Abercrombie & Fitch Rapidly Losing Customers
NEW YORK — Abercrombie & Fitch is the latest retailer to catch a case of the teenage blues.
A&F’s shares plummeted Thursday after the store chain reported a 33 percent drop in second-quarter profit and warned that business would get even worse in the current quarter, which includes the final stretch of the back-to-school selling period.
The teen retailer’s results missed analysts’ estimates. Its third-quarter earnings forecast came in well below Wall Street expectations.
The stock tumbled 18 percent.
Teen retailers have struggled during their most recent quarter. Their customer base can be fickle, with constantly changing tastes in fashion and promotions causing shopper loyalty to wane.
In addition, many teens’ clothing purchases are tied closely to how much their parents are willing to spend – and lately that’s not much. Shoppers have been increasingly cautious as they continue to deal with uncertain economic conditions and absorb a 2 percentage-point increase in the Social Security payroll tax. A shift in spending toward cars and home improvement is also leaving little left to spend on clothing and other purchases.
Source: Huffington Post