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The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $976.7 million, suggesting 11% growth from that reported in the year-ago quarter. For fiscal third-quarter earnings, the consensus mark is pegged at $1.09 per share, implying a significant increase from 1 cent reported in the year-ago quarter. The consensus estimate for earnings has moved up 1.9% in the past 30 days.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by a significant margin. Moreover, ANF has delivered an earnings surprise of 724.8%, on average, in the trailing four quarters.
Abercrombie & Fitch Company Price and EPS Surprise
Abercrombie has been gaining from continued momentum in the Abercrombie brand and sequential improvement in the Hollister brand. Its store-optimization efforts and lower freight costs have been aiding the bottom line.
The company noted that its efforts to improve the brand positioning of the Hollister brand have been paying off. Strategic investments across stores, digital and technology via its Always Forward Plan bode well.
The company has been witnessing a surge in demand on the back of its effective rebranding efforts, which have brought it back in line with the leading fashion trends. Its efforts to improve its inventory across all labels have been attracting customers to shop for a diverse range of products like dresses and cargo. This is likely to have boosted the top line in the to-be-reported quarter.
On the last reported quarter’s earnings call, management anticipated sales growth to be up year over year in the low-double digits in third-quarter fiscal 2023. Sales in the fiscal third quarter are likely to include a benefit of 140 basis points (bps) from foreign currency.
Our model predicts third-quarter fiscal 2023 sales for the Abercrombie brand to increase 19.5% year over year. Sales for Hollister are expected to improve 1.4% year over year.
Lower freight costs and robust average unit retail (AUR) growth are likely to have aided margins in the fiscal third quarter. Management predicted the operating margin for the fiscal third quarter to be 8-10%, whereas it reported an adjusted operating margin of 2.4% in the prior-year quarter. This is likely due to a higher gross profit rate on lower freight costs, higher AURs and modest operating expense leverage on higher sales.
We expect the gross margin to expand 530 bps year over year to 64.5% in the fiscal third quarter, reflecting a decline in the cost of goods sold due to lower raw material prices and freight costs. Our model predicts an adjusted operating margin of 8.1%, suggesting a 570-bps expansion from 2.4% in the year-ago quarter.
Additionally, the company’s strategic investments across stores, digital and technology via its Always Forward Plan bode well. It has been on track with its 2025 Always Forward plan that focuses on brand growth, leveraging its omnichannel capabilities and expanding digital penetration and financial discipline. Growth in these avenues is likely to have contributed to the strong top-line performance in the to-be-reported quarter.
Abercrombie has been trying to accelerate its digital revolution via the Knowing Their Customer Better and Wowing Them Everywhere initiatives. Increased investment in customer analytics to meet and outpace customer demand bodes well. It has been working toward rationalizing its store base by reducing its dependence on underperforming tourist-driven locations. Digital and store growth is likely to have boosted sales in the fiscal second quarter.
However, higher expenses resulting from inflation and increased investment for the 2025 Always Forward Plan initiatives are expected to have slightly marred margin growth in the to-be-reported quarter. Additionally, investments in digital and technology and higher incentive-based compensation are expected to have partly offset margin growth in the to-be-reported quarter.
We expect adjusted total operating expenses to increase 9.4% year over year to $547.6 million in the fiscal third quarter, driven by a 9.2% rise in marketing, general and administrative expenses.
What the Zacks Model Unveils
Our proven model predicts a likely earnings beat for Abercrombie this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Abercrombie currently has an Earnings ESP of +7.17% and sports a Zacks Rank #1.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that have the right combination of elements to post an earnings beat:
American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +5.50% and a Zacks Rank #1. The company is likely to register growth in the top and bottom lines when it reports third-quarter fiscal 2023 numbers. The consensus mark for AEO’s quarterly earnings has moved up by a penny to 47 cents per share in the past 30 days. The consensus estimate suggests growth of 11.9% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle’s quarterly revenues is pegged at $1.28 billion, which suggests growth of 2.8% from the figure reported in the prior-year quarter.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2023 results. The consensus mark for BURL’s quarterly revenues is pegged at $2.3 billion, which suggests growth of 13.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for BURL’s earnings has moved down 2.9% to $1.01 per share in the past 30 days. The consensus estimate indicates a significant increase of 134.9% from that reported in the year-ago quarter.
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank #3. The company is likely to register growth in the top and bottom lines when it reports third-quarter fiscal 2023 results. The consensus mark for COST’s quarterly revenues is pegged at $57.7 billion, which suggests 6% growth from the figure reported in the prior-year quarter.
The consensus mark for COST’s quarterly earnings has been unchanged in the past 30 days at $3.43 per share. The consensus estimate suggests growth of 10.7% from the year-ago quarter.
Image: Bigstock
Will Abercrombie's (ANF) Q3 Earnings Beat on Brand Momentum?
