Teen clothing retailer Abercrombie & Fitch reported second quarter earnings this morning before the opening bell, and shares are already down 18% Thursday trading.
The company reported earnings of $US0.16 per share (down 20% from last year) versus the $US0.31 EPS predicted by analysts. Revenues also came in below expectations, at $US945.7 million (down 1% from last year) versus $US1.01 billion.
Same-store sales fell 10% in Q2 — down 11% in the United States and down 7% in international business.
Meanwhile, guidance was lousy: Abercrombie expects third quarter earnings per share to come in a range of $US0.40 to $US0.45, well below the $US1.06 EPS predicted by analysts.
“The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported. In that context we are planning sales, inventory and expenses conservatively for the remainder of the year,” said Abercrombie CEO Mike Jeffries in the release. “Despite the challenging environment, we are very pleased by strong growth in our direct-to-consumer business and continued strong growth in China. We have also made excellent progress on our profit improvement initiative during the quarter, and we now expect savings from this initiative to exceed $US100 million annually. In addition, we are nearing completion of our long-term strategic review, and we are confident that this will provide us with a clear roadmap for sustainable growth in sales, profitability and return on invested capital.”