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Abercrombie (ANF) Q3 Earnings: What's in Store this Time?

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Abercrombie & Fitch Co. (ANF - Free Report) is slated to release third-quarter fiscal 2016 results on Nov 18. This specialty retailer of premium, high-quality casual apparel for men, women, and kids, delivered negative surprises of 8.7% and 18% in the second and first quarters of fiscal 2016, respectively. However, the company surpassed the Zacks Consensus Estimate by an average of 34.6% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

ABERCROMBIE Price and EPS Surprise


Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Abercrombie is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Abercrombie has an Earnings ESP of +10.53% as the Most Accurate estimate stands at 21 cents and the Zacks Consensus Estimate is pegged at 19 cents, which increases the predictive power of ESP. However, the company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors Influencing this Quarter

Abercrombie has been posting dismal results for a while now, as the company has been facing soft traffic trends in its U.S. flagship and tourist stores. Also, the company remains prone to adverse currency movements, as over a quarter of its total revenue comes from overseas operations.

Management had warned of challenging comparable-store sales performance in the second half of fiscal 2016, anticipating the aforementioned hurdles to linger. Moreover, the Zacks Consensus Estimate for fiscal 2016 and fiscal 2017 has been witnessing a slight downtrend in the past seven days.

However, Abercrombie remains encouraged by the performance of its Hollister brand. Also, the company remains optimistic about its prospects, given its efficient cost management and constant focus on reviving its brands.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Foot Locker, Inc. (FL - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #2.

Burlington Stores, Inc. (BURL - Free Report) has an Earnings ESP of +6.06% and a Zacks Rank #3.

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