Abercrombie will close up to 40 stores and remodel/open 85 locations in 2019.
Abercrombie & Fitch Co. continued its comeback in the fourth quarter, notching its sixth straight quarter of positive same-store sales. The chain is also continuing to evaluate its store portfolio, closing some locations, opening new ones and remodeling others.
The apparel retailer on Wednesday reported fourth-quarter earnings and sales expectations that beat the Street and provided an upbeat outlook. It also said it would close up to 40 stores in fiscal 2019 and deliver 85 “new store experiences” through new store prototypes, remodeled stores and “right-sizes.” It’s expected that 40 of the 85 will be new stores featuring less square footage.
Abercrombie has been updating the look and feel of its namesake stores, with a more contemporary look that is more open and inviting and less dark that the chain’s previous format. On the company’s quarterly earnings call, CEO Fran Horowitz said that stores with the new format are proving to be “highly productive” and the company would continue to invest in them.
Abercrombie’s net income rose to $96.9 million, or $1.42 a share, for the quarter ended Feb. 2, from $74.2 million, or $1.05 a share, in the year-ago period. Excluding non-recurring items, adjusted EPS slipped to $1.35 from $1.38, but still easily topped analysts’ estimates of $1.15.
Net sales fell 2% to $1.16 billion, but beat estimates of $1.13 billion. (The results reflected a calendar shift and one less week compared to the fourth quarter last year.) By division, Hollister sales rose 1% to $712.9 million, beating estimates of $690.9 million, while Abercrombie sales fell 9% to $442.7 million, below expectations.
The company’s total same-store rose 3.0% in the fourth quarter, double what the Street had expected. By division, same-store sales rose 6% at Hollister and fell 3% at Abercrombie.
