Like my Fool buddy Seth Jayson, I'm really beginning to hate retail. I mean, really, truly loathe it.
Why, you ask? Because it's driving me nuts.
Chico's
FAS (NYSE: CHS)? Owned it. Loved it. Sold way too soon.
American Eagle Outfitters (Nasdaq: AEOS)? Owned it. Loved it. Sold way too soon.
Abercrombie & Fitch (NYSE: ANF)? Owned it. Loved it. Sold way too soon.
This last one burns me the most, though, because not only has the stock doubled from where I sold it, but also the stock I bought with the Abercrombie proceeds went on to do a whole heckuva lot of nothing.
May results for Abercrombie & Fitch were great. There, I said it. Total sales rose 43% as same-store sales increased by 29%. Comp sales at the flagship store went up 28%, while same-store sales growth at Hollister and Abercrombie were 24% and 48%, respectively.
It's hard to pin down an exact reason for Abercrombie's great performance. True, denim sales were up 166%, but I think there's more to it than that. Simply put, I think Abercrombie's strategy of going up-market (higher prices, more exclusive designs) is really starting to pay off. Not that it's doing me any good ...
Of course, Abercrombie isn't alone. Bebe (Nasdaq: BEBE) also posted good comps, and while Aeropostale's (NYSE: ARO) comps were down, they were a fair bit better than Wall Street had forecast. Weather, shmeather. If you've got the goods that people want to buy, you're going to do just fine.
What's the lesson here? Well, the first obvious one might be not to listen to me if I tell you to sell your high-performance retailing stocks. All jokes aside, the deeper lesson is worth mentioning.
I got shaken out of my Abercrombie & Fitch stock largely because I did something that I almost never do: I listened to TV reporters who were bad-mouthing it. I don't know which Bubblevision program it was, but a few reporters spent a fair bit of time slagging the stock, and for whatever reason, I listened.
Did they have any relevant experience? Nope. Did they offer up anything more substantial than the standard "Well, you know how teen-oriented retailers are ... "? Nope. Had any of their previous advice ever been worthwhile? Nope.
And yet I listened.
And therein lies the lesson. Have faith in your intelligence and your own stock-selection capabilities. There's nothing wrong with reading or listening to well-reasoned and well-meaning advice (that's what we do here at The Motley Fool), but when you start listening to perma-bears, it can seep into your brain and start to poison your thinking.
Just like a king or a president who must gather together a circle of good advisors, you must seek out the sources that are really worth listening to and try to block out the noise from the rest. Now, on to uncovering the next Abercrombie & Fitch ...
We've got a bargain for you! More retailing takes for the low, low price of free:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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