Clothing and accessory retailer Abercrombie & Fitch (ANF) released its earnings report for the third quarter of 2024 on Tuesday. The report starts off strong with its earnings per share of $2.50, compared to Wall Street’s estimate of $2.38 for the quarter. Investors will also note a 36.6% increase from the $1.83 per share reported in Q3 2023.
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Next, we have to talk about Abercrombie & Fitch’s record revenue of $1.2 billion. That’s a big win for ANF, considering analysts were expecting revenue of $1.18 billion in Q3. It’s also a 14% increase year-over-year from $1.06 billion.
What Is Behind Abercrombie & Fitch’s EPS & Revenue Beats?
Abercrombie & Fitch CEO Fran Horowitz pointed to strong performance worldwide as the reason for the company’s EPS and revenue beating estimates. What fuels that is the 14% growth in net sales for the Americas, 15% growth in net sales in Europe, Middle East, and Africa (EMEA), and a 32% increase in net sales in Asia Pacific (APAC) during the quarter.
Breaking that down by brand, Horowitz said “Abercrombie brands delivered 11% comparable sales on top of 26% last year and Hollister comped 21% on top of 7% last year.” The CEO points out that this pushed Q3 operating income up 30% to $179 million.
ANF Guidance, Leadership Changes, Stock Performance
Abercrombie & Fitch updated its outlook for the full year of 2024 in its latest earnings report. It now expects revenue growth for the year to range from 14% to 15%, compared to its prior estimate of 12% to 13%. It also provided a Q4 revenue growth guidance of 5% to 7%.
Alongside this update comes leadership changes. Robert Ball is taking over as the new CFO of Abercrombie & Fitch. Ball fills the empty CFO seat after Scott Lipesky was promoted to Chief Operating Officer last year.
However, Abercrombie & Fitch’s Q3 results, guidance, and new leadership didn’t impress investors. The stock was down 3.59% as of this writing. ANF stock is still up 75.13% year-to-date and 102.23% over the last year.
Is ANF Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Abercrombie & Fitch is Moderate Buy based on five Buy and two Hold ratings over the last three months. That comes with an average price target of $187.71, a high of $220, and a low of $147. This represents a potential upside of 21.5% for the shares. These ratings and price targets are likely to change as analysts update their coverage of ANF following its Q3 earnings release.
