Abercrombie & Fitch (ANF) 70% Off Promotion Pre-Planned and Not Concerning

This weekend Abercrombie & Fitch (NYSE: ANF) ran a 70 percent off redline promotion, which may have created some concern for investors worried about the impact on earnings. Commenting on the development, analyst Adrienne Tennant of Janney Capital said the promotion should not be alarming.

"We believe the 'additional 70% off' promotion was planned to move residual carryover inventory, and we point out it is only running for 4 days (January 26, 2013 through January 29, 2013)," said Tennant.

Tennant also pointed out that the markdown inventory was less than last year.

"Our observations suggest the promotion drove a lot of traffic and conversion this weekend, as the ANF concepts were the busiest in the teen space this weekend . . .We further remind investors that last year, internationally, ANF flagships (excluding Paris) ran 30% off all winter product post-Christmas and into January, which was not run this year," added the analyst.

Janney Capital has a Buy rating on Abercrombie & Fitch with a price target of $62.

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 $50.59 yesterday.

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