Jefferies analyst Corey Tarlowe has adjusted the firm's price target for Abercrombie & Fitch (ANF, Financial), increasing it to $29 from $26, while maintaining a Hold rating on the stock. Recent analysis of pricing and promotions revealed that in the first quarter, ending April 29, discounts across several retailers including Abercrombie & Fitch, saw a rise of 1.3% compared to the previous year. Meanwhile, average selling prices experienced a slight decrease of 0.9% year-over-year during the same period. These trends indicate a competitive promotional climate in the retail sector. Tarlowe perceives potential in some pressured retail stocks but is revising down several estimates and price targets within the industry group.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Abercrombie & Fitch Co (ANF, Financial) is $119.15 with a high estimate of $171.20 and a low estimate of $71.00. The average target implies an upside of 57.73% from the current price of $75.54. More detailed estimate data can be found on the Abercrombie & Fitch Co (ANF) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Abercrombie & Fitch Co's (ANF, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Abercrombie & Fitch Co (ANF, Financial) in one year is $74.09, suggesting a downside of 1.92% from the current price of $75.54. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Abercrombie & Fitch Co (ANF) Summary page.
ANF Key Business Developments
Release Date: March 05, 2025
- Net Sales Growth (Q4 2024): 9% increase to $1.58 billion.
- Comparable Sales Growth (Q4 2024): 14% increase.
- Operating Margin (Q4 2024): 16.2%, up from 15.3% last year.
- Gross Margin (Q4 2024): 61.5%, compared to 62.9% last year.
- Earnings Per Share (Q4 2024): $3.57, a 20% increase from last year.
- Net Sales Growth (Full Year 2024): 16% to $4.95 billion.
- Operating Income (Full Year 2024): $741 million, a 53% increase.
- Operating Margin (Full Year 2024): 15%.
- Gross Margin (Full Year 2024): 64.2%, up from 62.9% last year.
- Earnings Per Share (Full Year 2024): $10.69, a 72% increase from last year.
- Free Cash Flow (Full Year 2024): $527 million.
- Store Openings (2024): 65 new stores, 12 rightsizes, and 48 remodels.
- Total Stores (End of 2024): 789 stores.
- Digital Sales (2024): 46% of total sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Abercrombie & Fitch Co (ANF, Financial) reported a strong fourth quarter, with net sales growth of 9% and a 14% increase in comparable sales.
- The company achieved a record operating income of $741 million for the year, reflecting a 53% increase from the previous year.
- Both Abercrombie and Hollister brands delivered double-digit sales growth, with Hollister's net sales up 15% and Abercrombie's up 16%.
- Abercrombie & Fitch Co (ANF) successfully expanded its global presence, with significant growth in the Americas, EMEA, and APAC regions.
- The company generated over $500 million in free cash flow, enabling it to eliminate funded debt and repurchase 3% of its shares.
Negative Points
- The company faced a 550 basis point headwind from the 53rd week in 2023, impacting net sales growth.
- Higher freight costs and air usage to support delivery times negatively affected gross margins.
- Abercrombie brand experienced a more normalized transition into spring, resulting in a slight negative performance compared to Hollister.
- The company anticipates continued cost pressures from higher freight and more normalized carryover inventory selling in the first half of 2025.
- Marketing expenses increased, leading to a slight deleverage in operating margins for the first quarter of 2025.
