New Albany, Ohio -- Abercrombie & Fitch reported weak net and comparable store sales and laid out plans to restructure its Gilly Hicks brand as part of a strategic review in advance of releasing its full results for the third quarter of fiscal 2013.
Net sales for the quarter decreased 12% year-over-year, to $1.03 billion from $1.17 billion. Analysts had been expecting a $1.07 billion quarterly net sales figure. Total same-store sales for the quarter, including direct-to-consumer sales, decreased 14% with same-store U.S. sales decreasing 14% and same-store international sales decreasing 15%. In one positive result, total direct-to-consumer sales increased 11% for the quarter.
In response to these soft results, Abercrombie & Fitch will shutter all 28 of its Gilly Hicks stores. Most closures will occur by the end of the first quarter of fiscal 2014. The retailer will continue to sell Gilly Hicks branded merchandise through its Hollister retail banner and direct-to-consumer channel.
"Our results for the third quarter reflect continued top-line challenges, with overall spending among younger consumers remaining weak,” said Mike Jeffries, CEO and chairman of the board of Abercrombie & Fitch. “Until we have seen a clear trend improvement, we are continuing to take a cautious approach into the fourth quarter and are working to end the year with appropriate levels of fall carryover inventory.”
Abercrombie & Fitch expects a low-double-digit decrease in same-store sales for the fourth quarter of fiscal 2013. The retailer will release full third quarter earnings on Nov. 21.