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Zacks Investment Ideas feature highlights: American Eagle Outfitters, The Gap, Abercrombie & Fitch and Guess
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For Immediate Release
Chicago, IL – March 12, 2024 – Today, Zacks Investment Ideas feature highlights American Eagle Outfitters (AEO - Free Report) , The Gap (GPS - Free Report) , Abercrombie & Fitch (ANF - Free Report) and Guess (GES - Free Report) .
These Retail - Apparel Stocks Are Standing Out
Investors looking for stocks with sound value and attractive growth prospects may want to take a look at the retail sector at the moment.
Specifically, several retail apparel stocks are starting to check these boxes after surpassing their quarterly earnings expectations last week and here are a few to consider.
American Eagle Outfitters
Daunting a Zacks Rank #1 (Strong Buy), the increasing popularity of American Eagle Outfitters' brands shouldn't be overlooked with the company reporting a record $1.67 billion in fourth quarter sales last Thursday. This beat Q4 sales estimates by 1% and was a 12% increase from the prior year quarter. The top line expansion was driven by its Aerie brand which achieved record Q4 revenue and bolstered demand outside of the flagship American Eagle brand.
The trendy high-quality special apparel retailer posted Q4 earnings of $0.61 per share which comfortably surpassed the Zacks Consensus of $0.50 a share. More impressive, Q4 earnings soared 65% from $0.37 per share a year ago. Overall, AEO ended its fiscal 2024 with annual earnings increasing 57% to $1.52 per share and total sales rising 5% to $5.26 billion.
American Eagle Outfitters' profit improvement initiatives should continue to pay off and AEO shares trade at 14X forward earnings which is a slight discount to the Zacks Retail-Apparel and Shoes industry average of 17.2X and well below the S&P 500's 21.4X. Notably, American Eagle Outfitters announced a new "Powering Profitable Growth" campaign which is a long-term strategy structured to deliver $5.7-$6 billion in annual revenue and an approximate 10% operating margin by the end of fiscal 2026.
The Gap
Reforming its iconic brands to compete against other up-and-coming apparel retailers, The Gap's stock also sports a Zacks Rank #1 (Strong Buy). The Gap reported its Q4 results last Thursday as well and reconfirmed the resurgence of its bottom line with earnings of $0.49 a share crushing estimates of $0.20 a share by 145%. Furthermore, Q4 earnings climb swung from an adjusted loss of -$0.75 a share in the comparative quarter.
Fourth quarter sales of $4.29 billion were up 1% YoY and beat estimates of $4.24 billion by 2%. Improved trends at Old Navy and Gap were attributed to the company's favorable quarterly results with its other notable brands including Banana Republic and Athleta. The Gap ended its FY24 with annual earnings soaring to $1.43 per share compared to an adjusted loss of -$0.40 a share in FY23. This was despite total sales decreasing -4% to $14.89 billion.
Although FY25 EPS is expected to dip to $1.20 per share, The Gap's stock trades at a reasonable 17.5X forward earnings multiple. Plus, FY26 EPS is forecasted to rebound and rise 15% to $1.37 per share. More intriguing, GPS shares trade at just 0.52X forward sales with total sales projected to be virtually flat in FY25 and then rise 1% in FY26 to $15.08 billion.
Other Stocks to Watch
Sporting a Zacks Rank #2 (Buy) after exceeding its Q4 top and bottom-line expectations last Tuesday, Abercrombie & Fitch has remained among the crème of the crop regarding expansive yet fairly valued apparel stocks. Meanwhile, Guess stock may also appease value investors and sports a Zacks Rank #2 (Buy) ahead of its Q4 results on Tuesday, March 12.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: American Eagle Outfitters, The Gap, Abercrombie & Fitch and Guess
For Immediate Release
Chicago, IL – March 12, 2024 – Today, Zacks Investment Ideas feature highlights American Eagle Outfitters (AEO - Free Report) , The Gap (GPS - Free Report) , Abercrombie & Fitch (ANF - Free Report) and Guess (GES - Free Report) .
These Retail - Apparel Stocks Are Standing Out
Investors looking for stocks with sound value and attractive growth prospects may want to take a look at the retail sector at the moment.
Specifically, several retail apparel stocks are starting to check these boxes after surpassing their quarterly earnings expectations last week and here are a few to consider.
American Eagle Outfitters
Daunting a Zacks Rank #1 (Strong Buy), the increasing popularity of American Eagle Outfitters' brands shouldn't be overlooked with the company reporting a record $1.67 billion in fourth quarter sales last Thursday. This beat Q4 sales estimates by 1% and was a 12% increase from the prior year quarter. The top line expansion was driven by its Aerie brand which achieved record Q4 revenue and bolstered demand outside of the flagship American Eagle brand.
The trendy high-quality special apparel retailer posted Q4 earnings of $0.61 per share which comfortably surpassed the Zacks Consensus of $0.50 a share. More impressive, Q4 earnings soared 65% from $0.37 per share a year ago. Overall, AEO ended its fiscal 2024 with annual earnings increasing 57% to $1.52 per share and total sales rising 5% to $5.26 billion.
American Eagle Outfitters' profit improvement initiatives should continue to pay off and AEO shares trade at 14X forward earnings which is a slight discount to the Zacks Retail-Apparel and Shoes industry average of 17.2X and well below the S&P 500's 21.4X. Notably, American Eagle Outfitters announced a new "Powering Profitable Growth" campaign which is a long-term strategy structured to deliver $5.7-$6 billion in annual revenue and an approximate 10% operating margin by the end of fiscal 2026.
The Gap
Reforming its iconic brands to compete against other up-and-coming apparel retailers, The Gap's stock also sports a Zacks Rank #1 (Strong Buy). The Gap reported its Q4 results last Thursday as well and reconfirmed the resurgence of its bottom line with earnings of $0.49 a share crushing estimates of $0.20 a share by 145%. Furthermore, Q4 earnings climb swung from an adjusted loss of -$0.75 a share in the comparative quarter.
Fourth quarter sales of $4.29 billion were up 1% YoY and beat estimates of $4.24 billion by 2%. Improved trends at Old Navy and Gap were attributed to the company's favorable quarterly results with its other notable brands including Banana Republic and Athleta. The Gap ended its FY24 with annual earnings soaring to $1.43 per share compared to an adjusted loss of -$0.40 a share in FY23. This was despite total sales decreasing -4% to $14.89 billion.
Although FY25 EPS is expected to dip to $1.20 per share, The Gap's stock trades at a reasonable 17.5X forward earnings multiple. Plus, FY26 EPS is forecasted to rebound and rise 15% to $1.37 per share. More intriguing, GPS shares trade at just 0.52X forward sales with total sales projected to be virtually flat in FY25 and then rise 1% in FY26 to $15.08 billion.
Other Stocks to Watch
Sporting a Zacks Rank #2 (Buy) after exceeding its Q4 top and bottom-line expectations last Tuesday, Abercrombie & Fitch has remained among the crème of the crop regarding expansive yet fairly valued apparel stocks. Meanwhile, Guess stock may also appease value investors and sports a Zacks Rank #2 (Buy) ahead of its Q4 results on Tuesday, March 12.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.