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Here's Why Abercrombie (ANF) Stock Surged 41.2% in 3 Months
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Abercrombie & Fitch Co. (ANF - Free Report) is well-poised to tap the positive trends in the fashion arena, thanks to its digital endeavors and other robust strategies. The company has been gaining from brand strength and solid demand for its products that resonate well with customers. Buoyed by such strengths, shares of this apparel and accessories dealer surged 41.2% in the past three months, impressively outperforming the industry’s 0.8% growth.
Analysts seem quite optimistic about this Zacks Rank #1 (Strong Buy) company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $4.73 billion and $9.25, respectively, indicating corresponding growth of 10.4% and 47.3% year over year.
Let’s Delve Deeper
The company is experiencing strong sales growth for each of its brands and most of the regions. In the fiscal first quarter, net sales improved 12% year over year at Hollister and advanced 31% at Abercrombie. The Abercrombie brand accounted for 56% of the total sales, while Hollister contributed the remaining 44%. Comparable sales grew 29% for Abercrombie and 13% for Hollister in the reported quarter.
Sales were up 23% year over year in the Americas, 19% in the EMEA and 10% in the APAC. Comparable sales grew 21%, 23% and 22%, respectively, in the Americas, EMEA and APAC regions.
Image Source: Zacks Investment Research
Abercrombie has been witnessing favorable margin trends too, mainly driven by lower freight costs and improved average unit retail. The gross margin expanded 540 basis points to 66.4% in the fiscal first quarter. Further, the company reported an operating income of $130 million, up from the adjusted operating income of $38 million in the year-ago period. It reported an operating margin of 12.7%, up significantly from 4.1% in the year-ago quarter.
As part of its store-optimization efforts, Abercrombie plans to reposition larger format flagship locations to smaller omnichannel-enabled stores. During the fiscal first quarter, it introduced a store, remodeled 13 stores and closed 13. For the fiscal year, management has raised the store investment plan and aims to deliver nearly 60 new stores, 65 remodels and right sizes, and 40 closures.
Abercrombie notes that it is on track to achieve its 2024 target of demonstrating sustainable, profitable growth. The company expects to continue benefiting from strength in its brands, driven by its focus on delivering high-quality, on-trend assortments for new and existing customers across regions and brands. It has also been focused on making strategic investments across stores, digital and technology, which are slated to strengthen the company in the long term.
In a nutshell, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses. These efforts might continue to drive the company’s performance ahead.
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 202.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current financial-year EPS implies growth of 21.7% from the year-ago reported figure.
DICK'S Sporting, a sporting goods retailer, currently carries a Zacks Rank #2 (Buy). DKS delivered an average earnings surprise of 4.7% in the trailing four quarters.
The consensus estimate for DICK'S Sporting’s current financial-year sales indicates growth of 1.8% from the year-ago reported figure.
Tractor Supply, the largest retail farm and ranch store chain in the United States, currently carries a Zacks Rank of 2. TSCO delivered a trailing four-quarter average earnings surprise of 2.7%.
The Zacks Consensus Estimate for Tractor Supply’s current financial-year sales indicates growth of 3% from the year-ago reported figure.
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Here's Why Abercrombie (ANF) Stock Surged 41.2% in 3 Months
Abercrombie & Fitch Co. (ANF - Free Report) is well-poised to tap the positive trends in the fashion arena, thanks to its digital endeavors and other robust strategies. The company has been gaining from brand strength and solid demand for its products that resonate well with customers. Buoyed by such strengths, shares of this apparel and accessories dealer surged 41.2% in the past three months, impressively outperforming the industry’s 0.8% growth.
Analysts seem quite optimistic about this Zacks Rank #1 (Strong Buy) company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $4.73 billion and $9.25, respectively, indicating corresponding growth of 10.4% and 47.3% year over year.
Let’s Delve Deeper
The company is experiencing strong sales growth for each of its brands and most of the regions. In the fiscal first quarter, net sales improved 12% year over year at Hollister and advanced 31% at Abercrombie. The Abercrombie brand accounted for 56% of the total sales, while Hollister contributed the remaining 44%. Comparable sales grew 29% for Abercrombie and 13% for Hollister in the reported quarter.
Sales were up 23% year over year in the Americas, 19% in the EMEA and 10% in the APAC. Comparable sales grew 21%, 23% and 22%, respectively, in the Americas, EMEA and APAC regions.
Image Source: Zacks Investment Research
Abercrombie has been witnessing favorable margin trends too, mainly driven by lower freight costs and improved average unit retail. The gross margin expanded 540 basis points to 66.4% in the fiscal first quarter. Further, the company reported an operating income of $130 million, up from the adjusted operating income of $38 million in the year-ago period. It reported an operating margin of 12.7%, up significantly from 4.1% in the year-ago quarter.
As part of its store-optimization efforts, Abercrombie plans to reposition larger format flagship locations to smaller omnichannel-enabled stores. During the fiscal first quarter, it introduced a store, remodeled 13 stores and closed 13. For the fiscal year, management has raised the store investment plan and aims to deliver nearly 60 new stores, 65 remodels and right sizes, and 40 closures.
Abercrombie notes that it is on track to achieve its 2024 target of demonstrating sustainable, profitable growth. The company expects to continue benefiting from strength in its brands, driven by its focus on delivering high-quality, on-trend assortments for new and existing customers across regions and brands. It has also been focused on making strategic investments across stores, digital and technology, which are slated to strengthen the company in the long term.
In a nutshell, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses. These efforts might continue to drive the company’s performance ahead.
Other Key Picks
We have highlighted three other top-ranked stocks, namely Gap (GPS - Free Report) , DICK'S Sporting (DKS - Free Report) and Tractor Supply (TSCO - Free Report) .
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 202.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current financial-year EPS implies growth of 21.7% from the year-ago reported figure.
DICK'S Sporting, a sporting goods retailer, currently carries a Zacks Rank #2 (Buy). DKS delivered an average earnings surprise of 4.7% in the trailing four quarters.
The consensus estimate for DICK'S Sporting’s current financial-year sales indicates growth of 1.8% from the year-ago reported figure.
Tractor Supply, the largest retail farm and ranch store chain in the United States, currently carries a Zacks Rank of 2. TSCO delivered a trailing four-quarter average earnings surprise of 2.7%.
The Zacks Consensus Estimate for Tractor Supply’s current financial-year sales indicates growth of 3% from the year-ago reported figure.