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Abercrombie & Fitch Co. fell as much as 14 percent in early trading after second-quarter results trailed analysts’ estimates, hurt by declining sales at its larger flagship locations.
The loss in the quarter was 25 cents a share, excluding some items, the New Albany, Ohio-based company said in a statement Tuesday. Analysts projected a loss of 20 cents, on average.
The results show Abercrombie is struggling with a tourism slowdown that has hurt retailers who rely on large, flagship locations in major cities to drive sales. Merchants including Tiffany & Co. and Michael Kors Holdings Ltd. attributed recent weakness to the dearth of spending by travelers, who have been discouraged from visiting the U.S. by the dollar’s strength and global economic uncertainty. For Abercrombie, the trend contributed to a 4 percent decline in comparable sales, which was worse than the 3.8 percent drop analysts estimated.
“Flagship and tourist locations continued to account for the vast majority of the comparable sales decline as traffic remained a significant headwind,” Executive Chairman Arthur Martinez said in the statement. He said the company expects those stores to continue to weigh on the business for the rest of the year.
Total sales fell 4.2 percent to $783.2 million, just missing analysts’ $783.6 million projection.
The shares slid as low as $19.82 in early trading in New York. Abercrombie already had dropped 15 percent this year through Monday’s close.
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©2016 Bloomberg L.P.
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