Can Abercrombie Manage To Eke Out A Beat Tomorrow?

(Photo Credit: dadahappy99)

Before tomorrow’s opening bell, Abercrombie & Fitch (ANF) will report results for the fourth quarter. The Estimize community is calling for EPS of $1.16, two cents higher than the Wall Street consensus, suggesting a YoY decline of 13%. Revenues estimates of $1.17B are in-line with Wall Street, expected to fall 10% from the year-ago quarter.

 

The darling of all teen retailers has been struggling for sometime now, with sales declining for the last 7 quarters, as teens move away from preppy logo-ed gear in favor of fast-fashion retailers such as H&M and Zara. Abercrombie’s international business has also been a sore spot, one that investors were hoping they could turn around. However, after 10 consecutive quarters of negative international same store sales, many banks have lost their patience and recently downgraded the retailer in part due to slowing global trends and currency headwinds.

And it’s not just the business itself, but Abercrombie’s public image has somewhat been tainted by senseless comments from former-CEO Michael Jeffries as well as it’s employee discrimination cases, one that is unfolding right now in the Supreme court. Tomorrow morning investors will be looking for news that a new CEO has been appointed; they will surely have their work cut out for them.

Abercrombie isn’t the only teen retailer suffering, American Eagle (AEO) and Aeropostale (ARO), which both report next week, have been in the red for several quarters. Many will blame the decline of the American mall where most of these stores are located. Malls are getting less and less foot traffic and the stores located there are increasingly isolated from consumers.

Disclosure: There can be no assurance that the information we considered is accurate or complete, nor can there be any assurance that our assumptions are correct.

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