Abercrombie & Fitch Co. provided a third quarter update and the news was not good: it’s still having trouble getting teens to spend at its stores.
Sales for the quarter ended Nov. 1 fell 12 percent to $911.4 million from $1.03 billion a year ago. Total comparable sales, including direct-to-consumer, fell 10 percent, with U.S. comps down 7 percent and international comps falling 15 percent. One bright spot was total direct-to-consumer comps, which rose 8 percent.
The company said sales in the quarter were below expectations with comps in September and October significantly weaker than August. That means back-to-school merchandise, for the most part, didn’t resonate as well with teens this year. Unlike years ago when back-to-school sales began the first week in July when the first floor sets are in, in recent years teens and young adults heading to college opt to buy later in the season, after they go back to school and see what their friends are wearing.
Abercrombie said it ended the third quarter with inventory at cost down 20 percent compared to the end of the prior year’s third quarter.
Mike Jeffries, chief executive officer, said, “We are clearly disappointed with our results for the third quarter. Continued weak store traffic was the primary contributor to the weak sales trends, particularly in Europe, where the environment there showed signs of further slowing.”
Jeffries noted that the decline in sales of heavy logo product also “weighed on the sales trend as we continue to reduce that element of our assortment in response to changing consumer preferences.”
Hollister comps for the quarter, disproportionately weighed by European comp sales, continue to underperform in comparison with the Abercrombie & Fitch brand. Weakness in tops, particularly fleece and male graphic tees, more than offset positive trends in jeans and dresses, Jeffries said.
The company will release third quarter results on Dec. 3, and will provide a update to its full year earnings guidance then.