"Fiscal 2005 was a very successful year," said Abercrombie chairman and CEO Mike Jeffries during the company's earnings conference call. He added that the chain improved the shopping experience for all of its brands, which include Abercrombie & Fitch, abercrombie, Hollister and RUEHL, and broadening design and merchandising personnel.
For fiscal 2005, net income per share on a fully-diluted basis increased 61% to $3.66 versus $2.28 last year. Net income per fully-diluted share for fiscal 2005 includes the effect of a third quarter non-recurring charge of 9 cents on an after-tax basis. Net income per fully-diluted share for fiscal 2004 includes the effect of a non-recurring charge of 27 cents on an after-tax basis. Net sales for the fiscal year ended January 28, 2006 increased 38% to versus $2 billion last year.
"Each of our brands performed very well," Jeffries said. During the year, the adult brand Abercrombie & Fitch posted 18% comp-store sales. The company operated 361 Abercrombie & Fitch stores, 164 abercrombie stores, 318 Hollister stores, and eight RUEHL stores as of fiscal year-end 2005.
According to Jeffries, the brand has fewer regional mall expansion opportunities, so growth will come from flagship stores and international expansion. During the fourth quarter, the retail chain opened its Fifth Avenue Flagship store and two Abercrombie & Fitch stores in Canada. "The stores in Canada are off to an amazing start," Jeffries said, adding that the chain plans to open flagships stores in Los Angles and London this spring. Also in Canada, the chain opened three Hollister stores. "We expect the brand's iconic status to continue to strengthen," he said.
During the fourth quarter, the chain posted net sales of $961.4 million, an increase of 40% compared to $687.3 million for the same period last year. Company-wide comparable store sales increased 28% for the fourth quarter, while net income was up 58% to $164.6 million versus $104.3 million last year. Net income per share on a fully-diluted basis for the fourth quarter was $1.80 versus $1.15, representing an increase of 57% versus last year.
This year is off to a good start with strong comparable store sales growth of 33% in January. The company attributes the strong comparable store sales growth to strong sales momentum, gift card redemptions and unseasonably warm temperatures. While the chain said that it believes it can sustain positive comparable store sales increases, "the increases will not be at the level reported over the past 13 months."
For the first- half of fiscal 2006, the company expects net income per fully-diluted share to be in the range of $1.23 to $1.28, a 21% to 26% increase on a net income per share basis compared to last year. During the year, the retailer expects to spend $405 million and $415 million for capital expenditures, with approximately $260 million for new store construction, store remodels, conversions and improvements to existing stores. The remainder will be spent on home office and distribution center investments.
For fiscal 2006, the company expects to increase gross square-footage by approximately 11% through the addition of 64 Hollister Co. stores, 19 Abercrombie stores, 12 Abercrombie & Fitch stores and eight RUEHL stores.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
