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'Labor Day Sale On Abercrombie' After Lower Q2 Sales

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Abercrombie & Fitch (NYSE: ANF) shares are off nearly five percent after it posted disappointing second-quarter sales earlier this week and some analysts questioned its prospects.

"The number-one fear that prevents investors from owning Abercrombie is concern that the brand is becoming irrelevant," Macquarie's Liz Dunn said in a note Friday maintaining a Neutral rating and $45 target.

So on Thursday, Chief Executive Michael Jeffries, said the company is "looking to take the North American logo business to practically nothing."

Although logo sales have recently fallen considerably, UBS' Roxanne Meyer sees a downside to de-emphasizing the segment in an increasingly crowded fashion market place.

Meyer fears that "Abercrombie will become less differentiated versus other global fast fashion retailers, Meyer said in a note maintaining a Neutral rating and $40 target.

And with total U.S. denim sales down six percent last year, Meyer thinks Abercrombie's current plan to make the category a centerpiece of its fashion lineup is "risky."

But Oppenheimer's Anna Andreeva maintained a Buy rating and $50 target Friday, calling Abercrombie "one of our favorite names."

Andreeva's modeling a same-store sales decline of three percent to four percent in the third quarter, but raised her 2015 earnings estimate to $2.35 from $2.25 a share, citing lower operating costs.

Abercrombie closed Friday at $41.80, nearly unchanged.

Latest Ratings for ANF

DateFirmActionFromTo
Jun 2015FBR CapitalDowngradesOutperformMarket Perform
May 2015Janney CapitalDowngradesNeutralSell
May 2015RBC CapitalInitiates Coverage onUnderperform

View More Analyst Ratings for ANF
View the Latest Analyst Ratings

Posted-In: Anna AndreevaAnalyst Color Earnings News Guidance Price Target Reiteration Analyst Ratings

 

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