Abercrombie & Fitch (NYSE:ANF) reported a disappointing first quarter as more consumers shift their spending to online shops and fast-fashion chains. For the period ended April 30, New Albany, Ohio-based Abercrombie lost $39.6 million, or 59 cents per share. This was more than the 50 cents per share loss estimated by analysts polled by Zacks Investment Research. A year ago, Abercrombie reported a first-quarter loss of $63.2 million, or 91 cents per share.
The company reported that revenue declined 3.4 percent, to $685.5 million from $709.4 million in the same quarter last year. Wall Street analysts expected revenue of $705.9 million for the quarter. Shares fell 11 percent in premarket trading. Abercrombie stock has declined 7 percent in 2016.
Sales fell for the 13th straight quarter as customer traffic to its stores dropped. The company reported that sales at Abercrombie stores open at least a year fell 8 percent, while sales were flat at the company’s Hollister chain. Comparable sales at Abercrombie’s international stores open at least a year slumped 7 percent in the first quarter.
Abercrombie has been hit hard by changing consumer preferences, declining mall traffic and fierce competition from cheaper retailers. Since the Great Recession, the company has been losing favor with their core demographic. It is not the only retailer grappling with these challenging market conditions. Persistent weak sales have forced rivals Aeropostale, American Apparel and Pacific Sunwear of California to file for bankruptcy in the past year.
To reverse the trend, Abercrombie & Fitch is making a number of changes to its brand and stores. The company has pulled back on promotions and is now selling more merchandise at full price. It has also been remodeling its Hollister stores and hiring designers from top brands to keep up with trends. Abercrombie is also looking to reduce its footprint with plans to close up to 60 stores this year.
Abercrombie has been operating without a chief executive for over a year now. Since former CEO Mike Jeffries departed in December 2014, the company has been run by an office of the chairman, which includes Executive Chairman Arthur Martinez. The company recently named Target Corp. veteran Stacia Andersen and Victoria’s Secret veteran Kristin Scott to run the Abercrombie and Hollister brands, respectively. Hollister brand President Fran Horowitz was recently promoted to the role of company president and chief merchandising officer. She is also seen as a top candidate for the CEO job.