Core Viewpoint - H&M is closing two large stores in Manhattan as part of a global cost-cutting strategy, which will add significant retail space to the market in New York City [1][2]. Group 1: Store Closures - H&M will close its stores located at 18 Church St. at the World Trade Center and 150 E. 86th St. in January, resulting in a total of 55,000 square feet of retail space becoming available [1][3]. - After these closures, H&M will retain eight locations in New York City [2]. Group 2: Global Strategy - The closures in Manhattan are part of H&M's broader plan to shut down approximately 200 of its more than 4,300 stores worldwide as a measure to reduce costs [2].

Core Insights - American Eagle's shares increased by approximately 3% following the announcement of Martha Stewart as the new face of the brand, succeeding the controversial campaign featuring Sydney Sweeney [1][2] - The new "Give Great Jeans Campaign" features Stewart in a full denim outfit, aimed at capturing attention during the holiday shopping season [1][3] Marketing Strategy - American Eagle has adopted bold marketing strategies, as highlighted by the choice of Martha Stewart, which aligns with the brand's current direction [2] - The previous campaign featuring Sydney Sweeney faced criticism for its wordplay, which some found inappropriate, indicating the brand's willingness to take risks in its marketing approach [2][6] Brand Image and Target Audience - Martha Stewart's persona is seen as resonating with a younger audience, showcasing her ability to remain relevant despite her age [4] - Stewart's diverse promotional history, including products like CBD gummies and collaborations with celebrities, reinforces her adaptability as a brand ambassador [5] Controversies and Challenges - American Eagle faced backlash from the previous campaign with Sydney Sweeney, which was accused of promoting eugenics, highlighting the potential risks associated with celebrity partnerships [6][7]

Core Insights - Abercrombie & Fitch Co. (ANF) reported strong third-quarter fiscal 2025 results, with both top and bottom lines exceeding Zacks Consensus Estimates, although the bottom line showed a year-over-year decline [1][10] Financial Performance - Earnings per share (EPS) for the fiscal third quarter was $2.36, a decrease of 4.5% from $2.47 in the same quarter last year, but above the Zacks Consensus Estimate of $2.14 [1][10] - Net sales reached $1.291 billion, reflecting a 7% year-over-year increase on a reported basis and a 6% increase on a constant-currency basis, surpassing the Zacks Consensus Estimate of $1.275 billion [2][10] - Comparable sales improved by 3%, driven by broad-based net sales growth across most regions and exceptional performance from the Hollister brand [2][3] Brand and Regional Performance - The Hollister brand saw a 16% increase in sales to $673.3 million, while Abercrombie brand sales fell 2% to $617.3 million [6] - Sales in the Americas increased by 7% to $1.1 billion, while EMEA sales also grew by 7% to $194.5 million; however, APAC sales dipped by 6% to $38.7 million [5] - Comparable sales rose by 4% in the Americas and 2% in EMEA, but fell by 12% in the APAC region [5] Margins and Expenses - Selling expenses increased by 9.1% year over year to $459.5 million, representing 35.6% of sales, an increase of 80 basis points [7] - General and administrative costs rose by 2.8% to $193.4 million, accounting for 15% of sales, a decrease of 60 basis points [7] - Operating income was reported at $155 million, down 12.6% from $177.4 million in the previous year, with an operating margin of 12%, a decline of 260 basis points [8] Financial Health - At the end of the fiscal third quarter, the company had cash and cash equivalents of $605.8 million and stockholders' equity of $1.32 billion [9] - The company reported liquidity of $1.1 billion, including cash and equivalents and available borrowing under the ABL Facility [11] Share Repurchase and Outlook - In Q3, the company repurchased approximately 1.2 million shares for about $100 million, with a total of 4.5 million shares repurchased year-to-date for $350 million [12] - For Q4 fiscal 2025, net sales are projected to rise by 4-6% from the previous year's $1.58 billion, with EPS expected between $3.40 and $3.70 [13] - For fiscal 2025, the company anticipates sales growth of 6-7%, an increase from the previously expected 5-7%, and an operating margin of 13-13.5% [14][15]

