Though second-quarter earnings were down again at Abercrombie & Fitch, the results beat analysts’ predictions, signaling an uptick for the brand.
Net sales for the quarter decreased 8 percent to $817.8 million from the second quarter last year, but these numbers still beat Wall Street forecasts. According to the Associated Press, ten analysts surveyed by Zacks Investment Research predicted $811.3 million in revenue. Abercrombie also reported experiencing adverse impact from changes in foreign currency exchange rates of approximately 5 percent.
The brand reported an adjusted non-GAAP net income of $8.6 million and net income per diluted share of $0.12 for thirteen weeks ended August 1, 2015. This is compared to adjusted non-GAAP net income of $14.1 million and net income per diluted share of $0.19 for the second quarter last year.
On a sequential basis, however, the comparable sales trends improved broadly from last quarter, from an 8 percent decrease to a 4 percent decrease. The most progress came from Hollister and Abercrombie Kids. Arthur Martinez, executive chairman, said that the company plans to maintain an intense focus on customer experience and is strengthening their brand design and merchandising teams with new executive hires.
In a statement Martinez said, “Our results exceeded what we signaled in our first quarter earnings call and give us confidence that we are on the right track, although we recognize that we still have much to achieve.” He added, “We understand the challenges ahead. We are taking the steps necessary to deliver continued improvement in our performance and to establish very clear brand positions that will guide all elements of our business and provide the foundation for long-term profitability and growth.”
The company plans to open 15 full-price stores in fiscal year 2015 in the key growth markets of China, Japan and the Middle East, six full price stores in North America and ten new outlet stores in the U.S. In addition, the company anticipates closing approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.
The company also expects further comparable sales trend improvement, skewed toward the fourth quarter.