Dive Brief:
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Apparel retailer Abercrombie & Fitch reported healthier-than-expected Q4 same-store sales growth of 1%, its first increase in more than three years. On a sequential basis, comparable sales trends improved across all brands and geographies, the company said. Research firm Consensus Metrix had clocked estimates of a 0.10% fall.
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Profit increased 33% to $58.9 million, or $0.85 per share, from $44.4 million, or $0.63 per share year over year. Abercrombie noted that holiday web sales and strong demand for its Hollister brand contributed to the boost, and that its shift away from logo-splashed apparel to softer styles also helped. Q4 same-store Hollister sales increased 4%, while Q4 same-store Abercrombie sales decreased 2%.
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The company said it expects same-store sales to be flat or slightly positive for fiscal 2016, compared to analyst expectations of a 0.8% increase.
Dive Insight:
As with rival teen apparel retailer American Eagle in recent quarters, Abercrombie’s merchandising changes have enabled the company to ease up on heavy discounting in addition to selling more, according to its report. Executive chairman Arthur Martinez said in a statement that the changes helped mitigate the effects of currency swings, warm holiday-time weather and slow store traffic. He said the company has also been working, and will continue to work, to boost web sales and close underperforming stores.
“We completed our move to a branded structure, strengthened our teams and improved our core processes,” Martinez said in his statement. “More importantly, we evolved our assortment and we refocused our attention on our customer through greater accountability and empowerment at the store level, and through changes in our in-store experience… As we look ahead to 2016, it is likely to remain a challenging environment, but we believe we are on the right track and we will continue to focus on delivering a customer-centric shopping experience and compelling assortments based on clearly defined brand positions."
