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.
Advertisement
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.