Abercrombie & Fitch reported $822 million in Q1 2014 revenue, a 2% decline over the prior-year period but higher than Wall Street analysts had expected.
Broken down by brand, net sales were $317.8 million for the flagship Abercrombie & Fitch brand, $68.5 million for abercrombie kids and $421.6 million for Hollister Co. While comparable sales decreased across all brands, Abercrombie & Fitch reported a small 1% decline. Abercrombie kids (-6%) and Hollister Co. (-7%) had more tumultuous quarters.
While the net loss increased more than three-fold over the same period in 2013, it was less than analysts had expected.
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Excluding expenses related to the restructuring of the Gilly Hicks brand, profit improvement initiatives implemented by Abercrombie & Fitch and miscellaneous corporate governance matters, the retailer reported an adjusted non-GAAP net loss of $13 million for the quarter.
The Abercrombie & Fitch Board of Directors approved the closure of 24 stand-alone Gilly Hicks stores. Gilly Hicks intimate apparel will continue to be offered through Hollister Co. stores and the direct-to-consumer online business.
In a statement on the financial results, CEO Mike Jeffries was optimistic about the remainder of the year.
“In what remains a difficult teen retail environment, we are pleased that earnings for the quarter were in line with our expectations,” Jeffries said. “Overall sales for the quarter decreased 2%, which included strong growth in our direct-to-consumer business. In addition, comparable sales continued to head in the right direction, and included significant sequential improvement in our female business and our Abercrombie & Fitch brand as a whole.”
Throughout the year, the retailer plans to open approximately 15 full-price stores worldwide, including a small number of Abercrombie & Fitch mall-based stores. Up to 10 international and U.S. outlet stores also will be opened during the remainder of the 2014 fiscal year. However, Abercrombie & Fitch also will close between 60 and 70 stores nationwide as a result of lease expirations.
