Abercrombie & Fitch saw second-quarter net income slide on weaker traffic and continued softness in the women’s business.
The company said net income dropped to $11.4 million over the quarter ending August 3 from $17.1 million in the same period last year.
Sales declined 1% to $845.7 million. Including direct-to-consumer, U.S. sales were down 8% to $597.3 million, while international sales grew 15% to $348.4 million.
Comparable sales fell 10% overall, declining 11% in the U.S., and 7% internationally.
“The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported. In that context we are planning sales, inventory and expenses conservatively for the remainder of the year,” said chairman and CEO Mike Jeffries.
“Despite the challenging environment, we are very pleased by strong growth in our direct-to-consumer business and continued strong growth in China. We have also made excellent progress on our profit improvement initiative during the quarter, and we now expect savings from this initiative to exceed $100 million annually. In addition, we are nearing completion of our long-term strategic review, and we are confident that this will provide us with a clear roadmap for sustainable growth in sales, profitability and return on invested capital.”
Sales at the Abercrombie & Fitch brand fell 6%, were down 3% at Abercrombie Kids, falling 13% at Hollister Co.
The company expects third quarter comparable sales to fall slightly more than in second quarter, projecting diluted earnings in the range of $0.40-0.45.
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