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Bull of the Day: Abercrombie & Fitch (ANF)

·3 min read

Abercrombie & Fitch Co. (ANF) is a specialty retailer of premium, high-quality casual apparel for men, women, and kids through a network of approximately 850 stores across North America, Europe, Asia and the Middle East. Its product portfolio includes knit and woven shirts, jeans, sweaters, outerwear, and accessories for men, women and kids, under the Abercrombie & Fitch, abercrombie kids and Hollister brands.

Q1 Earnings Recap

Investors cheered Abercrombie’s latest earnings release, sending the stock up 13% the day of its pre-market report.

Revenue grew 61% year-over-year in the first quarter, and digital sales spiked 45% (and making up 52% of total sales). Even more notable is that Q1 sales were up 6% from Q1 2019 sales, showing that ANF’s growth goes beyond just rebounding from the coronavirus pandemic. The company’s styles and collections are clearly resonating with shoppers looking to buy more than just sweatpants.

Adjusted earnings hit $0.67 per share, a big improvement from a loss of $3.30 per share in 2020.

Management also said that inventories remained “tightly controlled,” which helped improve price realization and benefitted the retailer’s gross margin rate, which expanded by 900 basis points.

ANF Breaks Out

Abercrombie & Fitch Company Price and Consensus
Abercrombie & Fitch Company Price and Consensus

Year-to-date, shares of ANF have jumped over 111% compared to the S&P 500’s 13% increase. Earnings estimates have been rising too, and ANF is a Zacks Rank #1 (Strong Buy) right now.

For fiscal 2022, seven analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up $1.45 to $2.84 per share. Earnings are expected to grow about 489% compared to the prior year period. Fiscal 2023 looks strong too, with continuing bullish sentiment from analysts.

Looking ahead, CEO Fran Horowitz said they’re “excited about the future,” and commented in the earnings report that momentum is continuing in the second quarter across all of its brands. The retailer remains focused on profitable revenue growth and the expansion of its digital platforms.

If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep ANF on your shortlist.

Zacks Names “Single Best Pick to Double”

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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

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