A&F(ANF) ZACKS·2025-02-18 16:46Core Viewpoint - Abercrombie & Fitch Company (ANF) has experienced a significant decline in stock performance, down 25% year-to-date, underperforming both the broader industry and key competitors, despite strong sales growth and positive forward outlooks [1][2][16]. Group 1: Stock Performance - ANF stock has decreased by 25% in the year-to-date period, contrasting with a 5.7% decline in the broader industry and a 3.9% increase in the Retail-Wholesale sector [1]. - The stock trades at 196.99 and reflects a 5.6% premium over its 52-week low [5]. - ANF's stock is currently below its 50 and 200-day moving averages, indicating bearish sentiment [5]. Group 2: Sales and Growth Outlook - Abercrombie has reported strong sales growth across its brands, with positive customer responses and regional growth [7]. - The company provided an upbeat business update in January 2025, noting that its fiscal fourth-quarter performance exceeded management's expectations [9]. - For fiscal 2024, Abercrombie anticipates net sales growth of 15%, an increase from the previously mentioned 14-15% [13]. Group 3: Financial Projections - Management expects fiscal fourth-quarter net sales growth of 7-8%, up from the previous guidance of 5-7% [12]. - The operating margin for the fiscal fourth quarter is projected to be 16%, consistent with previous expectations [12]. - The Zacks Consensus Estimate for fiscal 2024 implies 15.1% sales growth and 69.4% EPS growth year-over-year [17]. Group 4: Valuation and Investment Opportunity - ANF shares are currently trading at a forward P/E ratio of 9.98X, significantly lower than the broader industry's 19.24X and the S&P 500's average of 22.67X [19]. - The stock's current valuation presents an attractive opportunity for accumulation, supported by a Value Score of A [19]. - Abercrombie's growth is driven by favorable fashion trends, digital initiatives, and store optimization strategies, positioning it for long-term growth [20].