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Abercrombie (ANF) to Report Q2 Earnings: What's in the Offing?
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Abercrombie & Fitch Co. (ANF - Free Report) is slated to report second-quarter fiscal 2018 results on Aug 30. The company has an average trailing four-quarter positive earnings surprise of 32.3%.
For the to-be-reported quarter, the Zacks Consensus Estimate is pegged at a loss of 4 cents, which narrowed by a penny over the last seven days. The loss estimate has also narrowed from a loss of 16 cents incurred in the year-ago quarter.
Abercrombie & Fitch Company Price, Consensus and EPS Surprise
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Abercrombie’s strategic initiatives like cost-saving efforts, capital investments, loyalty and marketing programs are commendable. Also, the company’s investments in mobile, omni-channel and fulfillment are significantly contributing to its Direct-to-Consumer (DTC) business. Digital engagement with consumers too proved to be its key strength. In fiscal 2018, management plans to continue investing in DTC capabilities besides innovations in this channel using customer insights and data analytics.
Meanwhile, the company’s store-restructuring efforts along with expansion of Hollister stores look promising. Abercrombie is aggressively expanding Hollister stores in new markets, thus enhancing the company’s overall performance. The brand is benefiting from the positive customer response to product innovations, emerging categories and overall customer experience. Notably, the Hollister brand reflected consistent positive momentum in the fiscal first quarter driven by solid sales growth across all channels and geographies. Simultaneously, it remains keen on closing underperforming U.S. chain stores to drive the top line.
Abercrombie is also gaining from strong performance across all brands, effective marketing and growing consumer confidence alongside robust comparable store sales (comps), gross margin expansion and expense leverage. Foreign currency tailwinds too proved conducive to the company. All these initiatives are likely to boost second-quarter fiscal 2018 results.
For second-quarter revenues, the Zacks Consensus Estimate stands at $847.1 million, up 8.7% year over year. Additionally, management anticipates sales growth in high-single digits, including about $10 million gain from foreign currency and $30 million from the calendar shift.
So far this year, shares of Abercrombie have surged 62.2%, outperforming the industry’s 8.3% rally.
However, in the quarter to be reported, operating expenses are likely to increase in mid-single digits from adjusted operating expenses of $479 million a year ago. This, in turn, might weigh on the company’s margins and hurt profitability.
A Look at the Zacks Model
Our proven model conclusively shows that Abercrombie is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Abercrombie has an Earnings ESP of +44.74% and a Zacks Rank #3, thus making us pretty confident of an earnings beat.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank of 3.
lululemon athletica inc. (LULU - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Abercrombie (ANF) to Report Q2 Earnings: What's in the Offing?
Abercrombie & Fitch Co. (ANF - Free Report) is slated to report second-quarter fiscal 2018 results on Aug 30. The company has an average trailing four-quarter positive earnings surprise of 32.3%.
For the to-be-reported quarter, the Zacks Consensus Estimate is pegged at a loss of 4 cents, which narrowed by a penny over the last seven days. The loss estimate has also narrowed from a loss of 16 cents incurred in the year-ago quarter.
Abercrombie & Fitch Company Price, Consensus and EPS Surprise
Abercrombie & Fitch Company Price, Consensus and EPS Surprise | Abercrombie & Fitch Company Quote
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Abercrombie’s strategic initiatives like cost-saving efforts, capital investments, loyalty and marketing programs are commendable. Also, the company’s investments in mobile, omni-channel and fulfillment are significantly contributing to its Direct-to-Consumer (DTC) business. Digital engagement with consumers too proved to be its key strength. In fiscal 2018, management plans to continue investing in DTC capabilities besides innovations in this channel using customer insights and data analytics.
Meanwhile, the company’s store-restructuring efforts along with expansion of Hollister stores look promising. Abercrombie is aggressively expanding Hollister stores in new markets, thus enhancing the company’s overall performance. The brand is benefiting from the positive customer response to product innovations, emerging categories and overall customer experience. Notably, the Hollister brand reflected consistent positive momentum in the fiscal first quarter driven by solid sales growth across all channels and geographies. Simultaneously, it remains keen on closing underperforming U.S. chain stores to drive the top line.
Abercrombie is also gaining from strong performance across all brands, effective marketing and growing consumer confidence alongside robust comparable store sales (comps), gross margin expansion and expense leverage. Foreign currency tailwinds too proved conducive to the company. All these initiatives are likely to boost second-quarter fiscal 2018 results.
For second-quarter revenues, the Zacks Consensus Estimate stands at $847.1 million, up 8.7% year over year. Additionally, management anticipates sales growth in high-single digits, including about $10 million gain from foreign currency and $30 million from the calendar shift.
So far this year, shares of Abercrombie have surged 62.2%, outperforming the industry’s 8.3% rally.
However, in the quarter to be reported, operating expenses are likely to increase in mid-single digits from adjusted operating expenses of $479 million a year ago. This, in turn, might weigh on the company’s margins and hurt profitability.
A Look at the Zacks Model
Our proven model conclusively shows that Abercrombie is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Abercrombie has an Earnings ESP of +44.74% and a Zacks Rank #3, thus making us pretty confident of an earnings beat.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters, Inc. (AEO - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank of 3.
lululemon athletica inc. (LULU - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>