Executive Summary

• Abercrombie & Fitch reported 4Q16 EPS of $0.71, missing the consensus estimate of $0.75 and down from $0.85 in the year-ago quarter. Total comps were down 5%, beating the consensus estimate of a 5.4% decline. Total revenue was $1.04 billion, down 6.9% from the year-ago period and missing the consensus estimate of $1.05 billion.
• Total net sales for the Abercrombie brand were $442.4 million, down 13%. Total comps for the Abercrombie brand were also down 13%, missing the consensus estimate of an 11.3% decline. Sales at Hollister were down 2%, to $594.0 million. Comps at Hollister were up 1%, beating the consensus estimate of a 0.5% decline.
• The company expects comp trends to improve in FY17. Gross margin is expected to be flat compared with FY16 due to continued promotion pressures that will be offset by lower average unit cost.