On Apr 16, 2014, we issued an updated research report on
Abercrombie & Fitch Co.
) following the company's better-than-expected fourth-quarter
fiscal 2013 bottom-line results.
This casual apparel retailer posted robust fourth-quarter
fiscal 2013 bottom-line results wherein its earnings of $1.34 per
share surpassed the Zacks Consensus Estimate of $1.04 per share.
Better-than-expected results were primarily due to a lower tax
rate that gained as the major chunk of earnings were derived from
across national borders as well as higher expense savings
stemming from the ongoing profit improvement initiatives.
We are impressed with Abercrombie's second consecutive quarter
of upbeat bottom-line performance. With a surprising
turnaround driven by its focus on executing long-term strategic
plans, the company provided an impressive guidance for fiscal
The company now expects significant improvement in its
business in 2014 and beyond. Therefore, it projects fiscal 2014
earnings in the range of $2.15-$2.35 per share, implying
year-over-year growth of 12%-23%. Currently, the Zacks Consensus
Estimate is pegged at $2.37 per share, which lies above the
company's higher-end guidance range.
Furthermore, we believe that management's sustained focus on
expanding global operations and improving cash flows, while
maintaining a healthy balance sheet, bode well for the
However, the company's comparable-store sales (comps), which
shows disappointing results for the past eight quarters, prevents
us from becoming more constructive on the stock.
Abercrombie currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some better-ranked stocks in the apparel/shoe retail space
American Apparel Inc.
Foot Locker Inc.
Bebe Stores Inc.
). All of these have a Zacks Rank #2 (Buy).
ABERCROMBIE (ANF): Free Stock Analysis Report
AMER APPAREL (APP): Free Stock Analysis
BEBE STORES INC (BEBE): Free Stock Analysis
FOOT LOCKER INC (FL): Free Stock Analysis
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