NEW YORK (TheStreet) -- Shares of Abercrombie & Fitch (ANF) are gaining 2.57% to $22.77 on heavy trading volume due to growing confidence that sales will rebound this year, said Financial Group analyst Thomas Filandro, Bloomberg reports.
Filandro adjusted his model for the company, expecting the specialty retailer to post a loss of 3 cents a share in the second quarter and then a gain of 35 cents per share and $1.10 per share in the next two periods.
"Management is 'keenly' focused on boosting same-store growth," he stated in a report, and the company's new changes should make the consumers' shopping experience faster, easier, and enjoyable.
Additionally, over the past week, two top executives reported new stakes in the company, which is a sign of optimism, Bloomberg noted.
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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ANF's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for ABERCROMBIE & FITCH is rather high; currently it is at 58.01%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ANF's net profit margin of -8.91% significantly underperformed when compared to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 40.82%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 184.37% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ANF is still more expensive than most of the other companies in its industry.
- 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. Compared to other companies in the Specialty Retail industry and the overall market, ABERCROMBIE & FITCH's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ANF Ratings Report