Apparel Stocks Tumble After a Pair of Disappointing Earnings
Apparel Stocks Tumble After a Pair of Disappointing Earnings
(Bloomberg) -- Apparel stocks plunged after weak guidance from Children’s Place Inc. and American Eagle Outfitters Inc. added to concerns about the health of the American mall.
Both retailers gave disappointing forecasts for the critical holiday quarter as management blamed “meaningfully weaker-than-planned mall traffic” at Children’s Place and “softer demand” in some American Eagle apparel categories that has led to higher markdowns. That sent a jolt to retail investors who were already reeling from a recent spat of earnings disappointments from the likes of Kohl’s Corp., Macy’s Inc., and Urban Outfitters Inc.
Deteriorating sentiment was reflected in a broad decline in clothing stocks on Wednesday, with the S&P Supercomposite Apparel Retail Index falling as much 1.2%. Children’s Place was the worst performer as shares sank as much as 23%, their biggest drop since 2002. American Eagle slid as much as 8.9% and also dragged down peer Abercrombie & Fitch Co., which fell as much as 7.5%.
Apparel watchers will next turn their attention to men’s retailer Tailored Brands Inc., the smallest member of the index and the last to report quarterly results. The owner of Men’s Wearhouse and Jos. A. Bank Clothiers is slated to release earnings after the close.
--With assistance from Jordyn Holman.
To contact the reporter on this story: Janet Freund in New York at jfreund11@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Sally Bakewell
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