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Abercrombie & Fitch to Close 60 Stores; G-III Posts Loss in Q2

Abercrombie & Fitch

Teen retailer Abercrombie & Fitch (ANF) continued its run of disappointing sales results in its second quarter ended July 30, revealing Tuesday that net sales decreased 4 percent to $783.2 million, down from last year’s $817.8 million. Total comparable sales declined 4 percent, as same-store sales at Abercrombie dropped by 7 percent and Hollister fell by 2 percent, which executive chairman Arthur Martinez attributed to poor traffic in flagship stores and tourist locations.

As a result, the company’s net loss widened from $0.8 million a year ago to $13.1 million in Q2. And there’s worse to come: in addition to closing up to 60 stores in the U.S. this year, the company expects comps will remain challenging going forward.

G-III Apparel

G-III Apparel (GIII) lowered its full-year earnings outlook Tuesday after reporting a net loss of $1.3 million in its second quarter ended July 30, compared to a $12.5 million profit a year ago. The New York-based company said this result included fees related to the pending acquisition of Donna Karan. Reduced outwear deliveries didn’t help matters either, offsetting strength in other parts of the business to send net sales tumbling 7 percent from $473.9 million to $442.3 million.

Even though the upcoming fall and holiday seasons are forecast to be cooler than last year, which should improve outerwear sales, G-III now expects net income of between $102 million and $106 million, or $2.16 to $2.26 per diluted share, compared to its previous guidance of net income between $120 million and $125 million, or a range between $2.55 and $2.65 per diluted share. The company’s share price plunged by 14.15% in early trading Tuesday.