Abercrombie & Fitch Company (ANF)

Interest coverage

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	507,361	92,648	343,084	-22,084	76,637
Interest expense	US$ in thousands	30,352	30,236	37,958	31,726	19,908
Interest coverage		16.72	3.06	9.04	-0.70	3.85

February 3, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $507,361K ÷ $30,352K
= 16.72

Interest coverage is a financial ratio that measures a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Looking at the historical trend of Abercrombie & Fitch Company's interest coverage ratio, we can see significant fluctuations. In the most recent fiscal year ending February 3, 2024, the company's interest coverage ratio was 16.72, indicating a substantial improvement compared to the previous year. This suggests that Abercrombie & Fitch's ability to cover its interest expenses improved significantly, reflecting potentially stronger profitability or lower interest costs.

In the fiscal years prior to 2024, the interest coverage ratio varied widely. In January 2023, the ratio was 3.06, showing a weaker ability to cover interest payments, while in January 2022, the ratio significantly improved to 9.04, indicating a healthier financial position. However, in January 2021, the interest coverage ratio was negative at -0.70, indicating that the company's earnings were insufficient to cover its interest expenses.

Overall, Abercrombie & Fitch's interest coverage ratio has shown volatility in recent years, with both improvements and declines. Investors and creditors should closely monitor this ratio in conjunction with other financial metrics to assess the company's financial health and ability to meet its debt obligations.