Abercrombie & Fitch may boost profits by restructuring Asia-Pacific operations, says Jefferies

Jefferies analysts suggest Abercrombie & Fitch could significantly improve earnings by reshaping its Asia-Pacific business, which has grown in sales but remains unprofitable. Despite sales rising from $119 million in 2023 to $157 million in 2026, the region still posts negative operating income, prompting management to reconsider its strategy. Potential moves include exiting the region or shifting to a royalty-based model, which could increase EBIT and EPS by fiscal 2028. The company also plans $450 million in share buybacks for FY 2027, supporting further upside. Jefferies maintains a 'Buy' rating with a $130 price target, implying nearly 50% upside from current prices.