It's spring, and Reuters reported that Abercrombie & Fitch (NYSE: ANF) has started mailing out Youth, a cleaned-up replacement for its controversial magalog, A&F Quarterly. Many investors who are sick of the scandals are probably relieved that this time the youthful models keep crucial parts covered and there's no dirty talk in its pages. However, with March numbers out today, it seems Abercrombie's rivals may have appealed more to shoppers' spring fever.
You may recall that Abercrombie finally pulledQuarterly last fall, after loads of outrage. The new magalog -- lacking nude images, interviews with porn stars, and other content not suitable for teens -- suggests that maybe Abercrombie has cleaned up its act, though a recent flap over an insulting tee shows the company hasn't completely learned its lesson.
Of course, the urge to lure teens through controversial tactics is not just the realm of Abercrombie. Urban Outfitters (Nasdaq: URBN) has caused a ruckus recently that was discussed right here at the Fool. However, one might argue that Urban Outfitters and Hot Topic (Nasdaq: HOTT) appeal to edgier young adults who probably have less parental input on their purchases, while Abercrombie's digressions from the straight and narrow clash with its otherwise conservative clothing line, its mainstream teenage audience, and the people who generally hold the purse strings -- parents.
Meanwhile, today Abercrombie released its March sales numbers, and it was a mixed bag of news. While sales for the month increased 18% year over year to $144.1 million, same-store sales still dipped 1%. Year-to-date sales increased 19% to $290.2 million, but same-store sales for the year remained flat.
Abercrombie said that while its young-teen-focused Hollister brand is racking up healthy sales, and its men's business is improving, its women's apparel is weak, specifically in tops. That's bad news when you consider that shoppers are shopping again, and retailers are gaining the benefit. In recent history, American Eagle Outfitters (Nasdaq: AEOS) reported same-store sales that were marching upward, and Aeropostale (NYSE: ARO) is downright hot. Even Gap (NYSE: GPS), which has continued to struggle, said today that its March same-store sales climbed 8%.
Abercrombie's cleaned up its act, and that's something investors have been looking for, considering the company's youthful target demographic. Even though Abercrombie upped its quarterly earnings guidance by a few cents, the continued sluggish signs in its March sales report imply that Abercrombie still has a ways to go before it's a hip investment again.
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Alyce Lomax
does not own shares of any of the companies mentioned.
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