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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
Sep 2014CitigroupMaintainsNeutral
Aug 2014Stifel NicolausUpgradesHoldBuy
Aug 2014WunderlichInitiates Coverage onBuy

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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