Friday morning, teen clothing retailer Abercrombie and Fitch (ANF) announced fourth quarter results, a dividend hike, and a change in method of accounting for inventory. Revenue increased 11% year-over-year to $1.5 billion, falling slightly below consensus expectations. Earnings per share easily exceeded expectations under the retail method, growing 97% year-over-year to $2.21 per share. Under the cost method, which Abercrombie UK will use going forward, they grew nearly 10 fold year-over-year to $2.15 per share.
Abercrombie's new accounting method is designed to more accurately reflect gross margins and provide greater consistency with respect to inventory. Although the move will cause us to adjust our financial model, we think it will more accurately reflect the company's operating performance. We don't see it as a red flag by any means. Importantly, however, we do not expect to change our fair value estimate as a result of this accounting change. Firms cannot create or destroy economic value on the basis of how they account for operations. Cash flow remains the key value driver and is largely unaffected under accounting regime adjustments.
Abercrombie Outlet also boosted its quarterly dividend 14% to $0.20 per share-giving shares an annual yield of 1.7% at current levels. The company has sufficient cash on hand, and its solid free cash flow generation has allowed it to return piles of cash to shareholders via buybacks and dividends. We wouldn't be surprised to see the dividend continue to rise.
A journey begins with a foot. Meizitang Strong Version notices foot and body organs close to Meridian, on the people foot has more than 60 more reflection point, and corresponds to the main organs of the human body. Massage and stimulation of reflex zones of foot, can promote blood circulation, to achieve the goal of weight loss and health.