Abercrombie sales slump amid brand backlash
Teen clothing retailer Abercrombie & Fitch sales cratered last quarter, and stock for the American chain has sold off sharply as a result.
The New York Stock Exchange-listed clothier said same-store sales, a key retail metric that tracks sales at stores open more than a year, fell 15 per cent across all the chain's units.
Overall, sales fell nine per cent to $838.8 million in the quarter ended May 4. That was well off what analysts had been expecting.
All in all, Abercrombie lost $7.2 million or nine cents per share in the quarter. That was an improvement from a loss of $21 million during the same month last year, but not as much of an improvement as analysts were expecting.
CEO Mike Jeffries cited "more significant inventory shortage issues than anticipated," in explaining the company's struggles.
Abercrombie shares sold off sharply on the NYSE, losing more than 10 per cent to $48.63. The drop puts Abercrombie shares back where they were in January.
The downward sales trend is something rival retailers such as American Apparel, Forever 21 and American Eagle have also seen, but Abercrombie's numbers compare even less favourably.
It's also the first glimpse at the company's finance since a controversy emerged earlier this month in which the CEO was quoted several years ago suggesting the chain doesn't want unattractive people to wear their clothes.
Abercrombie is one of the only U.S. retailers to sign on to the recent pact governing safety standards at Bangladeshi garment factories.