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Hollister powered Abercrombie's resurgence - but its popularity appears to be waning

10 months ago by Jon Marino in Markets

After helping the company make a big rebound, Abercrombie ($NYSE:ANF) brand Hollister is losing consumers' attention. 

When the company reports earnings May 29 we will also see if Hollister is causing Abercrombie to lose out in the fashion retail marketplace. This week, investors are excited about the brand - it declared a dividend of $0.20 per share on May 23, which lifted shares in otherwise choppy trading Thursday. 

No Longer the Talk of the Town

A pair of charts based on our data collection show consumers are less engaged with the Hollister brand. The first chart represents the brand's Facebook ($NASDAQ:FB) Talking About Count - how much consumers are talking with or about a brand on social. It's trending downward; as is the second chart, which tracks Hollister's Twitter ($NYSE:TWTR) Followers. That is down nearly 10% since the beginning of 2018.

If followers, or chatter, don't concern investors, Hollister's Facebook Checkins - when a person makes a post and tags a location in the social network - may be more worrisome. This metric is a diluted measure of foot traffic, and it reflects that 3.34% fewer consumers made Facebook Checkins at Hollister locations (see below). 

The Silver Lining

Mobile shoppers could be critical to Abercrombie and Hollister going forward. 

“Mobile engagement continues to grow, with over 70% of the Company’s digital traffic generated from mobile devices in Fiscal 2018,” the company stated in its most recent annual report. 

Abercrombie & Fitch's next earnings report May 29 will cover the two-year anniversary of the brand's appointing a new CEO (Fran Horowitz) to breathe new life into the company after a string of embarrassments, underperformance and the eventual removal of former leader Mike Jefferies - who had turned it into a global fashion juggernaut. 

Abercrombie stock peaked prior to the global financial crisis - but the brand was already in the process of shedding its past identity and doing more to embrace the Hollister brand. The launch of Hollister under Abercrombie began nearly 20 years ago, and today more Hollister stores dot the globe than Abercrombie & Fitch - in part thanks to a spate of stores being shut down in recent years. The entire company topped earnings expectations for the last quarter - which included the 2018 holiday shopping season - but a group of analysts tracked by Zacks Investment Research expect the stock will announce negative earnings, a loss of $0.43 per share. Another silver lining is Abercrombie & Fitch's stock price - in mid-day trading Thursday, shares were up almost 18% on the year. 

Abercrombie noted that its purchase-online-pickup-instore program (which helped guide Target to an earnings beat this week) has been aided by e-commerce - and retailers are eager to wield their brick-and-mortar pickup offerings to differentiate from web-only brands that complete sales with the ring of a doorbell. Whether Abercrombie's pickup offering is as successful as Target's, could have a big impact on its earnings. 

An Abercrombie representative who spoke with Thinknum said the company is focusing on Instagram and YouTube for consumer social engagement: “Our Instagram currently has 4.5 million followers, and our recent Swim Collective videos were our three most-viewed Instagram videos ever. Our YouTube Series, The Carpe Life, has also generated over 21 million views.”

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Jon Marino

Jon Marino is Thinknum's finance editor, covering the impacts of alternative data on public companies and investors. Prior to joining Thinknum, Jon worked in the ...

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