Financial Analysis : Abercrombie & Fitch

After careful review of the American Eagle Outfitters, Inc. 2014 Annual Report, it was noted that the company have four areas that they are focusing on. The first being to make more money by adding more “compelling product assortments” by providing an unique costumer experience both online and in stores. The second being to expand their Omni-Channel capabilities. The report defines Omni- Channels as stores including displays and kiosks, web, mobile devices, social networks and email. The third is growing their digital business. The final area is improving profitability.

American Eagle is defying a slump in teen retail, with sales rising 11% in the most recent quarter. The retailer has been taking several steps to avoid slipping sales, Phil Wahba of Fortune reports. A crucial component of this is avoiding heavily discounted clothing — a trend that's hurting competitors Abercrombie & Fitch and Aeropostale. While shoppers love discounts and good sales, too many of them can be detrimental for retailers. Constant heavy discounts can condition consumers to not want to pay full price.

Abercrombie and Fitch has noted a profit of $796,000 on discontinued operations for the 2011 fiscal year. This was Ruehl, a branded store and direct-to-consumer operation that was slated for closure as far back as 2009. H&M does not make note of any discontinued operations on its latest financial statements. It is assumed, then, that there are none, since there is a reference to Current Operations, but none to Discontinued Operations.

This report presents the financial analysis of Macy’s Inc. The company’s financial position is gauged using ratio analysis and suggestions on improvements are provided. The ratios will be compared to one of its top competitors Dillard’s. Using 2014 key financial statements such the income statement, balance sheet, cash flow, and key statistics found on yahoo finance. It also analyzes the company’s historical stock prices and will compute the stock average, standard deviation, and beta over a 60 month period and compares it to the market average. It then will transition into reviewing future growth estimates and will use the constant growth model to compute the company’s fundamental value. Also, it will review analyst opinion

They need to work on earning the trust of their customers with their affordable prices and good quality of the garments sold. In addition to customer loyalty, not enough time is spent on advertising of the company. Because of the lack of advertising AE has experienced a loss of fashion sales in the recent years. The store needs to reach out to its target market by providing more commercial or doing more promotional work. American Eagle is challenged with determining what trends are appropriate for its customers and how to interpret thee trends. Over the past two years, competitors such as Abercrombie and Fitch have lowered their prices, which have created additional promotional pressure for American Eagle. Some investors believe Aeropostale has the value niche and Abercrombie has the high end positioning, so American Eagle is sometimes perceived as being stuck in the middle, without a true niche (http://www.tcnj.edu/~keyser2/Strategic%20Management/American%20Eagle/Datamonitor%20Overview.txt).

This memo provides an analysis of two prosperous retailer companies in the United States: American Eagle Outfitters and the Buckle Company. We will help you determined which of the two company demonstrates the highest potential investment opportunity based on their financial statements for the current year. We will be discussing American Eagle Outfitters and the Buckle Company cost and book value of property and equipment, their depreciation method, the estimated useful lives for buildings, leasehold improvements, the future minimum lease obligations under operating leases, their return on assets, their profit margin, and their asset turnover ratio. We recommend to invest in the Buckle Company because it has a higher profit margin

Nordstrom’s profitability demonstrates similar results as compared to competing companies, however, indicates positive future performance. From 2014 to 2015, Nordstrom’s income decreased by $120 million as a result of increased cost of goods sold and administrative expenses. The retailer continues to invest heavily in online technologies and order fulfillment, however, it has minimal improvement up to this point. In addition, Nordstrom’s growth-oriented investments in expansion of its Nordstrom Rack stores and entrance to the Canadian market has greatly increased its heavy capital expenditures for the year. Consequently, Nordstrom’s ability to generate profit from investment in sales faltered as its return on assets decreased by .8%. The retail

