Young consumers are a mercurial bunch and nowhere is this clearer than in the retail apparel industry. A clothing line that's de rigueur one day is mocked as out of fashion the next. The fickle spawn of baby boomers (generations X, Y and Z) typically show little brand loyalty and impatiently flit from fad to fad.
This merciless dynamic has been very bad news for Abercrombie & Fitch (ANF) , the once-dominant clothing chain store that appears to be in a death spiral. Abercrombie & Fitch is scheduled to report second-quarter earnings on Tuesday, Aug. 30.
Unlike the half-naked models in the company's notoriously risque clothing catalogues, Abercrombie & Fitch's earnings picture won't be pretty.
The average analyst estimate is for Abercrombie & Fitch to lose 20 cents a share on an adjusted basis. In the same quarter a year earlier, the company reported adjusted earnings per share of 12 cents. On average, analysts expect third-quarter adjusted EPS of 43 cents, vs. 48 cents in year-earlier period. Full-year adjusted EPS is expected to come in at 80 cents, compared with $1.12 in 2015.
Based in New Albany, Ohio, Abercrombie & Fitch operates 754 stores in the U.S. and 178 stores in Canada, Europe, Asia and the Middle East. As sales have tanked in recent years, the company abandoned the eponymous logo that once made its preppy clothing one of the hippest and coolest brands in the shopping mall. The company also is redesigning its stores to give them a more open and inviting look. The revamped retail spaces are slated to open in early 2017.
From our perspective, it's all to no avail. Abercrombie & Fitch belongs to a group of stressed equities that are poised for collapse.
