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Abercrombie Hopes Change Will Spur Sales

Published 05/27/2015, 01:55 PM
Updated 07/09/2023, 06:31 AM

Very rarely does the Estimize community have a corporate earnings or revenue consensus that is lower than Wall Street’s, but that's the case for Abercrombie & Fitch (NYSE:ANF), which is set to report results after Thursday's bell. The Estimize EPS consensus calls for -$0.36 vs. Wall Street’s -$0.34. Revenues of $729M are also below the Street’s estimate for $734M.

Abercrombie & Fitch: Historic Earnings

Abercrombie is well aware of what the issues are, but can it reverse them? It has already ditched logoed gear, which has fallen out of favor with teens and recently announced it is getting rid of suggestive and sexy images that have long been a staple of its marketing strategy. There has also been a push to diversify stores that have traditionally been staffed by preppy, all-American employees.

Abercrombie & Fitch: Historic Revenue

Teen retailers continue to lose market share to the “fast fashion” names such as H & M (LONDON:0HBP), Zara and Forever 21. Fellow teen retailer Aeropostale (NYSE:ARO) reported crushing Q1 results last week, with EPS of -$0.56 missing analysts’ estimates. Revenues also missed, signifying a 20% year-over-year decline. Not all in this space have been doing poorly, however, as American Eagle Outfitters (NYSE:AEO) put up superb results last week, beating on both the top and bottom-line, and even growing EPS 650% from the year-ago quarter.

American Eagle Outfitters: Historic Earnings

As for Abercrombie, it hasn't only been struggling in the US, but internationally as well, posting 11 consecutive quarters of negative same-store sales -- a trend exacerbated by the stronger dollar. The stock is down around 30% this year and could use a positive surprise Thursday. Some news of a new CEO, which it has been without for 5 months.

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