Abercrombie & Fitch may try to attract "cool, good-looking" customers and employees, but the retailer's financial performance is just ugly. So much for summer girls, and anyone else for that matter, liking Abercrombie.
Teens, particularly girls, are ditching Abercrombie as well its sister brand Hollister. Same store sales, a key measure for retailers, tumbled 10% during the second quarter, leading to worse-than-expected earnings and revenue for the retailer. Shares of Abercrombie (ANF) plunged nearly 18% Thursday following the earnings news.
Will things turnaround soon? Fat chance. Abercrombie said same-store sales next quarter will be down even more, and its earnings outlook was far below what analysts were predicting. The company didn't even offer guidance beyond the third quarter "due to a lack of visibility given recent traffic trends."
The retailer, as well as rivals American Eagle (AEO) and Aeropostale (ARO) have been struggling for some time now as the tastes of teens and young millennials have shifted from classic jeans, logo T-shirts and hoodies toward more fashion-forward chains like Forever 21, H&M, as well as Urban Outfitters (URBN), which delivered strong results earlier in the week.
Through Abercrombie failed to warn earlier in the quarter that it would deliver poor results, the Twittersphere didn't seem all that surprised.
"Abercrombie & Fitch's 2Q net income down 33 percent"- this happens when your customer base is fickle, w/constantly changing tastes—
Jaret Landon (@JaretLandon) August 22, 2013
$anf had its run. It was a fad not a consistent fashion leader. Low quality clothes that aren't fashionable anymore.—
Mark (@strengthofalion) August 22, 2013
Retail is in challenging environment. $ANF in trouble. Core customer moved on and spent on cell phones, video games and sneakers.—
Jassem el Mahmoud (@jemfinancial) August 22, 2013
Some also speculated that company's financial troubles may be a result of Abercrombie's CEO Mike Jeffries comments from 2006, which were resurrected in May after a retail expert suggested that the company may not carry XL and XXL sizes for women because it doesn't consider plus-sized women to be among the "cool" teens it's going after.
In an interview with Salon.com more than seven years ago, Jeffries said that the company hires "good-looking people" because they attract "other good-looking people, and we want to market to cool, good looking people."
Abercrombie: If you make clothes for thin people and cool kids only, then u shld've seen this coming—
Sammyrue Vazh (@SammyVazh) August 22, 2013
Others were hoping Abercrombie's dismal results may force it to rethink the way it does business beyond just its marketing strategy.
it brings me an odd degree of joy to watch Abercrombie & Fitch plummet. maybe the 10% drop in sales means they'll turn the music down. $ANF—
Jeffrey KGB (@JeffreyKGB) August 22, 2013
Gold bugs stocked up on their favorite coin last month in a post-election pop.
Sales of American Eagle gold coins, a popular investment among retail buyers, jumped 130% in November.
The U.S. Mint sold 136,500 ounces worth of American Eagle gold coins in November, up from 59,000 ounces in October. The coins come in various sizes ranging from one ounce to a tenth of an ounce.
The surge in demand came immediately after MOREBen Rooney - Dec 11, 2012 1:01 PM ET
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