Fashion retailing has always been a fickle business, with success largely dependent upon staying ahead of rapidly changing tastes. Those tastes are changing faster than ever, with a growing number of retailers opting to totally turn over their stock every 10 weeks and no longer offering basic items such as tees and polo shirts. Retailers have also been abandoning logos over the past few years as consumers have become increasingly hesitant to brand themselves for the world to see.

Abercrombie & Fitch (NYSE: ANF), founded in 1892 and best known for catering to higher-end teen fashionistas for decades, announced last week that it was caving in to those trends. Net sales in the second quarter fell 6% from $945.7 million last year to $890.6 million as company-wide comparable sales were down 7 percent on a year-over-year basis.

On the earnings call, the company’s chief operating officer said that they had noticed that sales of items without logos had been improving in recent quarters while branded merchandise (which included the majority of inventory) was declining. As a result, the company plans to have almost no logoed merchandise on its shelves by next year.

The company is also speeding up its supply chain to capture a larger share of the fast-fashion market, in the hopes of edging out companies like Forever 21 and H&M. The competition not only update their fashions faster, they typically don’t brand their merchandise and offer lower prices, all attractive qualities for teenage slaves to fashion. Abercrombie & Fitch will be working towards replicating that model over the next several quarters.

Despite those changes, many people wonder if the company will actually be able to survive in today’s tumultuous fashion market.

It’s important to remember that this isn’t the first time the retailer has given itself a makeover. After last year’s dustup over its garment sizes and management’s tone-deaf response that the stores cater to “the good looking, cool kids,” it began offering larger plus sizes for some of its women’s clothes online. It has also survived a bankruptcy in the late 1970s and transitioned from being a purveyor of hunting and outdoor wear to teen fashion around the same time.

Most importantly, though, it has the financial strength to ride out its transition. While margins are razor thin, store expenses fell year-over-year from $472 million (nearly half of sales) to $426 million (47.9% of sales) in the second quarter. Marketing, general and administrative expenses also declined from $118 million to $111 million. Net income per share of 19 cents in the quarter also beat both last year’s 17 cents and analyst estimates even as sales missed.

In addition to still being profitable, the company also maintained its 20 cent quarterly dividend for a yield just shy of 2% while repurchasing 1.5 million shares in the quarter. Buybacks have totaled 5.3 million shares so far this year, so management continues to create shareholder value through all of its available channels while still holding more than $300 million of cash on its balance sheet.

There’s no denying that all of these changes are likely to unsettle some current customers and, as a result, management has lowered its guidance for the year to account for that and overall slowing sales. It now estimates full-year earnings per share to fall between $2.15 and $2.35 as same-store sales are likely to decline by mid-single digits. It also looks to close about 60 stores by 2016. It will also be placing a greater emphasis on its direct-to-consumer business by promoting both its website and catalog sales.

Shares have fallen from a 52-week high of $45.50 since the announcements, settling around $40 as many investors are clearly taking a wait-and-see approach. That’s understandable – while the company has remained in the black on an annual basis, quarterly earnings have been extremely volatile over the past two years.

I wouldn’t count the company out, though. While Wall Street analysts have cut their average full-year earnings forecast from $2.44 to $2.36 since the second quarter earnings announcement, they’re still confident that they will come in at the high end of management’s forecast. They also predict that earnings should grow by 18.8 percent over the next five years, well ahead of most of Abercrombie & Fitch’s competitors.

There are also a few attractive points as far as valuation is concerned, with the company’s price-to-earnings-growth ratio currently at just 0.9, meaning you can pick it up for less than the value of expected future growth. It is also trading at just 0.8 times trailing one-year sales. Trading at an attractive valuation with a solid turnaround plan, Abercrombie & Fitch is a buy up to $45.