Ahead of the Bell: Abercrombie & Fitch downgraded

NEW YORK

An analyst downgraded Abercrombie & Fitch Co. Monday, citing worrying domestic performance in the fourth quarter.

Eric Beder of Brean, Murray, Carret & Co. lowered his rating to "Sell" from "Hold," saying that the company's fourth-quarter results showed strength overseas but its U.S. results were troubling.

The apparel retailer in February reported that its domestic sales dropped 12 percent in the fourth quarter, while international sales surged 86 percent.

"We believe the domestic operations are becoming even more and more broken as the company has begun to discount fashion items to drive any semblance of traffic and that the turnaround of the company remains farther in the future than investors believe," he wrote in a note to clients.

Retailers have been squeezed during the recession as shoppers have pulled back on their discretionary spending.

Beder set a $29 price target on the retailer's shares. The stock finished Friday's trading at $36.42.