Market Overview - Major U.S. equities indexes experienced gains, with the Dow Jones Industrial Average up over 1%, the S&P 500 climbing 0.5%, and the Nasdaq increasing by 0.1% [1] Retail Sector Performance - Kohl's (KSS) shares surged 35% after reporting a surprise third-quarter profit and appointing Michael Bender as permanent CEO [2] - Abercrombie & Fitch (ANF) saw a 30% increase in shares after exceeding third-quarter earnings estimates, with sales growth expected to be driven by the Hollister brand during the holiday season [3] Technology Sector Developments - Zoom Communications (ZM) reported quarterly results that surpassed analysts' expectations, resulting in a 12% rise in shares, attributed to meaningful adoption of its AI offerings [4] - Nvidia (NVDA) shares fell nearly 4% following reports that Meta Platforms is considering using chips from Alphabet, impacting Nvidia and its competitor AMD negatively [5] Cryptocurrency and Commodities - Coinbase (COIN) and other cryptocurrency-related stocks continued to decline as Bitcoin's price dropped to around $87,200, while gold prices rose and crude oil futures decreased [6]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for American Eagle Outfitters (AEO) despite an increase in revenues when it reports its results for the quarter ended October 2025 [1] Earnings Expectations - The consensus EPS estimate for the upcoming report is $0.43 per share, reflecting a year-over-year decrease of 10.4% [3] - Expected revenues are projected to be $1.32 billion, which is an increase of 2.3% compared to the same quarter last year [3] Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 0.36%, indicating a reassessment by analysts [4] - The Most Accurate Estimate for American Eagle is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +1.55% [12] Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10] - American Eagle currently holds a Zacks Rank of 2, suggesting a likelihood of beating the consensus EPS estimate [12] Historical Performance - In the last reported quarter, American Eagle exceeded the expected earnings of $0.20 per share by delivering $0.45, resulting in a surprise of +125.00% [13] - Over the past four quarters, the company has beaten consensus EPS estimates three times [14] Market Reaction Considerations - An earnings beat or miss may not solely dictate stock price movements, as other factors can influence investor sentiment [15] - It is advisable to consider a company's Earnings ESP and Zacks Rank prior to quarterly releases to enhance investment success [16]

Core Insights - Abercrombie & Fitch reported revenue of $1.29 billion for the quarter ended October 2025, a year-over-year increase of 6.8% [1] - The company's EPS for the same period was $2.36, down from $2.50 a year ago, but exceeded the consensus estimate of $2.14 by 10.28% [1] - The revenue surpassed the Zacks Consensus Estimate of $1.27 billion, indicating a surprise of 1.26% [1] Financial Performance Metrics - Total comparable store sales increased by 3% year-over-year, slightly below the four-analyst average estimate of 3.5% [4] - Hollister brand comparable store sales saw a significant increase of 15%, outperforming the three-analyst average estimate of 10% [4] - Abercrombie brand comparable store sales decreased by 7%, which was worse than the average estimate of -4.4% [4] Brand Performance - Net sales for the Hollister brand reached $673.27 million, exceeding the average estimate of $638.14 million, representing a year-over-year change of 16.3% [4] - Abercrombie brand net sales were reported at $617.35 million, slightly below the average estimate of $632.66 million, reflecting a year-over-year decline of 2% [4] Stock Performance - Abercrombie's shares have returned -11.2% over the past month, compared to a -1.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Abercrombie's stock has experienced a significant increase, driven by the strong performance of its Hollister-brand stores [1] Company Performance - The apparel retailer has seen a notable rise in sales, particularly in its Hollister brand, which has resonated well with consumers [1] - The positive momentum in sales has contributed to the overall growth of Abercrombie's stock value [1] Market Trends - The success of Hollister stores reflects broader trends in the apparel industry, where brands that connect with younger consumers are thriving [1] - The apparel sector is witnessing a shift towards brands that emphasize lifestyle and community engagement, which Hollister has effectively capitalized on [1]

