Earnings Preview: Abercrombie & Fitch

NEW YORK (AP) — Teen apparel retailer Abercrombie & Fitch Co. reports earnings for the fiscal third quarter on Friday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Preppy retailer Abercrombie & Fitch Co. has seen sales slump and lost market share to lower-priced competitors such as Aeropostale Inc., as it has stuck to its strategy of higher prices and investing internationally even amid the recession. But recently it has started discounting more, and international sales are strong. Some analysts are saying its long-term strategy might pay off.

Goldman Sachs analyst Michelle Tan and Credit Suisse analyst Paul Lejuez this week both upgraded the company to the equivalent of a "Buy" rating, saying strong international sales and lower prices domestically could help results.

Sales in stores open at least one year, a key measurement of a retailer's financial health, have slowly improved, though they are still negative. They fell 29 percent in August, 18 percent in September and 15 percent in October.

International expansion remains a major focus of Abercrombie. It recently opened a flagship in Milan and plans to open one in Tokyo by year end. It also plans to open 10 mall-based international stores this year.