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Abercrombie & Fitch's Earnings: What Wall Street's Saying

NEW YORK (TheStreet) -- Abercrombie & Fitch (ANF - Get Report)  were tumbling Thursday on volume that was more than four times the stock's three-month average after sales fell well short of analyst expectations.

Shares of the New Albany, Ohio-based clothing retailer were dropping 4.5% to $42.03, trimming its gain for 2014 to 28%.

Abercrombie reported second-quarter earnings, including charges, of 17 cents a share for the three-month period ended Aug. 2, compared to 14 cents a share for the same period a year ago. Consensus estimates called for 11 cents a share. Adjusted earnings came in at 19 cents a share.

Net sales missed Wall Street expectations, posting $891 million, down 6% from a year earlier, and below the $909.8 million consensus estimate. Same-store sales declined 11%, worse than the consensus estimate of -4.1%, as tallied by Consensus Metrix, led by a 10% drop at Hollister, where the company has been focused on lowering prices to compete with the fast-fashion players in the mall. Same-store sales at the company's flagship brand dropped 1% and abercrombie kids declined 6%.

Read More: Abercrombie & Fitch's Sales Decline Is Hammering the Stock

Here's what analysts are saying about Abercrombie following its earnings report.

Eric Beder, Wunderlich Securities (Buy; $48 PT)

We reiterate our Buy rating, $48 price target and estimates after Abercrombie & Fitch (ANF) registered solid bottom line upside in 2QFY15. That said, ANF is down today as investors are "disappointed" with the company's -7% comp. Given the numerous material positives (better than expected gross margins, higher projected costs savings, YoY increase in international, etc.) we believe the Street is being typically short sighted and we would use the current dip to become even more aggressive in the name. We view Abercrombie as among the best positioned in the teen space to drive upside and one of the few management teams that realizes: a) less stores equals higher productivity; b) fashion will drive margin upside; and c) international offers appealing diversification. We are buyers of ANF.

Read More: Abercrombie Is Seen on the Recovery Road

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