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Shares of Abercrombie & Fitch Company ANF hit a new 52-week low of $77.19 yesterday before rising a notch to close at $78.17. The closing price reflects a 60.3% discount from its 52-week high of $196.99.
Additionally, this apparel retailer’s stock has slipped below critical technical thresholds, such as its 50-day and 200-day moving averages, which are important indicators for gauging market trends and momentum. These raise investor concerns regarding ANF’s ability to navigate current market dynamics.
ANF Trades Below 50 & 200-Day Moving Averages
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The company’s downtrend comes a week after it reported notable improvements in the top and bottom lines for the fourth quarter of fiscal 2024 on March 5, 2025. Abercrombie’s earnings per share (EPS) for the fiscal fourth quarter jumped 20.2%, with net sales increasing 9% year over year. In fiscal 2024, the company delivered net sales growth of 16% year over year, with EPS rising 72% year over year.
Despite the strong performance, ANF shares have declined 18.7% in the past week. Investors have expressed caution about the company’s prospects due to the continued slowdown in sales, the impacts of higher freight costs, and the potential tariff-related headwinds, which are expected to weigh on its near-term performance.
While Abercrombie has delivered an extraordinary stock return of 676.5% in the past years, its recent one-year performance shows a stark contrast. In the past year, its shares have declined as much as 35.2% against the broader industry’s rise of 2.1% and the Zacks Retail-Wholesale sector’s rally of 16.4%. The company also underperformed the S&P 500’s growth of 12.4% in the past year.
The ANF stock has also underperformed its peers, including Nordstrom Inc. JWN, Urban Outfitters URBN and Boot Barn BOOT, which have recorded gains of 37.2%, 34.4% and 20.1%, respectively, in the past year.
Abercrombie Stock’s One-Year Price Performance
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What’s Behind the ANF Stock’s Recent Decline?
The decrease in Abercrombie’s stock price can be attributed to its strong but slowed sales performance. Although net sales increased 9% in the fiscal fourth quarter, supported by double-digit comparable sales growth across regions and strong traffic, the growth rate was significantly below the 21% rise in the prior-year quarter and the 14% rally in third-quarter fiscal 2024. The sales slowdown from prior periods mainly reflects that the company is transitioning out of its high-growth phase of fiscal 2023.
ANF’s fiscal 2025 outlook indicates a further slowdown in sales growth. The company projects year-over-year sales growth of 3-5% for fiscal 2025, indicating a decline from growth of 16% recorded in fiscal 2024. For first-quarter fiscal 2025, the company expects sales to increase 4-6% year over year, suggesting a slowdown from growth of 22% reported in first-quarter fiscal 2024.
The company’s gross margin in the fiscal fourth quarter saw pronounced impacts of higher freight costs, which are expected to continue in the quarters ahead. The gross margin of 61.5% in the fiscal fourth quarter contracted 140 basis points (bps) year over year, as improved average unit retail from reduced discounts was more than offset by increased freight costs stemming from higher freight rates and air usage to aid delivery times.
Abercrombie anticipates margins in the first half of fiscal 2025 to be hurt by increased year-over-year freight costs and more normalized carryover inventory selling. However, margins in the second half are expected to benefit from estimated lower freight from the prior-year period. As a result, the company expects an operating margin of 14-15% for fiscal 2025, whereas it reported 15% in fiscal 2024. For first-quarter fiscal 2025, the company expects the operating margin to be 8-9%, significantly below the 12.7% reported in the prior-year quarter.
ANF provided a bleak EPS view for the first quarter of fiscal 2025. It expects EPS to be $1.25-$1.45 in first-quarter fiscal 2025, suggesting a decline from the $2.14 reported in the year-ago quarter. For fiscal 2025, it predicts EPS to be $10.40-$11.40, whereas it delivered $10.69 in fiscal 2024.
Apart from these, investors are highly skeptical about the impacts of the incremental tariffs, which are expected to have hurt its quarterly performance. As for the current tariffs, the company’s outlook includes the impacts of the recently imposed U.S. tariffs on China, Canada and Mexico. It expects effects of $5 million from these tariffs in fiscal 2025. The outlook, however, excludes the impacts of other potential incremental tariffs that may be imposed as retaliatory tariffs.