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Abercrombie & Fitch highlighted as Zacks Bull and Blue Bird Bear of the Day
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For Immediate Release
Chicago, IL – October 5, 2026 – Zacks Equity Research shares Abercrombie & Fitch (ANF - Free Report) as the Bull of the Day and Blue Bird (BLBD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walmart Inc. (WMT - Free Report) , Target Corp. (TGT - Free Report) and Dollar General Corp. (DG - Free Report)
The “retail is dead” story pushed through every facet of the stock market. Malls were dying, and the brick-and-mortar crowd was on its death bed. Then, something strange happened. There was a split in the road between stores that offered no experience and tried to cut their way to profitability and stores that became a destination while gearing up their omnichannel presence to rival the strongest of online presences. Today’s Bull of the Day is one of those brick-and-mortar stocks that figured it all out.
Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) Abercrombie & Fitch. The company is proving that sometimes the best comeback stories on Wall Street are hiding in plain sight. Remember when Abercrombie was supposed to be dead? The mall was dead. Teen retail was dead. The brand was stale. Amazon was going to eat everybody’s lunch.
Well, somebody forgot to tell Abercrombie. Today, ANF is a Zacks Rank #1 (Strong Buy), and the reason is exactly what I want to see in a Bull of the Day. That’s earnings estimates which are moving in the right direction. The current Zacks Consensus Estimate calls for fiscal 2027 earnings of $13.23 per share. That compares with $9.86 last year. Even better, the current-year estimate has moved 2.8% higher over just the last four weeks.
The Earnings Story Keeps Getting Better
The latest quarter gave analysts plenty of reasons to sharpen their pencils. Abercrombie delivered EPS of $2.42 versus the Zacks Consensus Estimate of $1.95. That’s a 24.1% positive earnings surprise. Revenue came in at $1.27 billion, another beat, and marked the company’s 15th consecutive quarter of sales growth. But there’s more going on here than one earnings beat.
Abercrombie-brand sales increased 8% while comparable sales increased 4%. APAC sales jumped 19%. Management then raised its full-year outlook, calling for roughly 5% sales growth and an operating margin of 14.5% to 15%. That is exactly the sequence bulls want to see: Beat the number. Raise the outlook. Watch the estimates follow.
There’s another piece of this story I like.
Abercrombie repurchased roughly $282 million worth of stock during the first half of the fiscal year, reducing shares outstanding by about 7% from where they started the year. Management now expects at least $500 million of share repurchases for the full year.
They have the flexibility to invest in stores, technology and growth while simultaneously shrinking the share count. That's a pretty good problem to have.
You’d think in an environment like we have now with sky high diesel and increasing EV efficiency that the stage would be set for a big bounce in the alternative energy transport space. Where are all those companies with the alternative energy trucks, cargo vans, and buses? Well, they’re still around, they just aren’t the most bullish looking cases in the market right now. In fact, I’ve got one of them here as today’s Bear of the Day.
I’m talking about Zacks Rank #5 (Strong Sell) Blue Bird. The school bus manufacturer became one of those sneaky industrial winners nobody was talking about. Replacement demand was strong, pricing was strong, margins improved and investors got excited about the potential transition toward electric school buses.
Blue Bird is currently a Zacks Rank #5 (Strong Sell), and when you dig into the estimate revisions, it's pretty easy to see why. The big problem is next year. Sixty days ago, the Zacks Consensus Estimate for next-year earnings sat at $5.23 per share. Today? Just $4.40.
That's a decline of roughly 16% in only two months. Even worse, both analysts covering the stock have cut their estimates over the last 60 days. Nobody has taken their number higher. That's exactly the kind of estimate-revision trend that can put a stock in the penalty box.
And the weakness isn't limited to the full year. The current-quarter estimate has fallen from $1.61 to $1.48 over the last 60 days. The following quarter has dropped from $1.15 to $1.05. So we're not talking about one analyst tweaking a spreadsheet. We're seeing earnings expectations reset lower across multiple periods.
The stock price is telling you something too. BLBD closed October 2 at $55.60. The 52-week high? $83.39. That's a stock sitting roughly one-third below its high. Again, stocks don't drop because Wall Street is worried about what happened yesterday. Stocks drop because investors are worried about what's coming tomorrow. And those falling earnings estimates suggest there's some turbulence ahead.
