Abercrombie & Fitch expected to have another strong quarter – analyst

Abercrombie & Fitch (NYSE:ANF) will likely have another strong quarter as Q3 results are seen beating expectations on momentum at both the Abercrombie and Hollister brands. Accordingly, Citigroup has placed the stock on a 30-day Positive Catalyst Watch ahead of quarterly results before the market opens on November 26.

For the first time in many years, Hollister comparable sales are expected to outpace the ANF brand, driving “meaningful” upside to second half/fiscal 2025 earnings. While the deceleration of ANF Q3 comparable sales matters, Citigroup’s Paul Lejuez believes the ANF brand remains solid, driven by strong execution and on-trend products, while accelerated share repurchases this quarter will also underpin the share price.

Lejuez is maintaining his Q3 EPS estimate of $2.51 versus the consensus estimate of $2.41 but lowered his ANF comparable sales estimate to 12% from 15% (consensus 14%) and raised his Hollister comp to 15% from 12% (consensus 10%). Based on stronger Hollister comps, Lejuez hikes his FY24/FY25 EPS estimates as well to $10.73/$12.34 from $10.64/$12.08.

Last quarter, ANF comparable sales were up 18%, leading the company to raise its full year net sales growth guidance to 12-13% from initial guidance of 10%.

Abercrombie & Fitch (ANF) shares are up 2.4% into Monday’s open, indicating a higher open after three days in the red.