Abercrombie & Fitch Co. (ANF) Fell on Concerns Over Gross Margins and Growth

Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Small Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Small-cap stocks experienced a significant drop in Q1, with the Russell 2000 Growth Index (down 11.12%) trailing the Russell 2000 Value Index (down 7.74%). In the Russell 2000 Growth Index, real estate, which increased by 1.76%, outperformed all sectors both absolutely and relatively. The only other sector delivering positive returns was consumer staples, which rose by 0.67%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Carillon Eagle Small Cap Growth Fund highlighted stocks such as Abercrombie & Fitch Co. (NYSE:ANF). Abercrombie & Fitch Co. (NYSE:ANF) is an omnichannel retailer that offers an assortment of apparel, personal care products, and accessories. The one-month return of Abercrombie & Fitch Co. (NYSE:ANF) was 3.54%, and its shares lost 51.28% of their value over the last 52 weeks. On May 23, 2025, Abercrombie & Fitch Co. (NYSE:ANF) stock closed at $73.17 per share with a market capitalization of $3.486 billion.

Carillon Eagle Small Cap Growth Fund stated the following regarding Abercrombie & Fitch Co. (NYSE:ANF) in its Q1 2025 investor letter:

"Abercrombie & Fitch Co. (NYSE:ANF) is a global multi-brand omnichannel specialty retailer that offers a broad assortment of clothes, personal care products, and accessories for men, women, and kids. The stock lagged due to concerns about the sustainability of the company’s gross margins and the growth of the core Abercrombie & Fitch brand, despite solid revenue performance overall. Temporary freight costs are weighing down forward-quarter gross margins, but these are expected to reverse in the second half of 2025. Even as growth of the Abercrombie & Fitch brand slows due to difficult comparisons, we anticipate that growth at Hollister will continue to support growth of overall company revenue."

Abercrombie & Fitch Co. (NYSE:ANF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Abercrombie & Fitch Co. (NYSE:ANF) at the end of the first quarter, which was 51 in the previous quarter. While we acknowledge the potential of Abercrombie & Fitch Co. (NYSE:ANF) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Abercrombie & Fitch Co. (NYSE:ANF) and shared billionaire Jim Simons’ RenTech’s small-cap stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.