Abercrombie & Fitch Co. (NYSE: ANF) stock falls despite analysts thumbs up

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Abercrombie & Fitch Co. (NYSE: ANF) stock fell over 4.7% on September 3rd, 2019 (As of 11:50 am GMT-4; Source: Google finance) even though Deutsche Bank upgraded its shares from a sell rating to a hold rating in a research report. However, Deutsche Bank upgraded shares of Abercrombie & Fitch (NYSE:ANF) from a sell rating to a hold rating in a research report.

On the other hand, the company has reported a second-quarter sales miss and gave weak guidance. Net losses totaled $31.1 million after a loss of $3.9 million, last year. The result reflects a 50-cent charge for flagship store exits.

The company in the second quarter of FY 19 has reported the adjusted loss per share of 48 cents, while adjusted revenue of $841.1 million in the second quarter of FY 19, missing the analysts’ estimates for revenue of $852 million.

Same-store sales were flat compared with the FactSet guidance for 0.5% growth. For the third quarter, Abercrombie expects sales to be up about 1% and same-store sales to be about flat. FactSet is projecting for sales of $882.4 million, up 2.5% year-over-year, and same-store sales growth of 1.8%. For the year, Abercrombie expects sales to be in the range of flat to 2% growth and same-store sales of flat to 2% growth. The company said its outlook takes the impact of tariffs on Chinese goods into account. The FactSet outlook is for sales of $3.66 billion, up 1.9%, and same-store sales growth of 1.5%.

Moreover, as of 3 August, cash and equivalents were $499.8 million as compared to $581.2 million last year. Gross borrowings under the company’s term loan were of $253.3 million, in line with last year. Inventories were of $487.1 million, an increase of approximately 7% over last year, with in-transit inventories and lower inventory reserves accounting for over half of this growth.

ANF has declared a quarterly cash dividend of $0.20 per share on the Class A Common Stock of Abercrombie & Fitch Co., payable on September 16, 2019 to stockholders of record at the close of business on September 6, 2019. In addition, the company repurchased 3.5 million shares during the second quarter and, at the end of the second quarter, had approximately 5.0 million shares remaining available for purchase under its publicly announced stock repurchase authorizations. The company has returned $84.2 million to stockholders through share repurchases and dividends during the fiscal 2019 year-to-date period.

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