Abercrombie & Fitch Co. (NYSE: ANF) reported first-quarter fiscal 2016 results before markets opened Thursday. The specialty retailer posted a diluted loss per share of $0.59 on net sales of $685.5 million. In the same period a year ago, the company reported an adjusted net loss of $0.53 per share ($0.91 on a GAAP basis) and revenues of $709.42 million. First-quarter results also compare to the Thomson Reuters consensus estimates for a loss per share of $0.51 and $710.26 million in revenues.

Same-store sales for the quarter in the United States fell 2%, and international same-store sales tumbled 7%. Companywide, same-store sales were down 4%. Direct-to-consumer and omnichannel sales accounted for 24% of total quarterly sales. Adjusted gross margin rose from 58% year over year to 62.1%, primarily due to higher average unit retails, partially offset by lower average unit cost.

In its outlook for the 2016 fiscal year, Abercrombie said it expects same-store sales to “remain challenging in the second quarter, but to improve in the second half of the year.” Gross margin is forecast to rise “slightly” compared with 61.9% in fiscal 2015, with second-quarter gross margin down “modestly.”

Abercrombie did not provide an EPS or revenue forecast, but analysts are looking for 2016 EPS of $1.20 on revenues of $3.52 billion. Consensus estimates also call for second-quarter earnings per share sales of $0.08 and net sales of $810.1 million.

The company expects to open 15 new stores in 2016. It also expects to close 60 U.S. stores in the fiscal year as leases expire.

Executive Chairman Arthur Martinez said:

Our results for the quarter reflect significant traffic headwinds, particularly in international markets and in our U.S. flagship and tourist stores, resulting in negative comparable sales. However, in the face of these headwinds, we were encouraged by our U.S. business, where comparable sales improved in the Hollister brand, and gross margin rate increased meaningfully for both brands. … We expect the second quarter to remain challenging, but to see better results in the back half of the year as our assortments continue to improve and we see returns from significant investments in marketing, store management and omnichannel.

Shares traded down more than 15% Thursday morning, at $20.94 in a 52-week range of $15.42 to $32.83. The consensus target price for the stock was $28.29 before the report, and the high target is $50.00 a share.

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