Nov. 3 (Bloomberg) -- Abercrombie & Fitch Co., the teen-clothing retailer, dropped the most in almost three years after saying sales fell at European flagship stores last quarter.
The retailer was hurt by a “slowing trend” in the region, while same-store sales in Japan and Canada continued to decline, according to a statement today. The shares slumped 20 percent to $59.26 at the close in New York, the biggest loss since November 14, 2008.
Abercrombie & Fitch surprised investors after Chief Executive Officer Michael Jeffries said in August that there was a “strong momentum” in Europe. The retailer is joining a growing list of consumer companies, from Whirlpool Corp. to Kimberly-Clark Corp., that saw a slowdown in the region mired by a sovereign debt crisis.
“The international division was seen as the key growth driver so the fact it slowed down has some investors very spooked,” Eric Beder, an analyst at Brean Murray Carret & Co. in New York, said of Abercrombie & Fitch. “People are wondering if this is a pause or a significant change.”
Beder recommends buying the stock.
Shares of the New Albany, Ohio-based retailer, also owner of the Hollister chain, had jumped 28 percent this year before today, while the Standard & Poor’s 500 Index dropped 1.6 percent.
The company said in August it expected to open 45 international stores this year. The company made about 19 percent of its revenue outside of the U.S. in the fiscal year ended in January.
The slowdown in the European business was more than investors expected, said Ken Perkins, president of researcher Retail Metrics.
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