Abercrombie & Fitch stock is up more than 210% in 2023, nearly matching Nvidia’s massive gains.
The clothing retailer saw stronger-than-expected sales in the third-quarter, and raised its 2024 outlook.
Abercrombie’s adjusted earnings per share of $1.83 beat estimates of $1.15.
Nvidia investors have captured massive, triple-digit stock gains this year on the back of the artificial intelligence boom, but its gains have nearly been matched by a clothing retailer that’s been a fixture in American malls for decades.
Shares of Abercrombie & Fitch — an inconic brand that helped shape millennial fashion in the early 2000s — are up more than 210% in 2023, and the company just wrapped up a stellar third quarter.
On Tuesday, Abercrombie raised its net sales outlook for the year ahead to 12%-14%, up from 10%. Its adjusted earnings per share of $1.83 handily beat the consensus estimate of $1.15 a share. Revenue for the quarter came in at $1.06 billion, beating the expected $981 million, per LSEG data.
According to its latest quarterly earnings release, net sales were up 30% year-over-year, and the retailer anticipates further growth in the fourth quarter. Lower freight and raw materials costs, the company said, should help cushion its operating margins moving forward.
The outperformance this year and in the most recent quarter bucks wider trends in the retail space, with numerous chains in all sectors of the consumer economy telling investors that they expect spending to slow into the holiday season. Experts say that there are numerous warning signs flashing that show strong US consumer spending is set to dwindle.
This week Abercrombie rival American Eagle Outfitters saw shares plummet as the clothing chain beat earnings estimates but couldn’t impress investors with its guidance.
“Our strong third quarter results, with net sales and operating margin well-exceeding our expectations, speak to the power of our playbook working globally across our brand portfolio,” Abercrombie chief executive Fran Horowitz said in a statement Tuesday.
Abercrombie stock’s remarkable year-to-date gains come as the S&P SmallCap 600 Index has climbed a mere 2% in the same stretch.
“Entering the important holiday season, our fiscal 2023 year-to-date results give us the confidence that we can continue to deliver for our customers and drive profitable growth,”Horowitz said.
Read the original article on Business Insider