Abercrombie & Fitch, American Eagle Outfitters and other retailers for teens are slated to report earnings this week as fast fashion from Europe bites into their market share.
Last week, Abercrombie & Fitch (NYSE:ANF) said that it had signed its first franchise agreement to bring its Abercrombie and Hollister brands to Mexico. The move to expand into Mexico comes as U.S. and European sales for the T-shirt and jeans retailer fade.
The company is removing its moose and other logos from its clothing as many teens prefer unmarked clothes.
Abercrombie was known for its dimly lit stores, which tried to give teens a VIP club-like feel. But the company is rethinking that model and plans to include stores with large windows in mall settings to compete with Forever 21 and H&M, with their large window displays and light interiors.
Abercrombie is slated to report quarterly results Wednesday. Analysts polled by Thomson Reuters expect a 21% drop in earnings to 41 cents per share and an 11% slide in sales to $916 million.
American Eagle Outfitters (NYSE:AEO) also has expansion plans outside the U.S. in a effort to boost sales. In November, the retailer opened locations in London as it plans to expand into Western Europe. It already has stores in Japan, Israel and Poland.
American Eagle is slated to report third-quarter results on Thursday. It raised its Q3 earnings outlook Nov. 12 to 22 cents a share, up from an earlier forecast for 17-19 cents.
"We are encouraged by our ability to reduce promotional activity, particularly given the challenging and highly promotional retail climate," interim Chief Executive Jay Schottenstein said in a release.
Analysts are expecting a 15.8% jump in EPS to 22 cents but a 1.3% dip in sales to $845.95 million.
Aeropostale (NYSE:ARO) is expected to announce quarterly results Wednesday. Analysts see the budget teen retailer widening its per-share loss to 45 cents from 29 cents in the year-ago quarter. Sales are seen falling 13.7% to $444.72 million.
Zumiez (NASDAQ:ZUMZ), a teen sportswear retailer, is doing the best of the four teen-focused retailers. Quarterly results are due out Thursday.
The company has been expanding overseas too, and analysts forecast a 15.2% jump in earnings to 53 cents per share with a 10.8% rise in sales to $211.78 million.
The Retail-Apparel/Shoes/Accessories group is ranked No. 35 out of the 197 industry groups that IBD tracks.
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