ANF - Why Abercrombie & Fitch Stock Skyrocketed Today
2023-05-24 13:08:58 ET
Shares of apparel company Abercrombie & Fitch (NYSE: ANF) skyrocketed on Wednesday after the company reported financial results for its fiscal first quarter of 2023. As of noon ET, Abercrombie stock was up 26%.
Abercrombie's Q1 ended in April. In Q1, the company had net sales of $836 million, which were only up 3% year over year. But that was solidly ahead of management's guidance of $813 million. Moreover, its Q1 operating margin of 4% exceeded management's guidance for a 2% operating margin, at best.
Importantly for a company like Abercrombie, it was able to reduce its inventories by 20% year over year and is now approaching normalized levels after spiking to unusually high levels in the second half of 2022. For an apparel company , too much inventory can lead to clearance sales, write-downs, and lower profits. So it's encouraging that Abercrombie grew sales while lowering inventory.
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Why Abercrombie & Fitch Stock Skyrocketed Today