Analysts Comment On Abercrombie & Fitch Follow CEO Retirement

On Tuesday, Abercrombie & FItch ANF announced that Chief Executive Officer Mike Jefferies is retiring effective immediately. Following the announcement, analysts at Topeka Capital Markets and Mizuho Equity Research commented the company following the management change.

Mizuho: “with 3Q results as recent indication of further hurdles to a potential turnaround, we believe investors may welcome the news given few signs of product driven sales or margin improvement under Jefferies' leadership. Additionally, we note the vacant CEO position may put ANF in play for privatization given the company’s strong cash flow generation. On our calculation, 6x, 8x, or 10x EBITDA multiples would yield share prices of $35, $48, and $61, respectively.”

Topeka: Dorothy Lakner is surprised that “COO Ramsden was not put into the CEO position,
given his efforts to inject greater discipline into ANF's operating structure, efforts to bring down it's bloated expenses and inventories, as well as his relatively long tenure at ANF compared to any other member of senior management.”

Lastly, the analyst feels American Eagle is the best way to play the space.

Shares of Abercrombie are up roughly 7 percent Tuesday afternoon.