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Abercrombie & Fitch Co. (ANF) has outperformed the Zacks Consensus Estimate for the last 3 quarters, delivering an average beat of 36.4%. Most recently, it topped by 47.5% in its fiscal third quarter and raised its earnings guidance for 2012, sending shares higher for this casual apparel retailer.

This Zacks Rank #1 (Strong Buy) stock is an attractive investment pick given its expected earnings growth of 28.1% in fiscal 2012 and projected long-term earnings growth of 18.9%.

Third Quarter Beat

On Nov 14, Abercrombie & Fitch reported fiscal third quarter earnings of 87 cents per share, rising more than 52% year over year and significantly beating the Zacks Consensus Estimate of 59 cents. The robust quarterly performance was primarily driven by strong top-line growth along with improved margins and a lower effective tax rate.

Driven by robust sales performances in the international market, total sales advanced 9% to $1.170 billion from $1.076 billion last year. Moreover, Abercrombie’s quarterly revenue surpassed the Zacks Consensus Estimate of $1.115 billion.

Based on the strong quarterly performance, Abercrombie raised its earnings guidance for fiscal 2012 to between $2.85 and $3.00 per share, compared to its earlier guidance range of $2.50 to $2.75.

Earnings Estimates Climb

Over the past 30 days, the Zacks Consensus Estimate for fiscal 2012 rose 0.3% to $2.96 per share, representing year-over-year growth of 28.1%. The Zacks Consensus Estimate for fiscal 2013 advanced 0.6% to $3.58 over the same time frame, reflecting a year-over-year increase of 21.1%.

Valuation

Abercrombie & Fitch currently trades at a forward P/E of 16.9x, reflecting a 15% premium to the peer group average of 14.7x. On a price-to-book basis, shares are trading on par with the peer group at 2.5x.

However, given the company’s compelling fundamentals, the premium is justified and well supported by its long-term estimated EPS growth rate of 18.9%.

Shares have been steadily growing since mid-November, reflecting an upside of about 61.5%. Abercrombie & Fitch has consistently traded above its 200-day and 50-day moving average since Nov 13, 2012. Volume averages roughly 3,202K daily.

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Founded in 1892 and based in New Albany, Ohio, Abercrombie & Fitch Co. operates as a specialty retailer of premium, high-quality casual apparels for men, women, and kids through a network of over 1,050 stores across the U.S., Europe, Canada, and Asia. The company operates through Abercrombie & Fitch, abercrombie kids, Hollister and Gilly Hicks across the United States and Internationally. The company reports its operating results under three segments: U.S. Stores, International Stores and Direct-to-Consumer. Abercrombie & Fitch has a market cap of $4.01 billion

Source: Aggressive Growth: Abercrombie & Fitch