Abercrombie & Fitch Earnings: Investors Ignore These Numbers

S&P 500 (NYSE:SPY) component Abercrombie & Fitch (NYSE:ANF) reported its results for the second quarter. 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.

Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?

Abercrombie & Fitch Earnings Cheat Sheet

Results: Net income for Abercrombie & Fitch fell to $15.5 million (19 cents per share) vs. $32 million (35 cents per share) a year earlier. This is a decline of 51.6% from the year-earlier quarter.

Revenue: Rose 3.8% to $951.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Abercrombie & Fitch fell short of the mean analyst estimate of 36 cents per share. Analysts were expecting revenue of $951.4 million.

Quoting Management: Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said: “The second quarter results we are reporting today are disappointing and below our expectations coming into the quarter. In particular, we saw a further deceleration in the trend in our international stores, while our U.S. chain stores also comped negatively for the quarter for the first time since 2009.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 1.1 percentage points to 62.5% from the year-earlier quarter. In that span, margins have contracted an average of 3.2 percentage points per quarter on a year-over-year basis.

Revenue has increased for four quarters in a row. Revenue increased 10.1% to $921.2 million in the first quarter. The figure rose 15.6% in the fourth quarter of the last fiscal year from the year earlier and climbed 21.5% in the third quarter of the last fiscal year from the year-ago quarter.

The company’s net income has now fallen for three straight quarters. In the first quarter, net income fell 88.1% from the year earlier, while the figure fell 78.9% in the fourth quarter of the last fiscal year.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 3 cents versus a mean estimate of net income of 2 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from $1.07 a share to $1.01 over the last seven days. In the past seven days, the average estimate for the fiscal year has declined from $3.56 per share to $3.48.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

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

Don’t Miss These Additional Hot Stories:

Is Disney’s Stock a Buy?

Here’s How to Invest According to Paul Ryan’s Philosophy>>

Is GE Stock a Buy, Sell, or Hold?