- Prachi Singh
Third quarter net sales at Abercrombie & Fitch Co. of 820 million dollars, were down 5 percent as compared to last year, reflecting the adverse impact of Covid-19 on store sales. The company said in a statement that digital net sales increased 43 percent to 382 million dollars reflecting robust growth in every month of the quarter. Gross profit rate improved 390 basis points to 64 percent, operating income improved to 59 million dollars and 65 million dollars on a reported and adjusted non-GAAP basis, respectively, while net income per diluted share improved to 66 cents and 76 cents on a reported and adjusted non-GAAP basis, respectively, compared to 10 cents and 23 cents on a reported and adjusted non-GAAP basis, respectively.
Commenting on the results, Fran Horowitz, the company’s Chief Executive Officer, said: “Results were fuelled by 43 percent year-over-year digital sales growth and sequential sales improvements in our global store base. Updated product and marketing resonated with existing and new customers across brands and regions. Combined with a focused inventory management strategy, we expanded gross profit rate significantly while continuing to tightly manage expenses, leading to operating margin improvements over last year.”
As part of its ongoing global store network optimization initiative and stated goal of repositioning from larger format, tourist-dependent flagship locations to smaller, omni-enabled stores that cater to local customers, the company is announcing the early exit of four European Abercrombie & Fitch flagship locations. The company said, Dusseldorf flagship closed during the third quarter, and the London, Munich and Paris flagships will close by the end of January 2021. In addition to the four early exits, the Brussels, Madrid and Fukuoka flagships will close in early January 2021 due to natural lease expirations leaving the company with eight operating flagships at year end down from fifteen at the beginning of the year.
Picture:Facebook/Abercrombie & Fitch