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Subject:  Re: ANF Date:  2/9/2015  5:24 PM
Author:  NajdorfSicilian Number:  174 of 3717

Due to the success of my long AEO Short ANF trade, it's now up to ~7% of my portfolio.

Every time I look into various ANFs there's no shoppers. AEO always has at least some traffic [sample size]. ANF is now discounting 70% off according to their signs.

It is certainly cheap on many measures, just not on PE and with EPSAdj est to drop at 13.2%, Sales down 9.7% Qtly YoY, down 7.8% for FY, given the action you'd expect a worse Q4 than that even.

What's priced in? Who knows...

"Last quarter, the company reported a YoY decline in revenue and EPS. While commenting on the recent price revision, Eric Beder, Wunderlich analyst, believed that there are no hopes for “any type of turn in FY16” and Abercrombie & Fitch Co will continue to face stress both at the domestic and international front. He added: “We believe both Abercrombie and Hollister have been unable to retain any pricing power as they switch away from logo-driven product, despite material cost cutting and store pruning. On the international front, we are worried over foreign exchange (FX) issues and what has been a domestic business highly dependent upon tourist-driven traffic”. Mr. Beder, therefore, expects the company to announce “materially disappointing” 4QFY14 results on March 4 this year."
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