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

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  • 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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