Wedbush Remains Comfortable With ANF Q1 Estimate

Wedbush reports that it remains comfortable with its Q1 estimate of $0.04 vs. $(0.13) LY “on a comp of +5% vs. +1% LY (inline with guidance of +MSD).” “Our checks have indicated increased traffic at Abercrombie & Fitch Co. ANF and Hollister, as well as cleaner inventory and fewer promotions compared to LY,” Wedbush writes. “We forecast EBIT margin improving ~330 bp to 0.6% vs (2.7)% LY with gross margin up 30 bp and SG&A leverage of ~300 bp. Consensus estimate is also $0.04. ANF plans to report full Q1 results on 5/18. “Similarly, we are maintaining our F11 EPS estimate of $2.95 vs. $2.04 LY. Our estimate is based on a +2.6% comp vs. +7.4% LY and operating margin improvement of ~140 bp to 9.7% vs. 8.3% LY as we anticipate increased sales volume partially offset by lower gross margin from a difficult sourcing environment and SG&A leverage on positive comps. Consensus estimate is $2.93.” Abercrombie & Fitch currently trades at $71.14.