Abercrombie & Fitch Co. Reaffirms Fourth Quarter Outlook Ahead of ICR Conference
14 January 2019 - 11:00PM
Abercrombie & Fitch Co. (NYSE: ANF) today announced that it is
reaffirming its previously issued outlook for the fourth quarter of
fiscal 2018 as follows:
- Driven by the loss of fiscal 2017's 53rd week and adverse
impacts from both the calendar shift and changes in foreign
currency exchange rates, net sales to decrease mid-single
digits
- Comparable sales to be up low-single digits on top of 9% last
year
- A gross profit rate flat to up slightly from last year's rate
of 58.4%
- GAAP operating expense, excluding other operating income, to be
down in the range of 1% – 2% from last year's adjusted non-GAAP
operating expense of $561 million
Fran Horowitz, Chief Executive Officer,
said:
“We were pleased with our performance in
the competitive holiday season. We remain on track to deliver
a low-single digit comp for the fourth quarter, representing our
sixth consecutive quarter of positive comparable sales. From a
regional perspective, comp trends remain directionally consistent
with the third quarter. Hollister continues its momentum with
strength across genders. At Abercrombie, weakness in Women’s
tops and dresses is driving a projected negative brand comp for the
quarter, which the brand's new leadership team is actively
addressing.
For the full year, we remain on track to deliver
top-line growth including over $1 billion in digital sales, gross
profit rate expansion and operating expense leverage. We are
excited to continue evolving our brands and transforming our
operating model as we move into 2019."
The company plans to release its fiscal 2018
fourth quarter and full year results on March 6, 2019.
SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
A&F cautions that any forward-looking
statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) contained in this Press Release or
made by management or spokespeople of A&F involve risks and
uncertainties and are subject to change based on various important
factors, many of which may be beyond the company's control. Words
such as "estimate," "project," "plan," "believe," "expect,"
"anticipate," "intend," and similar expressions may identify
forward-looking statements. Except as may be required by applicable
law, we undertake no obligation to publicly update or revise any
forward-looking statements. The following factors, in addition to
those disclosed in “ITEM 1A. RISK FACTORS” of A&F's Annual
Report on Form 10-K for the fiscal year ended February 3, 2018
and in A&F's subsequently filed quarterly reports on Form 10-Q,
in some cases have affected, and in the future could affect, the
company's financial performance and could cause actual results for
Fiscal 2018 and beyond to differ materially from those
expressed or implied in any of the forward-looking statements
included in this Press Release or otherwise made by management:
changes in global economic and financial conditions, and the
resulting impact on consumer confidence and consumer spending, as
well as other changes in consumer discretionary spending habits,
could have a material adverse effect on our business, results of
operations and liquidity; failure to anticipate customer demand and
changing fashion trends and to manage our inventory commensurately
could adversely impact our sales levels and profitability; our
market share may be negatively impacted by increasing competition
and pricing pressures from companies with brands or merchandise
competitive with ours; fluctuations in foreign currency exchange
rates could adversely impact our financial condition and results of
operations; our ability to attract customers to our stores depends,
in part, on the success of the shopping malls or area attractions
that our stores are located in or around; the impact of war, acts
of terrorism or civil unrest could have a material adverse effect
on our operating results and financial condition; the expansion of
our direct-to-consumer sales channels and omnichannel initiatives
are significant components of our growth strategy, and the failure
to successfully develop our position across all channels could have
an adverse impact on our results of operations; our international
growth strategy and ability to conduct business in international
markets may be adversely affected by legal, regulatory, political
and economic risks; failure to successfully implement our strategic
plans could have a negative impact on our growth and profitability;
failure to protect our reputation could have a material adverse
effect on our brands; our business could suffer if our information
technology systems are disrupted or cease to operate effectively;
we may be exposed to risks and costs associated with cyber-attacks,
credit card fraud and identity theft that would cause us to incur
unexpected expenses and reputation loss; our reliance on DCs makes
us susceptible to disruptions or adverse conditions affecting our
supply chain; changes in cost, availability and quality of raw
materials, labor, transportation, and trade relations could cause
manufacturing delays and increase our costs; we depend upon
independent third parties for the manufacture and delivery of all
our merchandise, and a disruption of the manufacture or delivery of
our merchandise could result in lost sales and could increase our
costs; we rely on the experience and skills of our senior executive
officers and associates, the loss of whom could have a material
adverse effect on our business; extreme weather conditions,
including natural disasters, pandemic disease and other unexpected
events, could negatively impact our facilities, systems and stores,
as well as the facilities and systems of our vendors and
manufacturers, which could result in an interruption to our
business and adversely affect our operating results; fluctuations
in our tax obligations and effective tax rate may result in
volatility in our results of operations; our litigation exposure
could have a material adverse effect on our financial condition and
results of operations; failure to adequately protect our trademarks
could have a negative impact on our brand image and limit our
ability to penetrate new markets; changes in the regulatory or
compliance landscape and compliance with changing regulations for
accounting, corporate governance and public disclosure could
adversely affect our business, results of operations and reported
financial results; and, our Asset-Based Revolving Credit Agreement
and our Term Loan Agreement include restrictive covenants that
limit our flexibility in operating our business.
About Abercrombie & Fitch Co.
Abercrombie & Fitch Co. (NYSE: ANF) is a
leading, global specialty retailer of apparel and accessories for
Men, Women and Kids through three renowned brands. For over 125
years, the iconic Abercrombie & Fitch brand has outfitted
innovators, explorers and entrepreneurs. Today, the brand reflects
the updated attitude of the 21 to 24-year old customer, while
remaining true to its heritage of creating expertly crafted
products with an effortless, American style. The Hollister brand
epitomizes the liberating and carefree spirit of the endless
California summer for the teen market. abercrombie kids creates
smart, playful apparel for children ages 5-14, celebrating the
wide-eyed wonder of childhood.
The brands share a commitment to offering
products of enduring quality and exceptional comfort that allow
consumers around the world to express their own individuality and
style. The Company operates over 850 stores under these brands
across North America, Europe, Asia and the Middle East, as well as
the e-commerce sites www.abercrombie.com and
www.hollisterco.com.
Investor Contact: |
|
Media Contact: |
|
|
|
Pamela Quintiliano |
|
Ian Bailey |
Abercrombie &
Fitch |
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Abercrombie &
Fitch |
(614) 283-6751 |
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(614) 283-6192 |
Investor_Relations@anfcorp.com |
|
Public_Relations@anfcorp.com |
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