ABERCROMBIE & FITCH CO /DE/ (ANF) - Comprehensive Stock Analysis & Investment Research
Deep dive into ABERCROMBIE & FITCH CO /DE/'s business profile, financial performance, AI predictions, and competitive positioning to make informed investment decisions.
ABERCROMBIE & FITCH CO /DE/ Investment Summary
When evaluating whether ABERCROMBIE & FITCH CO /DE/ (ANF) represents a compelling investment opportunity, investors must consider multiple factors including the company's financial health, market position, growth prospects, and what our AI-powered predictive models suggest about its near-term price trajectory.
Company Profile
ABERCROMBIE & FITCH CO /DE/ (ANF) operates within the Trade & Services sector, specifically in the Retail-Family Clothing Stores industry. The company employs approximately 22,500 people. With a market capitalization of $6 billion, the company is a mid-cap stock that typically offers a balance between growth potential and established business operations.
Financial Performance Analysis
ABERCROMBIE & FITCH CO /DE/ generates annual revenues of approximately $5 billion. The company maintains solid profitability with a net margin of 11.2%, indicating healthy operational efficiency.
From a profitability standpoint, the company delivers an outstanding Return on Equity (ROE) of 25.0%, demonstrating excellent shareholder value creation and management effectiveness. The Return on Assets (ROA) stands at 7.2%, showing reasonable asset productivity. The gross margin of 64.7% reflects strong pricing power and cost control.
Balance Sheet Strength
Examining the balance sheet health, the current ratio of 1.42x indicates the company can meet its short-term obligations, though with limited buffer. The debt-to-equity ratio of 1.39x shows higher leverage, which increases financial risk but may support growth initiatives.
Cash Flow Generation
ABERCROMBIE & FITCH CO /DE/ generates $82 million in annual free cash flow, providing financial flexibility for dividends, share buybacks, debt reduction, or strategic investments. Operating cash flow stands at $191 million, demonstrating the company's ability to generate cash from its core business operations. Year-over-year operating cash flow has changed by 34.7%, showing strong cash flow momentum.
Valuation Analysis
The P/E ratio of 11.9x suggests the stock may be undervalued relative to its earnings, potentially offering value for investors. However, low P/E ratios can also reflect market concerns about future growth prospects. The price-to-book ratio stands at 4.72x, indicating the market values the company above its book value, typical for profitable enterprises. For income-focused investors, the current dividend yield of 0.63% offers modest income, with the company likely retaining more earnings for growth.
AI-Powered Price Predictions
Investment Considerations
When determining whether ABERCROMBIE & FITCH CO /DE/ is a suitable investment, consider your investment objectives, risk tolerance, and time horizon. As a mid-cap stock, ABERCROMBIE & FITCH CO /DE/ may offer a balance of growth potential and established business fundamentals.
This analysis is generated automatically using our proprietary AI systems and should not be considered personalized investment advice. Past performance does not guarantee future results. Always conduct your own research and consider consulting a financial advisor before making investment decisions.
Corporate Identity
ABERCROMBIE & FITCH CO /DE/ (Stock Symbol: ANF) is a prominent company operating within the Trade & Services sector, with a specific focus on the Retail-Family Clothing Stores industry. The company's shares are publicly traded on the NYSE exchange.
Leadership & Workforce
The organization employs approximately 22,500 professionals worldwide, demonstrating a significant operational footprint and the capacity to support substantial business operations across multiple markets.
Market Classification
With a market capitalization of $6 billion, ABERCROMBIE & FITCH CO /DE/ is classified as a mid-cap stock. Mid-cap companies often represent businesses in a growth phase, having moved beyond the early startup stage but still possessing significant expansion potential. These stocks can offer an attractive balance between the growth potential of smaller companies and the stability of larger corporations.
Sector & Industry Context
Operating within the Trade & Services sector, ABERCROMBIE & FITCH CO /DE/ is subject to the unique dynamics, opportunities, and challenges that characterize this segment of the economy.
