Teen Retailer Plague Getting Worse, 'Nobody Immune' Says Wells (ANF) (AEO) (ARO)

August 22, 2013 8:55 AM EDT Send to a Friend
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Just a day after dismal guidance from American Eagle Outfitters (NYSE: AEO), Abercrombie & Fitch Co. (NYSE: ANF) reported weak results, with comps guidance calling for a 10% decline in Q3.

Given Aeropostale's (NYSE: ARO) warning in early August, none of this a complete surprise. However, with massive sell-offs in American Eagle and Abercrombie & Fitch post-earnings, clearly investors thought they would fare better against to what is looking more and more like a plague among teen retailers.

Commenting on the 'illness', analyst Paul Lejuez said nobody is "immune."

"The entire segment is under extreme promotional pressure as all the key players are struggling," said Lejuez. "From a stock perspective, we believe ANF is still the best house in a bad neighborhood, but it's the neighborhood that the market is starting to question as a whole."

Wells Fargo has an Outperform rating on Abercrombie & Fitch with a price target of $56-$60.

For an analyst ratings summary and ratings history on Abercrombie & Fitch (NYSE: ANF) click here. For more ratings news on Abercrombie & Fitch click here.

Shares of Abercrombie & Fitch closed at $46.80 yesterday.


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