Abercrombie & Fitch Co.
) seems to have evolved from the dismal scenario that surrounded
it due to disappointing top-line performances in the last 4
quarters. With a surprising turnaround, this teen retailer
reported better-than-expected holiday sales results and revised
its full-year earnings guidance upward, bringing some respite to
This holiday season ended on a low note with most retailers
reporting lackluster results for the holiday shopping period.
During the period, retailers suffered from lower traffic, an
intensified promotional environment, lesser shopping days between
Thanksgiving and Christmas, numerous icy storms and sluggish
Amid such a tough environment, Abercrombie & Fitch came out
triumphant, improving from its trend of posting double-digit
comps decline. This casual apparel retailer reported only a 6%
decline this holiday season (nine-weeks ended Jan 4, 2014),
including direct-to-consumer sales, which came as a surprise for
investors, given the company's recent trend of posting negative
comps for nearly 7 straight quarters as well as its previous
fourth-quarter comps projection of a low double-digit decline.
The plunge in comps mainly resulted from a 4% downside in U.S.
comps and a 10% decline in International comps, while a 25% rise
in direct-to-consumer comps was an offset.
Overwhelmed by the strong quarter-to-date performance and smooth
progress on its cost reduction initiatives, the company raised
its adjusted earnings per share forecast to $1.55 - $1.65,
compared to $1.40 - $1.50 projected earlier.
This, in turn, triggered an upward movement in the Zacks
Consensus Estimate over the last 30 days, while also bringing it
to a Zacks Rank #2 (Buy) mark. The Zacks Consensus Estimate for
fiscal 2014 reflected significant 8.8% growth to $1.60 per share
in the last 30 days, while the estimate for fiscal 2015 moved up
by 3.1% to $2.36 per share over the same period.
Further, the company expects significant improvement in its
business in 2014 and ahead, driven by its stringent focus on
successful execution of its long-term strategic plans.
Other Stocks to Consider
Other stocks performing well in the apparel retail industry
Christopher & Banks Corporation
Finish Line Inc.
The Men's Wearhouse Inc.
). Of these, Christopher & Banks has a Zacks Rank #1 (Strong
Buy), while Finish Line and Men's Wearhouse carry a Zacks Rank #2
ABERCROMBIE (ANF): Free Stock Analysis Report
CHRISTOPHER&BNK (CBK): Free Stock Analysis
FINISH LINE-CLA (FINL): Free Stock Analysis
MENS WEARHOUSE (MW): Free Stock Analysis
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