NEW YORK (TheStreet) -- Shares of Abercrombie & Fitch (ANF) were plunging 20.37% to $18.27 in late-afternoon trading on Tuesday as the company reported a wider-than-expected loss for the 2016 second quarter before today's market open.
Abercrombie & Fitch posted an adjusted loss of 25 cents per share, which was bigger than analysts' projected loss of 20 cents per share. Revenue came in at $783.2 million, above Wall Street's estimated $782.7 million in revenue.
Same-store sales declined 4% year-over-year during the quarter.
Stifel analysts said the loss was largely driven by weaker-than-expected same-store sales, which "drove higher than modeled gross margin pressure."
"Results were below expectation as a challenging retail environment (weak traffic and a shift in consumer spending towards experiences away from apparel) contributed to the soft sales," the firm continued in their analyst note, according to Barron's.
The New Albany, OH-based retailer's traffic was particularly weak in flagship and U.S. tourist stores, Stifel noted.
Abercrombie management said it expects traffic headwinds to continue to weigh on the business in the second half of 2016, which should further impact sales, the firm added.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Abercrombie & Fitch as a Hold with a ratings score of C. The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, the team finds that the company's return on equity has been disappointing.
You can view the full analysis from the report here: