Abercrombie & Fitch (ANF) reports Q1 2020 loss, shares fall

Abercrombie & Fitch stated Thursday its sales tanked 34% throughout the very first quarter since of shop closings throughout the coronavirus pandemic and individuals buying less garments as they holed up in the house. 

The Hollister owner’s shares sank 6% in early trading. 

Here’s how the business did throughout its financial very first quarter ended May 2: 

• Earnings per share: An adjusted loss of $3.29 
• Revenue: $485.4 million 

Net sales dropped to $485.4 million from $734 million a year previously. Sales at its name Abercrombie brand name were down 30% while Hollister sales were down 36%. The business did not break out same-store sales throughout the quarter. 

Its bottom line for the duration ended May 2 broadened to $244.1 million, or $3.90 per share, from $19.2 million, or 29 cents a share, a year previously. Excluding one-time charges, the business lost $3.29 per share. 

The seller is not providing a second-quarter or full-year outlook at this time. 

Analysts had actually been requiring Abercrombie to report an adjusted bottom line of $1.39 per share on profits of $497.3 million, based upon Refinitiv price quotes. However, it is hard to compare documented revenues to expert price quotes for Abercrombie’s very first quarter, as the coronavirus pandemic continues to strike worldwide economies with revenues effects that are hard to evaluate. 

Abercrombie signs up with a variety of mall-based sellers such as Macy’s and Victoria’s Secret-owner L Brands that are having a hard time throughout the crisis more than grocery chains and business like Walmart that offer basics. 

CEO Fran Horowitz stated that since Thursday, approximately half of Abercrombie’s worldwide shop base, or 409 stores, is back open for company. 

She stated first-quarter digital sales worldwide were up about 25% year over year, which they have actually sped up even more into May. 

As Abercrombie’s shops resume throughout the Covid-19 crisis, efficiency is going back to about 80% in the U.S. and 60% in the Europe, Middle East and Africa area, according to Horowitz. 

In the U.S., “we are encouraged by recent results, with a customer returning to stores at an even quicker pace than in China,” she stated throughout a post-earnings call with experts. 

Meantime, the business stated it is continuing to examine its property, as it has a “couple hundred leases” turning up for renewal each year. It states it has actually cut its gross square video footage by 14% because 2015, which has actually consisted of shutting a few of its imposing flagship areas. 

“This year should be no different,” CFO Scott Lipesky informed experts. “As we have stated before, we are willing to walk away from any location, if we cannot get terms that work for us. The disruption, we have seen from the pandemic only reinforces this perspective.” 

Abercrombie ended the quarter with $704 million in money and equivalents on hand. And the business stated it had stocks of $427 million, down 1% from a year previously. 

“While there is still work to be done on the inventory balances, at least it is below last year’s levels despite the significant disruptions as well,” Telsey Advisory Group expert Dana Telsey stated in a note to customers. 

“While this year is a lost one across the space from an earnings perspective, we do see improved underlying brand health,” she included. 

As of Wednesday’s market close, Abercrombie shares were down about 24.5% this year. The business has a market cap of $803.8 million. 

Read the complete revenues release from Abercrombie here.