Ahead Of Abercrombie & Fitch Q4 Results

(RTTNews) - Teen apparel retailer Abercrombie & Fitch Co. (ANF) remains intensely focused on continuing to execute against its strategic initiatives to deliver a compelling customer focused shopping experience and assortments based on clearly defined brand positions.

Meanwhile, the company sees mixed signals in the retail sector, thus remains cautious about the fourth quarter performance.

For the fourth quarter of fiscal 2015, the company expects comparable sales to be approximately flat; Gross margin rate to be approximately flat to last year on a constant currency basis; Operating expense to be approximately flat to last year after absorbing a provision for the restoration of incentive compensation.

The company is due to release its fourth-quarter numbers before the bell on Wednesday, March 2, with analysts polled by Thomson Reuters estimating earnings of $0.99 per share on revenue of $1.10 billion. Analysts' estimate typically exclude certain special items.

Q3 Overview

In the last quarter, the company reported a profit that more than doubled from the previous year, reflecting benefits related to a change in the estimated annual effective tax rate. But, quarterly net sales were down 4% on a reported basis over the same period a year ago. Both net sales and adjusted earnings per share for the quarter beat analysts' expectations.

Arthur Martinez, Executive Chairman, said, "Our gross margin rate increased substantially year-over-year, as promotional frequency and intensity were moderated. Expense management remains aggressive. As a result, adjusted operating income improved meaningfully on a constant currency basis. Inventories remain well controlled."

Net income attributable to the company for the third-quarter surged to $41.89 million or $0.60 per share from $18.23 million or $0.25 per share in the same quarter last year.

Excluding certain items, the company reported adjusted non-GAAP earnings of $0.48 per share, compared to $0.42 per share for the third quarter last year. Analysts expected earnings of $0.22 per share for the third-quarter.

Net sales for the third quarter, at $878.6 million, were approximately flat on a constant currency basis, but down 4% on a reported basis over the same period a year ago. Wall Street expected revenues of $864.65 million for the third-quarter. Comparable sales for the third quarter decreased 1%.