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