Abercrombie & Fitch Company (ANF)

Interest coverage

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	484,671	348,892	228,415	136,382	92,648	103,759	158,947	275,925	343,084	360,850	346,735	246,091	-20,469	-14,037	-58,174	-111,801	70,068	-12,583	-26,839	-29,558
Interest expense (ttm)	US$ in thousands	11,902	9,324	15,948	21,768	26,134	28,980	28,955	33,313	34,647	36,685	38,223	34,046	28,274	22,106	16,220	10,492	7,737	7,765	7,866	9,514
Interest coverage		40.72	37.42	14.32	6.27	3.55	3.58	5.49	8.28	9.90	9.84	9.07	7.23	-0.72	-0.63	-3.59	-10.66	9.06	-1.62	-3.41	-3.11

February 3, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $484,671K ÷ $11,902K
= 40.72

The interest coverage ratio of Abercrombie & Fitch Company has shown fluctuations over the past few periods. The interest coverage ratio measures the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT), with higher ratios indicating a stronger ability to meet interest obligations.

Looking at the data provided, we can observe that the interest coverage ratio ranged from a high of 40.72 in February 3, 2024, to a low of -10.66 in February 1, 2020. Generally, a ratio above 2 is considered healthy, indicating that the company can comfortably cover its interest expenses.

In some periods, such as in February 3, 2024, October 28, 2023, and July 30, 2022, the interest coverage was well above 20, which suggests a robust ability to meet interest obligations. However, there were also periods, like in January 30, 2021, and August 1, 2020, where the ratio fell below 1, indicating that the company may have struggled to cover its interest expenses with its operating income.

It is important to note that negative interest coverage ratios, such as in January 30, 2021, October 31, 2020, and August 1, 2020, are concerning as they imply that the company's EBIT was insufficient to cover its interest payments, raising solvency issues and possibly indicating financial distress.

Overall, the trend in Abercrombie & Fitch's interest coverage ratio shows variability, highlighting the importance of monitoring the company's financial performance and assessing its ability to meet its interest obligations in the long term.