#5 Worst S&P Stock: Abercrombie & Fitch
Sector: Consumer discretionary
Shares in Abercrombie & Fitch (NYSE:ANF) have struggled mightily since 2011. After crashing during the recession, ANF stock fought back to almost 2008 levels briefly last summer … before dropping more than 50% to current valuations.
The biggest pain has come quite recently. Shares of Abercrombie tumbled just a few weeks ago on news that the struggling retailer would close yet more stores in an effort to boost profitability. Its cash hoard was more than $700 million a year ago, but is almost nothing now thanks to restructuring costs.
The story with ANF mirrors the troubles of fellow S&P 500 laggard Electronic Arts (NASDAQ:EA) in that the world of youth fashion is fickle and competition is fierce. There’s also the high unemployment among its young adult customer base.
Earnings are set to slip in fiscal 2012, and investors aren’t confident that the cost-cutting is enough to make Abercrombie & Fitch attractive again. The result is a race for the exit in this retail stock.