Abercrombie and Fitch share price down 26% despite Q1 results revenue beat
The retailer's stock has a double-digit decline after a mixed Q1 earnings report.
Abercrombie and Fitch share price is down significantly even though Abercrombie and Fitch's Q1 revenue beat Wall Street estimates. The clothing chain had a mixed Q1 results report with high revenue and flat same-store sales. Abercrombie and Fitch's Q1 earnings report shows the difficulty brick and mortar retailers are having against Amazon.
Abercrombie and Fitch earnings:key figures
|Net loss per share||$0.29|
Abercrombie and Fitch's Q1 revenue high, but same-store sales disappoint
Abercrombie and Fitch’s Q1 revenue was $733.97 million, beating the $730.90 million of Q1 2018. While the retailer had a net loss of $0.29 per share, it was less than the predicted loss of $0.43 per share. Abercrombie and Fitch’s same-store sales were disappointing, with 1% growth instead of the expected 1.4%.
Abercrombie and Fitch to close flagship stores and redesign other locations
The clothing chain will close three flagship stores in New York, Milan, and Fukuoka, Japan because of slow sales in those locations. Abercrombie and Fitch plans to redesign 85 stores to take up less space and appeal to customers. Chief executive officer (CEO), Fran Horowitz, noted that some existing large stores will be broken up into smaller stores and future locations will have less square footage.
‘What we’ve learned from the consumer is they are really enjoying the smaller spaces. There is a more intimate feel to it. ... And the customer likes that one-on-one interaction,’ said Horowitz.
How did Abercrombie and Fitch’s Q1 earnings compare to other retailers?
Compared to retailer JCPenney, Abercrombie and Fitch’s Q1 results report was better. JCPenney had negative earnings and revenue, while Abercrombie and Fitch’s Q1 revenue exceeded predictions made by financial expert Zacks Investment Research.
Abercrombie and Fitch's Q1 earnings report was similar to Kohl's. Both retailers had better-than-expected revenue, but worse-than-expected same-store sales.
What’s next for Abercrombie and Fitch’s Q2 earnings?
Abercrombie and Fitch expects Q2 sales to grow by 2%, less than the 2.8% predicted by financial analysts. Despite diminished projections, Horowitz had a positive outlook for Abercrombie and Fitch’s Q2 earnings.
‘We are focused on our transformation initiatives, with global store network optimisation a key priority. We continue to believe in stores and are committed to delivering intimate, omni-channel brand experiences that closely align with our customers’ needs,’ said Horowitz.
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