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Zacks Rank #1 (Strong Buy) stock Abercrombie & Fitch ((ANF - Free Report) ) is a fashion brand specializing in creating and distributing laid-back clothes and accessories tailored to teenagers and young adults. Renowned for its trendy aesthetic, the label features a variety of clothing items, including denim bottoms, tops, dresses, and outerwear that prioritize both comfort and fashion. The company conducts its business via brick-and-mortar stores and has a popular website. A&F sustains its popularity by using high-quality materials and offering stylish designs influenced by current trends.
A&F’s Ability to Adapt
Billionaire investing legend Paul Tudor Jones once proclaimed, “You adapt, evolve, compete, or die.” Though PTJ was referring to Wall Street and the investing world, his quote is also highly relevant to the ever-changing fashion industry. Fashion trends are consistently changing due to the dynamic influence of cultural shifts, seasonal variations, and evolving consumer preferences. No better example of successful evolution exists on Wall Street than A&F. The company has transitioned its brand from a once elitist image to a welcoming and approachable one. For instance, in August, Abercrombie’s popular Hollister brand unveiled a suite of collegiate graphics products representing more than 30 universities nationwide.
ANF Expanding Profit Margins
ANF’s margins are expanding in 2024 following a multi-year downtrend. Abercrombie’s gross margin expanded 240 basis points to 64.9% in the second quarter and are some of the highest in the industry.
Image Source: Zacks Investment Research
Abercrombie Store-Optimization Strategy
Abercrombie’s management is also not settling regarding its store location strategy. Management has closed underperforming locations and is repositioning to smaller omnichannel enabled stores. Thus far, new and remodeled locations have outperformed management’s expectations.
Wall Street is Bullish on Abercrombie
Zacks Consensus Estimates suggest that ANF’s earnings will explode by 63.38% for the full year 2025.
Image Source: Zacks Investment Research
If recent history is any clue, ANF will not only meet Wall Street’s expectations but blow them away. Over the past four quarters, ANF has beat Zacks Consensus Estimates by a robust 27.99%.
ANF 1sT 200-day Visit
ANF is retreating to its 200-day moving average for the first time after ripping more than 140% over the past year. The first tag of the 200-day MA in a leading stock like ANF is typically a very attractive reward-to-risk zone.
Image Source: TradingView
Bottom Line
Abercrombie & Fitch is thriving in fashion by constantly evolving its brand. A popular product line, new locations, and expanding margins are reasons to be long the stock into 2025.
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Bull of the Day: Abercrombie & Fitch (ANF)
Abercrombie & Fitch Company Overview
Zacks Rank #1 (Strong Buy) stock Abercrombie & Fitch ((ANF - Free Report) ) is a fashion brand specializing in creating and distributing laid-back clothes and accessories tailored to teenagers and young adults. Renowned for its trendy aesthetic, the label features a variety of clothing items, including denim bottoms, tops, dresses, and outerwear that prioritize both comfort and fashion. The company conducts its business via brick-and-mortar stores and has a popular website. A&F sustains its popularity by using high-quality materials and offering stylish designs influenced by current trends.
A&F’s Ability to Adapt
Billionaire investing legend Paul Tudor Jones once proclaimed, “You adapt, evolve, compete, or die.” Though PTJ was referring to Wall Street and the investing world, his quote is also highly relevant to the ever-changing fashion industry. Fashion trends are consistently changing due to the dynamic influence of cultural shifts, seasonal variations, and evolving consumer preferences. No better example of successful evolution exists on Wall Street than A&F. The company has transitioned its brand from a once elitist image to a welcoming and approachable one. For instance, in August, Abercrombie’s popular Hollister brand unveiled a suite of collegiate graphics products representing more than 30 universities nationwide.
ANF Expanding Profit Margins
ANF’s margins are expanding in 2024 following a multi-year downtrend. Abercrombie’s gross margin expanded 240 basis points to 64.9% in the second quarter and are some of the highest in the industry.
Image Source: Zacks Investment Research
Abercrombie Store-Optimization Strategy
Abercrombie’s management is also not settling regarding its store location strategy. Management has closed underperforming locations and is repositioning to smaller omnichannel enabled stores. Thus far, new and remodeled locations have outperformed management’s expectations.
Wall Street is Bullish on Abercrombie
Zacks Consensus Estimates suggest that ANF’s earnings will explode by 63.38% for the full year 2025.
Image Source: Zacks Investment Research
If recent history is any clue, ANF will not only meet Wall Street’s expectations but blow them away. Over the past four quarters, ANF has beat Zacks Consensus Estimates by a robust 27.99%.
ANF 1sT 200-day Visit
ANF is retreating to its 200-day moving average for the first time after ripping more than 140% over the past year. The first tag of the 200-day MA in a leading stock like ANF is typically a very attractive reward-to-risk zone.
Image Source: TradingView
Bottom Line
Abercrombie & Fitch is thriving in fashion by constantly evolving its brand. A popular product line, new locations, and expanding margins are reasons to be long the stock into 2025.