(By Salman - iStockAnalyst Writer)Abercrombie & Fitch Co. (NYSE: ANF) is scheduled to report third quarter earnings before the market open on Friday, November 13, 2009. Analysts on average expect the company to report earnings of 20 cents per share on revenue of $764.28 million. In the year ago period, the company reported earnings of 72 cents per share on revenue of $896.3 million.

Abercrombie & Fitch Co., through its subsidiaries, operates as a specialty retailer of casual sportswear apparel for men, women, and kids. As of October 31, 2009, the company operated 347 Abercrombie & Fitch stores, 209 abercrombie stores, 509 Hollister Co. stores, 27 RUEHL stores and 16 Gilly Hicks stores in the United States. The company also operated three Abercrombie & Fitch stores, three abercrombie stores and six Hollister Co. stores in Canada, one Abercrombie & Fitch store and seven Hollister Co. stores in the United Kingdom, and one Abercrombie & Fitch store and one abercrombie store in Italy. The company operates e-commerce websites as well.

The worst recession in decades has taken a heavy toll on the company as cash strapped consumers slashed spending and shifted to discount stores. At a time when rivals like American Eagle (NYSE: AEO) resorted to massive markdowns, Abercrombie & Fitch refused to lower prices. The high-end teen retailer insisted that the step would protect its brand value and did not resort to promotional events and sales on hopes that the strategy will enable it to emerge as a superior brand. Additionally, the company also missed some spring fashion trends.

The New Albany, Ohio-based teen apparel merchant swung to a second quarter net loss of $26.7 million or $0.30 per share, compared to a profit of $77.8 million or $0.87 per share in the year-ago quarter. Quarterly net sales fell 23% to $648.5 million. Analysts, on average, expected the company to post a loss of $0.07 per share on revenue of $646.46 million for the quarter. Comparable store sales decreased 10% for the quarter, compared to a 9% decline last year.

The casual apparel retailer's comparable store sales have remained weak. Abercrombie & Fitch Co. reported a 15% decline in comparable store sales for October while for September 2009; the company reported an 18% decline in comparable store sales. The company registered a decline of 29% in comparable store sales for August 2009. Comparable store sales for the year-to-date period ended October 31, 2009 decreased 27%, while it decreased 22% for the quarter-to-date period.

Shares of the company rallied early this month after Goldman Sachs analyst Michelle Tan raised Abercrombie stock to 'buy' from 'neutral,' saying the retailer's international expansion have the potential to almost double its earnings in 2010 as overseas stores are more profitable and productive. In a research note to investors, Tan wrote that the retailer may also get a boost from increased tourist traffic in Unites States. "Given ANF's depressed margins and accelerating international growth, coupled with our expectation for improving near-term trends, we believe shares should command a multiple premium to more mature peers," said Tan, who lifted her price target on the stock by $9 to $45.

In terms of stock performance, Abercrombie & Fitch shares have gained 57% since the beginning of the year. Shares of the company fell 29 cents or 0.77% to $37.30 in midday trade on Monday.

Disclosure: Author doesn't own any of the stocks mentioned here.