Optimistic View on Abercrombie & Fitch (ANF)

Goldman Sachs(NYSE: GS) is optimistic and recommends a buy on Abercrombie & Fitch (NYSE: ANF) despite a disappointing November.

There was a substantial pickup in sales in the final week, month’s comps are not good, but not as bad as feared by GS.

Sales grew by 9% in November on sq ft growth of only 3%.
Over the next 12 months, sq ft growth from international may double to about 5-6%, and total sales contribution should reach mid/high-teens.

Significant 2010/2011 EPS growth from international expansion, recovery potential in domestic earnings, near-term drivers of less negative trends in new value messages and returning US tourism are reasons to look optimistically at ANF.