Teen retailers Abercrombie & Fitch Co., Aeropostale Inc. and American Eagle Outfitters Inc. will stop reporting monthly sales after tomorrow, which may make it harder for investors to evaluate the companies.
“The more information the better,” said Michael Baron, an analyst for Baron Capital Inc. in New York. “More information helps us determine the true value of the company.”
Many retail executives say reporting sales from stores open at least a year puts too much focus on short-term results, said Brian Sozzi, an analyst for Wall Street Strategies Inc. in New York. In addition, many retailers don’t include sales generated on the Web or on mobile devices, he said.
Because the three teen retailers are stopping at once, “it makes it easier for others to follow,” said Sozzi, who in an interview called monthly reporting “archaic.”
“The shift enables American Eagle to align its reporting schedule with the company’s long-term strategic focus,” Jani Strand, a spokeswoman for American Eagle, said in an e-mail.
Abercrombie & Fitch and Aeropostale declined to comment on the decision to halt the practice.
While investors consider same-store sales a key growth indicator because new and closed stores are excluded, retail chains aren’t required to post them each month and can stop or start releasing them when they want. The key figure is called comparable-store sales and each retailer has its own definition for which locations are included. In general, most companies use stores open at least a year, eliminating new and closed stores.
Since 2008 chains including AnnTaylor Stores Corp., Chico’s FAS Inc. and Pacific Sunwear of California Inc. have stopped reporting monthly same store sales. In some cases, the halt coincides with declining sales. Wal-Mart Stores Inc. stopped reporting monthly sales in May of 2009. Sales at Wal-Mart’s namesake U.S. stores open at least a year have fallen for six consecutive quarters.
Reporting same-store sales each month is “good for investors if it’s a growth company because it can support the stock,” said Walter “Bucky” Hellwig, who oversees $17 billion at BB&T Wealth Management in Birmingham, Alabama. “For mature companies, it reflects noise and may hurt the stock price in the short run.”
Aeropostale, which is based in New York, has posted three straight declines in same-store sales. Pittsburgh-based American Eagle’s dropped 11 percent in December, while New Albany, Ohio-based Abercrombie & Fitch increased sales 15 percent.
Abercrombie fell $1.60, or 3.2 percent, to $49.13 at 4:01 p.m. in New York Stock Exchange composite trading. Aeropostale dropped 7 cents to $23.92, while American Eagle fell 21 cents to $14.46.
Same-store sales at U.S. retailers in January may have increased 2.6 percent for a 17th straight gain, according to analysts’ estimates for more than 30 chains compiled by Retail Metrics Inc. Heavy snowfall in the northeast may have weighed on results, said Amy Noblin, an analyst for Weeden & Co. in Greenbrae, California.
“I don’t think it’s going to move the needle much,” Noblin said. January makes up about 20 percent of the quarter’s revenue and “November and December were good enough,” she said.
Editors: Robin Ajello, James Callan