11 Best Fashion Stocks To Buy Now

3. Abercrombie & Fitch Co. (NYSE:ANF)

No. of Hedge Funds as of Q2 2024: 48

Abercrombie & Fitch (NYSE:ANF) is a global, digitally-led omnichannel retailer offering personal care products, apparel, and accessories for women, men, and kids. These products are primarily sold through company-owned stores, digital channels, and a number of third-party arrangements. It operates through a portfolio of brands, such as Abercrombie and Fitch, Abercrombie Kids, and Hollister brands, which include Hollister and Gilly Hicks.

The company operates throughout the Americas, APAC, and EMEA. The APAC segment operates in the Asia-Pacific region, including Oceania and Asia. The EMEA segment operates in Europe, the Middle East, and Africa. Abercrombie &Fitch (NYSE:ANF) operates 40 international franchise stores across its brands, primarily in the EMEA region and the Americas.

The company runs on strong financials. Net sales in Q2 2024 grew by 21% to $1.1 billion, with an operating margin of 15.5%. In addition, Q2 2024 marked the seventh consecutive quarter of net sales growth in an uncertain, dynamic consumer environment. This highlights the underlying strength of the company’s brands and its strong global consumer base. Bolstered by a culture of financial discipline and an agile supply chain, the company is positioned to deliver its goals across a variety of macro environments.

The company’s sales growth was driven by expansion across brands, regions, and genders. Consistent with the previous five quarters, it saw growth in both units and AUR, highlighting the strong model it is functioning on. Abercrombie & Fitch (NYSE:ANF) is delivering lifestyle assortments with growing relevance to local customers, expanding its consumer base, and developing across key categories. It delivered operating leverage in Q2, funding significant marketing, technology, digital, and people investments to strengthen its long-term goals. These efforts led to an operating income of $176 million for Q2, nearly double the results from Q2 2023.

Abercrombie & Fitch (NYSE:ANF) has plans to amplify its brands, opening new store locations, refreshing store experiences, and investing in incremental marketing to boost engagement. It is also reintroducing its Hollister brands to expand its target audience. The elevated marketing investment spans social and digital channels, along with authentic, real-life activations and experiences. It ranks third on our list of the best fashion stocks.

Here’s what Chartwell Investment Partners, LLC said about Abercrombie & Fitch Co. (NYSE:ANF) in its third-quarter 2023 investor letter:

“Within the Carillon Chartwell Small Cap Growth Fund, information technology and industrials were the strongest-performing sectors, with strong stock selection leading to alpha generation. Abercrombie & Fitch Co. (NYSE:ANF) reported very strong earnings driven by significant margin improvement that resulted from much lower shipping and freight costs compared to last year.”