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Should Abercrombie Investors Worry Over Ramsden's Departure?

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Should Abercrombie Investors Worry Over Ramsden's Departure?

Shares of Abercrombie & Fitch Co. (NYSE: ANF) fell more than 7 percent after the retailer said its Chief Operating Officer Jonathan Ramsden will resign from the company, effective June 15, 2016.

The departure of Ramsden, who joined the company as executive vice president and chief financial officer in December 2008 and has been holding the COO post since January 2014, has surprised the market as he was considered as the key executive at the retailer.

Was It Expected?

But, Susan Anderson, senior research analyst at FBR Capital, is not surprised at the announcement.

"I think this was probably expected at some point so no real surprise," she told Benzinga in an emailed statement.

Related Link: Goldman Says Sell American Eagle, Abercrombie, Express Heading Into Q1 Prints

"Jonathan likely decided to leave on his own for personal reasons," she added.

Anderson said Abercrombie had been restructuring its management team when they promoted Fran Horowitz last December to president and chief merchandising officer and decided to bring on two new brand presidents.

"I think this was a point that began to better shaped the direction of ANF's management team," Anderson noted.

Ramsden is considered to be the man behind overhauling the looks of the Abercrombie stores and closing hundreds of unprofitable stores. For the fourth quarter of 2015, Abercrombie said it earned $1.08 per share in the fourth quarter on revenue of $1.113 billion. Wall Street analysts were expecting the company to earn $0.99 per share on revenue of $1.1 billion.

Stock Performance And Looking Forward

Net sales for the quarter rose 2 percent on a constant currency basis, while comparable sales rose 1 percent. Abercrombie noted that its comparable sales trends improved across all brands and geographies. Comps for the Abercrombie division fell 2 percent, (better than the 5 percent drop in the third quarter), while Hollister comps grew 4 percent.

In a press release, Abercrombie said Ramsden's responsibilities will be assumed by other members of the office of the chairman, including Arthur Martinez, executive chairman; Fran Horowitz, president and chief merchandising officer; Joanne Crevoiserat, executive vice president and chief financial officer; and John Gabrielli, senior vice president of human resources.

"I have a strong attachment to Abercrombie & Fitch and to the fantastic group of people I work with every day. The decision to leave was a very difficult one, but I know that the Company is in the hands of an outstanding leadership team," Ramsden said in a statement.

The office of the chairman has been managing Abercrombie after longtime leader Mike Jeffries stepped down as CEO in 2014.

Latest Ratings for ANF

DateFirmActionFromTo
Sep 2019Initiates Coverage OnNeutral
Sep 2019UpgradesUnderperformPeer Perform
Sep 2019MaintainsUnderweight

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