Abercrombie & Fitch
The retailer is planning on closing 180 of its underperforming U.S. stores by 2015, more than expected.
The company reported Wednesday fourth-quarter earnings of $19.6 million, or 22 cents a share, down from year-ago earnings of $92.6 million, or $1.03."International will remain hugely profitable, albeit at slightly lower levels than previous expectations given a still tough macro environment," KeyBanc Capital Markets analysts wrote in a report Thursday. "The U.S. teen market remains highly competitive and heavy industry units can drive extraordinary promotions." Shares of Abercrombie & Fitch were downgraded to hold from a buy by TheStreet Ratings. "The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins," TheStreet Ratings wrote. "However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity." Abercrombie & Fitch has an estimated price-to-earnings ratio for next year of 10.63; the average for apparel retailers is 17. For comparison, Urban Outfitters (URBN) and American Eagle (AEO) both have higher forward P/Es of 17.81 and 13.55, respectively. Of the 36 analysts who cover Abercrombie & Fitch, 20 analysts gave it a hold rating. Fourteen analysts rated the stock a buy and two gave it a sell rating. TheStreet Ratings gives Abercrombie & Fitch a C grade. The stock closed Thursday at $48.49 and has dropped slightly to date.
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