Abercrombie & Fitch Company (ANF) has reported an 81.19 percent plunge in profit for the quarter ended Oct. 29, 2016. The company has earned $7.88 million, or $0.12 a share in the quarter, compared with $41.89 million, or $0.60 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $1.40 million, or $0.02 a share compared with $32.92 million or $0.48 a share, a year ago.
Revenue during the quarter dropped 6.47 percent to $821.73 million from $878.57 million in the previous year period. Gross margin for the quarter contracted 156 basis points over the previous year period to 62.15 percent. Total expenses were 97.61 percent of quarterly revenues, up from 95.33 percent for the same period last year. That has resulted in a contraction of 227 basis points in operating margin to 2.39 percent.
Operating income for the quarter was $19.64 million, compared with $40.99 million in the previous year period.
However, the adjusted operating income for the quarter stood at $13.64 million compared to $51.08 million in the prior year period. At the same time, adjusted operating margin contracted 415 basis points in the quarter to 1.66 percent from 5.81 percent in the last year period.
Working capital increases
Abercrombie & Fitch Company has recorded an increase in the working capital over the last year. It stood at $624.15 million as at Oct. 29, 2016, up 9.74 percent or $55.40 million from $568.74 million on Oct. 31, 2015. Current ratio was at 2.19 as on Oct. 29, 2016, up from 1.88 on Oct. 31, 2015.
Cash conversion cycle (CCC) has decreased to 21 days for the quarter from 89 days for the last year period. Days sales outstanding were almost stable at 8 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 76 days for the quarter compared with 154 days for the previous year period. At the same time, days payable outstanding went down to 63 days for the quarter from 72 for the same period last year.
Debt remains almost stable
Abercrombie & Fitch Company has recorded a decline in total debt over the last one year. It stood at $287.23 million as on Oct. 29, 2016, down 0.82 percent or $2.37 million from $289.60 million on Oct. 31, 2015. Total debt was 12.29 percent of total assets as on Oct. 29, 2016, compared with 11.53 percent on Oct. 31, 2015. Debt to equity ratio was almost stable at 0.24 as on Oct. 29, 2016, when compared with the last year. Interest coverage ratio deteriorated to 4.26 for the quarter from 8.94 for the same period last year.
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