Could Abercrombie & Fitch Stock’s Cash Flow Spark the Next Rally?

Here is why we think Abercrombie & Fitch (ANF) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount.

Abercrombie & Fitch’s structural brand reinvention, appealing to millennials and Gen Z with inclusive designs, has fueled its resurgence. Net sales for FY24 surged 16% to $4.95 billion, with FY25 revenue projected to grow 3-5% and operating margins expanding to 14-15%, despite a projected $90 million tariff impact. Digital channel strength continues to drive growth, evidenced by a 35% increase in Q2 2025 online sales. This strategic momentum positions ANF for sustained profitable growth, nearing $5 billion in annual sales.

Let’s look at some figures

• Cash Yield: Abercrombie & Fitch offers an impressive cash flow yield of 10.1%.
• Growing: Last 12 month revenue growth of 9.3% means that the cash pile is going to grow.
• Valuation Discount: ANF stock is currently trading at 31% below 3-month high, 56% below 1-year high, and 63% below 2-year high.

Free Cash Flow Yield refers to free cash flow per share / stock price. Why it matters? If a company produces high amount of cash per share, it can be used to fuel additional revenue growth, or simply paid through dividends or buybacks to shareholders. For quick background, Abercrombie & Fitch operates as a specialty retailer offering apparel through Hollister and A&Fitch segments, with approximately 729 stores across Europe, Asia, Canada, the Middle East, the US, and internationally.

Equities is one thing, but we do more. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more and protect you better? We have crunched the numbers.

But do these numbers tell the full story? Read Buy or Sell ANF Stock to see if Abercrombie & Fitch still has an edge that holds up under the hood.

The Point? The Market Can Notice, And Reward

The below statistics are from “high FCF yield with growth and discount” selection strategy since 12/31/2016. The stats are calculated based on selections made monthly, and assuming that a stock once picked, can not be re-picked for next 180 days.

• Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods

But Consider The Risk

That said, ANF isn’t immune to big drops. It plunged 83% in both the Dot-Com Bubble and the Global Financial Crisis. The inflation shock hit it hard too, with a nearly 70% fall. Even the smaller shocks, like 2018 and Covid, dragged it down by over 50%. Good fundamentals matter, but when the market turns, ANF shows it can still take a serious hit.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ANF Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.