Retail hasn't been an easy industry for investors lately, and Abercrombie & Fitch
Abercrombie said last week that its same-store sales fell 4% in June, while analysts were expecting a small increase of 0.3% for the month. Abercrombie's total sales, meanwhile, rose 10% to $243 million. Industrywide, same-store-sales data for June looks like a mixed bag, with some retailers doing just fine and others disappointing. Many of the underperforming retailers cited storms in the Northeast as a contributor to their woes.
I recently wrote a commentary about how same-store sales, or comps, are just one piece of a bigger puzzle in making long-term investing decisions. It seemed timely, since some retailers such as Talbots
As long as we're talking history, though, let's note that Abercrombie's been on a tear for a while now, giving it difficult comparisons this year. If you visit Abercrombie's investor-relations section on its website (be careful -- the flashy site might burn your retinas), you'll see that Abercrombie's June 2005 sales increased 52%, and its overall same-store sales grew by 38%.
On the other hand, last winter I looked at Abercrombie's history of running a bit hot and cold over the years, which made me wonder at what point the retailer might revisit the "down" side of the cycle once more.
After all, fashion has been undergoing a major shift into '80s-inspired clothing, which has made Urban Outfitters
In closing, Abercrombie's June comps might not be too surprising. However, given some of the elements at hand, it's not difficult to imagine that the chain may face some difficult times ahead. There's a choppy outlook for retail at present, plus macroeconomic concerns that may curtail consumer spending. In any event, retail watchers will surely be watching Abercrombie's situation closely, given its recent strong performance and a changing fashion landscape.