Retail
Key Points
- CNBC’s Jim Cramer said Thursday Abercrombie & Fitch still looks attractive, though he’d wait for the shares to cool off before buying.
- “Abercrombie & Fitch might need some time to digest yesterday’s gains, but I think Fran Horowitz is doing an incredible job here, and if the stock gives you a pullback, you might want to pounce,” the “Mad Money” host said.
CNBC’s Jim Cramer on Thursday said Abercrombie & Fitch is back on the map, though he’d wait for shares to cool off before buying. “Abercrombie & Fitch might need some time to digest yesterday’s gains, but I think [CEO] Fran Horowitz is doing an incredible job here, and if the stock gives you a pullback, may I suggest you do some buying,” the “Mad Money” host said. Shares of Abercrombie surged more than 35% Wednesday after the retailer delivered a huge earnings beat and raised its full-year outlook. Cramer said the move was particularly striking because comparable sales actually fell short of expectations, but stronger-than-expected margins and profit forecast ultimately overshadowed that weakness. “You raise your earnings guidance by nearly three bucks at the mid-point, of course your stock can rally 35% in a single session,” Cramer said. Some of that upside came from a $100 million tariff refund, he said. Cramer noted, however, that even excluding that benefit, Abercrombie still would have earned $2.42 per share, comfortably above the $1.99 Wall Street had expected. Cramer also pointed to Abercrombie’s aggressive share repurchases as another boost to earnings per share. He said the retailer retired roughly 7% of its outstanding shares during the first half of the year. Abercrombie shares have been on a rollercoaster ride. The stock took off in mid-2023 when it was in the low $20s, as the company’s turnaround took off. It ultimately peaked at roughly $192 in June 2024, two months before cautious commentary alongside earnings put the stock in Wall Street’s penalty box . Shares then suffered a steep decline until rebounding in late 2025, only to tumble for the first half of 2026. It bottomed in May at roughly $70 and has steadily increased since Cramer said Wednesday’s quarter showed that underlying trends remain healthy across much of the business. He highlighted that sales in the Americas grew 5%, while Asia-Pacific sales jumped 19% and Europe, the Middle East, and Africa sales increased 2%. Cramer said the Abercrombie brand continues to benefit from more full-price selling and initiatives including its partnership with the NFL. Hollister remains the biggest question mark, according to Cramer. Management attributed some of its weakness to difficult year-over-year comparisons, but said back-to-school trends have improved and the brand is already accelerating from the quarter it just reported. “That’s enough for me,” Cramer said. Cramer cautioned that part of Wednesday’s extraordinary move likely came from short covering. Nearly 10% of Abercrombie’s publicly available shares had been sold short heading into the report, he said, forcing some bearish investors to buy shares to close their positions as the stock soared. He also warned that the retail landscape can change quickly, pointing to previous post-earnings spikes in Abercrombie shares that were followed by significant pullbacks. “This is an industry that can change on a dime,” Cramer said. “Sure, Abercrombie’s printing money right now, but that doesn’t mean they’ll be doing well in six months.” Still, Cramer sees enough fundamental strength to remain interested. Even following Wednesday’s surge, he said Abercrombie trades at just 12 times 2027 earnings estimates, while its namesake brand has strong momentum and Hollister may be beginning to improve. Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
This beaten-down retailer just surged 35%. Jim Cramer says to pounce on the next pullback
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