Abercrombie & Fitch (ANF) Stock Fell Today on Weak Earnings Expectations
NEW YORK (TheStreet) -- Abercrombie & Fitch Co. (ANF) - Get Report shares closed Thursday's trading session down 1.32% to $19.49 on heavy trading volume as analysts expect the company to deliver a year-over-year decline in both earnings and revenue.
On Friday before the market open the company is set to release its third quarter 2015 financial results.
Wall Street's estimates for the New Albany-OH based specialty retailer of apparel for men, women and kids are 22 cents a share on revenue of $864.65 million.
In the same quarter last year, the company reported earnings of 42 cents a share on revenue of $911.45 million.
Overall, the prospects for this company do not look great, according to Zacks Equity Research. If it wants to make a comeback, making clothing cheaper would attract more consumers.
Separately, TheStreet Ratings team rates ABERCROMBIE & FITCH as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate ABERCROMBIE & FITCH (ANF) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 361.92% to $73.03 million when compared to the same quarter last year. In addition, ABERCROMBIE & FITCH has also vastly surpassed the industry average cash flow growth rate of -11.31%.
- The gross profit margin for ABERCROMBIE & FITCH is rather high; currently it is at 69.08%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.09% trails the industry average.
- ANF's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 106.3% when compared to the same quarter one year ago, falling from $12.88 million to -$0.81 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry and the overall market, ABERCROMBIE & FITCH's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ANF