Earnings Preview: Abercrombie & Fitch

Abercrombie & Fitch (ANF) is expected to report Q3 earnings before market open Friday, November 14, with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for a profit of 71c on revenue of $910.53M. The consensus range is 61c to 78c for EPS, and revenue of $886.51M to $1.03B, according to First Call. On October 9, the retailer reported September same-store sales fell 14% and forecast Q3 EPS 74c to 76c. At the same time, the company said 2H08 would be "appreciably below" the previous view of $3.40 to $3.45. Abercrombie reported October SSS declined 20% on net sales of $215M.

Analyst Views

Zacks Investment believes that although estimates have recently been cut on several retailers like Abercrombie, the company does have a history of topping expectations. Therefore, Zacks says it is difficult to say whether Q3 results will disappoint shareholders; however, even if earnings match or top expectations, guidance is likely to be weak. In a November 10 note to clients,

Barclays analyst Jeff Black said that near-term results are likely to remain pressured. Rather than turning to promotions as many of its rivals have done amid a difficult environment, Black says the retailer has focused on international expansion and has kept its price points steady. Friedman Billings analyst Adrienne Tennant says that sector expectations are extremely low and companies are likely to be very conservative with guidance. She said Abercrombie will likely miss analyst consensus expectations but kept her Outperform rating on the stock due to its longer-term value.

Comments

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2008 Nov 14 06:47 AM