A&F's shares tumble as teens turn elsewhere

People walk by an Abercrombie and Fitch clothing store May 10, 2007 in San Francisco, California. (Justin Sullivan, Getty Images)
People walk by an Abercrombie and Fitch clothing store May 10, 2007 in San Francisco, California. (Justin Sullivan, Getty Images)
Set Text Size SmallSet Text Size MediumSet Text Size LargeSet Text Size X-Large
Share
Updated: 8/28 12:22 pm

NEW ALBANY, Ohio (AP) — The Abercrombie & Fitch logo has lost the power it once wielded.

Shares of Abercrombie & Fitch Co. tumbled Thursday after reporting weak sales as more teens shop elsewhere.

The company is trying to stock trendier clothing — and it turns out that means stripping off the once-prized Abercrombie logo.

The New Albany, Ohio-based retailer reported that revenue fell 5.8 percent to $890.6 million, short of analyst estimates.

Revenue at stores open at least a year dropped a steep 11 percent, including 8 percent at U.S. stores. The company's earnings per share beat estimates.

A&F and other traditional teen stores are facing an uphill battle to turn their businesses around as mall traffic drops and shoppers' tastes change.

A slowly recovering economy is making parents and teens to think twice about splurging on clothes. Expensive standbys like Abercrombie also have lost business to "fast fashion" chains like H&M, known for quickly churning out trendy $9 tops.

Teens are also spending less time at the mall and more time researching and buying on mobile devices. And when they do buy, they're more likely buying the latest gadget than filling their closets.

Last week, Aeropostale last week reported its seventh consecutive quarterly loss on slumping sales. It also forecast another loss in the current quarter.

At the same time, Aeropostale, based in New York, reinstated Julian Geiger, its former CEO.

Earnings at another competitor, American Eagle, have also declined on weak sales.

Mike Jeffries, A&F's CEO, said in a statement that the retailer has made progress in stocking trendier clothing and said the progress is "clearly evident" in its back-to-school business.

"In a continuing challenging environment, our sales for the second quarter were somewhat below plan, but we have seen modest improvement since the back-to-school floor set," he added.

For example, A&F is getting rid of most of its logoed clothing at U.S. stores, because it has fallen out of favor with teens. Jeffries told investors on a call with analysts Thursday that it reduced its logoed clothing by half this fall compared to a year ago.

"In the spring season, we are looking to take the North American logo business to practically nothing," he added.

A&F said it earned $12.9 million, or 17 cents in its fiscal second quarter. That compares with $11.3 million, or 14 cents per share, a year earlier.

Earnings, adjusted for non-recurring costs, came to 19 cents per share.

The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 10 cents per share.

A&F's shares fell nearly 6 percent, or $2.57 to $41.43 in late morning trading. American Eagle's shares fell nearly 2 percent, or 25 cents, to $13.95. And Aeropostale's shares slipped more than 2 percent or 9 cents, to $4.07 in late morning trading.

____________

Follow Anne D'Innocenzio at http://www.Twitter.com/adinnocenzio

 

©2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Share
Featured Partners
www.eastridgeretirementcenter.com
The newly modeled East Ridge Residence is a must see with its spacious comfortable apartments. Plus, 3 delicious meals daily, geriatric physician, home healthcare services and fun festive activities. Schedule your visit today!
www.ameripriseadvisors.com/james.m.scotchie
Together we can make a confident retirement possible. Simply click to get started with your private wealth advisor. Talk to Jimmy Scotchie, Certified Financial Planner.
www.comcast.com/cable-internet-packages.html
Get started at $79.99 a month for 12 months. Plus, get a $75 VISA® Prepaid card.
 
Supermarket Guru
From The Archives
Scenic City Roots
Through Irish Eyes
Brand News
Prime Mashup
What's Trending
Megan Wise Goes Outside
Stay Connected with WDEF News 12
 
Inergize Digital This site is hosted and managed by Inergize Digital.