Abercrombie & Fitch announced earnings today, and the results are ugly.
Sales fell 14% in the fourth quarter ended Jan. 31, driven by a 10% drop in same-store sales in the US.
Online comparable sales also slowed due to a drop in website traffic in Europe, the company said.
Shares fell more than 6% in premarket trading Wednesday.
“2014 was a year of significant change for Abercrombie & Fitch,” Abercrombie executive chairman Arthur Martinez said in a release. “For the full year, our results came in well below our initial expectations, as an expected improvement in comparable sales did not materialise, and further progress on expense reduction was insufficient to offset weaker sales.”
The retailer made $US80.8 million in the fourth quarter compared to $US104.3 million for the same period last year.
For 2015, the company is focusing on increasing same-store sales by marketing new fashions and improving customer service, he said. The company is also planning to find ways to cut costs while investing more money in web operations.
“We expect the first half of 2015 to remain challenging, with declines in our logo business in 2014 persisting in the early part of 2015,” he said, referring to Abercrombie’s phasing out of visible logos on its clothes. “However, we believe that the benefits of all of the changes we have made will be reflected in improved performance in the second half of the year.”
Abercrombie has been struggling for the past several years to lure fickle teen shoppers, who are spending less on apparel than previous generations did.
The company’s same-store sales fell 10% in fiscal 2013 and its namesake brand no longer ranks among teens’ top 10 favourite brands as of fall 2014, according to Piper Jaffray’s semiannual survey on teen spending.
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