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 has 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 companys stock rebounded strongly, however, its stocks rebounded strongly until late October, 2011 when it began downward trend again. The question remains the firms long-term growth prospects. However, the company has been cutting cost and trying to improve productivity with its focus on the supply chain. In addition, it has actively been re-purchasing shares, indicating that management believes its shares are undervalued. The company continues to steadily expand shares abroad while closing underperforming domestic shares.

Given the questions about Abercrombie s future growth rate, analysts have focused on the companys earnings reports. Financial Website such as Yahoo finance, Morningstar and MSN Money (www.msn.com/en-us/money/markets) provides information on the companys recent earnings history along with a summary of analysts forecasts

1. What are the mean forecasts for Abercrombie s earnings per share over the next fiscal year?

2. Based on analysts forecasts, what is the firm s expected long-term(5-Years) 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?