Core Insights - Abercrombie & Fitch reported $1.1 billion in revenue for the quarter ended April 2025, a year-over-year increase of 7.5% [1] - The EPS for the same period was $1.59, down from $2.14 a year ago, with a surprise of +17.78% over the consensus estimate of $1.35 [1] - The reported revenue exceeded the Zacks Consensus Estimate by +3.82% [1] Financial Performance Metrics - Abercrombie's shares returned +11.1% over the past month, outperforming the Zacks S&P 500 composite's +7.4% change [3] - The company has a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3] Store and Sales Metrics - Total number of stores at the end of the period was 790, slightly below the estimated 797 [4] - Comparable store sales for Hollister increased by 23%, significantly above the average estimate of 8.8% [4] - Comparable store sales for Abercrombie decreased by 10%, worse than the average estimate of -6.4% [4] - Total comparable store sales increased by 4%, surpassing the average estimate of 1.3% [4] - Net sales for Hollister were $549.36 million, exceeding the estimate of $498.67 million, representing a +22.3% change year-over-year [4] - Net sales for Abercrombie were $547.95 million, below the estimate of $575.23 million, reflecting a -4.1% change year-over-year [4]

Financial Performance - Abercrombie & Fitch reported quarterly earnings of $1.59 per share, exceeding the Zacks Consensus Estimate of $1.35 per share, but down from $2.14 per share a year ago, representing an earnings surprise of 17.78% [1] - The company posted revenues of $1.1 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 3.82% and up from $1.02 billion year-over-year [2] Market Performance - Abercrombie shares have declined approximately 48.4% since the beginning of the year, contrasting with the S&P 500's gain of 0.7% [3] - The current Zacks Rank for Abercrombie is 4 (Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $2.48 on revenues of $1.18 billion, and for the current fiscal year, it is $10.64 on revenues of $5.12 billion [7] - The Retail - Apparel and Shoes industry is currently ranked in the bottom 46% of over 250 Zacks industries, suggesting potential challenges for Abercrombie's stock performance [8]

Financial Data and Key Metrics Changes - The company reported record net sales of $1,100,000,000 for the first quarter, representing an 8% increase compared to the previous year, exceeding the expected range of 4% to 6% [7][16] - Operating margin was 9.3%, with earnings per share of $1.59, both above the ranges provided earlier [8][18] - The company returned $200,000,000 to shareholders through share repurchases, totaling 5% of shares outstanding as of the beginning of the year [8][19] Business Line Data and Key Metrics Changes - Hollister brand achieved a 22% net sales growth, with comparable sales up 23%, marking the eighth consecutive quarter of growth [9][10] - Abercrombie brand experienced a 4% net sales decline, with comparable sales down 10%, primarily due to a decline in average unit retail (AUR) as the company worked through winter carryover inventory [11][17] Market Data and Key Metrics Changes - The Americas region saw a 7% growth, while EMEA grew by 12% and APAC by 5% [9][16] - In EMEA, strong performance was noted in the UK and Germany, with digital demand complementing the positive reception of new store openings [9][10] Company Strategy and Development Direction - The company aims to add around 100 new physical experiences in total for the year, including 60 new stores and 40 remodels, while planning to be net store openers [15][22] - The focus remains on global growth, with an emphasis on marketing, technology, and new channel partnerships to strengthen brand reach [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential improvement in Abercrombie's sales in the second half of the year, driven by a flexible operating model that allows for quick adjustments based on customer feedback [12][40] - The company anticipates a full-year net sales growth of 3% to 6%, with operating margins expected to be in the range of 12.5% to 13.5% [21][22] Other Important Information - The company is not planning broad-based ticket price increases despite anticipated tariff impacts, which are expected to cost around $50,000,000 for 2025 [20][21] - The tax rate for the quarter was in line with expectations at 25%, with a forecasted tax rate around 27% for the full year [18][21] Q&A Session Summary Question: Insights on Hollister and Abercrombie's outlook - Management highlighted the flexibility of their model in responding to customer trends, with expectations for Abercrombie to see an inflection in the back half of the year [28][40] Question: Real estate strategy and store openings - The company plans to close 20 stores this year, down from 40 last year, due to successful landlord negotiations and opportunities to maintain store productivity [32][33] Question: Full-year sales outlook and confidence - Management expressed confidence in the higher end of the sales guidance due to strong balance sheet and ongoing investments in marketing and technology [36][38] Question: Traffic and inventory management - Positive traffic was reported for both Abercrombie and Hollister, with management indicating that carryover inventory levels are normalized compared to previous years [44][45] Question: Gross margin expectations - Management expects sequential improvement in gross margins as they work through freight and carryover pressures, with flat AURs anticipated for the second quarter [48][88] Question: Promotions and inventory growth - Promotions will be aligned with inventory levels and customer demand, with expectations for fewer promotions in the back half of the year as inventory normalizes [92][95] Question: Growth expectations in Europe and Asia - Management confirmed expectations for growth across all regions, with strong performance noted in the UK and Germany [96][98]

