Abercrombie & Fitch Disappoints on Same-Store Sales: Shares Slide

Abercrombie & Fitch Co (NYSE: ANF) failed to take full advantage of an unusually long summer in Europe as its stock of Hollister brand of summer wear could not keep up with increased demand in the second quarter, sending its shares down as much as 14.6%.

The Company’s quarterly same-store sales missed Wall Street estimates on Thursday, taking the shine off a surprise adjusted profit. Abercrombie said sales at established stores rose 3% in the quarter, while analysts on average had expected 3.7% increase. Same-store sales of Hollister, the Company’s key revenue contributor, rose 4% in the second quarter, but missed the analyst average estimate of 5.3% rise.

“We sold through our warm wear seasonal categories too quickly and frankly ran out of ammunition as we moved through the quarter and the weather turned much warmer for much longer,” Chief Operating Officer Joanne Crevoiserat said on a conference call. “We overreacted to slower selling coming out of the first quarter.”

Given the strong sales coming out of peers such as American Eagle Outfitters (NYSE: AEO) and Urban Outfitters (NASDAQ: URBN), Abercrombie’s comparable sales will likely not be enough for investors, RBC Capital Markets analyst Brian Tunick said.

Its flagship Abercrombie brand also missed analysts’ estimates for the quarter, raising concerns the segment’s recovery is stills on shaky ground.

Net loss attributable to Abercrombie narrowed to USD 3.9 Million, or 6 cents per share, in the second quarter ended Aug. 4th. Excluding one-time items, the Company earned 6 cents per share, while analysts had expected a loss of 4 cents. The Company’s net sales rose 8.1% to USD 842.4 Million. Analysts on average had expected revenue of USD 845.2 Million.

1 Comment
  1. Patricia Liu 12 months ago
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    My $ANF trade…
    #AbercrombieAndFitch got chewed up by the markets today; gapping down (-10%) as the clothing chain’s comparable store sales revenue fell below forecast… The stock stumbled nervously at market open – I shorted ANF, anticipating a breakdown of the opening range!

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