Have You Offloaded Abercrombie (ANF) From Your Portfolio?

Abercrombie & Fitch Co. (NYSE:ANF) is one such stock that is struggling to find a place in investors’ portfolio. Why is it so?

Shares of this specialty retailer of casual apparel have nosedived roughly 30% year to date and there seems to be no catalyst to help it regain the lost momentum. Moreover, the company currently carries a Zacks Rank #5 (Strong Sell). This clearly implies that analysts covering the stock are not convinced about Abercrombie’s performance in the near future.

Why the Stock is Out of Favor Now

After three straight quarters of positive earnings surprise, Abercrombie slipped to a loss in first-quarter fiscal 2016. Also, the loss was wider than the Zacks Consensus Estimate. Moreover, the company’s sales missed expectations and fell year over year owing to soft traffic trends in international markets as well as its U.S. flagship and tourist stores.

Management expects the fiscal second quarter to remain challenging, which will result in lower comparable store sales and gross margin. (Read: Abercrombie Stock Down as Q1 Loss Misses Estimates)

Additionally, adverse foreign currency fluctuations have been weighing on Abercrombie’s results as more than a quarter of the company’s total revenue comes from overseas operations. These headwinds had a nearly 5 cents per share adverse impact on the company’s bottom-line results in the fiscal first quarter.

Estimates Trend South

Consequently, the Zacks Consensus Estimate of 89 cents and $1.16 for fiscal 2016 and fiscal 2017 has dropped 29 cents and 27 cents, respectively, over the past 60 days. Moreover, the Zacks Consensus Estimate for the second quarter has decreased to a loss of 20 cents from 7 cents over the same time frame.

With Abercrombie’s share price tumbling and estimates witnessing downward revisions, it would not be prudent to keep the stock in your portfolio, at least for the time being.

Stocks that Warrant a Look

Investors interested in the retail space may consider some better-ranked stocks such as Delta Apparel Inc. (NYSE:DLA) , sporting a Zacks Rank #1 (Strong Buy), and The Children's Place, Inc. (NASDAQ:PLCE) and Carter's, Inc. (NYSE:CRI) , both holding a Zacks Rank #2 (Buy).