Citi analysts maintained a Neutral rating and a $190 price target on Abercrombie & Fitch (NYSE:ANF), expressing optimism for another strong earnings beat in the company's upcoming Q2 report, scheduled on August 28.

The analysts anticipate solid results for both the Abercrombie and Hollister brands, with double-digit comp growth, improved gross margins, and an increase in average unit retail (AUR) due to reduced promotional activity. The analysts expect the company to raise its full-year 2024 sales guidance from 10% to 12%, potentially pushing EPS guidance above $10, surpassing consensus estimates.

Despite recent declines in stock price tied to weaker third-party data in July, the analysts see no slowdown in momentum for the brands and predict significant earnings upside for the year, maintaining a favorable risk/reward outlook ahead of the Q2 earnings release.