Weighed down by big charges and sagging sales, Abercrombie & Fitch Co. (ANF) saw its profit dive 68% during the fourth quarter and failed to offer a full-year profit forecast due to the “tumultuous” retail environment.
The retailer, famous for its brand of casual clothing popular among teens, posted a quarterly profit of $68.4 million, or 78 cents a share, compared with $216.8 million, or $2.40 a share, during the same period a year ago. Revenue for the quarter came in at $998 million -- a 19% decline from $1.29 billion the year prior.
The results include a 21-cent impairment charge tied to store-related assets, as well as an 11-cent tax expense-related charge. Analysts polled by Thomson Reuters were expecting earnings per share of $1 on revenue of $997.7 million, excluding charges.
The company’s same-store sales, or sales in stores opened at least a year, plunged 25% during the quarter as sales softened not only in its namesake division, but in its Hollister Co. and Ruehl divisions as well.
"The fourth quarter proved to be a catastrophe for the retail industry; a nightmare that included unprecedented promotional activity by other retailers in the malls and consumers who continued to show reluctance to spend, especially for premium brands,” said Mike Jeffries, chairman and CEO at Abercrombie & Fitch.
The company said it will maintain its 17.5-cent quarterly dividend. The dividend will be payable on March 17 to shareholders of record as of Feb. 27.
For the full year 2009, Abercrombie & Fitch said it “anticipates a difficult selling environment to persist” and therefore provided no EPS guidance.
The company also said it is in the middle of reviewing operating expenses and has also taken a number of cost-reduction measures.
The retailer laid off about 50 employees at its corporate headquarters in New Albany, Ohio, in January.
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