Wells Fargo Downgrades Abercrombie & Fitch (ANF) to Market Perform

Wells Fargo downgraded Abercrombie & Fitch (NYSE: ANF) from Outperform to Market Perform and lowered their valuation range to $40.00 to $44.00 from $52.00 to $57.00.

The firm comments, "While the macroenvironment is tough in Europe, the rapid deterioration in ANF’s international and tourist store comps in the past couple of quarters points to higher cannibalization from new store openings than we were anticipating. It also makes us wonder whether there is an issue with demand for the brand/product."

They also said, "Non-tourist U.S. stores comp of up low-single digits was also less than impressive given industry-wide strength across the sector in Q1 including 17% comps at AEO. Inventory remains elevated as well at up 44%. While ANF was able to reiterate EPS guidance on better margins and share buybacks, we
think there is risk to estimates given the sales trend."

For an analyst ratings summary and ratings history on Abercrombie & Fitch click here. For more ratings news on Abercrombie & Fitch click here.

Shares of Abercrombie & Fitch closed at $39.50 yesterday.

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