Lack of Traveler Spending and Strong Dollar Hurts Retailer Abercrombie in Q2

According to the Latest Earnings results, EMC Corporation reported Earnings Per Share (EPS) of $0.45 whereas, the Analyst were expecting an EPS of $0.41/share. The company’s net loss was $13.1m, or 19 cents a share, compared with a loss of $800,000 a year ago.

The company, which has several stores in the St. Louis area, said it plans to open six new outlet stores primarily in the USA and close up to 60 domestic stores during the fiscal year through lease expirations. Excluding certain items previous year, stores and distribution expense decreased $4.9 million, primarily due to the realization of savings on lower sales and expense reduction efforts, partially offset by higher direct-to-consumer expense. Additionally, adverse effects from currency exchange rates will be about $25 million for sales revenue and about $20 million on the company’s operating income – with the largest impact during the third quarter. According to the company’s Executive Chairman, Arthur Martinez, Abercrombie’s second-quarter results were – for the most part – in line with the guidance provided in the most recent earnings release.

The retailer’s comparable sales at stores open at least a year fell a slightly steeper-than-expected 4 per cent in the second quarter ended July 30.

The company also announced a closure of an additional 60 underperforming stores, and with the expiration of half of its leases in the next year, it will have greater flexibility to shut down more stores. That now appears to be out the window. Now shares have been suggested as “BUY” from “0” brokerage firms and recommended as “Strong Buy” by “6” brokerage firms.

The strength of the dollar has also dragged on tourist spending.

Merrill Lynch reiterated an Underperform rating and cut its price objective to $16 from $17. In the quarter, this figure fell by 4% with the company seeing significant headwinds in the flagship and tourist locations. The US business is showing signs of stabilization, with store closures and cost cuts helping to offset some margin pressure. Credit Suisse has “Underperform” rating and $18 price target.

Following the release of second quarter results, Miuho Securities weighed in on ANF nearly immediately, bringing their price target down in the process.

KeyBanc has an Overweight rating and cut its price target to $25 from $27. Finally, Royal Bank Of Canada decreased their target price on Abercrombie & Fitch Co. from $23.00 to $20.00 and set a “sector perform” rating for the company in a report on Wednesday.

Stifel cut its price target to a Hold rating from Buy. (NYSE:ANF) [Trend Analysis] considering as most desiring stocks in active trading lead, shares plunged following opening to traded at $18.29 with volume of 22.99 Million shares.