Abercrombie & Fitch Co /De/ (NYSE: ANF)

Sector: Consumer Cyclical Industry: Apparel Retail CIK: 0001018840
Market Cap 6.17 Bn
P/B 4.69
P/E 11.82
P/S 1.19
ROIC (Qtr) 21.14
Div Yield % 0.00
Rev 1y % (Qtr) 6.75
Total Debt (Qtr) 1.13 Bn
Debt/Equity (Qtr) 0.86

About

Abercrombie & Fitch Co., also known as ANF, is a prominent player in the American lifestyle apparel industry. The company's main business activities include designing, manufacturing, and selling high-quality casual wear for men, women, and children. Its products are available through its own retail stores, e-commerce platform, and other distribution channels. Abercrombie & Fitch's primary products include denim, graphic t-shirts, and other casual wear, which are designed to appeal to a wide range of customers, from teenagers to young adults. The...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 620.62M provides robust 0.55x coverage of total debt 1.13B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 605.78M provide 2.68x coverage of short-term debt 225.85M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 620.62M provides exceptional 57.85x coverage of interest expenses 10.73M, showing strong debt service capability.
  • Operating cash flow of 620.62M provides exceptional 78.51x coverage of minority interest expenses 7.91M, showing strong core operations.
  • Operating cash flow of 620.62M provides strong 16.32x coverage of stock compensation 38.03M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 620.62M barely covers its investment activities of (205.88M), with a coverage ratio of -3.01, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 384.55M represents just -21363.61x of debt issuance (18000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 620.62M barely covers operating expenses of (629000) with a -986.68 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Retained earnings of 3.53B provide limited buffer against comprehensive income items of (133.03M), which is -26.50x, indicating elevated exposure to market risks.
  • Operating cash flow of 620.62M is outpaced by equity issuance of (451.22M) (-1.38 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Apparel Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TJX Tjx Companies Inc /De/ 175.80 Bn 34.34 2.98 13.19 Bn
2 ROST Ross Stores, Inc. 58.85 Bn 28.21 2.67 5.19 Bn
3 LULU lululemon athletica inc. 25.43 Bn 14.61 2.30 1.76 Bn
4 BURL Burlington Stores, Inc. 18.26 Bn 32.57 1.63 5.94 Bn
5 GAP Gap Inc 10.00 Bn 11.75 0.65 5.52 Bn
6 URBN Urban Outfitters Inc 7.11 Bn 14.53 1.18 1.18 Bn
7 ANF Abercrombie & Fitch Co /De/ 6.17 Bn 11.82 1.19 1.13 Bn
8 BOOT Boot Barn Holdings, Inc. 5.78 Bn 27.75 2.79 0.67 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.92 1.35
EV to Cash from Ops. EV/CFO 10.79 8.18
EV to Debt EV to Debt 5.92 4.33
EV to EBIT EV/EBIT 8.98 -60.97
EV to EBITDA EV/EBITDA 7.43 6.53
EV to Free Cash Flow [EV/FCF] EV/FCF 17.42 22.99
EV to Market Cap EV to Market Cap 1.09 2.06
EV to Revenue EV/Rev 1.29 1.11
Price to Book Value [P/B] P/B 4.69 3.23
Price to Earnings [P/E] P/E 11.82 195.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.88
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.58
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.33
Interest Coverage Int. cover (Qtr) 69.55 13.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -46.42 -5.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -11.32 89.63
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -3.64 13.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 2.25 -16.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 0.87 10.85
EBT Growth (1y) % EBT 1y % (Qtr) 1.67 6.10
EPS Growth (1y) % EPS 1y % (Qtr) 1.32 10.94
FCF Growth (1y) % FCF 1y % (Qtr) -29.42 -129.32
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.34 -1.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.49 1.40
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.52 0.38
Current Ratio Curr Ratio (Qtr) 1.38 1.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.86 1.31
Interest Cover Ratio Int Coverage (Qtr) 69.55 13.58
Times Interest Earned Times Interest Earned (Qtr) 69.55 13.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.90 2.72
EBIT Margin % EBIT Margin % (Qtr) 14.40 -1.70
EBT Margin % EBT Margin % (Qtr) 14.19 -2.76
Gross Margin % Gross Margin % (Qtr) 62.10 40.52
Net Profit Margin % Net Margin % (Qtr) 10.10 -4.02