Macy's is one of the premier retailer franchises within the United States. To begin, Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isadora, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. Macy's, with its ride array of assortments and products continues to grow as it attempts to capture market share from failing competitors. Macy's is also unique as it operates in a unique market demographic. It is upscale, but not to the extent of Saks Fifth Avenue or a Nordstrom. It is also not as low scale as a JC Penny or Sears. As such, the company occupies a unique

Victoria’s Secret, the company that is the most famous manufacturer and marketer of women’s premium lingerie, womenswear and beauty products, and is famous for its models wearing angel wings, warned its investors. The stock is now down more than 25% so far this year and more than 40% over the past 12 months. One of the reasons for that is that Victoria’s Secret killed off its swimwear line last May. However, according to L Brands (retail company that owns Victoria’s Secret) words, the lack of swimwear contributed just to 6% of the overall drop this month. The bigger problem is Amazon. The Wall Street journal reported earlier this month that Amazon is planning on creating its own line of affordable

From 2011 to 2012, the Z- Score of Abercrombie & Fitch Corp. increased from 3.29 to 4.27, this increase is mainly contributed to the increase of ME/TL ratio (Market value of Equity/ Total Liability), which raised from 1.63 to 3.09. The ME/ TL ratio can indicate that A & F have more investment asset than financing asset. This ratio is important for the company’s owners and investors, as in some sense it shows market’s reaction to company’s financial position. The higher value of the ratio, the better it is for the company. The rise of this ratio is probably because of the earning rising in third quarter, 2012. Abercrombie & Fitch Co.'s ANF fiscal third-quarter earnings rose 40% as the teen apparel retailer posted stronger margins and stronger

Hollister performed well for the organization in the last announced quarter in spite of a testing retail condition, a pattern which is relied upon to proceed in the primary quarter also. In any case, for Abercrombie, the brand has not possessed the capacity to conquer the difficulties postured by the attire showcase, which is required to bring about a slower than anticipated advance of the brand renewal arranges. The organization's lead and traveler stores are foreseen to weigh vigorously on the outcomes, accordingly of the holding on activity headwinds.

The main issue of the article is that the company, Abercrombie and Fitch, is no longer a popular trend and it declining rapidly in sales. One of the main reasons is the CEO of the company, Mike Jeffries. Mike Jeffries has his own unique style of representing the company’s product; this style is not in favor of any business ethics, thus causing the sales of Abercrombie and Fitch to decline.

In the year 2000, the United Nations developed an initiative to make businesses more socially responsible. It is called the United Nations Global Compact, or U.N.G.C. for short and it has 10 principles that are categorized into 4 groups. Human rights, labor practices, the environment, and anti-corruption policies summarize the 10 principles that businesses should follow. Since its inception 15 years ago, more than 12,000 participants from all over the world have agreed to follow the U.N.G.C. 's principles (Participants and Stakeholders). So, where does Abercrombie & Fitch fit into all of this? In order to fully evaluate the business practices of Abercrombie & Fitch, or A&F for short, we need to see if they are a part of the U.N.G.C. initiative, and what Abercrombie and Fitch says they are doing versus what they actually are doing. After pointing out issues with Abercrombie and Fitch 's practices for the last 15 years, it 's also important to look at the effect these practices are having on the company 's bottom line.

Macy's is one of the premier retailer franchises within the United States. To begin, Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isadora, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. Macy's, with its ride array of assortments and products continues to grow as it attempts to capture market share from failing competitors. Macy's is also unique as it operates in a unique market demographic. It is upscale, but not to the extent of Saks Fifth Avenue or a Nordstrom. It is also not as low scale as a JC Penny

Abercrombie & Fitch is an American retail clothing chain store established in 1892. Currently, Abercrombie & Fitch are primarily in US, but also in Canada where retail stores are located. It sells men’s and women’s jeans, tees, tank tops, outerwear, sweatshirts, accessories, etc. Abercrombie & Fitch’s main target market is male and female teens and collegiate demographic who lean on parents for financial sustenance. Abercrombie & Fitch’s main target market is around college students and teen people(high-school students and pre-college students). It attracts mid-to-upper class family who are willing to spend a little