UBS Cuts Price Target on Abercrombie & Fitch (ANF) Following 3Q Miss
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UBS maintained a Neutral rating on Abercrombie & Fitch (NYSE: ANF), and cut the price target to $15.00 (from $18.00), following the company's 3Q earnings report. ANF reported EPS of $0.02, significantly below the Street's $0.21 estimate. Flagship and tourist locations remain challenged at A&F, with international traffic driving the -7pp sequential comp deceleration.
Analyst Michael Binetti commented, "3Q EPS was $0.02, significantly below estimates (UBSe: $0.37, Street $0.21). ANF SSS were worse than expected -6% (UBSe: -3%, Street: -4.3%). 3Q SSS by segment: A&F -14%; Hollister flat; US -5%; Int'l -10%. GM declined -130bp (UBSe: -30bp) on higher promos to clear cold-weather product in a warmer than expected qtr. ANF's -6% comp drove significant SG&A deleverage (240bp vs UBSe: 20bp leverage). ANF has done a good job in recent qtrs of cutting SG&A, but we think further "low hanging fruit" cuts are harder to come by—making the P&L very sensitive to top line trends going fwd."
Shares of Abercrombie & Fitch closed at $14.60 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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