Here's what makes this one tricky. Blue Bird isn't some fundamentally broken company. In fact, the current-year earnings estimate has actually moved higher over the last 60 days, from $4.73 to about $4.89. That's good. But stocks are discounting mechanisms.
Additional content:
How Walmart, Target and Dollar General Gain from Tariff Refunds
Tariff refunds emerged as a meaningful earnings tailwind for major U.S. retailers in the second quarter, helping Walmart Inc., Target Corp. and Dollar General Corp. strengthen margins while giving them additional flexibility to invest in pricing, promotions and customer experience. Although each company approached the benefit differently, the refunds supported their broader strategies of protecting value-conscious shoppers and improving competitive positioning in an uncertain environment.
Walmart Channels Tariff Refunds Into Pricing Actions
Walmart saw a notable boost to profitability from tariff refunds while enabling the company to reinvest in customer-focused pricing initiatives. The company received substantially all of its eligible tariff refunds, totaling approximately $2.9 billion, or about 0.5% of annual U.S. net sales. The refunds contributed to stronger margins, with second-quarter consolidated gross profit rate expanding 96 basis points to 25.4%, driven primarily by Walmart U.S.
Walmart U.S. gross profit increased 9.4%, while gross profit rate improved 158 basis points to 29.4%, supported by tariff refunds and favorable business mix. The benefit also contributed to overall operating income growth, which increased 28.8% year over year, while adjusted operating income rose 17.4% on a constant-currency basis.
Management noted that tariff refunds provided an approximately 750-basis-point benefit to operating income growth in the quarter. Walmart directed the refunds toward customer experience and price leadership, particularly in grocery and general merchandise categories, increasing rollbacks to more than 11,000 during the period.
Target Gets a $994M Margin Boost From Tariff Refunds
Target also recorded a substantial tariff refund benefit during the second quarter. The company recognized $994 million in International Emergency Economic Powers Act tariff refunds as a reduction in the cost of sales. Second-quarter gross margin increased to 33.7%, including a 3.7 percentage-point benefit from tariff refunds. The refunds contributed $1.65 to adjusted earnings per share, while total tariff refund benefits contributed $752 million to net earnings. Excluding tariff refunds, adjusted earnings per share increased 20% year over year.
Tariff refunds also supported operating results. The second-quarter operating margin rate increased to 9.6% from 5.2% a year ago, with tariff refunds accounting for 3.7 percentage points of the improvement. Excluding the refund impact, the operating margin rate was approximately 70 basis points higher than the prior year. The company expects its fiscal 2026 operating margin to include about 90 basis points of benefit from second-quarter tariff refunds.
Beyond improving reported profitability, Target used its stronger financial position to continue investing in value initiatives. Management highlighted that the company lowered prices on more than 10,000 frequently purchased items over the past year while continuing to invest in newness, convenience and the shopping experience. The company’s second-quarter results also showed broad-based sales strength, including growth across all six core merchandising categories and increased digital sales.
Dollar General Directs Tariff Refunds Toward Customer Value
Dollar General benefited from tariff refunds in the second quarter, supporting gross margin expansion and improved profitability. The company reported that gross profit as a percentage of sales increased 127 basis points year over year to 32.6%, driven by tariff refunds, lower LIFO provisions and reduced distribution costs. After considering related reinvestments, tariff refunds contributed approximately 81 basis points to gross margin expansion.
The benefit also supported operating performance, with operating profit rising 29.2% year over year to $769.2 million and operating margin expanding 126 basis points to 6.8%. Dollar General estimated that tariff refunds, after reinvestments, contributed about 66 basis points to operating margin growth. Adjusted earnings per share increased 33% to $2.48, including an estimated 25 cents benefit from tariff refunds.
The company used the refund benefits to support customer-focused initiatives, including targeted promotions, lower everyday prices and increased marketing investments. Dollar General received the majority of expected tariff refunds during the quarter and does not expect a material impact from refunds after reinvestments in the second half of fiscal 2026.
Final Words
Tariff refunds provided Walmart, Target and Dollar General with temporary financial support that strengthened near-term margins and earnings. The companies used the benefit strategically, primarily through price investments and customer-focused initiatives, to reinforce their value propositions in an increasingly competitive retail landscape.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performance for information about the performance numbers displayed in this press release.
