DRMTY - Abercrombie & Fitch: Don't Forget The Fashion Risk

2024-06-21 11:18:37 ET

Summary

• Abercrombie & Fitch has driven an impressive brand turnaround, fueled by changing fashion trends making Abercrombie brands more attractive to young people.
• Investors should still note the risk of ever-changing fashion trends that could deteriorate the current financial trajectory of incredible margins and growth.
• While the stock could continue to rise as earnings climb, the valuation is starting to extrapolate too high-growth expectations and forgets the major risk from changing fashion trends.

Abercrombie & Fitch Co. ( ANF ), the clothing manufacturer and retailer with the Abercrombie & Fitch and Hollister brands, has been the apparel sector's undeniable star in the past couple of years. The company has been able to revitalize its brands successfully and has been able to grow demand and push through better pricing as a result, pushing aggressively higher revenues....

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