Abercrombie & Fitch (NYSE: ANF) reported better than anticipated Quarter 3 earnings and revenue on Tuesday and claims it has a plan of action for any additional closures that may come amid the COVID-19 pandemic. Nevertheless, shares plunged as investors questioned the possible shutdowns during the holiday shopping season. Shares fell 3% during morning trading.
The company reported an adjusted net income of USD0.76 per share compared to the estimated USD0.04 a share. Net Income amounted to USD42.27 Million or USD0.66 per share, compared to the previous years USD6.52 Million or USD0.10 per share.
“Results were fueled by 43% year-over-year digital sales growth and sequential sales improvements in our global store base,” CEO Fran Horowitz said in a statement. “Updated product and marketing resonated with existing and new customers across brands and regions.”
The retailer anticipates sales to dip 5% to 10% within the fourth quarter, lower than its current quarter.
”We are also pleased to announce the early exit of four additional flagship locations by the end of January 2021. This is in addition to the three previously announced fiscal 2020 natural lease expirations. With these seven closures, we should end the year with eight operating flagships down from fifteen at the beginning of the year. These actions align with our multi-year strategy of reducing dependence on tourist-driven locations to reposition within key markets and deliver a better omnichannel experience to our local customer.”
In an Interview, Horowitz revealed that Abercrombie has a strategy in place to deal with the unexpected closures. A fact that not many retailers had when the pandemic hit in March.
“We’ve been managing through this honestly all year now, so we’re understanding what it means,” Horowitz said. “Eighty percent of our stores in California were closed during back-to-school this year. … We’ve created a playbook.”