The firm also cut its price target to $21 from $25, citing "deflationary pressure in the U.S. apparel market," as well as "mounting FX headwinds."
Due to the teen apparel retailer's international exposure, the stronger dollar and deeply unfavorable currency movements over the past three months, make Credit Suisse believe that the risk of downward revisions to 2015 international earnings is elevated.
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New Albany, OH-based Abercrombie & Fitch is a specialty retailer that operates stores and direct-to-consumer operations. The company sells a varitey of products, including casual sportswear apparel, personal care products, and accessories.
Separately, TheStreet Ratings team rates ABERCROMBIE & FITCH as a Hold with a ratings score of C. TheStreet Ratings 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 increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 216.5% when compared to the same quarter one year prior, rising from -$15.64 million to $18.23 million.
- Net operating cash flow has significantly increased by 350.89% to $53.79 million when compared to the same quarter last year. In addition, ABERCROMBIE & FITCH has also vastly surpassed the industry average cash flow growth rate of -17.29%.
- ANF's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- ANF has underperformed the S&P 500 Index, declining 21.09% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, ABERCROMBIE & FITCH's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: ANF Ratings Report