Abercrombie & Fitch continues to struggle as it cuts outlook

 
Jessica Morris
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Abercrombie & Fitch is in for more gloom (Source: Getty)

Teen retailer Abercrombie & Fitch cut its profit forecast for the year to between $1.50 and $1.65 adjusted earnings per share, which was below analyst estimates.

The company said that adjusted net income fell to $30.4m in the third quarter, down 25 per cent from the year earlier. It cited "disruption and turmoil" in the teen clothing sector and its heavy reliance on discounts.

Net sales for the third quarter fell 12 per cent to $911m from a year earlier, while gross profit was also down 13 per cent to $567m during the same period.

Mike Jeffries, Abercrombie's chief executive, said:

Our third quarter results were disappointing in what remains a very challenging environment for young apparel. Comparable sales improved somewhat in November, and this improvement was maintained through the Black Friday weekend.

However, we expect conditions to remain difficult through the balance of the fourth quarter.

The fashion brand is currently trying to win back fans by using fewer logos and offering trendier items.

It's hoped that Christos Angelides, former product director at Next who joined Abercrombie as "brand president" in October, will be able to turn the retailer's fortunes around.

He will have to contend with controversy surrounding chief executive Mike Jeffries, who lost his chairmanship role in a board restructuring earlier this year.

This came despite calls from shareholders for him to be replaced, after the company delivered a series of disappointing results.

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