Analyst: Abercrombie & Fitch Is 'Ripe' For A Disappointing Earnings Report

Abercrombie & Fitch Co. (NYSE: ANF)'s fourth quarter consensus earnings estimate is "misguided," and the company is bound to miss expectations when it posts results Wednesday, an analyst said on Monday.

The specialty apparel retailer changed hands recently at $24.29, off $0.45, and has seen its shares fall nearly 13 percent since December.

Wunderlich's Eric Beder reiterated a Sell rating and a $17 target, and said it's "nearly impossible" for the company to meet its fourth quarter earnings forecast.

Short interest equals about 28 percent of Abercrombie's 69.3 million shares outstanding. That's down from nearly 30 percent in November.

Waning interest from teen customers, foreign exchange headwinds and "fashion issues" will conspire to force Abercrombie to take "a material step backwards" when it posts quarterly results, Beder said.

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About 30 percent of the company's stores are in its international segment.

The Wall Street consensus for earnings growth in fiscal 2016 is "somewhat delusional," according to Beder.

Analysts on average expect 2016 earnings of $1.68 a share, up from $1.57 expected for the current year.

For the recently-ended fourth quarter, Wall Street expects earnings of $1.16 a share, while Beder is forecasting fourth quarter earnings of just $0.77 a share.

The company is "ripe once again to provide investors with a material disappointment," Beder said.