It is that time of the year again. The much-awaited holiday season is on its way, keeping all retailers on their toes. It’s time for grand preparations for retailers to make the most of this solid selling period.
During this period, retailers flood the markets with offers and promotions to sweep buyers off their feet with early-hour store openings, huge discounts, promotional strategies, and free shipping on online purchases. Since the season accounts for a sizeable chunk of yearly revenues and profits, retailers will grab every opportunity to drive footfall.
Well, specialty retailer of premium, high-quality casual apparel for men, women, and kids – Abercrombie & Fitch Co. (ANF - Analyst Report) is also ready to fire with its holiday strategy this time around. The company introduced a revamped identity of its Abercrombie & Fitch brand, which is a reflection of the contemporary consumer. Created over a period of a year and a half, the latest brand reflects Abercrombie’s focus on the evolving customer demands and aspirations.
To promote this redefined brand and embrace the holiday season, Abercrombie is set to launch an all-new advertisement campaign, which reads “This is Abercrombie & Fitch”. Further it has a redesigned logo and website. Additionally, the company plans to offer fresh digital advertising throughout social media, all video streaming networks, musical platforms, and out-of-home marketing – in Chicago, New York City and Los Angeles.
Apart from Abercrombie, many other retail bellwethers are making efforts to utilize the holiday opportunity and serve their patrons better. Incidentally, retail giants such as Target Corp. (TGT - Analyst Report) and Kohl's Corp. (KSS - Analyst Report) have announced their hiring plans for the upcoming holiday season. Per media reports, Target intends to employ 70,000 associates, while Kohl's will deploy over 69,000 workers nationwide, this holiday season. The recruiting plans of both retailers remain almost unchanged from last year. However, Target will hire another 7,500 people for its distribution center and fulfillment facilities.
Coming back to Abercrombie, we believe this step to tap holiday season sales should help this Zacks Rank #4 (Sell) company revive its long struggling top-line performance. Evidently, in the last reported quarter, the company’s sales missed expectations and fell year over year owing to soft traffic trends in its U.S. flagship and tourist stores. Further, management warned of challenging comparable store sales performance in the second half of fiscal 2016, anticipating the aforementioned traffic trends to continue along with currency woes.
However, Abercrombie seems to be leaving no stone unturned to overcome these hurdles. Sources revealed that apart from the holiday season advertisements, the company also intends to come up with a new store in Columbus at 2017 beginning – to boost traffic and sales.
We believe that all these efforts, including Abercrombie’s largest advertising campaign should work some wonders for its top line as it is likely to draw customers to the company’s stylish and classy assortments, by spreading the new holiday message.
Stock to Consider
A better-ranked stock in the Retail–Apparel/Shoe space is American Eagle Outfitters, Inc. (AEO - Analyst Report) , with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle has to its credit a spectacular earnings trend, as the company has delivered a positive earnings surprise over the past four quarters. Moreover, its long-term EPS growth rate of 11.8% and positive estimate revisions over the past 60 days help it stand strong against the industry.
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