Abercrombie isn't looking so fashionable

Sex isn't helping the uber-trendy retailer these days -- and that goes for its stock price as well.

By Jonathan Berr May 28, 2013 11:43AM
Abercrombie & Fitch (ANF) uses sex to sell everything -- including its shares, judging from the buff, shirtless young man pictured on the company's investor relations website. Too bad that strategy isn't working.

The purveyor of uber-trendy apparel to America's young and fashionable on Friday reported a loss of $7.2 million, or 9 cents per share, compared with a year-earlier loss of $21.5 million, or 25 cents per share. Revenue plunged 8.9% to $838.8 million. The results were way worse than the 5-cent-per-share loss that analysts had expected. Revenue also lagged their expectations of $941 million.  

 

To make matters worse, comparable-store sales, a key metric measuring performance at stores open for at least a year, plunged 15% as the company struggled with inventory shortages. Abercrombie has also been closing underperforming stores to cut costs.

 

CEO Mike Jeffries isn't helping matters. The Internet lit up last week after comments he made several years ago resurfaced in which he said he didn't want kids who weren’t "cool" to wear his clothes. Among the reactions was a campaign started on YouTube called "Fitch the Homeless" that encouraged people to donate the company's clothes to the homeless.

 

JeffA shopper leaves the Abercrombie & Fitch UK Flagship Store on Savile Row in London, England (© Gareth Cattermole/Getty Images)ries is no stranger to controversy. Earlier this year, Bloomberg reported that he insisted that the male models who serve as flight attendants on his corporate jet follow a 47-page rulebook. One of their chores is to provide each of his dogs their own seating arrangements.

 

Wall Street would be willing to tolerate Jeffries' eccentricities if the company's merchandise were selling. But it's not. During the last quarter, ANF noted a particular weakness in its women's business. The men's business isn’t doing that hot, either.  

 

Like the company's clothes, ANF stock generally runs to the pricey side, though the current price-to-earnings ratio of around 18.6 is actually below its five-year high. The stock, which got beaten down on Friday, is now 8% under its 52-week price target of $53.96. It may be worth buying in the hopes the shares will surge if Jeffries is ousted. Unfortunately, that may take a while.


Jonathan Berr doesn't own shares of the lusted stocks. Follow him on Twitter @jdberr.

9Comments
May 28, 2013 11:55AM
avatar
I recall an era when ANF was a sporting goods/outdoors/camping outfitting retailer in San Francisco.  In fact, ANF was used as a backdrop to the 1964 Rock Hudson movie, "Man's Favorite Sport", where the character works in the ANF retailer as a fishing expert, but in reality, the guy has no fishing experience.

So seeing the ANF name currently used for being a trendy clothier . . . seems almost sacrilegious to the originator of the brand in the first place.
May 28, 2013 1:00PM
avatar
If you need overpriced clothes with logos on them to boost your low self-esteem, then continue shopping there. Same goes for Old Navy. By the way, wearing basketball shorts and jersey as daily clothing, when you're older than 18, makes you a loser as well.
May 28, 2013 12:35PM
avatar

Perhaps more people would buy their clothes if the models showed what they look like while wearing them.

May 28, 2013 1:10PM
May 28, 2013 12:01PM
avatar

he didn't want to wear his clothes

 

this shud be a dead giveaway about the store. 

May 28, 2013 2:17PM
avatar
The Ambercrombie label = the kind of ridiculous narcissism that we see on MTV and reality shows.
May 28, 2013 2:12PM
avatar
He's a total ****. You reap what you sow and it's hitting him where it matters most. $$$  He should crawl back under the same rock he crawled out of to begin with.
May 28, 2013 1:10PM
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT

Killer Companies is a look at companies in the headlines that are killing it and getting killed in the market today.

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min