What to Expect From Abercrombie & Fitch Earnings

Abercrombie & Fitch Co. (NYSE: ANF) is scheduled to report its fiscal fourth-quarter financial results before the markets open on Wednesday. The consensus estimates call for $0.99 in earnings per share (EPS) on $1.10 billion in revenue. In the same period of last year, the retailer posted EPS of $1.15 and $1.12 billion in revenue.

This is a company with expectations low enough that any minor success could push its share price higher, faster than most other retailers. A fourth-quarter push from Abercrombie would come at just the right time to lift the company to new 52-week highs in March.

The fact that other competitors in the retail sector are struggling shows that it’s not necessarily that Abercrombie is losing its competitive edge to its rivals, but that consumers are simply spending less, or at least this has been the case in the past quarters.

From the most recent earnings report, the company gave its outlook for the fourth quarter. Abercrombie said it expects same-store sales to be approximately flat year over year and that negative effects of the stronger dollar will continue. Gross margin is also expected to be approximately flat, as are operating expenses.
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Executive Chairman Arthur Martinez said in the third-quarter earnings report:

As we look ahead in the fourth quarter, there are mixed signals in the sector and we remain cautious; however, we are confident that the work we are doing is laying the foundation for long-term profitability and growth.

A few analysts weighed in on Abercrombie & Fitch recently:

• Wolfe Research upgraded it to an Outperform rating.
• Jefferies has a Buy rating with a $35 price target.
• FBR reiterated a Hold rating.

So far in 2016, the company has outperformed the broad markets, with the stock up about 8% year to date. Over the past 52 weeks, the stock is up 21%.

Shares of Abercrombie & Fitch were trading up 0.5% at $29.20 on Tuesday, with a consensus analyst price target of $24.72 and a 52-week trading range of $15.42 to $29.50.