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Friday, August 23, 2013

Abercrombie & Fitch Fiscal 2013, Quarter 2 Results...

Hello TSOF fans! Are you getting excited for Labor Day? I know I am: I have a five-day weekend.

Well, A&F has released Fiscal Year (FY)2013's Quarter (Q)2 sales information online. You can find it on the Company's investors website (here). However, as I know not everybody has time to peruse investors presentations and such, so I'm going to summarize the quarter...



Glance at A&F stock as of today. (CNNMoney / NYSE)


Net sales for the Company for Q2 FY2013 were $945, 698. Net sales for the Company last year Q2 were $951,407. As you can see, there's a considerable negative difference. What does this mean? Allow me to break it down:

U.S. stores sales this year have dropped from $562,105 (2012) to $504,674. That a considerable reason why the Q2 FY2013 total is so low. International stores and direct to consumer sales have increased since 2012. This is noticeably good at a glance, but let's go further.

A&F also reported that by brand, including direct to consumer: sales have gone down 6% at Abercrombie & Fitch;  3% at abercrombie; and a whopping 13% for Hollister. I don't see where or if they've reported on Gilly Hicks, but as you can see, this is bad.

The Company has tried to rectify their bad sales by repurchasing stock, a well-known tactic in the market. In Q2 FY2013 alone, they repurchased 2,033 shares!

Also worth mentioning: the store count. At the end of Q2, eight stores have been opened and four stores have been closed. Four stores being closed in the middle of the year is slightly alarming, as most Companies close stores at the end of Quarter 4.

The Company expects comparable sales in Q3 down slightly more than Q2.

Conclusions: this year has proven to be a rough one for Abercrombie & Fitch. If I were a tad cynical, I would say that the Company dug its own grave after CEO Mike Jeffries' rather bold remarks in his past interview. However, we probably all know that the world of fashion is fickle. A&F just has to do its best to stay competitive and relevant.

Anyway, I hope you enjoyed the read. If all this isn't your thing, you can expect fall outfits from me sometime after Labor Day.

Later!
Marcus