Abercrombie & Fitch Delivers Strong Q1 Results; Shares Pop 8%

Abercrombie & Fitch (ANF) rose almost 8% on May 26 after the company announced strong first quarter results. The company is an American lifestyle retailer that focuses on casual wear.

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The company’s net sales of $781.4 million surpassed the Street’s estimates of $675.6 million and jumped 61% from the year-ago period. Digital net sales came in at $403 million, up 45% year-over-year.

The company earned a profit of $0.67 per share in 1Q, compared to the $0.38 loss per share estimated by analysts. A loss of $3.29 per share was reported in the same quarter last year.

Abercrombie & Fitch CEO Fran Horowitz said, “Momentum has continued into the second quarter across brands, and early reaction to our newest member of the A&F Co. family, Social Tourist, has been amazing. Our solid foundation and strong liquidity position enables us to be on the offense. We remain focused on profitable topline growth, our ongoing digital evolution and our growth vehicles, including Gilly Hicks, and are committed to thoughtful expense management and global square footage optimization.” (See Abercrombie Fitch stock analysis on TipRanks)

On May 11, Jefferies analyst Janie Stichter maintained a Hold rating and a price target of $39 (almost 5% downside potential).

Stichter commented, “We are encouraged by both brand revival initiatives and progress in cost/inventory mgmt, which appear capable of yielding multi-year benefits. We remain Hold rated given valuation, a slower pace of Europe recovery from COVID, and a still top-line reliant margin expansion path.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 6 Buys, 3 Holds, and 1 Sell. The average analyst price target of $39.60 implies 3.5% downside potential to current levels. Shares have increased 81.4% over the past six months.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Abercrombie Fitch is currently Neutral, as hedge funds decreased their cumulative holdings of the stock by 41,800 shares in the last quarter.