Assessing Apparel Retailers’ Valuation
As of June 22, Abercrombie & Fitch’s (ANF) forward PE multiple was 28.7x, much higher than other apparel retailers’ multiples. American Eagle Outfitters’ (AEO), Urban Outfitters’ (URBN), and Gap’s (GPS) PE multiples were 16.0x, 18.1x, and ~13.0x, respectively. Forward PE multiples, calculated by dividing a company’s stock price by analysts’ earnings estimates for the upcoming four quarters, are among the most popular metrics for making investment decisions.