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Abercrombie & Fitch posts 5 percent decline in Q4 sales

By Prachi Singh

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Business

Abercrombie & Fitch Co. fourth quarter net sales of 1.1 billion dollars were down 5 percent compared to last year, reflecting the adverse impact of Covid-19. Digital net sales increased 34 percent to 639 million dollars. The company said, gross profit rate improved 230 basis points to 60.5 percent, operating income was 116 million dollars and 131 million dollars on a reported and adjusted non-GAAP basis, respectively compared to 122 million dollars and 125 million dollars last year, and net income per diluted share was 1.27 dollars and 1.50 dollars compared to net income per diluted share last year of 1.29 dollars and 1.31 dollars on a reported and adjusted non-GAAP basis, respectively.

Commenting on the company’s performance, Fran Horowitz, Chief Executive Officer, said: “I am proud of our execution in the fourth quarter, where we exceeded initial internal expectations. We remain focused on controlling what we can control and ended 2020 even stronger than we started.”

For the full year, the company reported net sales of 3.1 billion dollars down 14 percent as compared to last year, while digital net sales increased 39 percent to approximately 1.7 billion dollars. The company added that gross profit rate improved by 110 basis points to 60.5 percent on higher average unit retail and flat average unit cost, operating loss was 20 million dollars and operating income was 52 million dollars on a reported and adjusted non-GAAP basis, respectively. This compares to operating income last year of 70 million dollars and 83 million dollars on a reported and adjusted non-GAAP basis, respectively.

Net loss per diluted share was 1.82 dollars and 73 cents on a reported and adjusted non-GAAP basis, respectively compared to net income per diluted share last year of 60 cents and 73 cents on a reported and adjusted non-GAAP basis, respectively.

The company closed eight flagship locations during fiscal 2020. This leaves the company with seven operating flagships at the end of fiscal 2020, down from 15 at the beginning of the year. In addition, the company closed 129 non-flagship locations, resulting in 137 total store closures during fiscal 2020. During fiscal 2020, the company opened 15 new store locations, remodelled four store locations and right-sized an additional six store locations.

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