Abercrombie & Fitch (NYSE: ANF) and Tilly’s (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Insider & Institutional Ownership

97.6% of Abercrombie & Fitch shares are owned by institutional investors. Comparatively, 40.8% of Tilly’s shares are owned by institutional investors. 0.6% of Abercrombie & Fitch shares are owned by company insiders. Comparatively, 50.1% of Tilly’s shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Abercrombie & Fitch and Tilly’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abercrombie & Fitch 6 13 3 0 1.86
Tilly’s 0 2 2 0 2.50

Abercrombie & Fitch presently has a consensus target price of $11.94, suggesting a potential downside of 4.96%. Tilly’s has a consensus target price of $11.50, suggesting a potential downside of 6.28%. Given Abercrombie & Fitch’s higher probable upside, research analysts plainly believe Abercrombie & Fitch is more favorable than Tilly’s.

Profitability

This table compares Abercrombie & Fitch and Tilly’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Abercrombie & Fitch -0.62% -0.79% -0.42%
Tilly’s 2.09% 8.85% 5.50%

Dividends

Abercrombie & Fitch pays an annual dividend of $0.80 per share and has a dividend yield of 6.4%. Tilly’s does not pay a dividend. Abercrombie & Fitch pays out -258.1% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Abercrombie & Fitch and Tilly’s’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Abercrombie & Fitch $3.33 billion 0.26 $3.95 million ($0.31) -40.51
Tilly’s $568.95 million 0.62 $11.41 million $0.42 29.21

Tilly’s has higher revenue, but lower earnings than Abercrombie & Fitch. Abercrombie & Fitch is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Abercrombie & Fitch has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.55, indicating that its share price is 155% less volatile than the S&P 500.

Summary

Tilly’s beats Abercrombie & Fitch on 8 of the 15 factors compared between the two stocks.

About Abercrombie & Fitch

Abercrombie & Fitch Co. is a specialty retailer who primarily sells its products through store and direct-to-consumer operations, as well as through various wholesale, franchise and licensing arrangements. The Company operates through two segments: Abercrombie, which includes the Company’s Abercrombie & Fitch and abercrombie kids brands, and Hollister, which includes the Company’s Hollister and Gilly Hicks brands. The Company offers an array of apparel products, including knit tops, woven shirts, graphic t-shirts, fleece, sweaters, jeans, woven pants, shorts, outerwear, dresses, intimates and swimwear, and personal care products and accessories for men, women and kids under the Abercrombie & Fitch, abercrombie kids, Hollister and Gilly Hicks brands. The Company has operations in North America, Europe, Asia and the Middle East. As of January 28, 2017, the Company operated 709 stores in the United States and 189 stores outside of the United States.

About Tilly’s

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

Receive News & Ratings for Abercrombie & Fitch Company Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Abercrombie & Fitch Company and related companies with Analyst Ratings Network's FREE daily email newsletter.