Are Abercrombie & Fitch Co. (ANF) Results Really That Bad?

Abercrombie & Fitch Co. (NYSE:ANF) came out with its second quarter earnings report today and yet again posted a decline in comp sales. The company posted EPS of $0.19, a rise of 26.7% year over year, but the shares still took a beating owing to the concern on Wall Street of the speciality retailer’s sales. While most analysts are bearish on the stock, Eric Beder of Wunderlich Securities is not. He discussed what still keeps his views bullish on the company on CNBC, recently.

“[…] I do understand why the Street was worrying about sales, but there are a lot of positives here. The Abercrombie & Fitch Co. (NYSE:ANF) chain have come almost positive for the first time in two years, you had international margins increase and the company actually raised the amount of cost savings they can think, from $175 to $200 million. So, I think this turn is starting to happen,” Beder said.

Beder mentioned that Abercrombie & Fitch Co. (NYSE:ANF) is looking to get out of logo product business. According to Beder, it takes around a year for a company to make that kind of transition. He revealed that Abercrombie & Fitch Co. (NYSE:ANF)‘s stores have less logo products now than they  ever had . Beder feels that the youth nowadays don’t want to sport logo of companies as they want their independence rather than being a ‘billboard’ for some company.

Beder compared Abercrombie & Fitch Co. (NYSE:ANF)’s results to that of other competitors suggesting that the results for Abercrombie & Fitch Co. (NYSE:ANF) are much better. He believes that for companies like Abercrombie & Fitch Co. (NYSE:ANF) to sustain themselves, they need to get smaller in size and focus on niche market, instead of targeting multiple audience.

Abercrombie & Fitch Co. (NYSE:ANF) operates its business under three different segments – International Stores, U.S. Stores and Direct to consumer.

Disclosure: None