{"id":14213,"date":"2023-08-24T14:39:08","date_gmt":"2023-08-24T14:39:08","guid":{"rendered":"https:\/\/isafespend.com\/investing\/abercrombie-fitch-stock-soars-as-earnings-smash-estimates-higher-prices-help\/"},"modified":"2023-08-24T14:39:09","modified_gmt":"2023-08-24T14:39:09","slug":"abercrombie-fitch-stock-soars-as-earnings-smash-estimates-higher-prices-help","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=14213","title":{"rendered":"Abercrombie & Fitch Stock Soars as Earnings Smash Estimates. Higher Prices Help."},"content":{"rendered":"
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Abercrombie & Fitch delivered a solid earnings beat and predicted a big jump in sales for this year versus 2022.<\/h4>\n


\n Courtesy Abercrombie & Fitch
\n <\/span>
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

\n Abercrombie & Fitch
\n \u2018s stock raced higher Wednesday after the retailer raised its outlook for sales after reporting impressive second-quarter earnings. Abercrombie\u2019s results were a bright spot among an otherwise volatile week for retail earnings.<\/p>\n

The owner of the Abercrombie and Hollister brands reported adjusted earnings of $1.10 a share on sales of $935 million for the period that ended on July 29. Analysts tracked by FactSet were looking for earnings of 17 cents a share on sales of $844 million.<\/p>\n

\n

CEO Fran Horowitz said both brands experienced lower freight costs as well as higher average unit retail. That\u2019s another way of saying, on average, each item was being sold at a higher price from the previous period. <\/p>\n

Abercrombie & Fitch also raised its outlook for fiscal-year sales\u00a0growth on the back of the solid quarter performance. It expects sales to grow around 10% from\u00a0$3.7 billion reported\u00a0in 2022. It previously expected between 2% and 4% in sales growth. Analysts were looking for 4% growth. <\/p>\n

\u201cWhile the macro environment remains dynamic, our first-half results give us confidence to stay on offense for the second half,\u201d Horowitz said. <\/p>\n

Shares of Abercrombie (ticker:
\n ANF
\n ) rose 25% on Wednesday. The stock has gained 125% this year. <\/p>\n

Abercrombie\u2019s results seem especially strong given the weakness seen across the sector, making it \u201cthe brightest star in the sky\u201d this earnings season, wrote Citi analyst Paul Lejuez. While Lejuez has a Neutral rating on the stock, he believes Abercrombie\u2019s guidance looks conservative given the company\u2019s sales growth. <\/p>\n

This quarter, sales grew across both of the company\u2019s major brands. Abercrombie sales were up 26% year over year, while Hollister was up 8%. The company\u2019s sales momentum was largely thanks to years of \u201cdeep transformational work\u201d to modernize the brand, Horowitz said on a call with investors Wednesday. <\/p>\n

To be sure, the company\u2019s sales growth is \u201cnothing to sneeze at for a mature retailer,\u201d wrote William Blair\u2019s Dylan Carden. But in Carden\u2019s opinion, the bigger headline is Abercrombie\u2019s margin growth. The company turned in operating margin of 9.6%, a jump from last year\u2019s loss of 0.3%. <\/p>\n

Still, Carden has a Market Perform rating on the stock, adding that the margin growth creates \u201cas much opportunity as risk.\u201d<\/p>\n

\u201cOne of the concerns we have had in the midst of A&F\u2019s run is how sustainable sales and in turn the higher-than-expected operating margins are,\u201d he added. <\/p>\n

Write to Karishma Vanjani at\u00a0karishma.vanjani@dowjones.com.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Abercrombie & Fitch delivered a solid earnings beat and predicted a big jump in sales for this year versus 2022. Courtesy Abercrombie & Fitch Abercrombie & Fitch \u2018s stock raced higher Wednesday after the retailer raised its outlook for sales after reporting impressive second-quarter earnings. Abercrombie\u2019s results were a bright spot among an otherwise volatile<\/p>\n","protected":false},"author":1,"featured_media":14214,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-14213","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nAbercrombie & Fitch Stock Soars as Earnings Smash Estimates. 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