Teen apparel retailer Abercrombie & Fitch Co’s sales fell for the 13th straight quarter as customer traffic to its stores dropped, mainly in markets outside the United States.
Shares of the company, whose brands include Hollister and abercrombie kids, plunged more than 11% in heavy premarket trading on Thursday. After the open, shares were down 10%.
Abercrombie, like other U.S. apparel retailers, has been hurt by fierce competition from fast-fashion retailers such as H&M and Inditex’s Zara as well as from online retailers such as Amazon.com Inc.
Persistent weak sales have even forced rivals Aeropostale, American Apparel and Pacific Sunwear of California to file for bankruptcy in the past year.
Comparable sales at Abercrombie’s international stores open at least a year slumped 7 percent in the first quarter, surprising analysts, who had expected a 0.2 percent rise, according to research firm Consensus Metrix.
Same-stores sales dropped 8 percent in the Abercrombie brand, a much bigger decline than the 0.6 percent expected by analysts.
“Weather, fashion, a shift in consumption patterns and the cannibalism of e-commerce provide an explanation for at least a portion of the weakness,” Stifel Nicolaus and Co analyst Richard Jaffe said in a note.
Large department store operators such as Macy’s Inc and Kohl’s Corp also saw weak demand for apparel in the quarter, mainly due to unseasonable weather.
Abercrombie has been remodeling its Hollister stores, hiring designers from top brands to keep up with trends and moving from logo-centric designs to woo back shoppers. The company said it planned to close up to 60 stores in the United States this year.
“We expect the second quarter to remain challenging, but to see better results in the back half of the year as our assortments continue to improve,” Executive Chairman Arthur Martinez said.
Abercrombie’s revenue fell 3.4 percent to $685.5 million in the quarter ended April 30, missing the average analyst estimate of $710.3 million, according to Thomson Reuters I/B/E/S.
The net loss attributable to the retailer narrowed to $39.6 million, or 59 cents per share, but was bigger than the 51 cents per share analysts on average had expected.
Abercrombie shares were trading at $22.25 before the bell. Up to Wednesday’s close, the stock had risen by about a quarter in the past 12 months.
