Abercrombie & Fitch Co., the teen-clothing retailer, dropped the most in more than 10 years after saying sales fell at European flagship stores last quarter.
The retailer was hurt by a “slowing trend” in the region, while same-store sales in Japan and Canada continued to decline, according to a statement today. The shares slumped 21 percent to $58.50 at 10:53 a.m. in New York after dropping as much as 23 percent for the biggest intraday loss since Nov. 30, 2000.
Abercrombie & Fitch surprised investors after Chief Executive Officer Michael Jeffries said in August that there was a “strong momentum” in Europe. The retailer is joining a growing list of consumer companies, from Whirlpool Corp. to Kimberly-Clark Corp., that saw a slowdown in the region mired by a sovereign debt crisis.
“The international division was seen as the key growth driver so the fact it slowed down has some investors very spooked,” Eric Beder, an analyst at Brean Murray Carret & Co. in New York, said of Abercrombie & Fitch. “People are wondering if this is a pause or a significant change.”
Beder recommends buying the stock.
Shares of the New Albany, Ohio-based retailer, also owner of the Hollister chain, had jumped 28 percent this year before today, while the Standard & Poor’s 500 Index dropped 1.6 percent.
The company said in August it expected to open 45 international stores this year. The company made about 19 percent of its revenue outside of the U.S. in the fiscal year ended in January.
The slowdown in the European business was more than investors expected, said Ken Perkins, president of researcher Retail Metrics.
© Copyright 2016 Bloomberg News. All rights reserved.