Abercrombie & Fitch Co. (NYSE:ANF)
On Thursday morning before the market opened, Abercrombie & Fitch announced first-quarter earnings that missed analyst expectations and sent shares tumbling in the premarket session. The company announced first quarter earnings of a 59 cent loss per share on $685.5 million in revenues while analyst were looking for a loss of just 51 cents per share on $709 million in revenues. Investors are not happy with these results and it is reflecting in the share price as the stock is currently trading at $22 after closing Wednesday at $25.08, a 12.2% drop in price. Currently analyst have an average price target of $28.44 but we should see that number come down after this release.
Looking at the chart you will see that shares have been under heavy selling pressure for the past couple months and especially this morning after the disappointing Q1 earnings release. Shares are now trading well below their 200-day moving average that is currently sitting at $24.85 and are looking to open at a key pivot level at $22. If shares can’t hold that level then we may be in for another push down with the next support level coming in at $21. If we hold $22 and push back up we will run into some resistance at $22.55 and $23.50. This will be an active stock today so keep an eye out for some intra-day opportunities.
CEO Comments
Arthur Martinez, Executive Chairman, said:
Our results for the quarter reflect significant traffic headwinds, particularly in international markets and in our U.S. flagship and tourist stores, resulting in negative comparable sales. However, in the face of these headwinds, we were encouraged by our U.S. business, where comparable sales improved in the Hollister brand, and gross margin rate increased meaningfully for both brands. Overall, our business remains well managed in these challenging times, with our assortment and customer-centricity efforts driving improved conversion, and expense and inventory well controlled.
We expect the second quarter to remain challenging, but to see better results in the back half of the year as our assortments continue to improve and we see returns from significant investments in marketing, store management and omnichannel. In addition, with the new brand presidents and other key roles now filled, we have a strong team in place to drive our brands forward and capitalize on the many opportunities we see ahead of us.
ANF Profile
Abercrombie & Fitch Co. is engaged in retailing apparel, personal care products and accessories. It operates stores and direct-to-consumer operations. It sells casual sportswear apparel, including knit and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters, outerwear, personal care products and accessories for men, women and kids under the Abercrombie & Fitch, abercrombie, Hollister, RUEHL brands and Gilly Hicks brand. The company operates its business through three reportable segments: U.S. Stores, International Stores and Direct-to-Consumer. The U.S. Stores segment includes the results of stores in the United States and Puerto Rico. The International Stores segment includes the results of stores in Canada, Europe and Asia. The Direct-to-Consumer segment includes website operations, both domestic and international. Abercrombie & Fitch was founded in 1892 and is headquartered in New Albany, OH.