Retail Picture: What Abercrombie & Birkenstock EPS Suggest

Abercrombie Falls on Mediocre OutlookThe 2025 Holiday season was generally strong, as expected. However, Abercrombie and Fitch (ANF) shares are falling today for a few different reasons, including:1.      A High Bar: After a successful, multi-year, store optimization and brand refresh, Abercrombie achieved record earnings-per-share in 2025. Although ANF’s holiday results were robust, the stock is up more than threefold over the past five years, and investors with profits are likely using the liquidity of earnings to take some chips off the table2.      Luke Warm Guidance: U.S. stock investors are known to be hyper-focused on quarterly results and have a forward-looking “what have you done for me lately?” mindset. In the conference call, management suggested that sales growth will be in the middle of its previous guidance range (at least 6%). With the strong 2025 performance, investors were looking for a stronger number. Additionally, many investors see a weaker consumer into 2026.3.      CAPEX & Tariff Impact: ANF announced that it will increase its capital expenditures, suggesting that, in order to compete, the company will need to spend more capital. Meanwhile, the company incurred a $90 million tariff expense in 2025, which will likely continue into 2026 and pressure margins.Despite the concerns, ANF is still one of the strongest and most consistent retail brands. Zacks Consensus Estimates suggest that revenue will continue to soar into 2027.Image Source: Zacks Investment ResearchAdditionally, ANF shares are approaching a high reward-to-risk zone after they pull into the rising 50-day moving average for the first time since a strong end-of-2025 rally.Image Source: TradingViewBirkenstock Steadies After Initial Post-EPS DumpBirkenstock (BIRK) shares took a post-EPS beating even though Q4 Adj. EPS $0.14 beat $0.08 est, Sales $407.67M beat $303.31M est. The company is expecting a modest headwind to adj. EBITDA margins due to planned ramp-up costs & an initial under-absorption in Pasewalk. Overall, the company is becoming a growth darling of sorts with double-digit top-and-bottom-line growth. As a result, shares are rebounding after the initial knee-jerk reaction.Gauging the Overall Retail Picture: Discount Retailers LeadThe current retail picture is muddied due to tariffs and weak consumer confidence. Nevertheless, it’s hard to argue with record-breaking global holiday sales of $1.29 trillion. That said, the retail market is highly bifurcated. While companies like BIRK and ANF continue to perform well on both price action and fundamental fronts, consumers are moving more towards discount retailers like Dollar Tree (DLTR) and TJX (TJX). Meanwhile, this trend can be seen in ANF itself, with more strength in its low-cost Hollister brand than its high-end ANF brand.Bottom LineWhile the market’s immediate “knee-jerk” reaction to retail earnings suggests cooling sentiment, the fundamental story for premium retailers remains intact.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The TJX Companies, Inc. (TJX): Free Stock Analysis Report Dollar Tree, Inc. (DLTR): Free Stock Analysis Report Abercrombie & Fitch Company (ANF): Free Stock Analysis Report Birkenstock Holding PLC (BIRK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks