Abercrombie & Fitch (NYSE: ANF), a specialty retailer selling casual clothing and footwear, is scheduled to report its fiscal first-quarter results on Tuesday, May 24. We expect ANF stock to likely trade higher (modestly) due to revenues and earnings beating market expectations. The company’s strong online presence resulted in its 2021 revenues growing 19% year-over-year (y-o-y) to $3.7 billion. It is worth mentioning that 90% of their global store fleet has digital purchase and pickup in-store capabilities. In the upcoming Q1, supply chain issues and inflationary pressures are expected to play a big part. However, a typically high gross margin of ~60%, an online sales mix of 48%, and a reduction in its store fleet should help the company offset these short-term pressures to some extent.
Our forecast indicates that ANF’s valuation is around $29 a share, which is 4% higher than the current market price. Look at our interactive dashboard analysis on ANF‘s Earnings Preview: What To Expect in Q1? for more details.
(1) Revenues expected to be above slightly above the consensus estimates
Trefis estimates ANF’s Q1 2022 revenues to be around $805 Mil, marginally above the consensus estimate. For the fourth quarter of 2021, ANF posted sales of $1.2 billion, up roughly 4% from the same quarter of 2020. Even so, the company’s sales remained 2% below pre-pandemic levels, so the performance was mixed at best. The company’s Abercrombie, a casual luxury brand, and Hollister, a young adult lifestyle brand – reported growth over the past year in the fourth quarter, but Hollister’s sales were below 2019. For full-year 2022, we expect ANF’s Revenues to decline 4% y-o-y to $3.8 billion.
2) EPS also likely to be above consensus estimates
ANF’s Q1 earnings per share (EPS) is expected to be 9 cents per Trefis analysis, above the 8 cents consensus estimate. The company’s earnings in the final quarter of 2021 were $1.12 per share, down from $1.27 in the prior year – largely due to rising costs. But for the full year of 2021, the company bounced back to $4.41 EPS after losing $1.82 the year before.
(3) Stock price estimate higher than the current market price
Going by our Abercrombie & Fitch’s Valuation, with an earnings per share (EPS) estimate of around $3.22 and a P/E multiple of 9.1x in fiscal 2022, this translates into a price of $29, which is almost 4% higher than the current market price.
It is helpful to see how its peers stack up. ANF Peers shows how Abercrombie & Fitch compares against its peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
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