Why Abercrombie & Fitch Is Thursday’s Big Earnings Loser

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When Abercrombie & Fitch Co. (NYSE: ANF) reported its most recent quarterly results before the markets opened on Thursday, the retailer said that it had $0.06 in earnings per share (EPS) and $842.4 million in revenue. That compares with consensus estimates that called for a net loss of $0.04 per share and revenue of $845.15 million, as well as the $0.16 per share profit and $779.32 million it posted in the same period of last year.

During the most recent quarter, comparable sales increased 3%, consisting of a 4% increase at Hollister and a 2% increase at Abercrombie. Thomson Reuters was calling for same-store sales of 3.7%.

In terms of its segments, the company reported as follows:

  • Hollister net sales increased 12% year over year to $500.8 million.
  • Abercrombie net sales increased 3% to 341.6 million.

Looking ahead, the company expects to see net sales flat in the third quarter and increasing between 2% to 4% for the fiscal full year. Consensus estimates for the third quarter call for $0.32 in EPS and $859.04 million in revenue. The consensus estimates for the full year are $0.88 in EPS and $3.57 billion in revenue.

CEO Fran Horowitz commented:

We are pleased with our second quarter performance, capping off a strong first half of the year. During the second quarter, we delivered both top and bottom line growth, while continuing to invest in the transformation of our business. Our results reflect another quarter of profit improvement fueled by comparable sales growth across both brands, gross margin expansion and expense leverage as we continue to execute our playbooks. Hollister continued its momentum with another quarter of strong sales growth and Abercrombie posted its third consecutive quarter of positive comparable sales, led by strength in the U.S.

Shares of Abercrombie & Fitch were last seen down about 14% at $23.47, with a consensus analyst price target of $23.08 and a 52-week range of $9.03 to $29.69.