Abercrombie & Fitch (ANF) Misses Q3 EPS by 1c, Comps Flat, Offers Outlook

Abercrombie & Fitch (NYSE: ANF) reported Q3 EPS of $0.23, $0.01 worse than the analyst estimate of $0.24. Revenue for the quarter came in at $863.5 million versus the consensus estimate of $868.28 million.

Comparable sales were approximately flat against positive 3% comparable sales last year.

Fiscal 2019 Full Year Outlook:

• Net sales to be in the range of flat to up 1%, driven by comparable sales and net new store contribution, partially offset by an adverse impact from changes in foreign currency exchange rates of approximately $40 million of which approximately $35 million has been reflected in year-to-date results.
• Comparable sales to be in the range of flat to up 1%, against positive comparable sales of 3% last year.
• Gross profit rate to be down approximately 100 basis points from the fiscal 2018 rate of 60.2%, reflecting a combined adverse impact of 40 basis points from changes in foreign currency exchange rates and anticipated China tariffs.
• Operating expense, excluding other operating income, to be up in the range 2% to 3% from fiscal 2018 adjusted non-GAAP operating expense of $2.03 billion, reflecting second quarter flagship store exit charges of $45 million and third quarter asset impairment charges of $13 million.
• Effective tax rate to be in the mid 20s.
• Diluted weighted-average shares outstanding of approximately 66 million shares, excluding the effect of potential share buybacks.
• Capital investments of approximately $200 million.

Fiscal 2019 Fourth Quarter Outlook:

• Net sales to be in the range of flat to up 2%, reflecting an adverse impact from changes in foreign currency exchange rates of approximately $5 million.
• Comparable sales to be in the range of flat to up 2%, against positive comparable sales of 3% last year.
• Gross profit rate to be down approximately 150 basis points as compared to fiscal 2018 rate of 59.1%, reflecting a combined adverse impact of 70 basis points from changes in foreign currency exchange rates and anticipated China tariffs.
• Operating expense, excluding other operating income, to be in the range of flat to up 2% from fiscal 2018 adjusted non-GAAP operating expense of $555 million.
• Effective tax rate to be in the mid-to-upper 20s.

For earnings history and earnings-related data on Abercrombie & Fitch (ANF) click here.

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