UPDATE: Macquarie Capital Downgrades Abercrombie & Fitch Co. to Neutral, Lowers PT as Weak Sales Trump Expense Opportunity

In a report published Monday, Macquarie Capital analyst Liz Dunn downgraded the rating on

from Outperform to Neutral, and lowered the price target from $47.00 to $36.00. In the report, Macquarie Capital noted, “Mall traffic continues to be down and retail sales results have been choppy. The teen space in particular appears to be suffering with weak demand that is exacerbated by a lack of strong fashion trend. The holiday season will likely be weak, in our view. Fewer shopping days, lack of must-have fashion, and competition from electronics and games are likely to lead to lackluster apparel sales in teen. Furthermore, excess inventory amongst competitors will likely lead to a more promotional season. ANF is hosting an investor day on November 6, after the close of the quarter but before earnings. We believe the company will negatively pre-announce ahead of this meeting but that the bulk of the meeting will focus on strategic initiatives. We specifically expect to hear greater cost cuts than the $100 million or more already announced as well as more domestic store closures than previously disclosed. Since the company's last formal analyst day in April 2011 through year-end 2013 the company will have shuttered about 17% of its domestic store base.” Abercrombie & Fitch Co. closed on Friday at $34.83.