2024-07-26 12:00:00 ET
Summary
- Most of the exuberance surrounding ANF's double beat FQ1'24 earnings call and raised FY2024 guidance have been moderated, with more near-term uncertainty likely - arising from elevated freight rates.
- With container freight rates rising higher than expected, we believe that we may see the fashion retailer's profit margins impacted, with it uncertain if the aggressive FY2024 margins still achievable.
- With ANF expected to record a tougher YoY comparison from FY2025 onwards, we believe that the market's exuberance surrounding its future execution may further moderate.
- The stock has also pulled forward much of its upside potential, with current levels offering interested investors a minimal margin of safety.
- With the VIX index still rising, the market rotating from growth/ gen AI stocks, and we enter the Q2'24 earnings season, there may be more volatility indeed.
ANF's Investment Thesis Shows Great Promise, Thanks To The Robust Performance Metrics
We previously covered Abercrombie & Fitch ( ANF ) on May 20, 2024, discussing the impressive growth in its top/ bottom-lines since FY2019, with demand remaining robust and the management offering optimistic FQ1'24/ FY2024 guidance....
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Abercrombie & Fitch's Pullback Is Well Warranted, More Pain Ahead