Financial Data and Key Metrics Changes - The company reported record net sales of $1,100,000,000 for Q1 2025, representing an 8% increase compared to the previous year, exceeding the expected range of 4% to 6% [6][14] - Operating margin was 9.3%, with earnings per share of $1.59, both above the previously provided ranges [6][14] - The company returned $200,000,000 to shareholders through share repurchases, totaling 5% of shares outstanding as of the beginning of the year [6][18] Business Line Data and Key Metrics Changes - Hollister brand achieved a 22% net sales growth, with comparable sales up 23%, marking the eighth consecutive quarter of growth [7][15] - Abercrombie Brands experienced a 4% net sales decline, with comparable sales down 10%, primarily due to a decline in average unit retail (AUR) as the company worked through winter carryover inventory [9][15] Market Data and Key Metrics Changes - The Americas region saw a 7% growth, while EMEA grew by 12% and APAC by 5% [7][14] - Strong comparable sales were reported across all regions, with the Americas up 4%, EMEA up 6%, and APAC up 2% [14] Company Strategy and Development Direction - The company aims to add around 100 new physical experiences in 2025, including 60 new stores and 40 remodels, while maintaining a focus on global growth [13][21] - The management emphasized the importance of agility in inventory management and marketing investments to align product offerings with customer demand [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential improvement in sales for Abercrombie Brands in the second half of the year, driven by positive customer responses to new product categories [10][41] - The company anticipates a full-year net sales growth of 3% to 6%, with operating margin expected to be in the range of 12.5% to 13.5% [20][21] Other Important Information - The company is not planning broad-based ticket price increases despite anticipated tariff impacts, focusing instead on maintaining product quality and aligning inventory with customer value perception [11][19] - The tax rate for the quarter was in line with expectations at 25%, with net income per diluted share above outlook at $1.59 compared to $2.14 last year [17] Q&A Session Summary Question: Outlook for Hollister and Abercrombie - Management highlighted the strong performance of Hollister and discussed the flexibility of Abercrombie's model to respond to customer trends, expecting an inflection in the back half of the year [30][41] Question: Full Year Profit Outlook - The management explained the reduction in profit expectations primarily due to tariffs, while maintaining confidence in the sales growth outlook based on strong balance sheet and planned investments [38][39] Question: Traffic and Inventory Levels - Positive traffic was reported for both Abercrombie and Hollister, with management indicating that carryover inventory levels are normalized compared to previous years [45][46] Question: Promotions and Growth Expectations - Management discussed expectations for promotions, indicating that AUR pressure would continue in the near term but would improve in the back half of the year [94][96] Question: Growth in Europe and Asia - The company remains optimistic about growth in EMEA and APAC, particularly in the UK and Germany, where strong performance was noted [99][100] Question: Improvement for Abercrombie - Management acknowledged the challenges faced in Q1 but expressed confidence in the brand's ability to adapt and respond to emerging trends, expecting improvement in the second half [102][106]

Retailers are shaking up Wall Street, with earnings reports from Macy's Inc (NYSE:M), Abercrombie & Fitch Co (NYSE:ANF), and Dick's Sporting Goods Inc (NYSE:DKS) offering mixed signals on the impact of tariffs, consumer demand, and operational resilience. Macy's reported adjusted first-quarter earnings of 16 cents per share on revenue of $4.60 billion, topping Wall Street expectations. Still, the company cut its full-year profit forecast, citing tariff hikes and heavier promotions. Macy's is in the middle o ...

