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Abercrombie & Fitch: We're working hard to boost shopper experience

Despite not meeting analysts' earnings expectations the brand remains intent on boosting customer experience in next quarter.

August 26, 2015

Teen retailer Abercrombie & Fitch is on a solid earnings footing thanks to healthy sales of its Hollister and kid clothing brand, and is vowing to boost customer experience, though revenue and net income dipped a bit in the second quarter and did not meet analysts’ expectation.

The company cited an organizational restructure and cost reduction effort for playing a role in decreasing store and distribution expenses and the closing of its Gilly Hicks clothing locations, according to a Market Watch report.

"In our second quarter, we delivered a meaningful sequential improvement in comparable sales, stabilized gross margins and achieved significant expense reductions. Our results exceeded what we signaled in our first quarter earnings call and give us confidence that we are on the right track, although we recognize that we still have much to achieve," stated CEO Arthur Martinez, in a statement.

Martinez said the company will continue its "intense focus" on improving the customer experience.

"To accelerate our efforts, we have reinvigorated Abercrombie & Fitch's brand design and merchandising teams, recruiting a number of talented executives with expertise relevant to our needs," he said, acknowledging that challenges remain ahead. "We are taking the steps necessary to deliver continued improvement in our performance and to establish very clear brand positions that will guide all elements of our business and provide the foundation for long-term profitability and growth."

Revenue dropped to $817.8 million, from $890.6 million and sales dipped 4 percent, compared to a year prior. Second quarter net sales decreased 8 percent compared to second quarter last year. Net sales from direct-to-consumer and omnichannel net sales increased to 21 percent of the total net sales in the second quarter, compared to approximately 19 percent last year.

The brand opened two Hollister stores abroad and one U.S. chain location in the quarter.