is the drop due to the inventory accounting change? Isn't the cost method more accurate and more labor intensive since they have to track the inventory from beginning to end instead of estimate based on retail method.... means they have upgraded their internal tracking systems... Am I wrong to think that?
Their new accounting method shows a good profit when in fact it was not so great. Their US stores performed at or below last year's level and they intend to close a good swath of them this year. The only growth was overseas, which was ostensibly very strong year over year, no doubt due to a weakened dollar.
I doubt if it has much effect at all for two reasons. First, ANF is not a big discounter. Some companies use discounting as their modus operandi. If you don't use variable pricing, like say, "Sims" It doesn't do anything. Second, Abercrobies stores are VERY different, so when you add the margins from their various subsidiaries, you have a pretty big averaging factor anyway. More averaging isn't going to change much.
Personally, I don't see how they could have avoided making the change. When you have an item you are selling in 15 countries, all with different COS and different exchange rates, determining inventory value would be really complicated.
the stock shot up from 30s to 50 in 3 months it's due for a pull back short of some miraculous guidance. China is probably where their growth will be judging by the performance of their Hong Kong stores since opening. The lines to take pictures with half naked models over Chinese New Year in their china stores are impressive.
Have you never heard of "SELL ON THE NEWS"? Learn that profits, business changes, improvements, etc. don't mean squat in the market. It's manipulation. If you want make or save money, you need to think like the manipulators and be nimbler than the herd.