Abercrombie & Fitch Co. (ANF) reported that its first quarter 2013 net loss narrowed to $7.2 million or $0.09 per share from the previous year's $21.3 million or $0.25 per share in the first quarter of fiscal 2012.
Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said, "Our results for the first quarter reflect a sixteen cent improvement in earnings per share versus last year, including better than expected gross margin rate improvement and tight expense management. The first quarter proved to be more difficult than expected on the top-line due to more significant inventory shortage issues than anticipated, added to by external pressures. However, comparable sales trends progressively improved during the quarter and with the inventory headwinds largely behind us, we expect to see continued sequential improvement in the second quarter."
Net sales for the quarter decreased 9% to $838.8 million from last year's $921.2 million. Total U.S. sales, including direct-to-consumer sales, decreased 17% to $534.9 million. Total international sales, including direct-to-consumer sales, increased 10% to $303.9 million. Total Company direct-to-consumer sales, including shipping and handling, decreased 10% to $132.7 million. Due to the 53rd week in Fiscal 2012, first quarter comparable sales are compared to the thirteen week period ended May 5, 2012.
Analysts polled by Thomson Reuters expected the company to report a loss of $0.05 per share on revenues of $941.66 million for the quarter. Analysts' estimates typically exclude special items.
Total comparable sales for the quarter, including direct-to-consumer sales, decreased 15% with comparable store sales decreasing 17% and comparable direct-to-consumer sales decreasing 6%. Comparable sales for the quarter, including direct-to-consumer sales, decreased 14% for the U.S. and decreased 16% for international. Within the quarter, comparable sales were weakest in February and March.
The company said that the reported results for the first quarter of Fiscal 2012 have been restated to reflect the change in accounting principle to the cost method of accounting for inventory.
For the second quarter of Fiscal 2013, the company expects earnings per share in the range of $0.28 to $0.33. Analysts expect the company to report earnings of $0.31 per share for the second-quarter.
The company now expects earnings per share for fiscal 2013 to be in the range of $3.15 to $3.25. This projection assumes comparable sales, including direct-to-consumer to be slightly down for the balance of the year. Earlier, the company had expected earnings per share for fiscal 2013 to be in a range of $3.35 to $3.45 under the cost method of accounting for inventory. Analysts expect the company to report earnings of $3.49 per share for fiscal 2013.
The company noted that the guidance for all periods does not include the impact of potential impairment and store closure charges.
The company continues to expect total capital expenditures for Fiscal 2013 to be approximately $200 million, predominately related to new stores and investments in IT initiatives.
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