For the first quarter of 2017 Abercrombie & Fitch’s net sales were down four per cent and gross margin was pressured by steep traffic headwinds and more promotional activity than had been planned.
Comparable sales were in line with expectations and have improved sequentially over the past few quarters across all brands, geographies and channels. Comp sales were down ten per cent.
Abercrombie & Fitch expects gross profit rate for the year to be slightly below last year’s adjusted rate of 61 per cent.
The company plans to close 60 stores in the US by the end of this year, and to remodel 47 stores and open seven full-price stores and two outlets. Strategic initiatives include strengthening its omni channel presence, engaging with customers through loyalty programs and social media, renovating stores through an updated prototype model and partnering with wholesalers and franchisers to reach more consumers.
Abercrombie & Fitch expects comp sales to remain challenging for the full year and to see trend improvements in the second half of the year. The company expects the gross profit rate for the year to be slightly lower than last year’s adjusted rate of 61 per cent. The company expects operating expenses to be down three per cent from last year, with 65 per cent of the reduction occurring in the second half of the year.