Core Insights - Abercrombie & Fitch (NYSE: ANF) experienced a nearly 20% increase in stock price following the release of its third-quarter financial results, which exceeded expectations [1] - The lifestyle retailer reported a revenue increase of 7.0% in the recent quarter, indicating strong performance [1]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Identifying the right entry point for momentum stocks is challenging, and investors may end up with expensive shares that have limited upside [1] Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score is useful for identifying strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen helps find attractively priced fast-moving stocks [2] Group 3: Case Study - Gap (GAP) - Gap (GAP) has shown a four-week price change of 3.7%, indicating growing investor interest [3] - Over the past 12 weeks, GAP's stock gained 12.5%, and it has a beta of 2.17, suggesting it moves 117% higher than the market [4] - GAP has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - GAP is trading at a Price-to-Sales ratio of 0.60, meaning investors pay 60 cents for each dollar of sales, indicating a reasonable valuation [6] Group 4: Additional Opportunities - Besides GAP, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, which can help identify winning stock picks [8]

Financial Data and Key Metrics Changes - The company reported record net sales of $1.3 billion for Q3 2025, up 7% year-over-year, marking the 12th consecutive quarter of growth [5][15] - Gross margin was 62.5% and operating margin was 12%, both impacted by approximately 210 basis points due to tariffs [6][17] - Earnings per share exceeded expectations at $2.36, compared to $2.50 in the previous year [7][17] - The company repurchased $100 million worth of shares in the quarter, totaling $350 million year-to-date, representing 9% of shares outstanding at the beginning of the year [5][18] Business Line Data and Key Metrics Changes - Abercrombie brands saw a net sales decline of 2% with comparable sales down 7%, primarily due to lower average unit retail (AUR) [8][16] - Hollister brands experienced a 16% increase in net sales and a 15% rise in comparable sales, benefiting from strong cross-channel traffic and lower promotions [10][16] Market Data and Key Metrics Changes - In the Americas, net sales increased by 7%, while EMEA also saw a 7% increase, offset by a 6% decline in APAC [15][19] - Comparable sales in the Americas were up 4%, EMEA up 2%, and APAC down 12% [15][19] Company Strategy and Development Direction - The company is focused on sustainable long-term growth through investments in marketing, stores, and technology, including AI enhancements in customer service [12][22] - The strategy includes a blend of owned and operated, franchise, wholesale, and licensing models to capture global growth opportunities [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fourth quarter outlook, narrowing full-year sales expectations to the upper end of the range, anticipating a strong finish to 2025 [6][19] - The company is prepared for the holiday season, having tested and learned from previous quarters to optimize inventory and product assortment [13][22] Other Important Information - The company plans to open 36 new stores by the end of the year and has made significant investments in digital technology to enhance customer experience [9][12] - The anticipated impact of tariffs for the full year is around $90 million, with ongoing efforts to mitigate these costs [19][21] Q&A Session Summary Question: Insights on Abercrombie brand performance by category and region - Management highlighted positive traffic and customer engagement, with a focus on denim, fleece, and sweaters for the fourth quarter [26][27] Question: Expectations for Hollister's momentum into 2026 - Management noted balanced growth across genders and categories, with strong customer engagement and inventory management [33][34] Question: Inventory composition and gross margin considerations for Q4 - Inventory is in good shape, with a 5% year-over-year increase at cost, and management expects continued AUR growth despite tariff impacts [42][43] Question: Marketing plans and promotional strategies - Management emphasized intentional marketing investments and a focus on brand building, with flexibility to adjust promotions based on demand [61][68] Question: Tariff impacts and pricing adjustments - Management anticipates a reduction in tariff headwinds in 2026, with pricing adjustments expected to take effect in early 2026 [82][84]