Apparel retailer Abercrombie & Fitch saw its stock price increase substantially during the week following the release of second-quarter fiscal year results. The company delivered earnings per share of $4.17, substantially exceeding analyst estimates of $1.99. Net income grew 13 percent to $250.8 million from $221.8 million in the prior-year period, while net sales advanced 5 percent to $1.27 billion from $1.208 billion, marking the company’s 15th consecutive quarter of net sales growth.
Geographically, the Americas segment generated the highest sales contribution at $1.02 billion, a 5 percent increase from $974.2 million year-over-year. The EMEA region posted sales of $201.99 million, up 2.4 percent from $197.21 million, while the Asia Pacific segment recorded $44.16 million in sales, representing a 19 percent jump from $37.15 million.
Following the earnings announcement, UBS raised its price target to $185 from $153 and maintained its buy rating, citing the company’s position as a leading specialty retailer and confidence in its brands’ growth trajectories. UBS projected a 13 percent compounded annual growth rate in earnings per share over the subsequent five years. Citigroup, meanwhile, acknowledged accelerating Hollister sales and strong performance but downgraded its rating to neutral from buy, concluding that the company’s positive outlook was already reflected in current share valuations.
Hedge fund activity signaled increasing caution about the stock. The number of hedge funds holding positions declined to 36 from 39 in the previous quarter, while their combined holdings fell 20.4 percent to $609.9 million from $766.5 million.
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