We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Abercrombie (ANF) Marches Ahead of Its Industry
Read MoreHide Full Article
Abercrombie & Fitch Co. (ANF - Free Report) has exhibited a decent run on the bourses in the past year, thanks to its continued momentum in the Abercrombie brand and sequential improvement in the Hollister brand. The advanced regional operating model has provided better support for local teams, resulting in improved customer experiences and growth in all regions.
Also, store optimization and the Always Forward plan bode well. This Zacks Rank #1 (Strong Buy) stock has rallied 292.9% compared with the industry’s growth of 31.4%.
An uptrend in the Zacks Consensus Estimate echoes the positive sentiment. The consensus estimate for fiscal 2023 and fiscal 2024 has increased 4.9% and 4.5% to $5.74 and $5.75, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Let’s Delve Deeper
The Abercrombie brand continued its impressive streak with the 11th consecutive quarter of sales growth, marking a 30% year-over-year increase in the third quarter of fiscal 2023. The brand's success is attributed to engaging its target audience with a balanced and consistent growth strategy and building strong franchises across various product categories.
Unique collaborations and brand experiences played a vital role in engaging both new and existing customers, especially through social media and digital platforms, showcasing Abercrombie's innovative and effective customer engagement strategies.
Abercrombie has been witnessing favorable margin trends mainly driven by reduced freight costs and improved average unit retail (AUR). Gross margin expanded 570 bps to 64.9% in the fiscal third quarter, attributed to a 200-bps gain from reduced freight costs, a 250-bps impact of AUR growth and a 200-bps gain from lower inventory write-downs.
Abercrombie expanded its physical presence by opening four additional neighborhood stores in strategic urban locations in the fiscal third quarter. These stores are part of the company's strategy to enhance the in-person shopping experience while integrating it with digital channels.
Each region, including the Americas, EMEA, and APAC, showed growth in the fiscal third quarter. Localization efforts in assortments, pricing, and store cadence, especially in EMEA and APAC, were crucial in driving this growth. Localized marketing strategies also yielded positive results in major markets like the UK and Germany. This regional success reflects the company's effective adaptation to diverse market conditions and customer preferences.
Abercrombie has strategically aligned its product and promotional messaging across brands in preparation for the holiday season. The company is set to capitalize on the large holiday volumes through increased marketing investment and a focus on brand positioning.
Wrapping Up
Driven by the robust performance and expectations of solid demand trends in the upcoming holiday season, the company raised its guidance for fiscal 2023. Management envisions year-over-year net sales growth of 12-14% for fiscal 2023, up from the prior mentioned 10% growth.
Abercrombie expects an operating margin of 10%, an increase from the earlier stated 8-9%. This includes year-over-year gains of 250 bps, driven by reduced freight and raw material costs and a modest operating expense leverage.
The company expects sales growth in fiscal 2023 to more than offset higher expenses resulting from inflation and increased investment for the 2025 Always Forward Plan.
Other Stocks Looking Red Hot
Here we have highlighted three other top-ranked stocks, namely The Gap, Inc. (GPS - Free Report) , Hibbett Sports, Inc. (HIBB - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1. GPS delivered a significant earnings surprise in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s current fiscal-year earnings implies growth of 387.5% from the previous year’s reported number. GPS has a trailing four-quarter average earnings surprise of 137.9%.
Hibbett Sports has evolved its offerings from sports goods to an athletic-inspired fashion-focused assortment. The company currently flaunts a Zacks Rank #1. HIBB delivered an 81.4% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Hibbett Sports’ current fiscal-year sales implies growth of 1.7% from the previous year’s reported number. HIBB has a trailing four-quarter average earnings surprise of 24.2%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear for men and women. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 39.2% and 4%, respectively, from the previous year’s reported figures. AEO has a trailing four-quarter average earnings surprise of 23%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Abercrombie (ANF) Marches Ahead of Its Industry
Abercrombie & Fitch Co. (ANF - Free Report) has exhibited a decent run on the bourses in the past year, thanks to its continued momentum in the Abercrombie brand and sequential improvement in the Hollister brand. The advanced regional operating model has provided better support for local teams, resulting in improved customer experiences and growth in all regions.
Also, store optimization and the Always Forward plan bode well. This Zacks Rank #1 (Strong Buy) stock has rallied 292.9% compared with the industry’s growth of 31.4%.
An uptrend in the Zacks Consensus Estimate echoes the positive sentiment. The consensus estimate for fiscal 2023 and fiscal 2024 has increased 4.9% and 4.5% to $5.74 and $5.75, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Let’s Delve Deeper
The Abercrombie brand continued its impressive streak with the 11th consecutive quarter of sales growth, marking a 30% year-over-year increase in the third quarter of fiscal 2023. The brand's success is attributed to engaging its target audience with a balanced and consistent growth strategy and building strong franchises across various product categories.
Unique collaborations and brand experiences played a vital role in engaging both new and existing customers, especially through social media and digital platforms, showcasing Abercrombie's innovative and effective customer engagement strategies.
Abercrombie has been witnessing favorable margin trends mainly driven by reduced freight costs and improved average unit retail (AUR). Gross margin expanded 570 bps to 64.9% in the fiscal third quarter, attributed to a 200-bps gain from reduced freight costs, a 250-bps impact of AUR growth and a 200-bps gain from lower inventory write-downs.
Abercrombie expanded its physical presence by opening four additional neighborhood stores in strategic urban locations in the fiscal third quarter. These stores are part of the company's strategy to enhance the in-person shopping experience while integrating it with digital channels.
Each region, including the Americas, EMEA, and APAC, showed growth in the fiscal third quarter. Localization efforts in assortments, pricing, and store cadence, especially in EMEA and APAC, were crucial in driving this growth. Localized marketing strategies also yielded positive results in major markets like the UK and Germany. This regional success reflects the company's effective adaptation to diverse market conditions and customer preferences.
Abercrombie has strategically aligned its product and promotional messaging across brands in preparation for the holiday season. The company is set to capitalize on the large holiday volumes through increased marketing investment and a focus on brand positioning.
Wrapping Up
Driven by the robust performance and expectations of solid demand trends in the upcoming holiday season, the company raised its guidance for fiscal 2023. Management envisions year-over-year net sales growth of 12-14% for fiscal 2023, up from the prior mentioned 10% growth.
Abercrombie expects an operating margin of 10%, an increase from the earlier stated 8-9%. This includes year-over-year gains of 250 bps, driven by reduced freight and raw material costs and a modest operating expense leverage.
The company expects sales growth in fiscal 2023 to more than offset higher expenses resulting from inflation and increased investment for the 2025 Always Forward Plan.
Other Stocks Looking Red Hot
Here we have highlighted three other top-ranked stocks, namely The Gap, Inc. (GPS - Free Report) , Hibbett Sports, Inc. (HIBB - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1. GPS delivered a significant earnings surprise in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s current fiscal-year earnings implies growth of 387.5% from the previous year’s reported number. GPS has a trailing four-quarter average earnings surprise of 137.9%.
Hibbett Sports has evolved its offerings from sports goods to an athletic-inspired fashion-focused assortment. The company currently flaunts a Zacks Rank #1. HIBB delivered an 81.4% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Hibbett Sports’ current fiscal-year sales implies growth of 1.7% from the previous year’s reported number. HIBB has a trailing four-quarter average earnings surprise of 24.2%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear for men and women. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 39.2% and 4%, respectively, from the previous year’s reported figures. AEO has a trailing four-quarter average earnings surprise of 23%.