Earnings Preview: Abercrombie & Fitch

| About: Abercrombie & (ANF)

Abercrombie & Fitch Co. (NYSE:ANF) is scheduled to report its Q2 2012 results on August 15, 2012, before market opens. The street expects EPS and revenue of $0.17 and $995.67M, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from ANF and the news from its closest competitors.

Abercrombie & Fitch Co. Revenue and Net Income History

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last two quarters. In the last quarter it reported $0.03 EPS, just above analyst estimates of $0.02.

Abercrombie & Fitch Co. EPS Historical Results vs Estimates

The consensus EPS estimate is $0.17 based on 28 analysts' estimates, down from $0.35 a year ago. Revenue estimates are $995.67M, up from $916.76M a year ago. The median target price by analysts for the stock is $33.50.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On August 2, 2012, Robert W. Baird downgraded the company from Outperform to Neutral.
  • On August 2, 2012, Oppenheimer reiterated Outperform rating for the company.
  • On August 2, 2012, Caris & Company downgraded the company from Buy to Average.
  • On August 1, 2012, Wells Fargo downgraded the company from Strong Buy to Hold.
  • On May 1, 2012, UBS upgraded the company from Neutral to Buy.
  • On February 21, 2012, UBS reiterated Neutral rating for the company.
  • On February 16, 2012, Needham reiterated Buy rating for the company.

Latest News

  • On August 1, 2012, Abercrombie & Fitch announced that for the second quarter of 2012, it expects diluted earnings per share of approximately $0.15-$0.18. Based on a lower sales trend than previously projected, the Company now expects fiscal 2012, diluted earnings per share of approximately $2.50 to $2.75. This projection assumes same store sales to be down 10% for the second half of the year, consistent with the second quarter trend. Abercrombie also announced that it is cutting its international Hollister openings for the year to 30 instead of 40 and will freeze its flagship store openings after a planned Shanghai shop. The company will open the flagships it already has announced which include sites in Hamburg, Munich, Amsterdam and Dublin.
  • On May 16, 2012, Abercrombie & Fitch Co. reported unaudited results which reflected net income of $3.0 million and net income per diluted share of $0.03 for the thirteen weeks ended April 28, 2012, compared to net income of $25.1 million and net income per diluted share of $0.28 for the thirteen weeks ended April 30, 2011.
  • On February 16, 2012, Abercrombie & Fitch announced that for fiscal 2012, it expects earnings per share (NYSEARCA:EPS) in the range of $3.50-$3.75. According to I/B/E/S estimates, analysts were expecting the Company to report EPS of $3.48 for fiscal 2012.

Competitors

American Eagle Outfitters (NYSE:AEO), Coach (COH), Gap (NYSE:GPS), Ralph Lauren (NYSE:RL), and Urban Outfitters (NASDAQ:URBN) are considered major competitors for Abercrombie & Fitch Co. and the table below provides the key metrics for these companies and the industry.

Abercrombie & Fitch Co. key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one year period.

ANF Chart

ANF data by YCharts

Competitors' Latest Development

  • On August 8, 2012, Ralph Lauren Corporation announced that it continues to expect consolidated net revenues for fiscal 2013 to increase by a mid-single-digit percentage.
  • On August 2, 2012, The Gap, Inc. announced that for second quarter of 2012, it expects diluted earnings per share to be in the range of $0.47 to $0.48, compared with $0.35 for the second quarter last year.
  • On August 1, 2012, American Eagle Outfitters, Inc. announced that for second quarter of 2012, it is raising adjusted EPS outlook to $0.19 to $0.21.
  • On July 18, 2012, Ralph Lauren Corporation reported in its Form 8-K that on July 16, 2012, Tracey T. Travis, Senior Vice President and Chief Financial Officer (NASDAQ:CFO) of Ralph Lauren Corporation (Company), notified the Company that she will be resigning from the Company, effective as of July 30, 2012, to pursue other interests.
  • On May 22, 2012, Ralph Lauren Corporation announced that for fiscal 2013, it currently expects consolidated net revenues to increase by a mid-single-digit percentage, reflecting the net impact of a low single-digit decline in wholesale sales and a low double-digit increase in retail sales.
  • On May 22, 2012, Ralph Lauren Corporation announced that its Board of Directors declared a 100% increase in the regular quarterly cash dividend on the Company's Common Stock.
  • On May 17, 2012, The Gap, Inc. announced that its Board of Directors authorized a quarterly dividend of $0.125 per share payable on or after July 24, 2012 to shareholders of record at the close of business on July 3, 2012.
  • On May 17, 2012, The Gap, Inc. announced that the Company raised its guidance for fiscal 2012 diluted earnings per share to be in the range of $1.78 to $1.83.
  • On May 3, 2012, The Gap, Inc. announced that for first quarter of 2012, it expects earnings per share in the range of $0.44 to $0.46. According to I/B/E/S Estimates, analysts on an average were expecting the Company to report EPS of $0.40 for first quarter of 2012.
  • On May 2, 2012, American Eagle Outfitters, Inc. announced that for the first quarter of 2012, it expects earnings to be in the range of $0.18-$0.20 per diluted share .
  • On March 21, 2012, Urban Outfitters, Inc. announced that Eric Artz is stepping down as Chief Financial Officer (CFO) effective April 3, 2012, and is being replaced by Frank Conforti, the Company's Chief Accounting Officer.
  • On March 19, 2012, Dow Jones reported that The Gap, Inc. (Gap) has opened its first store in South Africa. The expansion in the region comes as the Company is closing stores in North America and opening outlets in other emerging markets.
  • On March 7, 2012, American Eagle Outfitters, Inc. announced that for fiscal 2012, the Company is planning a modest sales increase. According to I/B/E/S Estimates, analysts are expecting the Company to report revenues of $3.33 billion for fiscal 2012.
  • On February 23, 2012, The Gap, Inc. announced that it has approved a new $1 billion share repurchase authorization and approved a plan to increase the annual dividend per share by 11%, from $0.45 in fiscal year 2011 to $0.50 for fiscal year 2012.
  • On February 23, 2012, The Gap, Inc. announced that for fiscal 2012, it expects diluted earnings per share to be in the range of $1.75 - $1.80. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $1.79 for fiscal 2012.

Technical Overview


The stock has a market capitalization of $2.55B and is currently trading at $30.92 with a 52 week range of $28.64 - $77.49. The stock's year-to-date performance has been -36.14%. It is currently trading below 20, 50 and 200 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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