by Burke Speaker | January 10, 2014 10:07 am
Abercrombie & Fitch (ANF) stock is up 12% today after the company announced it was raising its profit forecast — but will that be enough to keep ANF stock from sinking again?
After a clearly fruitful holiday season, the clothing retailer cited higher-than-expected sales in the fourth quarter as the reason for its updated earnings expectations.
ANF raised its expectations for 2013 earnings to $1.55-$1.65 per share, compared to Wall Street estimates of $1.47, according to Thomson Reuters I/B/E/S. ANF’s initial full-year forecast from early 2013 was for $3.35 per share, but that outlook sunk all the way to $1.40 to $1.50 per share as of November.
While ANF’s comparable store sales declined 6% in the nine-week period ended Jan. 4, Chief Executive Mike Jeffries pointed out that the company is actually improving in comps so far in the current quarter.
The Street points out that this still isn’t much to crow about:
“While sales were reported to be better than expected, they nonetheless represented a 4% decrease in the U.S. and a 10% decrease in international sales. Improved guidance was based on the nine-week period ending before much of the east coast freeze that is reported to have stalled mall traffic. It’s unclear how nature’s elements will affect future sales, as the first quarter becomes the object of focus.”
Nonetheless, today’s rebound could help out maligned CEO and Chairman Michael Jeffries, whose future has been put in question — and was even named Worst CEO of 2013 by Herb Greenberg — amid Abercrombie’s stock woes. Even after today’s gains, ANF remains down about 25% for the past 52 weeks.
Earlier this week, ANF was downgraded by Jefferies Group to a “hold.”
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