FBR Capital Reiterates Underperform on Abercrombie & Fitch (ANF) Following 3Q
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FBR Capital reiterated an Underperform rating and $14.00 price target on Abercrombie & Fitch (NYSE: ANF) following the company 3Q earnings report. Net sales were down 6% over last year, and comps were down 6% for 3Q. Operating income for 3Q was $19.6M compared to $41M last year. Weakness in the U.S. was attributed to unseasonable weather as well as softness in flagship and tourist stores.
Analyst Susan Anderson commented, "ANF reported 3Q EPS of $0.02, versus FBR/consensus of $0.20/$0.21 (see 2Q drivers in earlier note). Management expects SSS to continue to be challenging in 4Q, though they are expected to improve from 3Q16. In 3Q, ANF continued to expand its omni-channel capabilities and launched its loyalty program at Hollister, both of which have resonated well with customers. A&F is still in the early stages of restructuring, and it remains the bigger challenge, but management remains optimistic about the future for A&F with some highlighted initiatives going forward. While we are encouraged by ANF's omni-channel and brand initiatives, we remain Underperform rated given tougher international compares in 4Q (which had helped to drive SSS previously) and continued deterioration at A&F. We reiterate our Underperform rating and $14 price target."
Shares of Abercrombie & Fitch closed at $14.60 yesterday.
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