“Not cool, bro”- Abercrombie & Fitch stock drops
If you like your polos with collars popped and your clothing stores doused in club-scent cologne, you’d better have a seat before we share this news.
Abercrombie & Fitch, the unabashedly judgmental clothing outfitter that is only interested in “cool” customers and employees, has seen a precipitous drop of late in their stock value, which has gone down almost 18% following disappointing earnings news on Thursday.
A figure known as same store sales, which helps retailers measure their sales in comparison to similar outfitters, showed a 10% drop during the second quarter, which is the main culprit for a revenue drop for Abercrombie & Fitch (ANF). “Hey, bro,” you may be saying, “Don’t be a hater. They’ll turn it around, yo.”
Well, let’s limit that optimism for a moment. After all, Abercrombie itself has said that next quarter will look even worse, with an earnings outlook that is even worse than the low expectations coming from analysts. A “lack of visibility given recent traffic trends” means that Abercrombie won’t even estimate third quarter numbers right now. Ouch.
It’s not just Abercrombie & Fitch that has seen a decline in the once lucrative world of preppy clothing sales, either. Similar outfitters such as American Eagle (AEO) and Aeropostale (ARO), have also had struggles as of late, with many teens moving on to other brands in the always fickle world of youth fashion.
Of course, the viral element of the internet doesn’t help, as recent speculation about the company’s resistance to offering larger sizes for women has brought up years-old comments from CEO Mike Jeffries that stated that they only want to market to “cool, good looking people”.
Now, every popular outfitter that markets to young people may want to give out the image that those who wear their clothes are “cool, good looking people”, but you can’t come out and say that. Now, I suppose, with earnings being down, Abercrombie & Fitch would be happy to sell you a shirt or some jeans, no matter how uncool you are.
