Abercrombie & Fitch Q2 Earnings Beat, Stock Surges

Abercrombie & Fitch Co. (ANF - Analyst Report), a specialty retailer of premium, high-quality casual apparel, released second-quarter fiscal 2015 results, wherein adjusted earnings of 12 cents per share fared far better than the Zacks Consensus Estimate of loss of 8 cents but plunged from 19 cents in the year-ago quarter due to foreign currency headwinds.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2015 and 2016 has remained unchanged over the last 30 days.

Revenues: Abercrombie & Fitch’s net sales dipped 8% year over year to $817.8 million primarily due to 4% decline in comparable sales and negative impact of 5% from foreign currency translations. However, net sales came ahead of the Zacks Consensus Estimate of $811.3 million. Net sales fell 9% to $380.6 million for Abercrombie and 6% to $437.1 million for Hollister.

Key Events: During the quarter under review, the company opened 2 international Hollister chain stores, 1 international Abercrombie & Fitch chain outlet and 1 U.S. Abercrombie & Fitch chain store. During fiscal 2015, the company expects to open 15 full-price stores in China, Japan and the Middle East, 6 full price stores in North America and 10 new outlet stores in the U.S. The company also plans to shutter approximately 60 stores in the U.S.

Zacks Rank: Currently, Abercrombie & Fitch carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement.

Stock Movement: Abercrombie & Fitch’s shares are up around 10% following the earnings release. Clearly, a positive sentiment is palpable among investors following the company’s better-than-expected results.