Abercrombie & Fitch Announces Plans For Super Bowl Lx As “Official Fashion Partner Of The Nfl”

What Happened?

A number of stocks fell in the afternoon session after the Dow Jones Industrial Average fell as much as 0.7%, reflecting lingering uncertainty, and capping off a volatile week which saw stocks enjoy some relief as President Donald Trump reduced tensions with European allies by backing off his threat of imposing new tariffs. 

Threats of tariffs initially created uncertainty for businesses, as they can lead to higher costs for multinational corporations and disrupt global supply chains. By withdrawing the threat, the administration removed a significant headwind for the market, prompting a relief rally. This development was a key factor in helping major indexes recover from earlier losses, even as some analysts noted that underlying geopolitical risks and market volatility remain concerns for investors.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Specialty Retail company Leslie's fell 2.6%. Is now the time to buy Leslie's? Access our full analysis report here, it’s free.
• Footwear Retailer company Boot Barn fell 3.1%. Is now the time to buy Boot Barn? Access our full analysis report here, it’s free.
• Beauty and Cosmetics Retailer company Sally Beauty fell 5.7%. Is now the time to buy Sally Beauty? Access our full analysis report here, it’s free.
• Apparel Retailer company Abercrombie and Fitch fell 2.4%. Is now the time to buy Abercrombie and Fitch? Access our full analysis report here, it’s free.
• Apparel Retailer company Victoria's Secret fell 4%. Is now the time to buy Victoria's Secret? Access our full analysis report here, it’s free.

Zooming In On Sally Beauty (SBH)

Sally Beauty’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 2 days ago when the stock gained 4.5% on the news that Raymond James upgraded the stock to "Outperform" from "Market Perform.". The firm also set a price target of $19.00 for the beauty products retailer. According to analyst Olivia Tong, the more positive view was based on the belief that recent store upgrades and changes to how the company operates should lead to more stable growth. The upgrade indicated a shift in the analyst's confidence in the company's future performance.

Sally Beauty is up 4.9% since the beginning of the year, and at $15.20 per share, it is trading close to its 52-week high of $16.60 from October 2025. Investors who bought $1,000 worth of Sally Beauty’s shares 5 years ago would now be looking at an investment worth $1,017.

Since July 2025, Abercrombie and Fitch has been in a holding pattern, posting a small return of 4.4% while floating around $99.93.

Why Are We Positive On Abercrombie and Fitch?

Founded as an outdoor and sporting brand, Abercrombie & Fitch evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.

1. Surging Same-Store Sales Show Increasing Demand

Same-store sales is an industry measure of whether revenue is growing at existing stores, and it is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Abercrombie and Fitch has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 11.9%.

2. Elite Gross Margin Powers Best-In-Class Business Model

Gross profit margins are an important measure of a retailer’s pricing power, product differentiation, and negotiating leverage.

Abercrombie and Fitch has best-in-class unit economics for a retailer, enabling it to invest in areas such as marketing and talent. As you can see below, it averaged an elite 63.3% gross margin over the last two years. That means Abercrombie and Fitch only paid its suppliers $36.66 for every $100 in revenue.

3. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Abercrombie and Fitch’s EPS grew at an astounding 189% compounded annual growth rate over the last three years, higher than its 12.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Final Judgment

These are just a few reasons why we think Abercrombie and Fitch is a great business, but at $99.93 per share (or 9.9× forward P/E), is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.