Abercrombie Expecting Improvement in Sales for 2017
Abercrombie & Fitch the apparel retailer for teens said it was expecting a better performance in 2017 of its brand and posted its first increase in comparable sales for a quarter in the last year at its brand Hollister. That helped to send shares of the company up over 14%.
Hollister, the California beach theme brand of the retailer posted a surprise rise of 1% in its comparable sales for its fourth quarter that ended January 28. On average analysts expected a decline of 0.7% in that metric.
Abercrombie and its rivals Gap and American Eagle Outfitters have closed stores while investing in online business as they attempt to adjust to the ever-changing consumer habits and tastes while battling strong competition from fast fashion retailers like Zara and H&M and online behemoth Amazon.com.
Abercrombie, which has struggled with dropping sales the last four years, has remodeled its Hollister locations, hiring top executives and designers to entice shoppers back to the biggest brand in the company.
One retail analyst said following the release of the latest financials from A&F that the company was headed in the right direction.
As was shown today with Hollister, which is further along in its redevelopment program, reinvention work will pay dividends ultimately, added the analyst.
Abercrombie announced that it was planning to remodel close to 40 of its Hollister stores during 2017.
Abercrombie will also open seven new stores under a prototype for the A&F brand, which is attempting to distance itself from being the logo-centric theme with a focus on clients older than 18.
Hollister’s comparable sales are projected to remain flat or slightly improve during the year that ends January of 2018, while they likely will be better for the Abercrombie brand.
Its expansion of swimwear and the relaunch Gilly Hicks its intimate apparel line along with more sizes and colors across its key apparel will likely attract more customers, said an industry analyst.
Comparable sales overall in the company were down 5% during the January ended quarter, due in part to weaker traffic at flagship stores of Abercrombie and at its tourist locations.
The company, which shuttered 54 locations during 2016 in the U.S., announced that it would be closing 60 more stores during 2017.
Net income that was attributable to A&F was down ending the quarter at $48.8 billion equal to 71 cents a share compared to one year ago during the same quarter of $57.6 million equal to 85 cents a share.