** charts before earnings **
** charts after earnings **
Abercrombie & Fitch misses by $0.04, reports revs in-line; softens FY17 comp, gross margin guidance:
- Reports Q2 (Jul) adj. loss of $0.25 per share, $0.04 worse than the Capital IQ Consensus of ($0.21); revenues fell 4.2% year/year to $783.2 mln vs the $782.64 mln Capital IQ Consensus.
- Comps fell 4%: 7% at A&F and 2% at Hollister.
- By geography, net sales for the second quarter decreased 7% to $478.8 million in the U.S. and were ~flat at $304.4 million in international markets versus last year.
- The gross profit rate for the second quarter was 60.9%, 140 basis points lower than last year. Excluding certain items last year, the gross profit rate decreased 20 basis points on a constant currency basis, primarily due to higher average unit costs, partially offset by higher average unit retails. CO had guided for GM down modestly from 62.3%.
- For fiscal 2016, the company now expects:
- Comparable sales to remain challenging through the second half of the year(previously called for improvement in 2H), with a disproportionate effect from flagship and tourist locations. Adverse effects from foreign currency on sales of ~$25 million and on operating income of ~$20 million, with the greatest impact in the third quarter
- A gross margin rate flat to last year's adjusted non-GAAP rate of 61.9% (down from up slightly), but down in the third quarter due to adverse effects from foreign currency.
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