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.
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.
Jeffries 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.
Perhaps more people would buy their clothes if the models showed what they look like while wearing them.
he didn't want to wear his clothes
this shud be a dead giveaway about the store.
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