AS UPDATE TO performance during this fourth quarter (Q4) of the Fiscal 2013 year (FY2013), Abercrombie & Fitch Co. has announced, so far at the end of the 9-week period (having ended on 4 January 2014), a 6% decrease in comparable sales (including direct-to-consumer) for the Company – comparable sales broken down to a 4% decrease in the United States and a 10% decrease internationally, though, as a whole, direct-to-consumer comparable sales as a whole increased 25%. This is figured in comparison to the 9-week period of Q4 FY2012 which ended on 5 January 2013.
Full year adjusted non-GAAP earnings per diluted share on A&F stock are anticipated to fall between US$1.55 and US$1.65 as an improved outlook from the original prior guidance of $1.40 to $1.50. The figuring does not factor in "charges related to the Company's restructuring plans for the Gilly Hicks brand, other impairment and store closure charges, or charges related to the implementation of the Company's profit improvement initiative."
" Given the challenging and promotional retail environment, we are pleased that our quarter-to-date performance has exceeded expectations. Our direct-to-consumer business was particularly strong, reaching a record level of approximately 25% of total sales in December, and we also saw sequential improvement in comparable store sales. In addition, fall season carryover inventory levels are well controlled as we move into the new season. We continue to focus on execution against our long-term strategic plans, which we believe will drive meaningful improvements in our business in 2014 and beyond. " – Michael "Mike" S. Jeffries, A&F Chairman & CEO
Stock for "ANF" on the New York Stock Exchange (NYSE) surged close to 12% percent on Friday, January 10, after the release. This gave ANF stock a dramatic increase even for that week in comparison to that Monday. It was a nice spark on ANF stock which took a steep dive in August 2013 and has since been experiencing a declining trend since. As Barrons noted, stock has taken a 28% drop over the greater twelve-month period in general and only 1 in 3 analysts have rated it a buy.
Among still-critical conmmentators are Richard Jaffe (of the full-service brokerage and investment banking firm, Stifel) who stated:
" Management is playing good defense: significantly trimming a bloated expense structure, closing underperforming stores, focusing growth on accretive channels (international and e-commerce) and increasing speed to market. However we believe management remains focused on its “clearly defined aesthetic” of an aspirational, New England prep-inspired teenager which we believe is no longer relevant today. Additionally, management is reducing SKU counts and increasing depth of merchandise in an era where successful retailers are doing the opposite as consumers demand numerous choices and increased newness. This supports our belief that [Abercrombie & Fitch] will likely continue to struggle to gain relevancy in today’s saturated retail market. "
Though others with more positive expectations are William Blair’s Amy Noblin and Jared Lubel:
" We believe the company is in the early stages of implementing a sound turnaround plan that can drive meaningful profit recovery over the long term. We still see value in the brands and their global potential; thus, while we expect the turnaround to take time, particularly given the muted environment for teen spending, we see value for long-term investors with the stock at 14 times fiscal 2014 (ending January 2015) earnings and significant opportunity for profit improvement. "
And Adrienne Tennant and Gabriella Carbone (of full-service financial services firm, Janney) who share:
" Despite the highly promotional retail environment the company was able to exceed their expectations quarter-to-date. The company noted that fall season carryover inventory levels are well controlled as they move into the new season. We are seeking ways to play a downtrodden Softlines space for 2014, when we believe sectorwide inventory will be cleaner on a year-over-year basis, allowing for margin expansion. We believe the teen names have been the most beaten up and look for evidence of improving comp performance and ability to meet and possibly beat estimates in 2014, with the most opportunity in the back half of 2014. We believe [Abercrombie & Fitch] and [American Eagle Outfitters] are both names that fit the profile of attractive risk/reward names for 2014. "
The current Fiscal Year 2013 for Abercrombie & Fitch Co. will finally conclude on February 1, 2014. Results for Q4 FY2014 will be presented on February 24...