Abercrombie shares drop on weak sales
Shares of the teen retailer sank after the company reported a 17% decline in same-store sales in November.
By Andrea Tse, TheStreet.com
Abercrombie & Fitch, which operates Abercrombie Kids, Hollister and Ruehl, said same-store sales fell 17% in November from a year earlier. Total net sales decreased 8% to $245.7 million from a year ago. Hollister had the biggest decline at 23%.
Analyst Brian Sozzi of Wall Street Strategies says Abercrombie has been offering clothing that’s "counter-trend," against what's going on in the retail market. He calls its sweaters "a miss" this season. Sozzi has downgraded Abercrombie & Fitch to “sell” from “hold.”
"The [Abercrombie] comps are not there for women," Sozzi says. "They're looking for trends and Abercrombie doesn't have a lot of trend in their business."
Women have been looking for tailored looks created by unique designers without logos, Sozzi says. They prefer to shop at stores like Forever 21 and H&M. "Everything by brand traffic was very weak at Abercrombie and I think this is a function of teens going to American Eagle and Aeropostale," Sozzi says.
Abercrombie shares fell 9.6% to $36.21 a share, trailing behind rivals American Eagle Outfitters,
Gap and J. Crew Group.
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