Abercrombie can't stop talking about its Hollister brand
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That's not surprising. Abercrombie & Fitch has continued to underperform for years while Hollister has remained its sole saving grace throughout.
Last year, Hollister helped the company reverse negative sales for the first time in years. And going by the latest results released on Thursday, the trend looks set to continue into the future.
Abercrombie reported earnings of $0.71 per share in the fourth quarter of 2016, compared to $0.85 per share for the same period last year, well below expectations.
On a yearly basis, the company earned $0.06 per share in 2016, way below the $0.51 it earned in 2015.
Hollister, however, painted a different picture with its consistently strong performance. Hollister's comparable sales for the 4th quarter were up 1%, against a negative 13% for Abercrombie as a whole, according to Joanne C. Crevoiserat, Abercrombie's chief financial officer.
"While we are not happy with our results, we are pleased with progress we continue to make against our key strategic initiatives. Hollister, our largest brand, is stabilized and continues to perform," Fran Horowitz-Bonadies, Abercrombie's chief executive officer, said during the call. "Despite the headwinds in Q4, our performance at Hollister demonstrated a potential for our brand, when brand voice, product and brand experience are aligned and attuned to our customer."
Importantly, the company is trying to replicate its Hollister success across its business. "We continue to apply our success and learnings from our experience with Hollister to the ANF brand and we are confident that with the right people and processes now in place, we will see greater traction on our revitalization plan for the brand," Bonadies said.
A year ago, Abercrombie posted its first positive quarter since 2012, so the latest results pose a setback-although the company's positive guidance for 2017 led to a surge of over 13% in its shares on Thursday.