Core Viewpoint - Abercrombie & Fitch's shares surged despite a lowered profit outlook due to tariffs impacting the business by $50 million, with the company adjusting its earnings per share forecast downward while raising its revenue outlook for 2025 [1][2]. Financial Performance - The company reported a net income of $80.4 million, or $1.59 per share, for the first quarter, compared to $114 million, or $2.14 per share, a year earlier [3]. - Revenue for the first quarter reached $1.10 billion, an increase of approximately 8% from $1.02 billion a year earlier, marking a record high for the fiscal first quarter [4][5]. - Earnings per share exceeded expectations at $1.59 compared to the anticipated $1.39, while revenue also surpassed forecasts of $1.07 billion [5]. Outlook Adjustments - The company revised its full-year earnings per share expectation to a range of $9.50 to $10.50, down from $10.40 to $11.40 [1]. - Abercrombie raised its 2025 revenue growth outlook to 3% to 6%, up from a previous estimate of 3% to 5% [2]. - The operating margin forecast was cut to a range of 12.5% to 13.5%, down from 14% to 15% [2]. Brand Performance - The Hollister brand led the performance with a growth of 22%, achieving its best-ever first quarter net sales, while Abercrombie brand net sales decreased by 4% compared to a 31% sales growth in 2024 [4].

Abercrombie and Fitch (ANF) is a Zacks Rank #5 (Strong Sell) despite the fact that the company beat last quarter, the company is reporting before the bell today. This article was published before the company posted the latest results. The retail sector has been plagued by the tariff tantrum that the market is facing.  This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.Description                        Abercrombie & Fitch Co. engages in the retail of appar ...

INVESTOR PRESENTATION: FIRST QUARTER 2025 TABLE OF CONTENTS Safe Harbor and Other Information 3 Company Overview 5 Q1 2025 Results 15 Appendix 21 2 SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This presentation contains forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements, including, without limitation, statements regarding our second quarter and annual fiscal 2025 results, relate to our current ass ...

Core Viewpoint - Abercrombie & Fitch Co. reported record first quarter net sales of $1.1 billion, reflecting an 8% increase compared to the previous year, driven by broad-based growth across regions, particularly from Hollister brands which saw a 22% increase in sales [2][5][6] Financial Performance - Net sales for the first quarter ended May 3, 2025, were $1,097,311,000, up from $1,020,730,000 in the same quarter of 2024, marking an 8% increase [4][6][7] - Operating income decreased to $101,533,000, down from $129,849,000 year-over-year, resulting in an operating margin of 9.3%, down from 12.7% [6][24] - Net income attributable to Abercrombie & Fitch was $80,413,000, compared to $113,850,000 in the prior year, with diluted earnings per share at $1.59, down from $2.14 [6][24] Segment Performance - Net sales by segment showed the following growth: Americas up 7% to $874,804,000, EMEA up 12% to $185,036,000, and APAC up 5% to $37,471,000 [4][5] - Brand performance indicated Hollister brands grew by 22% while Abercrombie brands saw a decline of 4% [2][5][7] Cash Flow and Capital Allocation - The company repurchased 2.6 million shares for approximately $200 million, representing a 5% reduction in shares outstanding [2][9] - As of May 3, 2025, the company had cash and equivalents of $511 million, down from $864 million a year prior, with total liquidity of approximately $940 million [11][9] Outlook - For the second quarter, the company expects net sales growth in the range of 3% to 5%, with an operating margin projected between 12% and 13% [12][17] - The full-year outlook anticipates net sales growth of 3% to 6% and net income per diluted share in the range of $9.50 to $10.50 [17]

Group 1 - Abercrombie & Fitch Co. is set to release its first-quarter earnings results on May 28, with expected earnings of $1.33 per share, a decrease from $2.14 per share in the same period last year [1] - The company anticipates quarterly revenue of $1.06 billion, an increase from $1.02 billion a year earlier [1] - In the fourth quarter, Abercrombie & Fitch reported adjusted earnings per share of $3.57, surpassing the analyst consensus of $3.52, with quarterly sales of $1.585 billion exceeding estimates of $1.563 billion [2] Group 2 - Analyst ratings for Abercrombie & Fitch show varied opinions, with Raymond James maintaining an Outperform rating and lowering the price target from $110 to $90 [7] - JP Morgan also maintained an Overweight rating but cut the price target from $155 to $142 [7] - UBS increased its price target from $115 to $130 while maintaining a Buy rating [7] - Barclays initiated coverage with an Equal-Weight rating and a price target of $71 [7] - Citigroup maintained a Buy rating but lowered the price target from $135 to $98 [7]