News

Reporting their fourth quarter results this week, Abercrombie & Fitch ANF and CrowdStrike CRWD reconfirmed they have the expansion efforts that investors look for. The popular retail apparel company and innovative next-gen cyber security firm posted sound sales growth and strong improvements in profitability.

Making Abercrombie & Fitch and CrowdStrike shares more attractive is that their operating efficiency may sustain their impeccable year-to-date rallies.

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Robust Q4 Growth

On Wednesday, Abercrombie & Fitch flexed its ability to capitalize on the holiday shopping season stating its Q4 net income came in at $158.4 million (Non-GAAP) and more than 300% above the $38.33 million the company brought in a year ago.

This translated into earnings of $2.97 per share which topped the Zacks Consensus by 5% and skyrocketed from $0.81 a share in the comparative quarter. On the top line, Q4 sales of $1.45 billion beat estimates by 2% and spiked 21% year over year. Pricing power along with lower operating costs attributed to the impressive holiday profit and Abercrombie & Fitch has surpassed earnings expectations in each of its last four quarterly reports.

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As for CrowdStrike which reported its Q4 results on Tuesday, adoption of its endpoint cloud-delivered security services continues to accelerate. CrowdStrike achieved a fourth consecutive quarter of record net income at $236.2 million (Non-GAAP) which more than doubled from $111.6 million in the prior year quarter. Earnings of $0.95 per share soared 102% YoY and topped estimates by 16%. Quarterly sales expanded 34% to $845.34 million and beat by 1%. Furthermore, CrowdStrike has now beaten earnings expectations for 19 consecutive quarters.

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ANF & CRWD Price Performance is No Fluke

Abercrombie & Fitch and CrowdStrike’s strong price performance this year is not unordinary although the retail industry witnessed a slowdown amid high inflation and larger software titans such as Microsoft (MSFT) are usually in the spotlight. That said, over the last five years ANF and CRWD have been two of the market’s top performers catapulting over +400% respectively to impressively outperform the broader indexes.

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In fact, Abercrombie & Fitch’s post-pandemic surge has seen the fashion apparel retailer rebound to new heights after refocusing its brands including Hollister and Gilly Hicks to fit trends among younger generations. Sustaining its eye-catching growth over the last few years will be a tall task but ANF shares trade at a reasonable 20.8X forward earnings multiple with EPS projected to rise 3% in its current fiscal 2025 to $6.48 per share. Plus, Abercrombie & Fitch has continued to progress towards its target of bringing in $5 billion in annual sales.

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In the midst of its expansion, CrowdStrike’s execution and focus on profitability have remained compelling since going public in 2019. Annual earnings are expected to jump 18% in CrowdStrike’s current FY25 and leap another 24% in FY26 to $4.53 per share. Accompanied by high double-digit percent growth on its top line, CrowdStrike’s operating and free cash flow has been reassuring as well after reaching record levels regarding this mark during Q4.

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Bottom Line

Investing in Abercrombie & Fitch and CrowdStrike has continued to be rewarding thanks to their focus on improvements in operating effeciency while maintaing thier growth. At the moment Abercrombie & Fitch and CrowdStrike’s stock both sport a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.