Abercrombie & Fitch posts Q2 profit

Abercrombie & Fitch Co., for the second quarter ended August 1, 2020 has reported net sales of 698 million dollars, down 17 percent compared to last year, reflecting the adverse impact of Covid-19 on store sales. The company said in a statement that digital net sales increased 56 percent to 386 million dollars, reflecting growth in every month of the quarter. Net income per diluted share improved to 9 cents and 23 cents on a reported and adjusted non-GAAP basis, respectively, as compared to net loss per diluted share last year of 48 cents.

Commenting on the second quarter results, Fran Horowitz, the company’s Chief Executive Officer, said: “We are listening, learning and evolving, and staying nimble in this unprecedented period of turmoil and uncertainty. We ended the quarter with approximately 1.1 billion dollars of liquidity, reflecting 187 million dollars of operating cash flow generated in the second quarter. We will continue to be vigilant, thoughtfully managing operations while leveraging our strong liquidity position to strategically invest in critical functions that support our future global growth opportunities.”

The company’s gross profit rate improved 140 basis points to 60.7 percent on lower promotional and clearance activity, while operating income improved to 14 million dollars and 22 million dollars on a reported and adjusted non-GAAP basis, respectively compared to an operating loss last year of 39 million dollars.

The company added that it expects to continue to see, material adverse impacts as a result of Covid-19. As a result, for the third quarter, the company expects net sales to be down in the range of 15 percent to 20 percent compared to last year.

Picture:Abercrombie & Fitch press room

 

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