Wedbush Morgan Lifts Abercrombie Outlook

Amid stronger traffic and sales, analyst Elizabeth Pierce sees a positive back-to-school season

Wedbush Morgan raised its estimates and price target on Abercrombie & Fitch (ANF ).

Analyst Elizabeth Pierce says the second quarter reflects strong increases in gross margin resulting from higher initial markups, and a positive customer response to the company's early back-to-school assortment. She says the company now expects to open 114 stores on square-foot growth of 19% in fiscal 2003.

Pierce says early reads of merchandise and strong traffic observed are making Abercrombie poised for a strong back-to-school season. She raised her $1.86 fiscal 2003 (Jan.) earnings per share estimate to $1.93, and upped her $2.13 fiscal 2004 target to $2.18. Pierce also lifted her $36 target to $39, and is keeping her buy rating.