Just throw some ANF sponsored parties at some white only HS and colleges around the country and post it on youtube and TV - boom instant turnaround
But nowadays, it is good to have a token minority friend. So, they must at least hire one black or similar actor for that TV show. Then, write the script to make him emphasize his race in every conversation so that the white actors can agree with his sentiments. You cannot be a douche bag if you are racially sensitive… right?
They are closing stores around the world…
http://money.msn.com/top-stocks/post.aspx?post=9d082fdb-45ab-42cd-849d-32e1e09c888e
What’s up with them is that they have had several quarters in a row of negative SSS comps, have lost share (as have ANF and ARO) to fast fashion, and fired their CEO last week.
That said, I do think that there’s a lot of negative sentiment baked into the stock right now. Stock is down 33% over the last year and trading at a discount to just about everyone else in their comp group, while historically they have had better merchandising than peers and it’s possible they get a “free pass” for the next few quarters as the Chairman steps up to fill the role of the CEO. The 500K open market purchase by Jay Schottenstein as well as a couple other directors over the last three months definitely is encouraging.
The thing with these apparel retailers is that “turnaround” stories can take longer than you think and negative comps can persist for many quarters in a row before things get really better, and I’m not convinced that AEO can keep up with true fast fashion. That said, I think it has a better chance going to $20 than to $10 so probably would buy if it were even cheaper. Doesn’t seem like a screaming buy yet given the overall challenges in the teen apparel sub-sector but definitely like it better than ARO and ANF and would definitely go long instead of short if I had to choose.
^ Good stuff, thanks buddy. Going to have to do more research on this one and I’ll share anything interesting.
Yeah, I mean nothing is bulletproof but I think AEO has pretty good risk/reward at these levels. That’s never to say that they can’t continue to comp negatively especially if fast fashion continues to take share, but it’s all about making educated bets right? The insider buying and change in leadership are encouraging to me, and you’re buying AEO much cheaper than any of its peers. However, if you really wanted to be safe, getting in at $11/share would bring you closer to historical valuation troughs, though it hasn’t been that cheap since mid-2011.
The only people who wear A&F are in highschool or 40+ single guys who still go clubbing
I don’t even know if the above holds true anymore. High school kids these days dress like Mac Miller or Beiber, not A&F…
That’s what i mean! i don’t htink the whole college look is in style anymore, and some people will continue to wear them but certainly not going to keep buying the same hoodie over and over again.
What about the highschool crowd? Don’t they want to dress like the college look, while the middle schoolers are now starting to dress like high schoolers? Or am I off base?
No, highschool girls in america dress like 35 year old divorces.
ANF down 4.89% today to $33.65
AEO down 2.51% today to $13.19, the larger insider purchase made at $12.84.
It’s getting interesting, I have no positions in either but it’s getting tempting… doing more research, nothing out of the ordinary so far.
ANF had some good news today, up up up!
I didn’t buy in, I got into another retailer instead (COH).
Sentiment on the whole specialty apparel retailer space was so poor that given that the numbers today were “not as bad as expected,” ANF / AEO / ARO are all up meaningfully
^ Respect
Also hpracing007, it’s worth re-visiting the other posts on this thread where we were dialoguing about AEO. This is a good example of value investing gone right – sentiment on the sector was terrible, AEO trading well below comps and historical ranges, and significant insider buying driven by C-Suite turnover – great set-up for 15% gains in a month. At current levels, risk/reward is more balanced but as noted before, I still think AEO has a better chance going to $20 than down to $10.
I still like AEO better than ARO and ANF. I’m not involved with either ANF or ARO, but may take a closer look at ANF now that they disclosed an accelerated share repurchase program and basically guided in-line for FY2014 so seems like a fairly low hurdle to clear.
If you are contemplating going long any of these names, then you’ll need to keep track of SSS comps and how the turnaround is progressing. For the time being though, sentiment is still pretty low, which means that if Street is expecting “terrible” but the company delivers “bad,” the stock will still go up.
^ I read this thread again first thing and I agree it is a good example of value investing. Kicking myself, still learning.
Any new thoughts on AEO or ANF? I got in on some AEO at $13 and it got hit, under $11 now.
Bought more, I think the sentiment is too negative for what it is but I could be wrong.
Think sentiment is very negative right now, and stock is cheap, but this just underscores how important it is to manage your retail positions around weekly/monthly trends. There are a lot of people doing channel work here so hard to gain an edge; the best edge you have is buying in close to whatever you think the worst case scenario is.
Big reason AEO disappointed was because of profitability issues due to discounting and bad weather, and outlook did not look good. We are in a market that is becoming increasingly risk-off so stuff like retail and particularly AEO, where there are concerns about who the next CEO is or when comps will improve, aren’t exactly in favor. However, if you have a much longer term outlook I still think there is a greater chance AEO goes to $20 than back to $10 which is what I’d said a couple months ago.
I got ya, I have a really long time horizon so I hopefully the teenagers buy a ton of stuff from the spring and summer collection!
Yeah, and if it gets cheap enough then private equity will step in and buy them. They’ve been looked at by PE firms before. There’s downside protection here.