An Abercrombie & Fitch store in San Francisco.
Shares of Abercrombie & Fitch tanked Wednesday morning after the teen apparel retailer reported weaker-than-expected same-store sales growth and said it plans to close three more of its flagship stores, including a Hollister location in New York.
Its stock was down more than 16% in premarket trading following the announcement.
Overall, Abercrombie’s same-store sales were up 1% during the fiscal first quarter, falling short of estimates for growth of 1.3%, based on Refinitiv data.
The retailer reported a net loss during the quarter of $19.2 million, or 29 cents a share, compared with a net loss of $42.5 million, or 62 cents per share, a year ago. That was narrower than the adjusted loss of 43 cents a share analysts expected.
Sales grew to $734 million from $730.9 million a year ago, topping expectations for $733.4 million.
Looking to the second quarter, Abercrombie said it expects net sales to be flat to up 2%, short of analysts’ estimates for 2.8% growth. For the year, Abercrombie is calling for net sales to be up 2% to 4%.
Meantime, sales at stores open at least 12 months are expected to be flat in the second quarter, and to rise at a low-single digit rate this year, Abercrombie said.
As it continues to cull its real estate, Abercrombie said Wednesday it will close three more flagship stores — a Hollister store in the SoHo neighborhood in New York; an Abercrombie store in Fukuoka, Japan; and an Abercrombie store in Milan, Italy — bringing the total number of flagship stores it’s shut since 2017 to five. The New York and Milan stores are expected to shut this year, with the Japan location closing in the back half of fiscal 2020, Abercrombie said.
“We continue to believe in stores and are committed to delivering intimate, omni-channel brand experiences that closely align with our customers’ needs,” CEO Fran Horowitz said in a statement.
As of Tuesday’s market close, Abercrombie shares had surged nearly 25% so far this year.