Abercrombie & Fitch (ANF) Tops Q4 EPS by 9c; Comps Rose 1%
Abercrombie & Fitch (NYSE: ANF) reported Q4 EPS of $1.08, $0.09 better than the analyst estimate of $0.99. Revenue for the quarter came in at $1.11 billion versus the consensus estimate of $1.1 billion.
Comparable sales for the fourth quarter increased 1%. On a sequential basis, comparable sales trends improved across all brands and geographies.
| Fiscal 2015 Comparable Sales Summary (1) | ||||||||||||
| Brand | Geography | |||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||
| Abercrombie(2) | (9)% | (7)% | (5)% | (2)% | (6)% | United States | (7)% | (4)% | (3)% | (1)% | (3)% | |
| Hollister | (6)% | (1)% | 3% | 4% | -% | International | (9)% | (4)% | 1% | 6% | (1)% | |
| Total company | (8)% | (4)% | (1)% | 1% | (3)% | Total company | (8)% | (4)% | (1)% | 1% | (3)% | |
(1) Comparable sales are calculated on a constant currency basis.
(2) Abercrombie includes the Abercrombie & Fitch and abercrombie kids brands.
Outlook
For fiscal 2016, the company expects:
- Flat to slightly positive comparable sales
- Adverse effects from foreign currency on sales of approximately $50 million
- A gross margin rate approximately flat to last year's adjusted non-GAAP rate of 61.9%, but up on a constant currency basis
- Slight leverage in operating expense relative to last year's adjusted non-GAAP rate of 58.3%
- An improvement over last year's adjusted non-GAAP operating income, despite an adverse effect from foreign currency of approximately $30 million; the effect from foreign currency, calculated on a constant currency basis, is determined by applying fiscal 2016 forecasted rates to fiscal 2015 results and is net of the year-over-year impact from hedging
- An effective tax rate in the mid-to-upper 30s
- A weighted average diluted share count of approximately 68 million shares, excluding the effect of potential share buybacks
The company is targeting capital expenditures in the range of $150 million to $175 million for the fiscal year, including approximately $70 million for new stores and store updates and approximately $70 million for direct-to-consumer/omnichannel and IT investments to support growth and continuous profit improvement initiatives.
The company plans to open approximately 15 full-price stores in fiscal 2016, including approximately 10 in international markets, primarily China, and approximately five in the U.S. The company also plans to open approximately 10 new outlet stores, primarily in the U.S. In addition, the company anticipates closing approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.
Excluded from the company's full year outlook are potential charges, such as those related to impairments, store closings and its strategic initiatives.
For earnings history and earnings-related data on Abercrombie & Fitch (ANF) click here.