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Abercrombie (ANF) to Post Q4 Earnings: What Awaits the Stock?

Abercrombie & Fitch Co. ANF is likely to register top- and bottom-line declines when it reports fourth-quarter fiscal 2020 numbers on Mar 2, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $1,125 million, which indicates a fall of 5.5% from the year-ago quarter’s reported figure. The company’s top line registered a decline of 5%, in the last reported quarter.

The Zacks Consensus Estimate for quarterly earnings has moved down by two cents in the past seven days and is currently pegged at $1.20 per share. The consensus mark suggests a decline of 8.4% from earnings of $1.31 reported in the year-ago quarter. In the last reported quarter, the company’s earnings of 76 cents comfortably surpassed the Zacks Consensus Estimate of a loss of 5 cents. Moreover, it delivered a trailing four-quarter earnings surprise of 400.3%, on average.

Key Aspects to Note

Abercrombie’s sales have been impacted by sluggish store traffic trends and pandemic-induced store closures. Consequently, revenues have been dismal across both Hollister and Abercrombie brands. Management had earlier notified that in-store sales have continued to remain weak during the fourth quarter, due to limited store hours, restriction on store capacity along with store closures in some parts of EMEA and North America. These headwinds are likely to have put pressure on the company’s top line during the fourth quarter. According to a press release issued on Jan 12, Abercrombie guided net sales to decline in the range of 5-7% for the fourth quarter.

Nevertheless, the company’s efforts to expand digital and omni-channel capabilities are likely to have provided some cushion. Markedly, the company has been witnessing improved traffic across websites and apps.

Also the company is undertaking prudent measures for better managing inventory as well as expenses. In fact, the company had earlier guided gross margin to expand at least 130 basis points during the fourth quarter. This is likely to be driven by lower promotions and higher markdowns. Moreover, the company projected adjusted operating costs to decline at least 2%.

Abercrombie & Fitch Company Price, Consensus and EPS Surprise


Abercrombie & Fitch Company price-consensus-eps-surprise-chart | Abercrombie & Fitch Company Quote


What the Zacks Model Unveils

Our proven model predicts an earnings beat for Abercrombie this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Abercrombie currently carries a Zacks Rank #1 and an Earnings ESP of +9.17%.

Other Stocks Poised to Beat Estimates

Here are other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat.

Target Corporation TGT currently has an Earnings ESP of +8.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar Tree, Inc. DLTR currently has an Earnings ESP of +1.94% and a Zacks Rank #2.

Foot Locker, Inc. FL has an Earnings ESP of +0.87% and a Zacks Rank #3, at present.

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