Photo Credit: thinkretail

Abercrombie & Fitch, a clothing retailer specifically targeted towards teen consumers, will be reporting 3Q2016 earnings tomorrow before the bell. The company has had problems keeping up with competition and is focusing on returning to its roots through a comprehensive brand revival process. Analysts are holding mixed opinions on whether or not a positive earnings surprise is probable, with the vast majority calculating year over year declines in revenue and EPS. The Estimize consensus is anticipating a favorable EPS of $0.21 and revenue of $867.7 million as Wall Street Analysts are foreseeing EPS of $0.19 and revenue of $869 million.

Though sales figures have not been ideal, the Hollister stores have helped comps mainly in Asia and Europe. Overall same store sales have gotten better over the past two quarters. In Q12016 and Q22016, comparable stores growth dipped 8% and 4% respectively. Investors will be anxiously awaiting the figures for this quarter to see whether or not Abercrombie will be in a serious hole going forward.

To reestablish itself as one of the leaders in teen fashion, Abercrombie has redesigned its stores for a trendier feel and has reduced the use of logos on clothes. The logo reduction is a smart move, as often times, select shirts and pants would have the massive moose displayed. Trendier fashion items usually do not contain large logos.

For Abercrombie & Fitch to show investors substantive growth, the time has come to capitalize on the holiday season. Retail chains targeting teens like Gap and Aeropostale have been suffering and have experienced significant declines in share prices. Gap is down over 35% and Aeropostale shares are currently trading at a mere $0.70. The declines in all three companies including Abercrombie highlight the fact that teens are not spending on clothing anymore. With Black Friday coming up sweet in-store and online deals on “cool” clothes could help separate the Ohio based retailer from its competition.

Furthermore, the H&M model of fast fashion seems to be the way to go, pushing large volumes of cheap yet stylish clothing. Senior management has hinted of the launch of a mobile marketing campaign throughout the coming seasons. The campaign will instill the Abercrombie brand with new items that resonate with shoppers, with the ultimate goal of building up a customer base the firm has seemingly lost.