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Abercrombie (ANF) Strong on Online Sales Amid Coronavirus
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Consumers’ growing preference for online shopping, owing to store closures stemming from the coronavirus situation, is touted to leave a lasting impression on the e-commerce industry. Sources reveal that e-commerce spending has surged more than 40% year over year following Trump’s declaration of health emergency on Mar 14.
Notably, shares of Abercrombie Fitch Company (ANF - Free Report) have gained 32.8% in the past three months, outperforming the industry and the Retail-Wholesale sector’s growth of 4.5% and 16.5%, respectively. The stock’s bullish run on the bourses can be attributable to impressive digital growth.
Despite weak first-quarter fiscal 2020 results, digital sales grew 25% year over year to $275 million. The company witnessed double-digit growth in online sales from February till mid-March, which further accelerated in May. Moreover, the metric surged in April, particularly across the United States and Europe. Prior to this, it crossed the $1-billion mark in digital sales during fiscal 2019.
Similarly, other major retailers that have been treading the same path include American Eagle Outfitters (AEO - Free Report) , Skechers (SKX - Free Report) and V.F. Corp (VFC - Free Report) . Although in-store comps for American Eagle fell 3% in the fiscal fourth quarter, digital sales rose in double digits, up 200 basis points (bps) from the year-ago period. In recent quarters, American Eagle saw significant increases in its app and mobile channels, which together represent more than half of the company’s digital business.
Moreover, Skechers’ top line declined 2.7% in the last reported quarter, while e-commerce sales increased more than 70% in the first quarter and crossed 250% in April. Also, sales of V.F. Corp fell about 11% year over year in fourth-quarter fiscal 2020. However, its digital revenues were up 8%, with 9% growth in constant dollars during the fiscal fourth quarter, driven by double-digit growth in Vans, The North Face, Dickies and other emerging brands.
After a brief hiatus, Abercrombie is on track to reopen stores in a phased manner with adjusted store hours. In this regard, nearly half of the stores have been reopened on a global basis. Notably, stores that have reopened in the United States and EMEA regions have witnessed sales productivity of roughly 80% and 60% year over year, respectively. Also, most of the stores in China have reopened since early March.
However, management witnessed a material impact of COVID-19 in first-quarter fiscal 2020, which is likely to continue. Hence, the company refrained from providing any guidance for the first quarter and fiscal 2020.
All said, we hope that strong digital growth and store reopening initiatives will provide some cushion to this Zacks Rank #3 (Hold) company and help it overcome the headwinds caused by the COVID-19 crisis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Abercrombie (ANF) Strong on Online Sales Amid Coronavirus
Consumers’ growing preference for online shopping, owing to store closures stemming from the coronavirus situation, is touted to leave a lasting impression on the e-commerce industry. Sources reveal that e-commerce spending has surged more than 40% year over year following Trump’s declaration of health emergency on Mar 14.
Notably, shares of Abercrombie Fitch Company (ANF - Free Report) have gained 32.8% in the past three months, outperforming the industry and the Retail-Wholesale sector’s growth of 4.5% and 16.5%, respectively. The stock’s bullish run on the bourses can be attributable to impressive digital growth.
Despite weak first-quarter fiscal 2020 results, digital sales grew 25% year over year to $275 million. The company witnessed double-digit growth in online sales from February till mid-March, which further accelerated in May. Moreover, the metric surged in April, particularly across the United States and Europe. Prior to this, it crossed the $1-billion mark in digital sales during fiscal 2019.
Similarly, other major retailers that have been treading the same path include American Eagle Outfitters (AEO - Free Report) , Skechers (SKX - Free Report) and V.F. Corp (VFC - Free Report) . Although in-store comps for American Eagle fell 3% in the fiscal fourth quarter, digital sales rose in double digits, up 200 basis points (bps) from the year-ago period. In recent quarters, American Eagle saw significant increases in its app and mobile channels, which together represent more than half of the company’s digital business.
Moreover, Skechers’ top line declined 2.7% in the last reported quarter, while e-commerce sales increased more than 70% in the first quarter and crossed 250% in April. Also, sales of V.F. Corp fell about 11% year over year in fourth-quarter fiscal 2020. However, its digital revenues were up 8%, with 9% growth in constant dollars during the fiscal fourth quarter, driven by double-digit growth in Vans, The North Face, Dickies and other emerging brands.
After a brief hiatus, Abercrombie is on track to reopen stores in a phased manner with adjusted store hours. In this regard, nearly half of the stores have been reopened on a global basis. Notably, stores that have reopened in the United States and EMEA regions have witnessed sales productivity of roughly 80% and 60% year over year, respectively. Also, most of the stores in China have reopened since early March.
However, management witnessed a material impact of COVID-19 in first-quarter fiscal 2020, which is likely to continue. Hence, the company refrained from providing any guidance for the first quarter and fiscal 2020.
All said, we hope that strong digital growth and store reopening initiatives will provide some cushion to this Zacks Rank #3 (Hold) company and help it overcome the headwinds caused by the COVID-19 crisis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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