It was a so-so November for retailers. But the results for Abercrombie & Fitch
For November, Abercrombie suffered a 3% drop in same-store sales, among stores that have been open for at least a year. The real weakness was among the main store brands: Abercrombie & Fitch and Hollister. These concepts saw comps fall 5% and 2%, respectively. RUEHL and Abercrombie experienced flat same-store sales.
Keep in mind, though, that Abercrombie had a standout year in 2005, so comparisons were going to be tough to beat. Moreover, November's fairly moderate weather meant that consumers had little reason to buy sweaters and other warm clothing.
Yet other retailers that also focus on young demographics showed strength in November. American Eagle Outfitters
In keeping with its custom, Abercrombie has continued to resist deep discounting. But as seen in its sales reduction, this approach may mean that more inventory piles up.
In fact, the next year may be a time of transition for Abercrombie. In the third quarter, the company announced it would spend about $260 million to renovate and improve its store formats. While that's smart for the long haul, it's also likely to be a near-term drag. And with a sluggish economy, there may be few catalysts to get investors interested in this stock.
Related Foolishness:
American Eagle is a Motley Fool Stock Advisor recommendation. See what other snazzy stocks Tom and David Gardner are recommending in their market-beating newsletter service with a free, 30-day trial.
Fool contributor Tom Taulli does not own shares mentioned in this article. He is currently ranked 380 out of more than 14,000 participants in Motley Fool CAPS, the Fool's new stock-rating community.
