William Blair Remains Positive On Abercrombie & Fitch Despite Disappointing 3Q Results

William Blair analyst Amy Noblin maintained an Outperform rating on Abercrombie & Fitch (NYSE:ANF), following the company’s third-quarter results, posting an EPS of $0.25 on revenues of $911 million, compared to EPS of $0.20 on revenues of $1.03 billion in the same period a year ago. No price target was provided.

Noblin explained, “With the third quarter already preannounced and low expectations for updated guidance, we were encouraged by early signs to validate the brand strategy while acknowledging it is too early to call a turnaround. The reduction in logo product remains a headwind, accounting for a 12-percentage-point drag on the total comp of -10%, although the impact should lessen as we move into spring and lap next fall.”

The analyst added, “While valuation of 15 times our revised 2015 EPS estimate of $1.95 is relatively in line with Abercrombie’s long-run average, we see meaningful potential for productivity and margin recovery with further traction on the new strategy, suggesting upside to earnings.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Amy Noblin has a total average return of -8.0% and a 40.0% success rate. Noblin has a -22.6% average return when recommending ANF, and is ranked #2999 out of 3395 analysts.

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