Abercrombie & Fitch Co (ANF US) short interest is at $285 million, with 16.65 million shares shorted, for 25.22% of the float.
ANF is up 16%, after being up 29% earlier in the morning, on comparable same store sales for both its A & F and Hollister brands beat analysts’ expectations, with major growth coming in their online sales. ANF is not increasing its 2018 forecasts, but will not be closing as many of its stores as previously expected.
Shorts had been pounding the stock since its stock price peaked in mid-August with over 4.9 million shares shorted, +41.74%, in the 3rd and 4th quarters. There was a slight pullback in shares shorted in November, ahead of earnings, as shorts realized some of their near-term profits.
Shorts are down -$52 million in mark-to-market losses on today’s +16% price move.
After a dismal 1st quarter where they were down $99 million, -32.21%, in mark-to-market losses, shorts had a flat 2nd quarter but were up +$45 million and $62 million in the 3rd and 4th quarters, respectively. Today’s price move took out most of this quarters profits and leaves short sellers down $44 million in mark-to-market losses, -13.65%, on the year.
But it looks like shorts are not ready to throw in the designer towel, we are seeing over 600k of new short sales today as there is strong short selling into this morning rally. Short sellers are seeing this price move as an opportunity to get more short exposure at more attractive levels – thinking that the higher-end retail apparel sector will not perform well this holiday season.
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Managing Director Predictive Analytics, S3 Partners, LLC
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