A stabilizing U.S. business and growing international opportunities make abercrombie and fitch. a good choice for investors, an analyst said Thursday.
Jefferies & Co.'s Randal Konik said in a client note that the retailer has likely seen the worst in the U.S. and should start to bump up some of its inventories, as lean product prompted by the recession has led the New Albany, abercrombie and fitch Ohio-based chain "to lose business in products where demand has improved."
The analyst also expects the company's international business to continue to grow. While overseas sales currently make up more than abercrombie and fitch 10 percent of total revenue, Konik predicts it will make up 25 percent of total sales next year.
Konik kept a "Buy" rating and $40 price target.
Shares of abercrombie and fitch, which has sued singer Beyonce Knowles over a proposed fragrance, gained 92 cents, or 2.8 percent, to $33.92 in afternoon trading. Over the past year, the stock has traded in a range of $13.66 to $47.87.
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