Abercrombie & Fitch comparable sales rise in Q4

Abercrombie & Fitch reported GAAP net income per diluted share of 0.85 dollar for the fourth quarter ended January 30, 2016, compared to 0.63 dollars for the fourth quarter last year. Excluding certain items, adjusted non-GAAP net income per diluted share was 1.08 dollars for the quarter, compared to 1.15 dollars. GAAP net income per diluted share was 0.51 dollar for the full year, compared to 0.71 dollar for the full year last year. Excluding certain items, adjusted non-GAAP net income per diluted share was 1.12 dollars for the full year, compared to 1.54 dollars last year.

“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 of the company, adding, “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. 2015 was a year of tremendous change for us. As we look ahead to 2016, it is likely to remain a challenging environment.”

Detailed fourth quarter sales results

Net sales for the fourth quarter of 1.113 billion dollars were up 2 percent on a constant currency basis and down 1percent on a reported basis over last year. Comparable sales for the fourth quarter increased 1 percent. On a sequential basis, comparable sales trends improved across all brands and geographies.

By brand, net sales decreased 3 percent to 509.4 million dollars for Abercrombie and increased 2 percent to 603.6 million dollars for Hollister. By geography, net sales decreased 2 percent to 745.9 million dollars in the US and increased 3 percent to 367 million dollars internationally. Direct-to-consumer and omnichannel sales grew to approximately 28 percent of total company net sales for the fourth quarter, compared to approximately 27 percent of total company net sales last year.

Full year 2015 sales results

Net sales for the full year of 3.519 billion dollars were down 2 percent on a constant currency basis and down 6 percent on a reported basis over last year. Comparable sales for the full year decreased 3 percent. By brand, net sales for the full year decreased 7 percent to 1.641 billion dollars for Abercrombie and decreased 4 percent to 1.878 billion dollars for Hollister.

By geography, net sales decreased 5 percent to 2.282 billion dollars in the US and decreased 7 percent to 1.237 billion dollars internationally. Direct-to-consumer and omnichannel sales grew to approximately 24 percent of total company net sales, compared to approximately 22 percent of total company net sales last year.

Announces outlook for 2016

During the year, the company opened 30 new stores, including 15 international full-price, six US full-price and nine US outlet stores. The company also closed 59 stores, primarily in the US. As previously announced, on February 19, 2016, the Board of Directors declared a quarterly cash dividend of 0.20 dollar per share.

For fiscal 2016, the company expects flat to slightly positive comparable sales, adverse impact from foreign currency on sales of approximately 50 million dollars, a gross margin rate approximately flat to last year's adjusted non-GAAP rate of 61.9 percent, but up on a constant currency basis and an improvement over last year's adjusted non-GAAP operating income, despite an adverse effect from foreign currency of approximately 30 million dollars.

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 US. The company also plans to open approximately 10 new outlet stores, primarily in the US. In addition, the company anticipates closing approximately 60 stores in the US during the fiscal year through natural lease expirations.