ANF has scored a positive post-earnings reaction in four of its last eight reports
Abercrombie & Fitch Co (NYSE:ANF) is up 2.5% to trade at $153.61, as the red-hot retailer prepares to step into the earnings confessional. The sector staple– which has caught our eye numerous times in the last 12 months — will report first-quarter earnings before the market opens tomorrow morning.
ANF has closed higher the session after earnings in four of its last eight quarters, including three of the last four that featured a 31.1% pop last May. The shares average a 14.7% swing, regardless of direction, after their last eight reports. This time around, the options market is pricing in a larger post-earnings move of 19.7%.
The shares hit a record high of $154.87 earlier today, and boast an emphatic 413.7% gain in the last 12 months, with support in place at their ascending 100-day moving average. Yet somehow, there’s still contrarian potential with the stock. Of the eight brokerages covering ANF, five still maintain tepid “hold” ratings. And amongst short sellers, short interest increased in the most recent reporting period, and the 4.46 million shares sold short accounts for nearly 10% of the equity’s total available float.
In the options pits, the stock’s Schaeffer’s put/call open interest ratio (SOIR) of 2.44 sits in the one percentage point from an annual high, indicating that near-term traders are more put-biased now than at any other time in the past 12 months.
It’s also worth noting that ANF’s Schaeffer’s Volatility Scorecard (SVS) checks in at 84 out of 100. In other words, the security has consistently realized higher volatility than its options have priced in.