The Abercrombie and Fitch Co. (ANF), the teen retailer with more than
1,000 stores, plunged to a three-year low after cutting its annual forecast yesterday, citing an anticipated drop in same-store sales in the second
half of 2012.
The New Albany, Ohio-based company fell 15 percent to $29.06 at the close in New York, the lowest since July 31, 2009. With today’s drop, the biggest since November, the shares have declined 41 percent this year. Aeropostale Inc. (ARO), Abercrombie and Fitch amsterdam ’s smaller rival, plummeted 33 percent, the most in almost a decade, after reporting preliminary second-quarter results that were lower than previously forecast.
Abercrombie and Fitch parijs, which got 20 percent of sales from Europe in the year ended Jan. 28, has lost revenue as the region is roiled by a sovereign-debt crisis and amid tepid consumer sentiment at home. Full-year earnings per share will be $2.50 to $2.75, compared to a previous projection of $3.50 to $3.75, the company said yesterday in a statement. Analysts had predicted an average of $3.36, according to data compiled by Bloomberg.
“We believe weakness is more than just the economy, and can no longer justify a ‘free pass’ on continued execution errors,” Erika Maschmeyer, an analyst with Robert W. Baird & Co. in Chicago, wrote in a note yesterday, cutting her recommendation (Abercrombie and Fitch Nederland) on the stock to neutral from outperform. The retailer’s merchandise isn’t resonating with customers and the brand is pressured by value-oriented competitors, she wrote.
Abercrombie and Fitch outlet is “cannibalizing” business at its namesake stores with its less expensive Hollister Co. brand, Jennifer Davis, an analyst at Lazard Capital Markets, said in a telephone interview yesterday.