Abercrombie & Fitch Co. (NYSE: ANF) reported its first quarter financial results before the market open on Wednesday. The Company reported weaker same-store sales growth, which caused shares to tank by 24% shortly after the opening bell.
For the first quarter, Abercrombie & Fitch reported earnings loss of USD 0.29 per share on revenue of USD 734 Million. Refinitiv analysts expected earnings loss of USD 0.43 per share on revenue of USD 733.4 Million.
Despite the earnings and revenue beat, the retailer missed same-store sales growth estimates. For the quarter, Abercrombie reported that same-store sales were up 1%, however, analysts expected 1.3%.
Hollister brand sales were USD 428.44 Million for the quarter, up 1% year-over-year. Hollister comparable sales were 2%. Abercrombie sales were USD 305.52 Million at the end of the first quarter, declining by 1% year-over-year. Abercrombie comparable sales was 1%.
Abercrombie & Fitch’s flat revenue was primarily dragged down by its declining international revenue growth. International revenue was USD 264.31 Million for the quarter, falling by 6% from USD 281.77 Million the same quarter last year. U.S. revenue was USD 469.65 Million, increasing by 5% year-over-year.
U.S. comparable sales was 4% for the quarter, however, international comparable sales was -4%, offsetting U.S. same-store growth.
As a result of weaker comparable sales, Abercrombie ultimately closed down several stores worldwide. The retailer closed its Hong Kong, Copenhagen, Milan, Fukuoka, and Soho store in New York City. The stores are expected to close throughout fiscal 2019 and fiscal 2020.
Abercrombie reported that its Copenhagen, Soho, Milan, and its Fukuoka locations represented less than 1% of its total net sales in fiscal 2018. The SoHo and Fukuoka closures are expected to result in pre-tax lease-related net charges in the second quarter of fiscal 2019 of approximately USD 45 Million. The charges related to the Copenhagen and Milan closures are not expected to be significant in fiscal 2019.
As for the second quarter, Abercrombie expects net sales to be flat to up 2% year-over-year. Analysts are expecting sales growth of 2.8%. The retailer projects comparable sales growth to be flat to up 3%.
As for the full year, Abercrombie expects net sales to be up in the range of 2% to 4% and comparable sales up low single digits.