Abercrombie & Fitch Company (NYSE:ANF)
Consumer Discretionary - Specialty Retail | Reports May 26, Before Market Opens
Key Takeaways
- The Estimize consensus is calling for a loss of 50 cents per share on $705.19 million in revenue, right in line with Wall Street
- The move into fast fashion should provide Abercrombie an edge over its competitors and also drive top line expansion
- Abercrombie hasn’t looked back after parting ways with its founder and CEO in 2014
The retail space has taken a beating this season but that hasn’t stopped teen retailers from their steady comeback. Earlier this month, American Eagle Outfitters Inc (NYSE:AEO) trounced expectations with its first quarter results, setting a favorable stage for Abercrombie coming into its report. Abercrombie is scheduled to report first quarter earnings tomorrow, before the opening bell. With a string of better than expected earnings and positive momentum from American Eagle’s Q1 report, early indications look as if Abercrombie is poised for another strong quarter.
The Estimize consensus is calling for a loss of 50 cents per share on $705.19 million in revenue, right in line with Wall Street. Since Abercrombie’s last report per share estimates have increased 10%, reflecting the positive sentiment to ANF and the space in general. On a year over year basis, current estimates represent a 7% increase on the bottom line with sales remaining unchanged. 
The teen retailer that was long hated by Wall Street and teens alike seems to be continuing on it’s road to recovery in Q1. After parting ways with its founder and CEO in 2014, Abercrombie has ushered a new wave of change in the past two years. The company has moved away from its notoriously sexy image, to better position itself in the rapidly changing fashion industry.
In the fourth quarter, the company saw comparable store sales increase 1%, the first positive report for that metric in 2015. While the namesake Abercrombie stores posted negative SSS throughout the year, subsidiary Hollister began offsetting that weakness in the second half of 2015. Hollister has now been repositioned to compete in the burgeoning fast fashion segment. The move into fast fashion should provide Abercrombie an edge over its competitors and also drive top line expansion. Currency headwinds will still remain challenging for ANF.
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