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One of the world’s leading specialty retailers of premium, high-quality casual apparel for men and women, Abercrombie & Fitch Company (ANF - Analyst Report) is likely to beat the expectations while reporting its fiscal 2012 fourth-quarter results on Feb 22.

Why a Likely Positive Surprise?

Our proven model shows that Abercrombie may beat the earnings because it has the right combination of two key components – Positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1.

Zacks ESP: Abercrombie currently has an Earnings ESP of +1.04%. This is because the Most Accurate Estimate stands at $1.95, while the Zacks Consensus Estimate is pegged at $1.93.

Zacks #1 Rank (Strong Buy): Stocks with Zacks Rank #1, #2 and #3 have significantly higher chances of beating the earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.

The combination of Abercrombie’s Zacks Rank #1 (Strong Buy) and Earnings ESP of +1.04% make us confident regarding a positive earnings beat by the company on Feb 22.

What is Driving the Better-than-Expected Earnings?

We believe that management’s sustained focus on expanding global operations and improving cash flows, while maintaining a healthy balance sheet, bode well for future growth. This premium casual apparel retailer boasts a strong portfolio of well established brands, each of which is focused on the unique characteristics and rapidly changing preferences of its target customers. Moreover, with its unique and sexually-explicit advertising strategy, the company’s apparels are a major attraction for its target customers.

The company has met as well as surpassed the Zacks Consensus Estimate in trailing 4 quarters with an average surprise of approximately 36.4%.

Other Stocks to Consider

Abercrombie is not the only firm we are looking up to this earnings season. The following companies are also likely to beat the earnings in the to-be-reported quarter:

New York & Company Inc. (NWY - Snapshot Report) with Earnings ESP of +12.50% and a Zacks Rank #2 (Buy).

Big 5 Sporting Goods Corporation (BGFV - Analyst Report) with Earnings ESP of +5.56% and a Zacks Rank #2 (Buy).

Officemax Inc. has Earnings ESP of +7.14% and carries a Zacks Rank #2 (Buy).

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