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Abercrombie & Fitch highlighted as Zacks Bull and Blue Bird Bear of the Day
For Immediate Release
Chicago, IL – October 5, 2026 – Zacks Equity Research shares Abercrombie & Fitch (ANF - Free Report) as the Bull of the Day and Blue Bird (BLBD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Walmart Inc. (WMT - Free Report) , Target Corp. (TGT - Free Report) and Dollar General Corp. (DG - Free Report)
Here is a synopsis of all five stocks:
Bull of the Day:
The “retail is dead” story pushed through every facet of the stock market. Malls were dying, and the brick-and-mortar crowd was on its death bed. Then, something strange happened. There was a split in the road between stores that offered no experience and tried to cut their way to profitability and stores that became a destination while gearing up their omnichannel presence to rival the strongest of online presences. Today’s Bull of the Day is one of those brick-and-mortar stocks that figured it all out.
Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) Abercrombie & Fitch. The company is proving that sometimes the best comeback stories on Wall Street are hiding in plain sight. Remember when Abercrombie was supposed to be dead? The mall was dead. Teen retail was dead. The brand was stale. Amazon was going to eat everybody’s lunch.
Well, somebody forgot to tell Abercrombie. Today, ANF is a Zacks Rank #1 (Strong Buy), and the reason is exactly what I want to see in a Bull of the Day. That’s earnings estimates which are moving in the right direction. The current Zacks Consensus Estimate calls for fiscal 2027 earnings of $13.23 per share. That compares with $9.86 last year. Even better, the current-year estimate has moved 2.8% higher over just the last four weeks.
The Earnings Story Keeps Getting Better
The latest quarter gave analysts plenty of reasons to sharpen their pencils. Abercrombie delivered EPS of $2.42 versus the Zacks Consensus Estimate of $1.95. That’s a 24.1% positive earnings surprise. Revenue came in at $1.27 billion, another beat, and marked the company’s 15th consecutive quarter of sales growth. But there’s more going on here than one earnings beat.
Abercrombie-brand sales increased 8% while comparable sales increased 4%. APAC sales jumped 19%. Management then raised its full-year outlook, calling for roughly 5% sales growth and an operating margin of 14.5% to 15%. That is exactly the sequence bulls want to see: Beat the number. Raise the outlook. Watch the estimates follow.
There’s another piece of this story I like.
Abercrombie repurchased roughly $282 million worth of stock during the first half of the fiscal year, reducing shares outstanding by about 7% from where they started the year. Management now expects at least $500 million of share repurchases for the full year.
They have the flexibility to invest in stores, technology and growth while simultaneously shrinking the share count. That's a pretty good problem to have.
Bear of the Day:
You’d think in an environment like we have now with sky high diesel and increasing EV efficiency that the stage would be set for a big bounce in the alternative energy transport space. Where are all those companies with the alternative energy trucks, cargo vans, and buses? Well, they’re still around, they just aren’t the most bullish looking cases in the market right now. In fact, I’ve got one of them here as today’s Bear of the Day.
I’m talking about Zacks Rank #5 (Strong Sell) Blue Bird. The school bus manufacturer became one of those sneaky industrial winners nobody was talking about. Replacement demand was strong, pricing was strong, margins improved and investors got excited about the potential transition toward electric school buses.
Blue Bird is currently a Zacks Rank #5 (Strong Sell), and when you dig into the estimate revisions, it's pretty easy to see why. The big problem is next year. Sixty days ago, the Zacks Consensus Estimate for next-year earnings sat at $5.23 per share. Today? Just $4.40.
That's a decline of roughly 16% in only two months. Even worse, both analysts covering the stock have cut their estimates over the last 60 days. Nobody has taken their number higher. That's exactly the kind of estimate-revision trend that can put a stock in the penalty box.
And the weakness isn't limited to the full year. The current-quarter estimate has fallen from $1.61 to $1.48 over the last 60 days. The following quarter has dropped from $1.15 to $1.05. So we're not talking about one analyst tweaking a spreadsheet. We're seeing earnings expectations reset lower across multiple periods.
The stock price is telling you something too. BLBD closed October 2 at $55.60. The 52-week high? $83.39. That's a stock sitting roughly one-third below its high. Again, stocks don't drop because Wall Street is worried about what happened yesterday. Stocks drop because investors are worried about what's coming tomorrow. And those falling earnings estimates suggest there's some turbulence ahead.
