Abercrombie & Fitch shares plummet on sluggish Hollister demand
Clothing retailer posts its slowest rise in quarterly same-store sales
Hollister gained popularity among young shoppers who had previously abandoned flagship brand Abercrombie. Photograph: Reuters/Mike Segar
Abercrombie & Fitch forecast second-quarter sales below estimates on Wednesday after the clothing retailer posted its slowest rise in quarterly same-store sales at its surf-themed Hollister brand in two years, sending shares down 18 per cent.
Hollister has been a bright spot for the company over the last few years as its more casual and fun apparel gained popularity among young shoppers, who had previously abandoned flagship brand, Abercrombie, after its logo-emblazoned tees fell out of fashion.
However, the company’s most recent results showed that demand for Hollister was slowing, with its same-store sales rising just 2 per cent in the quarter ended May 4th, missing the average analyst estimate of a 3.3 per cent increase. A year ago, Hollister’s quarterly same-store sales rose 6 per cent.
Overall same-store sales in the first quarter rose 1 per cent, below estimates of a 1.33 per cent increase.
Abercrombie also said its international business took a hit from not taking advantage of some promotional events in Asia. – Reuters