(Bloomberg) — Abercrombie & Fitch Co . Sales beat analysts’ expectations for the sixth consecutive quarter, but it wasn’t enough to impress investors accustomed to the comeback of ’90s fashion.
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The retailer said comparable sales rose 18% in the second quarter, beating analysts’ forecast of 15% growth. The best performance was driven by the Hollister chain, while sales at named Abercrombie stores were roughly in line with estimates. The total margin was slightly lower than expected.
Abercrombie shares fell 11% in early New York trading at 8:30 a.m. Expectations were high ahead of the results as the best-performing stocks among the 15 companies in the S&P Composite 1500 Apparel Retail Index had nearly doubled this year by Tuesday’s close. That’s over a nearly 300% improvement in stocks by 2023.
Abercrombie “holds a higher standard than most retailers” so the results “will leave people feeling very low,” Vital Knowledge analyst Adam Crisafulli wrote in a note to clients.
The New Albany, Ohio-based company, once known for fragrances and shirtless models, has won over Gen Z and millennial adults with its denim offerings, bridal shop and weekly drops of new items. Sales at Abercrombie have continued to grow rapidly in recent quarters, while budget-conscious shoppers have been spending on other favorite purchases.
CEO Fran Horowitz highlighted an “increasingly uncertain environment” for retailers in a statement Wednesday. However, the company raised its full-year sales outlook.
(Third column updates stocks, fourth column adds analyst opinion)
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