In a series of corporate governance reshuffles, the teen retailer stripped Jeffries of his dual role and announced Arthur Martinez, former CEO of Sears (SHLD) and longtime retail executive, as his replacement. Jeffries will retain his position as director and CEO.
Following the announcement, shares spiked 6.4% to $37.38.
The New Albany, Ohio-based business said it had also appointed new directors Terry Burman, former CEO of Signet Jewelers (SIG), and Charles Perrin, one-time CEO of Avon Products (AVP) and Duracell, rounding out Abercrombie's board to a total 12 members.
Earlier in the month, the beleaguered retailer showed signs of improvement after comparable-store sales fell only 6% over the holiday period compared to a 14% drop in the third quarter ended October.
TheStreet Ratings team rates ABERCROMBIE & FITCH as a Hold with a ratings score of C. The team has this to say about their recommendation:
"We rate ABERCROMBIE & FITCH (ANF) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ANF's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that ANF's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
- The gross profit margin for ABERCROMBIE & FITCH is rather high; currently it is at 68.84%. Regardless of ANF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.51% trails the industry average.
- ANF, with its decline in revenue, underperformed when compared the industry average of 7.7%. Since the same quarter one year prior, revenues fell by 11.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 119.60% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- Net operating cash flow has significantly decreased to -$21.44 million or 108.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: ANF Ratings Report