Abercrombie & Fitch credited an ongoing profit improvement initiative as driving its net income growth in the second quarter, which increased 13% to $12.9 million, from $11.4 million a year ago, and beat Wall Street estimates.
But the company’s revenue decreased 5.8% to $890.6 million in the quarter, and same-store sales dropped 7%, with U.S. same-store sales down 5%. The third quarter may see some progress, however, since it will include back-to-school sales.
“In a continued challenging environment, our sales for the second quarter were somewhat below plan, but we have seen modest improvement since the back-to-school floorset,” CEO Mike Jeffries said. “We are confident that the evolution of our assortment will drive further improvements going forward.”
Abercrombie plans to a total of 14 full-price international stores throughout the year, including eight Hollister stores and five Abercrombie & Fitch stores. The company also plans to open approximately eight to 10 international and U.S. outlet stores during the fiscal year. In addition, the company now expects to close approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.