Abercrombie & Fitch nosedives as teenagers watch their wardrobes

ABERCROMBIE & Fitch plunged as much as 21% in early trading yesterday after posting secondquarter profit and sales that trailed analysts’ estimates, amid weaker customer traffic.

The owner of the Abercrombie & Fitch, Hollister and Gilly Hicks teen clothing brands said yesterday profit excluding some items was 16 US cents per share in the quarter ended August 3, below analysts’ estimates of 29c. Sales fell 0.6% to $945.7m, trailing analysts’ projection of about $1bn.

The shares fell 18% to $38.20 in New York yesterday and earlier dropped as low as $37, or 21% on the day, before recovering.

“The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported,” Abercrombie CEO Mike Jeffries said.

“In that context we are plan- ning sales, inventory and expenses conservatively for the remainder of the year.”

Third-quarter profit will be 45c per share, the company said, while analysts had estimated $1.07 on average.

Abercrombie, which cut its annual profit forecast in May, said it would not provide guidance beyond the third quarter “due to a lack of visibility given recent traffic trends”.

Leading American retailers, from Macy’s to Walmart Stores, have posted results that fell below expectations for their most recent quarters as consumers, concerned about the unsteady economy, limited pur- chases of nonessential items.

Abercrombie said its sales at shops open at least a year and through its websites fell 10%, including an 11% US decline.

“We are not satisfied by our results and are working hard to improve our trends for the third quarter and beyond,” Mr Jeffries said.