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Abercrombie Posts Wider Loss as Currency Hampers Turnaround

Abercrombie & Fitch Co. posted a wider first-quarter loss after currency fluctuations hampered attempts to turn around the business.
By
  • Bloomberg

NEW ALBANY, United States — Abercrombie & Fitch Co., the teen-apparel company looking for a new chief executive officer, posted a wider first-quarter loss after currency fluctuations hampered attempts to turn around the business.

Excluding some items, the deficit was 53 cents a share, the New Albany, Ohio-based company said in a statement Thursday. Analysts had predicted a loss of 35 cents, according to data compiled by Bloomberg.

Longtime CEO Michael Jeffries stepped down in December, sending the company on a search for a new leader and a new vision. Though Abercrombie has been without a CEO for almost six months, it has been retooling stores and products in a bid to regain fashion credibility with teen shoppers. The retailer also is contending with flagging mall traffic and the strong dollar, which took a bite out of its international sales.

“We knew the first quarter was going to be difficult due to a number of factors, both internal and external,” Executive Chairman Arthur Martinez said in the statement. “Many of the actions we are taking to improve our business are in the early stages of implementation and have not yet been fully realized.”

The shares fell 4.3 percent to $18.80 in early trading on Thursday. The stock had already declined 31 percent this year before the results.

“The company has continued to struggle with foreign- exchange issues in the higher-margin international business and, increasingly, will be negatively impacted domestically by a drop in tourist traffic,” Eric Beder, an analyst at Wunderlich Securities, said in a note to clients this week. “We see no semblance, beyond management trying a lot of things, of a coherent turnaround plan.”

By Lindsey Rupp; editors: Nick Turner, Kevin Orland.

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