Abercrombie & Fitch Co. (ANF)

jpauling352 (< 20) Submitted: 6/04/07 10:41 PM : Start Price: $67.01 ANF Score: -40.14

There seems to be a lot of people against Abercrombie lately. I notice a lot of people on here bashing A&F for not being "cool" anymore. I should hope most Fools have upgraded their wardrope out of college to suits, polos, etc instead of torn up jeans and rebelious t-shirts. This company is still doing things right as far as I am concerned. Hollister has taken over the torch of driving ANF sales like it should. Abercrombie & Fitch should be a premier store with only a limited number of locations. Ruehl seems to have lost its identity a little but should be up to par with the other three concepts by years end. Even abercrombie stores have improved comps. While enough people seem to think that ANF is not cool anymore, the numbers are not showing it.

ANF is doing well in America, but Abercrombie &Fitch is doing exceptionally well overseas. The London store is on pace to match or beat the New York Flagship store. With Europe and Asia screaming for Abercrombie, the growth is not yet over.

Another growth aspect is the fifth concept. I do not know much about the new concept other than it is supposed to be an underwear store. I do not know if it is men's and women's, but it will not cannibalize current store sales. If the company can bring the marketing and brand recognition to thist fifth concept that they have brought to the Abercrombie & Fitch line, then it should be a great success.

Finally, we come to the important part, the numbers. The company has $12/share in assets. If ANF meets the mean EPS estimates for 2007 of $5.23, then the earnings should be worth $89 (5.23 x current P/E of 17). Add the assets and the earnings together, and there is a value of $101. A 23% return over today's share price by next year. Now ANF just needs to deliver.

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