Abercrombie & Fitch Earnings: Experts & Crowd Expect Worst Quarter In A Lustrum

Abercrombie & Fitch Co. ANF will report its first quarter (fiscal 2016) financial results before the market opens on Thursday and earnings are expected to be the lowest in -at least- five years.

According to Estimize, the Street is modeling a consensus net loss of ($0.34) on revenue of $733.68 million, while the crowd projects a net loss of ($0.36) on revenue of $730.46 million.

These figures compare to a net loss of ($0.17) and revenue of $822 million reported in the same quarter last year, and a net loss of ($0.09) on revenue of $838.8 million registered two years ago.

It should be noted, however, that the first quarter is always the weakest for Abercrombie & Fitch, with earnings recuperating towards the fourth quarter.

Another interesting thing to note is the marked decline that the Street’s consensus estimate experienced over the first few months of the year.

Still A Sell?

In a report published Tuesday, analysts at Wunderlich reiterated a Sell rating on Abercrombie & Fitch, trimming their price target from $17 to $15, in anticipation of the first quarter results. "We believe, given continued YoY double-digit AUR declines in our pricing surveys and further material discounts and continued weakness in the international segment, that Street expectations for a loss per share of $0.34 and comps of -9.1% could prove aggressive," they explained.

They then added, "We view 1Q as another quarter of management failing to find any material sustainable positive shifts to offset a loss of the company's image and fashion direction."

The Benzinga article about this research note explains that “The company's poor performance is attributable to the negative impact of currency related issues in the high margin international business and a drop in tourist traffic in the domestic market.”