Abercrombie & Fitch stock pops after a years-in-the-making comeback yields results

Something’s in the air… and it’s not Fierce cologne. Abercrombie & Fitch shares soared 31% yesterday after the mall icon unloaded decade-high Q1 sales, a surprise profit, and a boosted annual forecast. A&F was a middle-school must-have in the early-2000s (moose shirts sold by shirtless models were a status symbol). But in the 2010s its popularity fell lower than a Y2K waistline. Then came a turnaround:

• New look: A&F stopped aggressively spritzing stores and scrapped the moose logo in 2017 when Fran Horowitz joined as its new CEO, leading an “America’s Next Top Model”-level makeover with Aaron Levine, who revamped its clothing design.

• Inclusivity: After notoriously refusing to carry sizes above L in the ’00s, the retailer added extended sizing and showed it off in a 2020 ad campaign featuring plus-size models, and has leaned into inclusive marketing.

Super-high rise… A&F’s brand refresh started in the late 2010s but only recently started paying off after serious legwork by top execs. It’s avoided the mall graveyard, despite a critical Netflix doc last year titled “White Hot: The Rise & Fall of Abercrombie & Fitch.” The comeback was driven by social media:

• For You: A&F hired a Gen Z consultancy to expand its TikTok presence and collab’d with TikTok stars Charli and Dixie D’Amelio to launch a sub-brand called Social Tourist.

• #AbercrombieJeans: Out of its portfolio of brands (including Hollister and Gilly Hicks), it was Abercrombie’s namesake denim that went viral last year.

THE TAKEAWAY

A&F found its spending sweet spot… While retailers like Walmart and Target recently said consumers were tightening discretionary budgets, fashion retailers like A&F that hit a mid-level price point (somewhere between Shein and Chanel) are seeing success. This week, Urban Outfitters reported double-digit sales growth for its Free People and Anthropologie brands, and American Eagle delivered record Q1 revenue thanks to Aerie.