Clothing retailer Abercrombie & Fitch enjoyed phenomenal success in the late 1990s. Between 1996 and 2000, its sales grew almost fourfold-from $335 million to more than $1.2 billion-and its stock price soared by more than 500%. However, in 2002, its growth rate had begun to slow down, and Abercrombie had a hard time meeting its quarterly earnings targets. As a result, the stock price in late 2002 was about half of what it was 3 years earlier. Abercrombie's struggles resulted from increased competition, a sluggish economy, and the challenges of staying ahead of the fashion curve. From late 2002 until November 2007, the company's stock rebounded strongly; however, its stock price declined during the 2008 economic downturn. Its stock price rebounded until late October 2011, when it began a downward trend again. Questions remain about the firm's long-term growth prospects. However, the company has been cutting costs and trying to improve productivity with its focus on the supply chain. In addition, it has been actively repurchasing shares, indicating that management believes its shares are undervalued. The company continues to steadily expand stores abroad while closing under- performing domestic stores. Given the questions about Abercrombie's future growth rate, analysts have focused on the com- pany's earnings reports. Financial websites such as Yahoo! Finance, Morningstar, and MSN Money (www.msn.com/en-us/money/markets) provide information on the company's recent earnings his- tory along with a summary of analysts' earnings forecasts. DISCUSSION QUESTIONS 1. What is the mean forecast for Abercrombie's earnings per share over the next fiscal year? 2. Based on analysts' forecasts, what is the expected long-term (5-year) growth rate in earnings? 3. Have analysts made any significant changes to their forecasted earnings for Abercrombie & Fitch in the past few months? Explain. 4. Within the last year, have Abercrombie's reported quarterly earnings generally met, exceeded, or fallen short of analysts' forecasted earnings? 5. How has Abercrombie's stock performed this year relative to the S&P 500