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Abercrombie & Fitch Co  (NYSE:ANF) Piotroski F-Score: 3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Abercrombie & Fitch Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

NYSE:ANF' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 3

3
8

During the past 13 years, the highest Piotroski F-Score of Abercrombie & Fitch Co was 8. The lowest was 3. And the median was 6.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Abercrombie & Fitch Co Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 5.00 5.00 5.00 5.00

Abercrombie & Fitch Co Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.00 6.00 5.00 4.00 3.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jul17) TTM:Last Year (Jul16) TTM:
Net Income was 7.881 + 48.791 + -61.7 + -15.491 = $-21 Mil.
Cash Flow from Operations was 78.536 + 163.213 + -84.262 + 35.412 = $193 Mil.
Revenue was 821.734 + 1036.363 + 661.099 + 779.321 = $3,299 Mil.
Gross Profit was 510.739 + 615.001 + 398.925 + 460.895 = $1,986 Mil.
Average Total Assets from the begining of this year (Jul16)
to the end of this year (Jul17) was
(2332.39 + 2336.468 + 2295.757 + 2157.965 + 2227.913) / 5 = $2270.0986 Mil.
Total Assets at the begining of this year ({FiscalYear0}) was $2,332 Mil.
Long-Term Debt & Capital Lease Obligation was $313 Mil.
Total Current Assets was $1,076 Mil.
Total Current Liabilities was $499 Mil.
Total Assets was 41.891 + 57.741 + -39.587 + -13.129 = $47 Mil.

Revenue was 878.572 + 1112.93 + 685.483 + 783.16 = $3,460 Mil.
Gross Profit was 559.787 + 676.345 + 425.721 + 477.107 = $2,139 Mil.
Average Total Assets from the begining of last year (Jul15)
to the end of last year (Jul16) was
(2422.201 + 2512.744 + 2433.039 + 2344.182 + 2332.39) / 5 = $2408.9112 Mil.
Total Assets at the begining of last year (Jul15) was $2,422 Mil.
Long-Term Debt & Capital Lease Obligation was $336 Mil.
Total Current Assets was $1,097 Mil.
Total Current Liabilities was $499 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Abercrombie & Fitch Co's current Net Income (TTM) was {NetIncome0_f}. ==> Negative ==> Score 0.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Abercrombie & Fitch Co's current Cash Flow from Operations (TTM) was 193. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets(Jul16)
=-20.519/2332.39
=-0.00879741

ROA (Last Year)=Net Income/Total Assets(Jul15)
=46.916/2422.201
=0.01936916

Abercrombie & Fitch Co's return on assets of this year was -0.00879741. Abercrombie & Fitch Co's return on assets of last year was 0.01936916. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Abercrombie & Fitch Co's current Net Income (TTM) was -21. Abercrombie & Fitch Co's current Cash Flow from Operations (TTM) was 193. ==> 193 > -21 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul16 to Jul17
=312.9/2270.0986
=0.13783542

Gearing (Last Year: Jul16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul15 to Jul16
=335.66/2408.9112
=0.13934096

Abercrombie & Fitch Co's gearing of this year was 0.13783542. Abercrombie & Fitch Co's gearing of last year was 0.13934096. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Jul17)=Total Current Assets/Total Current Liabilities
=1075.745/498.78
=2.15675248

Current Ratio (Last Year: Jul16)=Total Current Assets/Total Current Liabilities
=1096.671/499.344
=2.19622345

Abercrombie & Fitch Co's current ratio of this year was 2.15675248. Abercrombie & Fitch Co's current ratio of last year was 2.19622345. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Abercrombie & Fitch Co's number of shares in issue this year was 68.5. Abercrombie & Fitch Co's number of shares in issue last year was 67.9. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=1985.56/3298.517
=0.60195536

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2138.96/3460.145
=0.61817063

Abercrombie & Fitch Co's gross margin of this year was 0.60195536. Abercrombie & Fitch Co's gross margin of last year was 0.61817063. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Jul16)
=3298.517/2332.39
=1.41422189

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jul15)
=3460.145/2422.201
=1.42851275

Abercrombie & Fitch Co's asset turnover of this year was 1.41422189. Abercrombie & Fitch Co's asset turnover of last year was 1.42851275. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+1+0+0+0+0
=3

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Abercrombie & Fitch Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


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