With the Q2 financial results coming out among various publicly held teen retailers, it’s very telling that we’re still not out of an economic quagmire when it comes to changes in shopping patterns among youth culture today.
In our upcoming Fall Youth Culture Study 2013, we get right at this point with even more data, analysis, and forecasts on the various shifts that have been taking place among a new generation of consumers, which, since 2008, have had to change their spending patterns.
Abercrombie & Fitch came out with their Q2 report today, August 22, 2013, and have already forecasted a difficult back-to-school season to come.
By brand, including direct-to-consumer, comparable sales decreased 6% for Abercrombie & Fitch, decreased 3% for abercrombie kids, and decreased 13% for Hollister Co. Total sales by brand were $356.6 million for Abercrombie & Fitch, $76.0 million for abercrombie kids and $488.5 million for Hollister Co.
Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said: “The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported. In that context we are planning sales, inventory and expenses conservatively for the remainder of the year.
Despite the challenging environment, we are very pleased by strong growth in our direct-to-consumer business and continued strong growth in China. We have also made excellent progress on our profit improvement initiative during the quarter, and we now expect savings from this initiative to exceed $100 million annually. In addition, we are nearing completion of our long-term strategic review, and we are confident that this will provide us with a clear roadmap for sustainable growth in sales, profitability and return on invested capital.”
According to their financial statements, Abercrombie & Fitch is not providing guidance beyond the third quarter due to a lack of visibility given recent traffic trends.
Recent traffic trends have also hit other retailers in the teen marketplace as more people continue to shop either discount, or are looking to buy elsewhere, including the ongoing rise of preferences for thrift and vintage.
According to the company, they anticipate opening an Abercrombie & Fitch flagship store in Seoul, as well as approximately 20 international Hollister chain stores throughout the year. In addition, the Company will open a small number of international and U.S. outlet stores during the year. The Company continues to expect to close approximately 40-50 stores in the U.S. during 2013 through natural lease expirations. The planned opening of an Abercrombie & Fitch flagship store in Shanghai is now expected in the spring of 2014.