Market Update: Abercrombie & Fitch Stock Falls!
Clothing companies usually rely on retail stores to make a lot of sales. This becomes especially problematic for luxury clothing companies. During the current pandemic, people are saving up on their money.
Millions of people have lost their jobs and they cannot afford to spend on luxury goods such as expensive clothing. Due to this, companies like Abercrombie & Fitch are suffering during the time of this pandemic. They have not been able to open their retail stores and their online sales are also very low right now.
Abercrombie Stock Falls
Abercrombie and Fitch’s stock closed on Wednesday, 26 May 2020 at a price of 13.04 USD. Then the stock fell in pre-market trading by 0.7 USD. It opened at a price of 12.34 USD on Thursday, 27 May 2020.
The stock proceeded to fall throughout the day and has a low of 11.57 USD as of 15:58 GMT. This breaks a string of continuous positive days for Abercrombie’s stock during this week. As of now, this is a fall of 1.45 USD or 11.15% over the previous closing price. Market experts expect the stock to keep falling over the next few days.
Why Did The Stock Fall?
Abercrombie And Fitch release its report of earning for the previous financial quarters. The company had total sales of $485.4 Million, which is much lower than the company’s sales of $734 Million in the same quarter last year.
The company reported net losses of $244.1 Million in the quarter which is equivalent to $3.9 per share. The loss in Quarter 1 last year was only $19.2 Million which is equivalent to 29 cents per share.
The sales of the company were much lower than the market expectation of $497 Million. Due to the company failing to meet expectations, investors got bearish on the stock. This is why the company’s stock fell by over 11% on the day.
Abercrombie And Fitch Covid-19 Impact
The company’s stock was at a price of 17.30 USD on February 12, 2020. But then the Coronavirus pandemic started spreading fast and the stock started plunging. It hit its 2020 low on 2 April 2020 at a price of 7.97 USD.