It's not easy to rank among the worst of the worst today, when every retailer is awash in red after dismal May same-store sales results, but the teen retailer did just that during the last month.
Indeed, the company's 28% plunge in comparable sales, announced today, may have finally convinced investors that a near-term turnaround at the company is a pipe dream. Shares in the company tumbled 13% to $27.60 in afternoon trading.
Analysts had expected a 24.1% decline in monthly comparable sales.This double-digit decline comes even after the retailer resorted to aggressive markdowns, a position it adamantly fought several months ago. It marks the seventh consecutive month the retailer reported declines of at least 20%. Last month Abercrombie & Fitch also posted a bigger-than-expected loss in its first quarter and said it is reviewing alternative options for its Ruehl concept. But why aren't competitors like American Eagle Outfitters (AEO - Get Report) and Aeropostale (ARO - Get Report) experiencing as severe a downturn? The answer is simple: shoppers, even the young'uns, do not want to shell out $50 for a polo shirt. American Eagle Outfitters also missed analysts expectations, slipping 7% during the month; analysts had expected a 6.3% decline. Shares of the company fell 2% to $14.84 in afternoon trading. But Aeropostale actually managed another month of double-digit growth, soaring by more than 19% and far surpassing Wall Street's target of 10.7% growth. Clearly, both of these retailers have been better able than Abercrombie & Fitch to capture the value-oriented consumer looking for fashionable merchandise at wallet-friendly prices.