Here's what makes this one tricky. Blue Bird isn't some fundamentally broken company. In fact, the current-year earnings estimate has actually moved higher over the last 60 days, from $4.73 to about $4.89. That's good. But stocks are discounting mechanisms.
Additional content:
How Walmart, Target and Dollar General Gain from Tariff Refunds
Tariff refunds emerged as a meaningful earnings tailwind for major U.S. retailers in the second quarter, helping Walmart Inc., Target Corp. and Dollar General Corp. strengthen margins while giving them additional flexibility to invest in pricing, promotions and customer experience. Although each company approached the benefit differently, the refunds supported their broader strategies of protecting value-conscious shoppers and improving competitive positioning in an uncertain environment.
Walmart Channels Tariff Refunds Into Pricing Actions
Walmart saw a notable boost to profitability from tariff refunds while enabling the company to reinvest in customer-focused pricing initiatives. The company received substantially all of its eligible tariff refunds, totaling approximately $2.9 billion, or about 0.5% of annual U.S. net sales. The refunds contributed to stronger margins, with second-quarter consolidated gross profit rate expanding 96 basis points to 25.4%, driven primarily by Walmart U.S.
Walmart U.S. gross profit increased 9.4%, while gross profit rate improved 158 basis points to 29.4%, supported by tariff refunds and favorable business mix. The benefit also contributed to overall operating income growth, which increased 28.8% year over year, while adjusted operating income rose 17.4% on a constant-currency basis.
Management noted that tariff refunds provided an approximately 750-basis-point benefit to operating income growth in the quarter. Walmart directed the refunds toward customer experience and price leadership, particularly in grocery and general merchandise categories, increasing rollbacks to more than 11,000 during the period.
Target Gets a $994M Margin Boost From Tariff Refunds
Target also recorded a substantial tariff refund benefit during the second quarter. The company recognized $994 million in International Emergency Economic Powers Act tariff refunds as a reduction in the cost of sales. Second-quarter gross margin increased to 33.7%, including a 3.7 percentage-point benefit from tariff refunds. The refunds contributed $1.65 to adjusted earnings per share, while total tariff refund benefits contributed $752 million to net earnings. Excluding tariff refunds, adjusted earnings per share increased 20% year over year.
Tariff refunds also supported operating results. The second-quarter operating margin rate increased to 9.6% from 5.2% a year ago, with tariff refunds accounting for 3.7 percentage points of the improvement. Excluding the refund impact, the operating margin rate was approximately 70 basis points higher than the prior year. The company expects its fiscal 2026 operating margin to include about 90 basis points of benefit from second-quarter tariff refunds.
Beyond improving reported profitability, Target used its stronger financial position to continue investing in value initiatives. Management highlighted that the company lowered prices on more than 10,000 frequently purchased items over the past year while continuing to invest in newness, convenience and the shopping experience. The company’s second-quarter results also showed broad-based sales strength, including growth across all six core merchandising categories and increased digital sales.
Dollar General Directs Tariff Refunds Toward Customer Value
Dollar General benefited from tariff refunds in the second quarter, supporting gross margin expansion and improved profitability. The company reported that gross profit as a percentage of sales increased 127 basis points year over year to 32.6%, driven by tariff refunds, lower LIFO provisions and reduced distribution costs. After considering related reinvestments, tariff refunds contributed approximately 81 basis points to gross margin expansion.
The benefit also supported operating performance, with operating profit rising 29.2% year over year to $769.2 million and operating margin expanding 126 basis points to 6.8%. Dollar General estimated that tariff refunds, after reinvestments, contributed about 66 basis points to operating margin growth. Adjusted earnings per share increased 33% to $2.48, including an estimated 25 cents benefit from tariff refunds.
The company used the refund benefits to support customer-focused initiatives, including targeted promotions, lower everyday prices and increased marketing investments. Dollar General received the majority of expected tariff refunds during the quarter and does not expect a material impact from refunds after reinvestments in the second half of fiscal 2026.
Final Words
Tariff refunds provided Walmart, Target and Dollar General with temporary financial support that strengthened near-term margins and earnings. The companies used the benefit strategically, primarily through price investments and customer-focused initiatives, to reinforce their value propositions in an increasingly competitive retail landscape.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performance for information about the performance numbers displayed in this press release.