CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Abercrombie shares down on lower than expected sales

Article By: ,  Financial Analyst
August 28, 2014 6:15 PM

Clothing chain Abercrombie & Fitch fell the most in more than nine months after second-quarter sales fell below analysts’ estimates.

Revenue slid 5.8 per cent to $890.6 million (£537.2 million) in the period, while previous analysts estimated this figure would be $909.8 million on average, according to data compiled by Bloomberg.

Some analysts believe that the company is struggling to compete with fast-fashion companies such as Forever 21 and Hennes & Mauritz AB (HMB), which have won over teens with their ability to react to trends quickly. 

Slow mall traffic and an industry-wide reliance on heavy discounting to entice customers were also blamed.

“Based on what we have seen and heard from other mall-based teen retailers, customer traffic continues to negatively weigh on business,” Howard Tubin, a New York-based analyst, told Bloomberg.

Signs of recovery

Chief executive officer Mike Jeffries said in a statement today (August 28th) that the company has been working to turn around these softer sales, revamping its clothing.

He said he is now seeing small signs of recovery.

"In a continued challenging environment, our sales for the second quarter were somewhat below plan, but we have seen modest improvement since the back-to-school floorset," he said.

Earlier this year, Mike Jeffries said the company would cut costs for its clothing line, which could allow it to lower prices without significantly hurting margins. 

It has also reduced logo use in its merchandise and said it plans to close 60 of stores in the US this year as their leases expire, the Wall Street Journal reports.

Abercrombie & Fitch was down 6.02 per cent at 10:37 ET today (August 28th) in New York.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024