ANF - Abercrombie & Fitch's Q1 Results: Not Enough To Justify The Valuation

2024-05-29 17:29:59 ET

Summary

• Abercrombie & Fitch Co. is an American apparel retailer, owner of the Abercrombie & Fitch and Hollister brands.
• The company's 1Q24 results were very good, beating expectations. Revenue grew more than 20%, operating income increased close to 200%, and EPS increased 600%.
• These results build on top of good performance in 2023. This performance was driven by trend-right assortment, and good pricing management.
• However, Abercrombie & Fitch trades at a P/E ratio of 25x when comparing the company's current market cap with net income derived from management's FY24 guidance.
• In my opinion, this valuation is excessive, both in absolute and in comparative terms. For that reason, Abercrombie & Fitch stock is not an opportunity.

Abercrombie & Fitch Co. ( ANF ) is an American apparel retailer. The company owns the namesake brand, which focuses on millennials, and Hollister, which focuses on teenagers....

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