Please ensure Javascript is enabled for purposes of website accessibility

Why Abercrombie & Fitch Stock Soared 13% at the Open Today

By Reuben Gregg Brewer - Updated May 26, 2021 at 9:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the teen basics retailer got a boost from earnings. Here's a quick look at what got investors so excited.

What happened

Shares of retailer Abercrombie & Fitch (ANF 1.97%) rose a swift 13% as trading got under way on May 26. The company's pre-market earnings release was the driving force, with investors obviously pleased with what they saw.

So what

The retailer's top line grew 61% year over year in the first quarter, with digital sales advancing 45%. Digital sales were 52% of total sales in the quarter. While all of that is positive, the really important statistic is that first-quarter 2021 sales were up 6% from first-quarter 2019 sales. Given that the comparison to 2020 is biased by the impact of the coronavirus pandemic, the 2019 comparison provides a better look at the company's ongoing growth. The retailer is clearly resonating with shoppers right now.  

Two people with shopping bags standing in a mall.

Image source: Getty Images.

First-quarter 2021 adjusted earnings came in at $0.67 per share, up from a loss of $3.30 per share in 2020. In the first quarter of 2019 the company posted an adjusted loss of $0.29 per share. Management noted that it was able to keep inventories under control, helping to support strong margins. Wall Street was looking for a loss of $0.38 per share, so the company handily beat expectations. Investors reacted to all of this as you might expect, by pushing the shares higher.  

Now what

Including the early gains today, Abercrombie & Fitch's stock is up more than 260% over the past year and nearly 150% above where it started out in 2020. There is a lot of good news priced in here, suggesting that investors should be pleased with the first quarter's results, but perhaps a little cautious about the enthusiasm Mr. Market is showing for the stock.  

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Abercrombie & Fitch Co. Stock Quote
Abercrombie & Fitch Co.
$19.70 (1.97%) $0.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.