Abercrombie & Fitch sales fall 34%, with stores forced shut during coronavirus pandemic; shares fall

Abercrombie & Fitch said Thursday its sales tanked 34% during the first quarter because of store closings during the coronavirus pandemic and people purchasing less apparel as they holed up at home. 

The Hollister owner’s shares sank 6% in premarket trading. 

Here’s how the company did during its fiscal first quarter ended May 2: 

• Earnings per share: An adjusted loss of $3.29 
• Revenue: $485.4 million 

Net sales dropped to $485.4 million from $734 million a year earlier. Sales at its namesake Abercrombie brand were down 30% while Hollister sales were down 36%. The company did not break out same-store sales during the quarter. 

Its net loss for the period ended May 2 widened to $244.1 million, or $3.90 per share, from $19.2 million, or 29 cents a share, a year earlier. Excluding one-time charges, the company lost $3.29 per share. 

The retailer is not offering a second-quarter or full-year outlook at this time. 

Analysts had been calling for Abercrombie to report an adjusted net loss of $1.39 per share on revenue of $497.3 million, based on Refinitiv estimates. However, it is difficult to compare reported earnings to analyst estimates for Abercrombie’s first quarter, as the coronavirus pandemic continues to hit global economies with earnings impacts that are difficult to assess. 

CEO Fran Horowitz said that as of Thursday, roughly half of Abercrombie’s global store base is back open for business. 

She said first-quarter digital sales globally were up about 25% year over year, and that they have accelerated further into May. 

As Abercrombie’s stores reopen during the Covid-19 crisis, productivity is returning to about 80% in the U.S. and 60% in the Europe, Middle East and Africa region, according to Horowitz. 

Abercrombie ended the quarter with $704 million in cash and equivalents on hand. And the company said it had inventories of $427 million, down 1% from a year earlier. 

As of Wednesday’s market close, Abercrombie shares were down about 24.5% this year. The company has a market cap of $803.8 million. 

Read the full earnings release from Abercrombie here.