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On Wednesday, JPMorgan analyst Matt Boss revised the price target for Abercrombie & Fitch (NYSE:ANF) shares, reducing it from $189.00 to $168.00, while maintaining an Overweight rating on the stock. Boss noted that Abercrombie & Fitch has made significant progress in marketing and merchandising, which has expanded the brand’s appeal to a broader age range of customers, from 18 to 40 years old.
The analyst highlighted that the company’s efforts have led to strong new customer acquisition globally, which supports broad-based top-line results. This is further complemented by increased full-price selling, indicating a robust demand for the brand’s products.
Boss pointed out that the Hollister brand, which is part of the Abercrombie & Fitch portfolio, is experiencing an inflection point, particularly in the Men’s and Tops categories. These segments are seen as areas with potential for further growth.
International brand momentum is also building, according to Boss, who cited an approximately $400 million revenue recapture opportunity remaining relative to pre-pandemic levels. This suggests that Abercrombie & Fitch has significant room to recover and grow its international sales.
On the earnings front, Boss is optimistic about the company’s long-term prospects, anticipating modest annual EBIT (Earnings Before Interest and Taxes) margin expansion. This expectation is based on a structurally higher EBIT margin compared to pre-pandemic figures, supported by savings in occupancy expenses. Such savings could translate into improved profitability for Abercrombie & Fitch as it continues to adapt and evolve in the post-pandemic retail landscape.
In other recent news, Abercrombie & Fitch reported its first-quarter 2025 earnings, slightly exceeding expectations with an earnings per share (EPS) of $3.57 compared to the forecasted $3.56. The company’s revenue also surpassed projections, reaching $1.58 billion against the anticipated $1.56 billion. This marks a continuation of strong financial performance, with Abercrombie & Fitch achieving a 16% growth in net sales to $4.95 billion for the full year. The company’s operating income increased by 53%, supported by successful product launches and strategic partnerships. Looking forward, Abercrombie & Fitch projects a net sales growth of 3-5% for 2025, with plans to open approximately 100 new store experiences. In related developments, Jefferies analyst Corey Tarlowe adjusted the price target for Abercrombie & Fitch, lowering it to $170 from the previous $220, while maintaining a Buy rating on the stock. Tarlowe cited temporary challenges such as negative brand trends and inventory issues but expressed confidence in the company’s long-term potential, highlighting its debt-free status and ongoing share buyback program.
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