Abercrombie & Fitch Co. (ANF): A Bull Case Theory

We came across a bullish thesis on Abercrombie & Fitch Co. on Value investing subreddit by zech83. In this article, we will summarize the bulls’ thesis on ANF. Abercrombie & Fitch Co.'s share was trading at $97.87 as of November 28th. ANF’s trailing and forward P/E were 9.42 and 9.15 respectively according to Yahoo Finance.

Abercrombie & Fitch Co., through its subsidiaries, operates as an omnichannel retailer in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. ANF continues to build on a formidable multi-year turnaround driven by a leadership team that has consistently demonstrated disciplined capital allocation, operational resilience, and a nuanced omnichannel strategy that meets customers where they are.

Despite navigating a series of external shocks—COVID, cotton shortages, freight spikes, and tariffs—the company has emerged stronger, supported by a differentiated brand approach between Abercrombie and Hollister. Investor skepticism, reflected in a 20% short interest, contrasts sharply with ANF’s fundamentals, including an FCF/EV yield above 20% and a $1.1 billion buyback program that becomes increasingly accretive as shorts depress the share price.

The company just delivered its 12th consecutive quarter of growth, with Abercrombie driving record earnings last year and Hollister now providing nearly 20% growth, signaling a broadening base of momentum. International expansion remains a meaningful long-term lever, but the more immediate opportunity lies in ANF’s strategic push into nostalgia-driven branding and the creation of a new kids line distributed through partners like Macy’s.

This initiative deepens engagement with millennials while diversifying distribution channels and reducing dependence on any single brand or region. Shares have already appreciated close to 20% to $78 as the company repurchased double the expected amount of stock, reinforcing management’s conviction in intrinsic value. With a current EV/EBITDA multiple of 3.87, a re-rating toward GAP’s 7.3x would imply a share price north of $123, while a P/E alignment supports a valuation around $120—before incorporating the latest earnings beat or accelerated buybacks. Together, these factors create a compelling margin of safety and an attractive risk/reward profile for investors.

Previously we covered a bullish thesis on Abercrombie & Fitch Co. (ANF) by LocoJorge7 in March 2025, which highlighted the company’s undervaluation, strong comparable sales growth, and successful brand repositioning. The company's stock price has appreciated approximately by 18.84% since our coverage. This is because the thesis played out. The thesis still stands as ANF maintains strong fundamentals. zech83 shares a similar view but emphasizes leadership and capital allocation discipline.

Abercrombie & Fitch Co. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held ANF at the end of the second quarter which was 42 in the previous quarter. While we acknowledge the potential of ANF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.