Abercrombie & Fitch Share Price Doubled; Fundamentals are Supporting the Uptrend

Abercrombie & Fitch

Abercrombie & Fitch (NYSE:ANF) share price doubled in the last twelve months; the stock price soared almost 100% to $23 at present amid strong support from improving financial numbers and strengthening trader’s confidence in its future fundamentals. Abercrombie & Fitch is a specialty retailer that sells personal-care products, casual clothing, and accessories for women, men, and children.

Along with returns for shareholders in the form of share price appreciation, the company has also been offering a solid dividend yield of 3.3% (quarterly dividend of $0.20 per share).

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Financial Numbers Supports the Upside For Abercrombie & Fitch

ANF stock price soared close to 11% today after exceeding revenue and earnings forecast for the fourth quarter by a wide margin of $30 million and $0.28 per share. Abercrombie & Fitch financial numbers also improved when compared to the same period last year.

Its comparable sales increased 9% in Q4 compared to the consensus estimate of 8.4%, thanks to comparable sales growth of 11% for the Hollister brand and the growth of 5% for the Abercrombie brand. Sales from international markets jumped 20% year on year in Q4, while sales from U.S. region increased 13% to $775M.

CEO said: “We are pleased by our performance, delivering positive comparable sales for the fourth quarter across brands, channels, and geographies and more than doubling our operating income. Our focus on staying close to our customer, executing to our playbook and maintaining our disciplined approach to expense management delivered a strong performance on both the top and bottom line.”

The company earnings landed around $1.05 per share, higher from $0.71 per share, driven by strong sales growth and strong operational efficiencies.

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Future Fundamentals Are Strong

Abercrombie & Fitch expects to generate mid-single digit growth in comparable and net sales in fiscal 2018, while its earnings are likely to grow at the high single-digit rate. It is looking to extend its strategy of investing in new stores; ANF plans to start 21 full-price stores: 10 in international markets and 11 in the U.S. Overall, investors are applauding its investments strategies and the sustainable growth in financial numbers.

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