Institutions still controling ANF and pushing it up despite negative comps and accounting games
Amazing how the press ignores the fact that the last quarters profit was only because Abecrombie changed the way it values its inventory. Becasue the holiday was disasterous ANF got stuck with inventory they should have marked down but did not and lost sales to American Eagle. So they had to change inventory valuation to keep the income up. ANF is in trouble but the institutional holders control the press releases and continut to paint the future as great. The game is to reduce expectations to a level below actual numbers so that it looks like a beat every time. ANF is closing stores....is haveing pricing problems, and is dealing with great competition from Amereican Eagle and other retailers that price better then the clueless management of ANF. ANF also has some of the highest paid officers. I am shocked that NO ONE adressed the invenvoty valuations that ANF did to create profit. And they are allowed to hide the accounting game in notes to the financial statements instead of disclosing a minipulate accounting game to create profit.
Abercrombie & Fitch is the popular apparel company, with two major brands driving revenues, Hollister (50% of revenues) and Abercrombie & Fitch (30%). The bad news for the company includes a string of negative comp sales numbers -- with comp sales growth having been negative for the past four quarters. Management is also expecting a decline in comp sales in the high single digits for the current quarter. The company is hoping to manipulate the poor same store sales number by closing down underperforming stores, upwards of fifty in the U.S. this year. Analysts' expect the company to grow EPS at an annualized rate of 18% over the next five years. What other accounting games can ANF do to meet those lofty projections?