Even teen retailers get the blues, if recent quarterly tidings are any judge. Urban Outfitters
Urban Outfitters' second-quarter net income fell 14%, to $49 million, or $0.29 per share. Total revenue increased a mere 1%, to $459 million, while same-store sales fell 6%.
It was not a tremendously impressive quarter by most measures, though any increase in a retailer's top line is no mean feat these days. While many retailers have juiced their profits by cutting costs -- witness Starbucks'
While Urban Outfitters' silver lining shone through the clouds, copious cost-cutting couldn't make Abercrombie & Fitch's recent quarterly results any less scary for investors. The teen-centric retailer reported a second-quarter loss of $26.7 million, or $0.30 per share. Total sales fell 23%, to $648.5 million, and same-store sales plunged a nauseating 30%.
These figures are nothing new for Abercrombie, and the ongoing ugliness of its fundamentals should give investors serious pause. The brand's overemphasis on physical perfection has left Abercrombie cruising for a bruising. Its former success now looks more like the faded fad of Crocs
Urban Outfitters seems a lot more compelling than Abercrombie, although it's priced a bit steeply, currently at 26 times earnings. Retailers Aeropostale
Abercrombie & Fitch is one of the market's riskiest retail stocks at the moment, especially in a difficult consumer spending environment. There are plenty of cheaper (or at least better-run) retailers with more promising futures.
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