Courtesy of Benzinga.
Abercrombie & Fitch Co. (NYSE: ANF) today reported on the Company’s performance for the quarter ended July 28, 2012.
Net sales increased 4% to $951.4 million for the quarter, compared to net sales of $916.8 million for the fiscal quarter ended July 30, 2011. Total US sales, including direct-to-consumer sales, decreased 5% to $648.0 million. Total international sales, including direct-to-consumer sales, increased 31% to $303.4 million. Total Company direct-to-consumer sales, including shipping and handling, increased 25% to $127.7 million.
Comparable store sales for the quarter were down 10% relative to last year. Comparable store sales were down 5% in US stores and were down 26% in international stores. Within the quarter, comparable store sales were weakest in June.
The Company expects gross margin rate erosion for the second quarter of approximately 100 basis points versus last year. Additionally, the Company expects inventory at cost to be up approximately 20% at the end of the second quarter versus a year ago.
The Company expects to report diluted earnings per share for the quarter of approximately $0.15 to $0.18.
Based on a lower sales trend than previously projected, the Company now expects full year diluted earnings per share of approximately $2.50 to $2.75. This projection assumes same store sales to be down 10% for the second half of the year, consistent with the second quarter trend. The Company continues to expect substantial recovery of the gross margin rate erosion seen in 2011 on a 2012 full year basis. In addition to lower sales, the reduction in projected earnings per share also reflects the impact of a stronger US dollar and the impact of an increase in the effective tax rate primarily as a result of a reduced benefit related to international operations taxed at a lower rate. The Company now expects the tax rate for the year as a whole to be in the high 30’s.
