Abercrombie & Fitch reported another quarter of declining sales on Wednesday, while fellow teen retailer American Eagle's shares rose on better-than-expected results.
These retailers, known for their logo-laden apparel, have struggled to compete in a highly promotional industry and against fast-fashion competitors like H&M.
At Abercrombie, comparable sales fell 10% in the fourth quarter, worse than the Street's expectations of a 8.7% decline.
Its international stores particularly struggled, with comparable sales falling 17% abroad and 6% in the U.S. All brands posted declines: Comparable sales fell 11% at Hollister, 9% at Abercrombie & Fitch and 6% at abercrombie kids.
"2014 was a year of significant change for Abercrombie & Fitch," said Executive Chairman Arthur Martinez, in part referencing the December ouster of CEO Mike Jeffries. "For the full year, our results came in well below our initial expectations, as an expected improvement in comparable sales did not materialize, and further progress on expense reduction was insufficient to offset weaker sales."
As part of the company's efforts to reduce expenses, it said on a call with investors that it was selling its private jet.
"We believe it is taking time to win back customers (longer than we expected), despite better assortments," said Stifel Nicolaus analyst Richard Jaffe.
Net income fell to $44.4 million, or 63 cents per share, from $66.1 million, or 85 cents per share, a year ago. Excluding certain items, per-share earnings came in at $1.15.
Analysts had called for revenue of $1.17 billion and net income of $1.15 per share.
Meanwhile,
The teen retailer, which has worked to reduce promotions, reported profit of $61.6 million, or 32 cents per share, up from $10.5 million, or five cents per share, a year ago. Adjusted for items, per-share earnings were 36 cents, ahead of analyst consensus estimates of 34 cents.
"Improved merchandise assortments, combined with a better customer experience, drove strengthened sales trends and we successfully reduced promotion," said interim CEO Jay Schottenstein.
Revenue increased 3% to $1.07 billion, ahead of analyst estimates of $1.06 billion. Comparable sales were flat.
“After a tough start to fiscal 2014, I’m pleased to see our initiatives and business priorities begin to deliver results. We achieved a solid fourth quarter, exceeding our expectations," said Schottenstein, who added that they're "encouraged to see momentum continue into the spring season."
American Eagle is calling for first quarter earnings of nine to twelve cents per share, which includes an expected negative impact from the West Coast port delays.
Shares of Abercrombie fell 9% on Wednesday morning and are down 15.5% this year.
