Abercrombie & Fitch Co. Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Abercrombie & Fitch Co. (NYSE:ANF) will unveil its latest earnings on Wednesday, November 14, 2012. Abercrombie & Fitch is an American specialty retailer company that, through its wholly-owned subsidiaries, operates stores and direct sales of casual apparel for men, women, and children.

Abercrombie & Fitch Co. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 60 cents per share, a rise of 5.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 72 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 61 cents during the last month. For the year, analysts are projecting net income of $2.49 per share, a rise of 7.8% from last year.

Past Earnings Performance: The company is looking to top estimates for the third straight quarter. Last quarter, it reported profit of 19 cents per share against a mean estimate of net income of 17 cents, and the quarter before, the company exceeded forecasts by one cent with profit of 3 cents versus a mean estimate of net income of 2 cents.

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A Look Back: In the second quarter, profit fell 51.6% to $15.5 million (19 cents a share) from $32 million (35 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 3.8% to $951.4 million from $916.8 million.

Stock Price Performance: Between September 13, 2012 and November 8, 2012, the stock price had fallen $7.04 (-18.3%), from $38.54 to $31.50. The stock price saw one of its best stretches over the last year between August 14, 2012 and August 21, 2012, when shares rose for six straight days, increasing 13.7% (+$4.43) over that span. It saw one of its worst periods between October 16, 2012 and October 24, 2012 when shares fell for seven straight days, dropping 5.3% (-$1.71) over that span.

Wall St. Revenue Expectations: On average, analysts predict $1.02 billion in revenue this quarter, a rise of 11.3% from the year-ago quarter. Analysts are forecasting total revenue of $4.65 billion for the year, a rise of 11.8% from last year’s revenue of $4.16 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 21.5% in the third quarter of the last fiscal year, 15.6% in the fourth quarter of the last fiscal year and 10.1% in the first quarter before increasing again in the second quarter.

An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 78.9% in the fourth quarter of the last fiscal year, by 88.1% in the first quarter and again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.78 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 2.04 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 26.1% to $687.6 million while assets rose 10.5% to $1.23 billion.

Analyst Ratings: There are mostly holds on the stock with 18 of 29 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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