Abercrombie & Fitch Surge On Booming Sales and Higher Guidance

29 May

Abercrombie & Fitch (ANF) shares rose 23.27% to an all-time high on Wednesday as the clothing retailer's first-quarter results exceeded estimates and raised its guidance. The company reported quarterly net income of $113.9 million, nearly seven times greater than a year ago, with earnings per share (EPS) of $2.14, up from $0.32 in 2023. Revenue jumped 22% year-over-year to $1.02 billion, a first-quarter record. Profit and revenue topped forecasts.

Sales of the Abercrombie brand climbed 31% to $571.5 million, while Hollister brand sales rose 12% to $449.2 million. They were up 23% to $820.1 million in the Americas, 19% to $164.8 million in Europe, the Middle East, and Africa, and 10% to $35.8 million in the Asia-Pacific region. CEO Fran Horowitz said the company "successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline."

Abercrombie (ANF) now expects full-year sales to rise about 10% from $4.3 billion in fiscal 2023, up from its previous outlook of a 4% to 6% gain. It sees an operating margin of approximately 14% compared with the earlier prediction of about 12%. Shares of Abercrombie & Fitch (ANF) soared more than 24% to $189.40 as of the time of writing after touching a record $182.86 earlier in the session. They have more than doubled this year.

Abercrombie & Fitch's (ANF) "Always Forward Plan" playbook aims to drive global growth through a data-driven approach to store expansion, digital marketing, and social selling. The retailer's sales channels are varied, with the Abercrombie brands selling 40% in stores and 60% digital, while the Hollister brand sells 70% in stores and 30% digital. The company targets millennials who are "fashion-obsessed" and "digitally-led," while the Hollister brand is aimed at Generation Z shoppers who are "comfort obsessed" and "value versatility."

Technically, Abercrombie & Fitch's (ANF) stock is currently overbought with a Relative Strength Index (RSI) of 86.64. The daily price chart depicts a long bullish Harami candle stick pattern which accentuate the bullish reversal of the ticker.