Abercrombie Misses On Second Quarter Earnings

Abercrombie & Fitch’s fiscal second-quarter earnings fell short of analysts’ expectations. The company posted a wider-than-expected loss of 25 cents a share during the period. Analysts projected a loss of 20 cents, on average. Abercrombie’s net loss increased to $13.1 million from $810,000 in the year-ago quarter.

A same-store sales decline of 4 percent was steeper than the projected 3.8 percent expected by analysts. Comparable sales at Abercrombie fell 7 percent in the quarter, while those at Hollister dropped 2 percent. Net sales fell to $783.2 million from $817.8 million. It was the company’s 14th consecutive drop in sales.

Most of the same-store sales decline was attributed to slowing traffic at its European flagship and domestic tourist locations. The Abercrombie label has more flagship stores in tourist locations than Hollister. A strong U.S. dollar and sluggish mall traffic have also weighed on the company’s sales. Abercrombie said e-commerce sales rose when compared to the same quarter a year ago.

The company lowered its full-year guidance during its earnings report. The company now believes that the second half of the year will “remain challenging” after previously calling for an improvement. Since the beginning of July, Abercrombie’s shares had risen more than 26 percent as investors banked on a rebound in the second half. Shares of the company fell 20 percent after the announcement.

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