Archive for May 25, 2010

Most top Abercrombie sale chains reported weaker-than-expected April same-store sales on Thursday, suggesting that Wall Street’s hopes for a consumer rebound have gotten ahead of the actual pace of recovery.

Abercrombie clothes sales at stores open at least a year rose 0.5 percent in April, well short of Wall Street estimates of a 1.7 percent increase. Nearly 70 percent of 28 retailers tracked by Thomson Reuters disappointed, with the biggest misses seen among apparel retailers like Gap Inc (GPS.N) and teen chains like Abercrombie & Fitch Co (ANF.N).

Gap shares closed down 7.2 percent at $22.91, while Abercrombie and rival Aeropostale Inc (ARO.N) closed down 8.6 percent and 6.7 percent, respectively. The Standard & Poor’s Retail Index (.RLX) fell 3.6 percent at close and Wal-Mart Stores Inc (WMT.N), which does not report monthly sales, fell 2.8 percent to close at $53.23.

But that translated into mixed results for U.S. businesses, as people are more selective about where they spend, analysts say. In addition, a fresh report on jobless claims showed a slightly smaller-than-expected drop in unemployment filings, suggesting a more gradual recovery.

“This is still a fragile environment and the consumer is still fickle,” said Matthew Katz at U.S. advisory firm AlixPartners. “This is going to absolutely be a fits-and-starts recovery.”

Abercrombie and Fitch clothing retailers who want to win in this economy must go beyond controlling inventory and costs, and offer new products, he said. Many analysts also urged investors to be picky while investing in the retail space.