Zacks Investment Research downgraded shares of Abercrombie & Fitch Company (ANF) from NEUTRAL to UNDERPERFORM on December 24, 2014, with a target price of $26.00.
We are downgrading our recommendation on Abercrombie & Fitch to Underperform based on its dismal third-quarter fiscal 2014 performance, wherein both the top and bottom lines fell year over year. The company's sales declined due to soft store traffic, particularly in Europe, and continued weakness in its Hollister brand. Some offsetting factors in the quarter included slight improvement in November sales on account of the Black Friday event. Nevertheless, the company warned of difficult conditions through the fourth quarter and the holiday season, anticipating continued weakness in top line. Moreover, the stock has been underperforming lately due to the fading popularity of the brand among teenagers. The company has also been losing its market share with the rising popularity of fast-fashion retailers like H&M and Forever 21 among its target customers.
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