Not even the briefest of booty shorts could pick Abercrombie & Fitch out of its second quarter slump, as the mall-based retailer and fellow teen apparel companies struggle with weak customer demand.
The controversial chain on Thursday announced dismal earnings for the three-month period that ended Aug. 3. Net income tanked 30% to $11.4 million, or 14 cents a share, from $17.1 million, or 20 cents, a year earlier.
Revenue slid 1% to $945.7 million.
"The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported," Chief Executive Mike Jeffries said in a statement.
Same-store sales, which strip out volatility by considering performance only at stores open at least a year, fell 10%. The New Albany, Ohio, company expects the gauge to be down even more in the third quarter.
In the U.S., same-store sales sank 11%, while diving 7% internationally.
The measure fell 6% for the namesake Abercrombie & Fitch brand. For Hollister Co., it was down 13%.
The company said it plans to cut more than $100 million in expenses.
Ken Perkins, an analyst at Retail Metrics Inc., wrote that Abercrombie was a huge negative surprise.
The company's shares sank 18%, or $8.27, to $38.53.
But Abercrombie is not alone in its woes. The entire teen apparel market has endured "carnage" in the second quarter, amid weak foot traffic in the key back-to-school season, Perkins wrote in a note to clients.
The company said it suffered a net loss of $33.7 million, or 43 cents a share. It said it would close 30 to 40 Aeropostale stores, compared with the 15 to 20 units it previously planned to shut.
"We are committed to turning our business around and remain focused on shifting brand perception and recapturing market share," Chief Executive Thomas P. Johnson said in a statement.
Aeropostale shares slid 4%, or 44 cents, to $10.98 and continued to fall in after-hours trading.
Revenue slid 1.7% to $727.3 million. Same-store sales were down 7%, after increasing 8% in the same quarter last year.
Hanson blamed "a highly promotional and competitive retail landscape and a decline in traffic, which have continued into the third quarter."
The company's shares Thursday rose 3%, or 45 cents, to $15.21 cents.
"Teen retail is NOT for the faint of heart," RBC Capital Markets analyst Howard Tubin wrote in a note to clients.
There's some hope, however, Tubin said. Teens haven't started shopping for fall.
"We continue to believe as we move through August and into September, traffic will build as the weather cools and we get further into the season," he wrote. "However, competition is intense, promotions are aggressive, and in our view, the assortments at [Abercrombie] don't offer significant newness or differentiation."