Abercrombie & Fitch sees Q3 EPS and revs well below consensus; Q3 comps -10%
Co issues downside guidance for Q3 (Oct), sees EPS of $0.40-0.42 vs. $0.69 Capital IQ Consensus Estimate; sees Q3 (Oct) revs of $911.4 mln vs. $983.29 mln Capital IQ Consensus Estimate.
- Total comparable sales, including direct-to-consumer sales, decreased 10% with comparable U.S. sales decreasing 7% and comparable international sales decreasing 15%. Total direct-to-consumer comparable sales increased 8%.
- Sales during the quarter were below expectations with comparable sales in September and October being significantly weaker than August. Although the international stores segment was the most difficult, the lower sales trend was broadly based.
- In addition, the Company now expects modest gross margin rate erosion for the quarter compared to last year, given the highly promotional and challenging environment.
- The Company ended the third quarter with inventory at cost down 20% compared to the end of the prior year third quarter.
- Realted Peers: AEO, ARO, BKE, LB, ZUMZ, ZQK, URBN, APP, FRAN, PSUN, WTSL, EXPR