We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Abercrombie's (ANF) Strategic Endeavors to Bolster Growth
Read MoreHide Full Article
Abercrombie & Fitch Co. (ANF - Free Report) has been gaining traction on its strategic capital investments, cost-saving efforts, loyalty and marketing programs. In addition, the company’s store-restructuring efforts along with expansion of Hollister stores are commendable. Abercrombie’s initiatives to expand Direct-to-Consumer (DTC) channel through expansion of online and omni-channel capabilities are also boding well.
Backed by these initiatives, the company is witnessing robust performance across all its brands, alongside higher comparable store sales (comps), gross margin growth and expense leverage.
Strategies in Detail
Abercrombie’s investments in mobile, omni-channel and fulfillment are significantly boosting growth at its DTC business along with digital engagement with consumers being its core strength. Overall, the DTC business accounted for nearly 27% of net sales in first-quarter fiscal 2018, recording 14% increase in comp sales. In fiscal 2018, management plans to continue investing in DTC capabilities besides innovations in this channel using customer insights and data analytics. Moving ahead, the company remains keen on improving customer experience by investing in loyalty programs, stores, direct-to-consumer and omni-channel capabilities.
Additionally, Abercrombie shifted focus to closing underperforming U.S. chain stores to drive the top line and profitability as a part of its streamlining efforts. Simultaneously, it is aggressively expanding Hollister stores in the new markets, which is likely to enhance the company’s overall performance. The brand is benefiting from the positive customer response to product innovations, emerging categories and overall customer experience. Notably, the Hollister brand reflected persistent positive momentum in the fiscal first quarter driven by solid sales growth across all channels and geographies. Comps for the brand improved 6% owing to continued strength in North America and Asia.
In fiscal 2018, the company plans introduce 22 full-price stores, including 13 Hollister and nine Abercrombie stores. Moreover, it plans to shut down up to 60 stores in the United States, through natural lease expirations. Store closure is anticipated to give Abercrombie more flexibility in terms of cost savings, amid a tough environment. Meanwhile, Abercrombie is also focused on opening new smaller footprint prototype stores.
Abercrombie, which shares space with retailers like American Eagle Outfitters, Inc. (AEO - Free Report) , Boot Barn Holdings, Inc. (BOOT - Free Report) and Zumiez Inc. (ZUMZ - Free Report) , has a robust surprise trend as well. The company delivered narrower-than-expected loss per share in first-quarter fiscal 2018 with a top line beat. This also marked its fourth straight positive bottom-line surprise and fifth consecutive sales beat.
As a result, management issued encouraging outlook for fiscal 2018. It now anticipates both comps and sales to be up 2-4% compared with low-single digits gain predicted earlier. Top line gains from the favorable currency rates will be offset by the absence of the additional week of sales compared with fiscal 2017.
However, the company estimates operating expenses to increase nearly 2% from the fiscal 2017 level compared with the prior guidance of 1% increase. Nevertheless, it expects liquidity to be strong in fiscal 2018. The company expects to exceed the minimum liquidity target of $700 million through fiscal 2018, as it accelerates potential investments.
Bottom Line
Given solid strategies, including focus on DTC business and omni-channel capabilities, expansion of Hollister stores as well as store remodeling, positions Abercrombie well for future growth. Also, robust top and bottom line surprise history along with an encouraging outlook for fiscal 2018 builds optimism.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Abercrombie's (ANF) Strategic Endeavors to Bolster Growth
Abercrombie & Fitch Co. (ANF - Free Report) has been gaining traction on its strategic capital investments, cost-saving efforts, loyalty and marketing programs. In addition, the company’s store-restructuring efforts along with expansion of Hollister stores are commendable. Abercrombie’s initiatives to expand Direct-to-Consumer (DTC) channel through expansion of online and omni-channel capabilities are also boding well.
Backed by these initiatives, the company is witnessing robust performance across all its brands, alongside higher comparable store sales (comps), gross margin growth and expense leverage.
Strategies in Detail
Abercrombie’s investments in mobile, omni-channel and fulfillment are significantly boosting growth at its DTC business along with digital engagement with consumers being its core strength. Overall, the DTC business accounted for nearly 27% of net sales in first-quarter fiscal 2018, recording 14% increase in comp sales. In fiscal 2018, management plans to continue investing in DTC capabilities besides innovations in this channel using customer insights and data analytics. Moving ahead, the company remains keen on improving customer experience by investing in loyalty programs, stores, direct-to-consumer and omni-channel capabilities.
Additionally, Abercrombie shifted focus to closing underperforming U.S. chain stores to drive the top line and profitability as a part of its streamlining efforts. Simultaneously, it is aggressively expanding Hollister stores in the new markets, which is likely to enhance the company’s overall performance. The brand is benefiting from the positive customer response to product innovations, emerging categories and overall customer experience. Notably, the Hollister brand reflected persistent positive momentum in the fiscal first quarter driven by solid sales growth across all channels and geographies. Comps for the brand improved 6% owing to continued strength in North America and Asia.
In fiscal 2018, the company plans introduce 22 full-price stores, including 13 Hollister and nine Abercrombie stores. Moreover, it plans to shut down up to 60 stores in the United States, through natural lease expirations. Store closure is anticipated to give Abercrombie more flexibility in terms of cost savings, amid a tough environment. Meanwhile, Abercrombie is also focused on opening new smaller footprint prototype stores.
Abercrombie, which shares space with retailers like American Eagle Outfitters, Inc. (AEO - Free Report) , Boot Barn Holdings, Inc. (BOOT - Free Report) and Zumiez Inc. (ZUMZ - Free Report) , has a robust surprise trend as well. The company delivered narrower-than-expected loss per share in first-quarter fiscal 2018 with a top line beat. This also marked its fourth straight positive bottom-line surprise and fifth consecutive sales beat.
As a result, management issued encouraging outlook for fiscal 2018. It now anticipates both comps and sales to be up 2-4% compared with low-single digits gain predicted earlier. Top line gains from the favorable currency rates will be offset by the absence of the additional week of sales compared with fiscal 2017.
However, the company estimates operating expenses to increase nearly 2% from the fiscal 2017 level compared with the prior guidance of 1% increase. Nevertheless, it expects liquidity to be strong in fiscal 2018. The company expects to exceed the minimum liquidity target of $700 million through fiscal 2018, as it accelerates potential investments.
Bottom Line
Given solid strategies, including focus on DTC business and omni-channel capabilities, expansion of Hollister stores as well as store remodeling, positions Abercrombie well for future growth. Also, robust top and bottom line surprise history along with an encouraging outlook for fiscal 2018 builds optimism.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>