Stifel maintains Abercrombie & Fitch (NYSE: ANF) at Hold following Q3 results and outlook.

Analyst Richard Jaffe offered the following initial takeaways from the report:

• Below Consensus Guidance – Management now expects adjusted full year EPS of $1.50-$1.65 (down from $2.15-$2.35) and vs. our estimate of $1.80 and consensus of $1.83. The guidance assumes a mid-to-high single digit decline in 4Q comparable sales. 4Q gross margin is expected to increase y/y (due to lower average unit cost) but will likely be lower than 3Q’s and ytd.
• Merchandise Not Resonating With Consumers – While we believed it would take time to win back customers following several years of uninspiring offerings, it appears that the problem impacting ANF is greater than just a lack of brand awareness. We believe the new assortments are not resonating with consumers, evident in the continued significant comp declines year to date both domestically and abroad. Comps deteriorated throughout the 3Q. Comps improved somewhat in November, including Black Friday weekend. However, management remains cautious as difficult retail conditions are expected to continue through the 4Q.
• External Headwinds Also a Factor – We believe 4Q will be challenging as the external headwinds experienced in 3Q (lack of a strong fashion trend, shift in consumer spending to electronics and other non-apparel categories and continued weak mall traffic) will likely continue into 4Q. We reiterate our Hold rating.

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

Abercrombie & Fitch closed at $27.84 yesterday.