Abercrombie & Fitch Co. (ANF - Free Report) is scheduled to report third-quarter fiscal 2023 results on Nov 21, before the opening bell.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $976.7 million, suggesting 11% growth from that reported in the year-ago quarter. For fiscal third-quarter earnings, the consensus mark is pegged at $1.09 per share, implying a significant increase from 1 cent reported in the year-ago quarter. The consensus estimate for earnings has moved up 1.9% in the past 30 days.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by a significant margin. Moreover, ANF has delivered an earnings surprise of 724.8%, on average, in the trailing four quarters.
Abercrombie & Fitch Company Price and EPS Surprise
Abercrombie & Fitch Company price-eps-surprise | Abercrombie & Fitch Company Quote
Factors to Note
Abercrombie has been gaining from continued momentum in the Abercrombie brand and sequential improvement in the Hollister brand. Its store-optimization efforts and lower freight costs have been aiding the bottom line.
The company noted that its efforts to improve the brand positioning of the Hollister brand have been paying off. Strategic investments across stores, digital and technology via its Always Forward Plan bode well.
The company has been witnessing a surge in demand on the back of its effective rebranding efforts, which have brought it back in line with the leading fashion trends. Its efforts to improve its inventory across all labels have been attracting customers to shop for a diverse range of products like dresses and cargo. This is likely to have boosted the top line in the to-be-reported quarter.
On the last reported quarter’s earnings call, management anticipated sales growth to be up year over year in the low-double digits in third-quarter fiscal 2023. Sales in the fiscal third quarter are likely to include a benefit of 140 basis points (bps) from foreign currency.
Our model predicts third-quarter fiscal 2023 sales for the Abercrombie brand to increase 19.5% year over year. Sales for Hollister are expected to improve 1.4% year over year.
Lower freight costs and robust average unit retail (AUR) growth are likely to have aided margins in the fiscal third quarter. Management predicted the operating margin for the fiscal third quarter to be 8-10%, whereas it reported an adjusted operating margin of 2.4% in the prior-year quarter. This is likely due to a higher gross profit rate on lower freight costs, higher AURs and modest operating expense leverage on higher sales.
We expect the gross margin to expand 530 bps year over year to 64.5% in the fiscal third quarter, reflecting a decline in the cost of goods sold due to lower raw material prices and freight costs. Our model predicts an adjusted operating margin of 8.1%, suggesting a 570-bps expansion from 2.4% in the year-ago quarter.
Additionally, the company’s strategic investments across stores, digital and technology via its Always Forward Plan bode well. It has been on track with its 2025 Always Forward plan that focuses on brand growth, leveraging its omnichannel capabilities and expanding digital penetration and financial discipline. Growth in these avenues is likely to have contributed to the strong top-line performance in the to-be-reported quarter.
Abercrombie has been trying to accelerate its digital revolution via the Knowing Their Customer Better and Wowing Them Everywhere initiatives. Increased investment in customer analytics to meet and outpace customer demand bodes well. It has been working toward rationalizing its store base by reducing its dependence on underperforming tourist-driven locations. Digital and store growth is likely to have boosted sales in the fiscal second quarter.
However, higher expenses resulting from inflation and increased investment for the 2025 Always Forward Plan initiatives are expected to have slightly marred margin growth in the to-be-reported quarter. Additionally, investments in digital and technology and higher incentive-based compensation are expected to have partly offset margin growth in the to-be-reported quarter.
We expect adjusted total operating expenses to increase 9.4% year over year to $547.6 million in the fiscal third quarter, driven by a 9.2% rise in marketing, general and administrative expenses.
What the Zacks Model Unveils
Our proven model predicts a likely earnings beat for Abercrombie this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Abercrombie currently has an Earnings ESP of +7.17% and sports a Zacks Rank #1.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that have the right combination of elements to post an earnings beat:
American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +5.50% and a Zacks Rank #1. The company is likely to register growth in the top and bottom lines when it reports third-quarter fiscal 2023 numbers. The consensus mark for AEO’s quarterly earnings has moved up by a penny to 47 cents per share in the past 30 days. The consensus estimate suggests growth of 11.9% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle’s quarterly revenues is pegged at $1.28 billion, which suggests growth of 2.8% from the figure reported in the prior-year quarter.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2023 results. The consensus mark for BURL’s quarterly revenues is pegged at $2.3 billion, which suggests growth of 13.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for BURL’s earnings has moved down 2.9% to $1.01 per share in the past 30 days. The consensus estimate indicates a significant increase of 134.9% from that reported in the year-ago quarter.
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank #3. The company is likely to register growth in the top and bottom lines when it reports third-quarter fiscal 2023 results. The consensus mark for COST’s quarterly revenues is pegged at $57.7 billion, which suggests 6% growth from the figure reported in the prior-year quarter.
The consensus mark for COST’s quarterly earnings has been unchanged in the past 30 days at $3.43 per share. The consensus estimate suggests growth of 10.7% from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.