Will Abercrombie Beat in 4Q? - Analyst Blog
February 20 2013 - 9:00AM
Zacks
One of the world’s leading
specialty retailers of premium, high-quality casual apparel for men
and women, Abercrombie & Fitch Company (ANF)
is likely to beat the expectations while reporting its fiscal 2012
fourth-quarter results on Feb 22.
Why a Likely Positive
Surprise?
Our proven model shows that
Abercrombie may beat the earnings because it has the right
combination of two key components – Positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method) and a Zacks Rank #1.
Zacks ESP:
Abercrombie currently has an Earnings ESP of +1.04%. This is
because the Most Accurate Estimate stands at $1.95, while the Zacks
Consensus Estimate is pegged at $1.93.
Zacks #1 Rank (Strong
Buy): Stocks with Zacks Rank #1, #2 and #3 have
significantly higher chances of beating the earnings. The sell
rated stocks (#4 and #5) should never be considered going into an
earnings announcement.
The combination of Abercrombie’s
Zacks Rank #1 (Strong Buy) and Earnings ESP of +1.04% make us
confident regarding a positive earnings beat by the company on Feb
22.
What is Driving the
Better-than-Expected Earnings?
We believe that management’s
sustained focus on expanding global operations and improving cash
flows, while maintaining a healthy balance sheet, bode well for
future growth. This premium casual apparel retailer boasts a strong
portfolio of well established brands, each of which is focused on
the unique characteristics and rapidly changing preferences of its
target customers. Moreover, with its unique and sexually-explicit
advertising strategy, the company’s apparels are a major attraction
for its target customers.
The company has met as well as
surpassed the Zacks Consensus Estimate in trailing 4 quarters with
an average surprise of approximately 36.4%.
Other Stocks to
Consider
Abercrombie is not the only firm we
are looking up to this earnings season. The following companies are
also likely to beat the earnings in the to-be-reported quarter:
New York & Company
Inc. (NWY) with Earnings ESP of +12.50% and a Zacks Rank
#2 (Buy).
Big 5 Sporting Goods
Corporation (BGFV) with Earnings ESP of +5.56% and a Zacks
Rank #2 (Buy).
Officemax Inc.
(OMX) has Earnings ESP of +7.14% and carries a Zacks Rank #2
(Buy).
ABERCROMBIE (ANF): Free Stock Analysis Report
BIG 5 SPORTING (BGFV): Free Stock Analysis Report
NEW YORK & CO (NWY): Free Stock Analysis Report
OFFICEMAX INC (OMX): Free Stock Analysis Report
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