Why Analysts Are Upgrading Abercrombie And Fitch This Week

abercrombie & fitch

Abercrombie & Fitch was upgraded this week by Wells Fargo to outperform and hopeful outlooks were presented by Oppenheimer and UBS in research notes this morning.

Keep in mind these hopeful analyst expectations are coming in despite less-than-expected retail sales numbers for January that were announced this morning. Sales came in at 0.3% falling short of an expected 0.6% increase.

  • Comparable store sales for January were down 4% but its internet & catalogue orders sales increased by over 20% and international sales increased by over 40%
  • ANF reported a net 6% increase in sales compared to January 2009 
  • Among its own stores, A&F saw an increase in comparable store sales of 3% 
  • The number of store sales has been relatively flat between 2005-2009 but that number is expected to increase this year, especially with international expansion

A Wells Fargo analyst wrote “We believe that growth in ANF’s high-margin international business will accelerate over the next few years (through a faster pace of store openings), diversifying the company’s earnings streams away from difficult U.S. teen market.”

Oppenheimer analyst Pamela Quintiliano said expectations heading into the quarter are fairly high.

Abercrombie will be releasing fourth quarter results tomorrow.

Read about the downfall of American Apparel here >

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