Revenue & Growth Analysis
ABERCROMBIE & FITCH CO /DE/ generates annual revenues of $5 billion , indicating a well-established business with proven market demand for its products or services. This revenue base supports sustainable operations and provides capacity for continued growth investments.
Profitability Analysis
The company achieves a 11.2% net profit margin, demonstrating healthy profitability and efficient operations. This margin level provides comfortable coverage for reinvestment in the business, dividend payments, and building financial reserves for future opportunities or challenges.
Gross profit margin stands at 64.7%, a premium margin typical of software, pharmaceuticals, or luxury goods companies with exceptional pricing power and low marginal costs of production.
Operating margin is 14.7%, indicating moderate operational leverage where fixed costs consume a significant portion of gross profits.
Market Valuation
Current market capitalization stands at $6 billion . This mid-cap classification represents companies that have proven their business models but still have significant growth runway. Mid-caps often offer an attractive blend of growth potential and established operations.
Return on Investment Metrics
Return on Equity (ROE) measures 25.0%, demonstrating exceptional efficiency in generating profits from shareholder equity. ROE at this level indicates excellent capital allocation and strong competitive positioning, making the company highly attractive to growth-focused investors.
Return on Assets (ROA) stands at 7.2%, showing moderate asset utilization common in capital-intensive industries like manufacturing or utilities.
Return on Invested Capital (ROIC) measures 11.1%, suggesting returns roughly in line with typical corporate cost of capital, indicating value maintenance but limited value creation.
Cash Flow Generation
Free cash flow generation of $82 million annually indicates positive cash generation, though at a modest level that may limit flexibility for major investments or returns to shareholders.
Operating cash flow reaches $191 million , with year-over-year growth of 34.7%. Operating cash flow represents the cash generated from core business operations before capital investments, providing insight into the sustainability of the company's business model.
Strategic Market Position
ABERCROMBIE & FITCH CO /DE/ strategically competes in the highly dynamic Retail-Family Clothing Stores marketplace. As a mid-cap company, it occupies an attractive position balancing growth potential with established operations. Mid-caps often represent the 'sweet spot' for investors seeking companies that have proven their business models but still have meaningful runway for expansion. These companies are large enough to have competitive advantages but nimble enough to adapt quickly to market changes.
Industry Competitive Landscape
ABERCROMBIE & FITCH CO /DE/ competes within the Trade & Services sector, navigating the competitive dynamics and market forces specific to this industry. The company's competitive position depends on its ability to differentiate through product quality, cost efficiency, customer relationships, or other strategic advantages relevant to its specific market segment.
Operational Efficiency
The company shows positive operational efficiency through free cash flow generation of $82 million annually , with year-over-year cash flow growth of 34.7%. Positive free cash flow indicates the business generates more cash than required for operations and capital investments, providing resources for growth initiatives or shareholder returns.
Margin & Pricing Power Analysis
The company maintains a 64.7% gross margin which reflects exceptional pricing power and/or an asset-light business model. Gross margins at this level are typically seen in software, pharmaceuticals, or luxury goods companies where the cost of incremental production is minimal relative to selling prices. Such margins indicate significant competitive advantages protecting the company from price-based competition.
Operating margin of 14.7% demonstrates how efficiently the company converts revenues into operating profits after accounting for all operating expenses including research and development, sales and marketing, and general administrative costs. This healthy operating margin shows balanced investment in growth functions while maintaining reasonable profitability.
Asset Utilization Efficiency
Asset turnover ratio of 1.32x indicates solid asset utilization efficiency appropriate for many manufacturing or mixed business models. This level suggests the company generates meaningful revenue from its asset base while maintaining necessary capital investments for operations.
Financial Strength & Leverage
Current ratio of 1.42 indicates adequate liquidity to meet short-term obligations with reasonable cushion. This level balances working capital efficiency with financial safety.