Abercrombie & Fitch's stock fell despite strong Q3 results, possibly due to lower sequential sales growth

From Nasdaq: 2024-11-29 02:20:51

Abercrombie & Fitch (NYSE: ANF) stock fell 5% on Nov. 26, while American Eagle Outfitters (NYSE: AEO) dropped 4%. Despite strong Q3 results with 16% growth in comparable sales and raised full-year guidance, ANF’s stock decline may be due to lower sequential sales growth and decreased operating margin.

ANF’s stock price of $147 is 8% below Trefis’ estimated valuation of $158 for FY 2024, based on expected EPS of $10.54 and a 15.0x P/E multiple. ANF’s stock performance has been volatile, unlike the more stable Trefis High Quality Portfolio which outperformed the S&P 500 consistently.

In Q3, ANF saw a 14% y-o-y sales increase to $1.2 billion, driven by 16% growth in comparable sales. Hollister and the Abercrombie brand both experienced y-o-y revenue growth. ANF expects a strong holiday season and raised full-year guidance, anticipating 5%-7% sales growth in Q4 and 14%-15% growth for the full year.

ANF returned 17% in Nov. 2024 MTD and 75% YTD, with a total return of 759% from 2017-24. Comparatively, the S&P 500 returned 5% MTD, 26% YTD, and 167% from 2017-24. The Trefis Reinforced Value Portfolio outperformed both with 9% MTD, 25% YTD, and 828% from 2017-24.



Read more at Nasdaq: Why is Abercrombie’s Stock Falling Despite An Upbeat Q3?