Investors stampeded out of Abercrombie & Fitch yesterday, leaving shares of the popular clothing retailer in tatters.
Abercrombie stock dove 38 percent after the company said Christmas sales had been tepid and a dozen analysts downgraded the stock; it fell $9.37 to $15.
Despite a healthy 21st 10% of the fourth quarter earnings, sales in stores open up at least one year only half - about 3% Wall Street had expected.
Analysts said sales of women's clothes were slow and inventory has strengthened.
"I think we worry about is in forward development, on the basis of Kindra Hix said the United States first of securities, relegation analysts shares.
"I still think this is a good story, but it has slowed from its ultra fever stage."
She said, management told analysts expect to reduce their this year's sales.
Part of Abercrombie's problem is the market has become saturated with specialty retailers looking to chip away at Abercrombie's share of the coveted teenage market.
"We just can't hear enough positive things about Abercrombie. It has climbed to No. 6 on our coolest brand meter" said Michael Wood of the market research firm Teenage Research Unlimited.
But he added that brands like Gap, Old Navy, Gadzooks and Pacific Sunwear were hot on its heels.
While yesterday's beating of Abercrombie was particularly brutal, investors have been whaling away at it for months.
Abercrombie & Fitch was a $48 stock last July.
But an investigation by securities regulators and controversy over a racy catalog have spooked stock holders -- and shared more than two-thirds of the stock's value.
The Securities and Exchange Commission launched a formal investigation of the chain last December.
It is probing whether a company executive warned Lazard Freres & Co. analyst Todd Slater on Oct. 8 that third-quarter sales wouldn't meet analysts' forecasts -- that was five days before the company made the forecast public.
Before that, the company had landed in hot water for its "Naughty and Nice" catalog, which included partially nude models and an interview with a porn star.
While the racy catalog was shrink-wrapped and marked "mature content," the Michigan Attorney General complained that it violated that state's law against distributing sexually explicit material to minors.
Abercrombie & Fitch ultimately agreed not to sell it to kids under 18.
The company has since yanked the $6 catalogs from its only Manhattan store, on Water Street, and has required identification to sell them elsewhere.
The news isn't all gloomy for Abercrombie.
Abercrombie stock dove 38 percent after the company said Christmas sales had been tepid and a dozen analysts downgraded the stock; it fell $9.37 to $15.
Despite a healthy 21st 10% of the fourth quarter earnings, sales in stores open up at least one year only half - about 3% Wall Street had expected.
Analysts said sales of women's clothes were slow and inventory has strengthened.
"I think we worry about is in forward development, on the basis of Kindra Hix said the United States first of securities, relegation analysts shares.
"I still think this is a good story, but it has slowed from its ultra fever stage."
She said, management told analysts expect to reduce their this year's sales.
Part of Abercrombie's problem is the market has become saturated with specialty retailers looking to chip away at Abercrombie's share of the coveted teenage market.
"We just can't hear enough positive things about Abercrombie. It has climbed to No. 6 on our coolest brand meter" said Michael Wood of the market research firm Teenage Research Unlimited.
But he added that brands like Gap, Old Navy, Gadzooks and Pacific Sunwear were hot on its heels.
While yesterday's beating of Abercrombie was particularly brutal, investors have been whaling away at it for months.
Abercrombie & Fitch was a $48 stock last July.
But an investigation by securities regulators and controversy over a racy catalog have spooked stock holders -- and shared more than two-thirds of the stock's value.
The Securities and Exchange Commission launched a formal investigation of the chain last December.
It is probing whether a company executive warned Lazard Freres & Co. analyst Todd Slater on Oct. 8 that third-quarter sales wouldn't meet analysts' forecasts -- that was five days before the company made the forecast public.
Before that, the company had landed in hot water for its "Naughty and Nice" catalog, which included partially nude models and an interview with a porn star.
While the racy catalog was shrink-wrapped and marked "mature content," the Michigan Attorney General complained that it violated that state's law against distributing sexually explicit material to minors.
Abercrombie & Fitch ultimately agreed not to sell it to kids under 18.
The company has since yanked the $6 catalogs from its only Manhattan store, on Water Street, and has required identification to sell them elsewhere.
The news isn't all gloomy for Abercrombie.
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