Abercrombie & Fitch Plunges After Sales Fall Short
(Bloomberg) -- Abercrombie & Fitch Co.’s stock plunged after the release of earnings -- another sign that apparel retailers’ recent strength could be short-lived.
Comparable-store sales, a measure that shows how established retail locations are performing, fell short of estimates across the board for the teen apparel company. Total revenue also fell slightly short in the latest quarter, sending shares down as much as 14 percent, the most in more than a year.
While Abercrombie has left a lengthy sales slump behind in recent quarters, investors may be concerned that its current growth is starting to lose momentum. With the U.S. economy steaming forward, Wall Street has demonstrated little tolerance for retailers that have shown any signs of slowing down.
Total same-store sales rose 3 percent, below the 3.7 percent increase forecast by Consensus Metrix. The Abercrombie and Hollister brands also failed to meet estimates.
The 126-year-old retailer has worked to renew its image, pivoting toward seasonal clothing and dialing back racy ads that featured half-clad models. In an interview, Chief Executive Officer Fran Horowitz said the company is pleased with its progress in overhauling the brand.
Abercrombie also opened two new smaller-format stores at the campuses of University of Southern California and Ohio State University stores to court core customers.
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