Following the Q2 miss reported and guidance cut by Abercrombie & Fitch Co. (NYSE: ANF), Baird’s Mark R. Altschwager believes the company “remains in turnaround mode
amid a difficult macro/retail environment.”
Altschwager maintains a Neutral rating on the company, while lowering the price target from $23 to $21.
Q2 Miss
Abercrombie & Fitch reported its Q2 loss per share at $0.25, missing the consensus, due to weaker than anticipated gross
margins, in-line sales and comps and traffic headwinds.
Although comp trends were in line with expectations, they were mixed sequentially across geographies.
Related Link: The
"Teenage Wasteland" Continues To Underperform; Wunderlich Stays Sidelined On Abercrombie
Total sales declined 4.2 percent on comps of -4 percent. EBIT margin declined 420 bps, while inventory/store decline 2.5
percent.
“Management now expects results to remain challenging in 2H16,” Altschwager mentioned.
Guidance
With marketing initiatives around new brand positions and new prices intensifying, management believes trends might improve with
time, although there were no near-term catalysts that could reverse the traffic declines in tourist locations.
The F2016 comp and gross margin guidance were lowered, partially offset by cost savings.
“While management has made progress on controllable initiatives, we believe any meaningful inflection will take time given
leadership changes, new brand positions, and updated pricing amid an environment with persistent headwinds,” the analyst added.
The F2016 EPS estimate has been reduced to reflect more conservative top line trends during H2.
At time of writing, shares were down 1.44 percent at $17.83.
Full ratings
data available on Benzinga Pro.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win
a $20 Amazon gift card!
Latest Ratings for ANF
Date |
Firm |
Action |
From |
To |
Aug 2016 |
Stifel Nicolaus |
Downgrades |
Buy |
Hold |
Aug 2016 |
UBS |
Maintains |
|
Neutral |
Aug 2016 |
KeyBanc |
Maintains |
|
Overweight |
View More Analyst Ratings for
ANF
View the Latest Analyst Ratings
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.