RBC Trims Abercrombie Price Target To $20

Related Link: Abercrombie & Fitch Shares Plummet 14% After Missing EPS Estimates For Second Straight Quarter

Tunick highlighted Abercrombie's traffic challenges in its flagship and international tourist locations, which weighted on the "majority" of the comp decline By brand, A&F comped negative 7 percent while Hollister comped negative 2 percent. On the other hand, international comps improved sequentially to negative four percent from negative 7 percent last quarter, the U.S. business (negative 4 percent) acted as a "negative surprise."

Turnick continued that there is now "little visibility" on the international and tourist front and management itself even cited a lack of catalyst. In fact, the comp outlook was revised to "challenging" from a sequential improvement, and the analyst's bottom half of 2016 comp estimate was revised to negative four percent from a prior negative three percent.

Bottom line, the company's second-quarter earnings miss and comp outlook reduction "fell short of a building bar" at a time when many other department stores and specialty retailers are communicating encouraging commentary. As such, shares are likely to "remain volatile around quarterly updates" and investors should "remain on the sides."

Shares remain Sector Perform rated with a price target lowered to $20 from a previous $23 due to a worse than previously expected bottom half to 2016.

At time of writing, shares were down 1.58 percent on Thursday, trading at $17.46.

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