Bourbon is in, and apparel is out. That's the story if you look at the earnings picture today.
Abecrombie & Fitch cannot catch a break. Third-quarter earnings were about in line with expectations, but EPS of 42 cents is poor in comparison to last year's 52 cents. Traffic was weak, and with about 30 percent of sales coming from outside the United States, including Europe, is it any wonder?
Here's an understatement: Abercrombie & Fitch expects conditions to remain "difficult." Difficult? I would call lowering full-year guidance to $1.50 to $1.65 from prior guidance of $2.15 to $2.35 more than "difficult." I call it "lousy."
We all know merchandise is not the hot item. Accessories and electronics are what's selling, but this goes beyond that. The merchandise is just not connecting with consumers. You can see that in the earnings and the comparable store sales declines.
It's enough to make you take up drinking. Speaking of drinking...