Channel checks show better sentiment at Hollister than Abercrombie & Fitch

Channel checks at Abercrombie & Fitch Co. stores show that managers at Hollister are more upbeat than those at Abercrombie & Fitch shops, Wedbush said in a Thursday note. Analysts visited 40 Hollister stores and 40 Abercrombie & Fitch stores, and found that 24 Abercrombie & Fitch stores fell below planned quarterly sales goals. Some Abercrombie & Fitch store managers saw benefits from better fashions and inventory control while others thought fewer promotions were having a negative impact. "Some however noted that larger offerings online of petite and tall sizes were a plus for attracting older customers," the Wedbush note said. Analysts expressed skepticism about Abercrombie's efforts to reach this older demographic and concern about the brand's lagging acceptance in the U.S. Hollister managers were upbeat about spring purchasing, attributed to better year-over-year fashion assortment. And seven Hollister stores launched the Club Cali rewards program, which analysts said would help the chain maintain momentum. Abercrombie shares are down 0.7% in premarket trading, and down 10.9% for the year to date. The S&P 500 is up 1% for the year so far.

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