Analyst: Ricky Guan, BCom. ‘21
[email protected] Equity Research U.S. Abercrombie & Fitch Co. (NYSE:ANF) Price Target USD$ 33.00 Consumer Goods – Clothing and Accessories Rating Buy Fitch is the Name, Comps is the Game Share Price (Mar. 11 Close) USD$ 26.64 March 11, 2019 Total Return 26.9% Abercrombie and Fitch Co. (“Abercrombie”) is a global clothing Key Statistics retailer focused on providing premium offerings of fashion 52 Week H/L $29.69/$15.28 apparel, accessories, and personal care products through its Market Capitalization $1.76B brands: Abercrombie & Fitch, Hollister, Gilly Hicks, and Average Daily Trading Volume 2.76M Abercrombie kids. Abercrombie currently operates 861 stores across over 20 countries worldwide, with a majority of its Net Debt N/A operations situated domestically within the US. Enterprise Value $1.40B Net Debt/EBITDA N/A Thesis – Return to Growth in Deteriorating Retail Backdrop Abercrombie is in the midst of restructuring its organizational Diluted Shares Outstanding 68.1M strategy – taking on certain key initiatives that we believe have Free Float 98.86% potential to stimulate global growth and re-establish stability Dividend Yield 3.00% within its current stores. Despite its abysmal performance of the WestPeak’s Forecast past, the turnaround story here is supported by management’s recent performance. Growing revenues amidst store shutdowns 2019E 2020E 2021E in the near term while setting high targets for its EBIT margins Revenue $3.67B $3.74B $3.79B seem overly optimistic given the current industry landscape and EBITDA $324M $336M $379M macro environment. However, we suspect heavier than expected Net Income $88M $97M $122M comps will continue to drive Abercrombie forward into FY19.