Abercrombie & Fitch Stock Has Surged 10.4% since Q1 Results



ANF stock surged

As of June 4, Abercrombie & Fitch (ANF) stock had jumped 10.4% since the announcement of its fiscal first-quarter results on June 1. The company reported robust top-line and bottom-line performances for the first quarter. Strong Hollister brand sales, international operations, and D2C (direct-to-customer) sales were the main growth catalysts.

Sales of $730.9 million beat analysts’ projection of $695.7 million. Sales rose 11% year-over-year. The company’s comps grew 5% in the first quarter with US comps rising 8% YoY. Its adjusted loss per share was $0.56 narrower than the loss of $0.77 per share that analysts expected. Foreign exchange added $0.03 to its bottom line.

Article continues below advertisement

Apparel retailers had a good beginning to 2018

Most apparel retailers have reported strong numbers in the first quarter. A couple of years back, the advent of online retailers and falling mall traffic began to jeopardize the growth prospects of retailers like Abercrombie & Fitch, American Eagle Outfitters (AEO), and Urban Outfitters (URBN). However, efforts to improve the digital channel, revamp merchandise assortment, and improve operational efficiency have yielded the desired financial results for apparel retailers. Improving financial performances have also boosted these companies’ stock prices.

On a YTD (year-to-date) basis, Abercrombie & Fitch stock has risen 37.9% year-to-date as of June 4. In comparison, American Eagle Outfitters and Urban Outfitters rose 25.3% and 26.1%, respectively. However, Gap (GPS) has fallen 14.3% on a year-to-date basis. Gap’s bottom-line numbers for the fiscal first quarter were underwhelming, sending the stock price down. The company’s Gap brand continues to struggle.

Dividend yield also attracts investors

Apart from stock gains, Abercrombie & Fitch pays a healthy dividend to its shareholders. The company’s quarterly dividend stands at $0.20, taking the annualized dividend to $0.80. The company’s dividend yield based on the June 4 closing stock price of $24.03 is 3.7%. The dividend yield refers to the cash flow an investor gets for each dollar invested in the company’s stock.

Abercrombie & Fitch has a higher dividend yield than its peers. American Eagle Outfitters’ dividend yield stands at 2.4%, while Gap’s is 3.4% based on the June 4 closing price. Urban Outfitters doesn’t pay dividends.


More From Market Realist