Abercrombie & Fitch Co. Reports Fourth Quarter and Full Year Results

Abercrombie & Fitch Co. (NYSE: ANF) today announced results for the fourth quarter and fiscal year ended January 30, 2021. These compare to results for the fourth quarter and fiscal year ended February 1, 2020. Descriptions of the use of non-GAAP financial measures and reconciliations of GAAP and non-GAAP financial measures accompany this release.

Fran Horowitz, Chief Executive Officer, said, “I am proud of our execution in the fourth quarter, where we exceeded initial internal expectations. We listened and remained close to our customer, adjusting our product and messaging to align with their new reality. We drove 34% digital sales growth, expanded gross profit rate by 230 basis points and reduced operating expense during the fourth quarter.”

“For the year, we made significant progress on our key transformation initiatives. We leaned into our infrastructure to grow digital to 54% of annual revenues while utilizing our lease flexibility to take approximately 1.1 million gross square feet, or 17%, out of our base, including eight tourist-dependent flagships. At the same time, we continued to make strategic investments to support future growth including: opening smaller, more omni-enabled experiences; adding senior level talent in key areas including marketing, data and analytics and digital; and further building-out regional teams in EMEA and APAC. We remain focused on controlling what we can control and ended 2020 even stronger than we started.”

“As we enter 2021, we are pleased with our start to the first quarter and have proven strategies in place to build on recent successes in product, marketing and digital. Our solid foundation and strong liquidity position enable us to be on the offense as we continue to focus on profitable topline growth, square footage optimization, digital transformation and global market share gains. While the landscape remains uncertain, I am excited about the future and more confident than ever in our ability to drive sustainable long-term operating margin expansion.”

A summary of results for the fourth quarter ended January 30, 2021 as compared to the fourth quarter ended February 1, 2020:
*Net sales of $1.1 billion down 5% as compared to last year, reflecting the adverse impact of COVID-19.
*Digital net sales increased 34% to $639 million reflecting robust growth in every month of the quarter.
*Gross profit rate improved 230 basis points to 60.5% on higher average unit retail and slightly lower average unit cost.
*Operating expense, excluding other operating income, was approximately flat and down 3% as compared to last year on a reported and adjusted non-GAAP basis, respectively, reflecting an ongoing focus on managing costs. Operating expense as a percentage of sales deleveraged 260 basis points on a reported basis and 140 basis points on an adjusted non-GAAP basis as compared to last year.
*Operating income of $116 million and $131 million on a reported and adjusted non-GAAP basis, respectively, as compared to $122 million and $125 million last year, on a reported and adjusted non-GAAP basis, respectively.

A summary of results for the full year ended January 30, 2021 as compared to the full year ended February 1, 2020:
*Net sales of $3.1 billion down 14% as compared to last year, reflecting the adverse impact of COVID-19.
*Digital net sales increased 39% to approximately $1.7 billion.
*Gross profit rate improved by 110 basis points to 60.5% on higher average unit retail and flat average unit cost.
*Operating expense, excluding other operating income, was down 8% and 11% as compared to last year on a reported and adjusted non-GAAP basis, respectively. Operating expense as a percentage of sales deleveraged 380 basis points on a reported basis and 190 basis points on an adjusted non-GAAP basis as compared to last year. Operating expense reflects $12 million of benefits from flagship store exits this year compared to $47 million of flagship store exit charges last year.
*Operating loss of $20 million and operating income of $52 million on a reported and adjusted non-GAAP basis, respectively. This compares to operating income last year of $70 million and $83 million on a reported and adjusted non-GAAP basis, respectively.
details at: http://corporate.abercrombie.com/investors/newsevents/press-releases

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