Abercrombie & Fitch Posts Wider-Than-Expected Q1 Loss

Abercrombie & Fitch Co. ANF reported a wider-than-expected loss for the first quarter. The New Albany, Ohio-based company posted a quarterly net loss of $63.2 million, or $0.91 per share, versus a year-ago loss of $23.7 million, or $0.32 per share. Excluding non-recurring items, the company's adjusted loss came in at $0.53 per share, versus year-ago adjusted loss of $0.17 per share. Its sales slipped 14 percent to $709.4 million. However, analysts were expecting a loss of $0.34 per share on revenue of $730.9 million. The average estimate among 17 Estimize users was for a loss of $0.35 per share and revenue of $728.05 million. Its total same-store sales shrank 8 percent in the quarter. Same-store sales at its Abercrombie stores dropped 9 percent, while same-store sales fell 6 percent at Hollister stores. Analysts were expecting around 9 percent drop in total same store sales. Its gross profit rate for the first quarter slipped 420 basis points to 58.0 percent. Stores and distribution expense dropped to $391.6 million, from $417.6 million last year. Abercrombie & Fitch ended the quarter with $383.2 million in cash and cash equivalents. Arthur Martinez, Executive Chairman, said, "We knew the first quarter was going to be difficult due to a number of factors, both internal and external and, most significantly, because many of the actions we are taking to improve our business are in the early stages of implementation and have not yet been fully realized. However, we did see sequential improvements in a number of areas during the quarter, most notably within Hollister, and our comparable sales trend has continued to improve in May. While our turnaround won`t be accomplished overnight, we believe the changes we are making will reinvigorate our iconic brands and lead to meaningful and lasting improvement." Abercrombie & Fitch shares gained 4.63 percent to $20.56 in pre-market trading.