Abercrombie & Fitch Brand Remains Healthy With More Resilient Customer Base, Says Analyst

Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on the shares of Abercrombie & Fitch Co ANF with a price target of $25.00.
Despite a softening demand environment amid macro challenges to lower-income consumers and significant uncertainty in Europe, management struck a fairly positive tone during the investor meetings hosted by the analyst and her team.
Inventory balances are expected to be right-sized to demand trends heading into the holiday, said Telsey.
The analyst added that the pullback in orders from large players such as Walmart Inc WMT and Target Corp TGT creates a more favorable chase environment.
Freight looks to finally become a tailwind to margin as well in Q4, with the benefit continuing into FY23, noted Telsey.
The analyst continues to see a long-term margin expansion opportunity through a more productive store footprint and expanding digital penetration.
Price Action: ANF shares are trading higher by 2.46% at $15.81 on the last check Friday.

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