our international stores, while our U.S. chain stores also comped negatively for the quarter for the first time since 2009. Our direct to consumer business remained a bright spot, posting its tenth successive quarter with growth of 25% or better.”

The report also stated, in a summary of the second quarter, that “Net sales for the thirteen weeks ended July 28, 2012 increased 4% to $951.4 million from $916.8 million for the thirteen weeks ended July 30, 2011. Total U.S. sales, including direct-to-consumer sales, decreased 5% to $648.0 million. Total international sales, including direct-to-consumer sales, increased 31% to $303.4 million. Total company direct-to-consumer sales, including shipping and handling, increased 25% to $127.7 million. Total comparable store sales for the quarter decreased 10% relative to last year.”

For the rest of 2012, “Based on a lower sales trend than previously projected, the company now expects full year diluted earnings per share of approximately $2.50 to $2.75. This projection assumes comparable store sales will decline 10% for the second half of the year. The company continues to expect substantial recovery of the gross margin rate erosion seen in 2011 on a 2012 full year basis. In addition to lower sales, the reduction in projected earnings per share also reflects the impact of a stronger US dollar and the impact of an increase in the effective tax rate. The Company now expects the tax rate for the year as a whole to be in the high 30s.”

more Financial and General Interest News >>

Published 09-30-2012 by -

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‘Disappointing’ 2Q Results For Abercrombie
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