Abercrombie & Fitch Sales Fall Short of Wall Street Expectations

5 hours ago

BNN

(Bloomberg) -- Abercrombie & Fitch Co. is still growing, but not fast enough for investors.

The fashion retailer reported record net sales of $1.2 billion, but this only matched analysts estimates. Wall Street was expecting stronger growth after seven straight quarters of year-over-year revenue gains.

The fashion retailer’s shares dropped 5.6% at 7:48 a.m. in New York premarket trading Tuesday. Through Monday, the stock has risen 75% so far this year through Monday’s close, compared with a nearly 21% gain in the Russell 2000 Index.

The New Albany, Ohio-based company raised its full-year growth outlook to as much as 15%, up from 13% in August. Same-store sales in the quarter ending Nov. 2 at Abercrombie’s namesake brand grew 15%, while Hollister gained 14%.

Abercrombie’s store count ended at 770, narrowly missing analysts estimates for almost 772.

Abercrombie & Fitch named Robert Ball as chief financial officer, replacing the retailers current financial leader Scott Lipesky. Lipesky, who has been CFO since 2017, will remain the retailer’s chief operating officer. Ball, who has been at Abercrombie and Fitch for 22 years, will begin the role on Nov. 20.

Abercrombie has been in the news after its former Chief Executive Officer Mike Jeffries was charged with sex trafficking and interstate prostitution last month. Following the charge, to which Jeffries pleaded not guilty, the retailer’s stock dropped. The retailer shared a statement saying it was “appalled and disgusted” by the alleged behavior and highlighted changes at the company since Jeffries departed in 2014.

Read More Here: Ex-Abercrombie CEO Jeffries Pleads Not Guilty to US Charges

The retailer, which once gained popularity in the 1990s for its branded T-shirts, polos and sexually suggestive ads has come back into favor in recent years after regaining the interest of 20 and 30 year olds. Abercrombie now offers wedding attire and baby clothing in an effort to cater to its new and older customer base.