Abercrombie & Fitch, a brand infamous for its shirtless male models in the early aughts, may have actually managed to claw its way back to popularity all over again.

Shares surged 14.67% on Wednesday after the preppy apparel purveyor surpassed Wall Street’s expectations on both top and bottom lines in the first quarter, with record-high net sales of $1.10 billion—up about 8% from $1.02 billion a year earlier.

Hollister, ANF’s younger, hipper offshoot, led the recovery with 22% growth, achieving its best first-quarter net sales in history. Meanwhile, the Abercrombie brand declined 4%, although it may simply be settling down after its sizable 31% sales growth last year. Earnings per share also easily surpassed expectations at $1.59 versus $1.39.

Abercrombie seems to be regaining the momentum it built over the past two years, when shares surged by over 550%—before plummeting 50% on the news of President Trump’s tariffs. The company expects levies to take a $50 million toll on earnings this year, but management forecasts net sales will rise 3% to 6% for the rest of the fiscal year, though they did cut EPS estimates.

Inside Abercrombie’s makeover

Abercrombie’s recent rally shows that tariffs haven’t completely killed the apparel industry quite yet. True, American Eagle is down 35% year to date, Nike has sunk 16%, and Lululemon is 15% lower than where it started in 2025. So, what is Abercrombie doing right?

“Abercrombie’s surge, despite slashing profit guidance, is a fascinating case study in how markets are pricing resilience over near-term headwinds,” said Aether Holding CEO Nicolas Lin. “What’s particularly impressive is their supply chain agility. Reducing China exposure from 30% to low single digits while maintaining margins shows operational excellence that most retailers lack.”

In addition to dispersing its supply chain to other countries, the brand has bent over backward to become relevant to young consumers. “The company ditched its moody mall-era baggage: Out went the shirtless greeters and exclusionary ethos; in came inclusive sizing and quiet confidence for shoppers who now prefer oat milk to Axe body spray,” explained Chief Investment Officer at Running Point Capital Advisors Michael Ashley Schulman.

But some are skeptical whether Abercrombie fever will remain this high—at least when it comes to the stock.

“The rally feels overdone from a risk/reward perspective,” said Lin. “When a stock jumps on objectively challenging news—EPS guidance cut by roughly 10%, operating margins compressed 150-200 basis points—it typically signals short covering rather than new fundamental conviction.”

Tariffs will also continue to play a role in the retailer’s future. If Trump’s tariffs on Vietnam, Cambodia, and India go into effect, that could destroy margins or raise prices and kill demand, no matter how cute those Hollister printed jeans may be.—JD

🟢 What’s up

• Vail Resorts soared 8.84% on the news that it’s bringing back former CEO Rob Katz to turn the company around.
• Dick’s Sporting Goods climbed 1.66% thanks to solid earnings, and the retailer also impressed by keeping fiscal guidance intact.
• Box jumped 17.23% after the cloud storage company beat earnings estimates and raised its forecast for the coming quarter and full year.
• Joby Aviation soared 28.78% after the air taxi startup secured a $250 million investment from Toyota.

What’s down

• US chip designers sank on reports that the White House has ordered them to stop selling to clients in China. Cadence Design Systems tumbled 10.67%, while Synopsys lost 9.64%
• Okta tumbled 16.16% despite the identity management software company posting solid earnings and standing by its fiscal guidance for the year.
• Macy’s fell 0.50% despite beating Wall Street estimates across the board, though it did cut its profit outlook for the year.
• Automaker Stellantis dropped 3.15% after revealing veteran exec Antonio Filosa will become the new head of Jeep’s parent company.
• Freshpet fell 3.97% on a downgrade from TD Cowen analysts, who think the company’s refrigerated pet food concept doesn’t have much growth potential.
• Semtech stumbled 4.56% even though the semiconductor supplier beat earnings estimates and raised its fiscal forecast.
• Boston Scientific sank 1.56% after it decided to discontinue its artificial heart valve system due to regulatory feedback.
• Chevron fell 1.31% a day after the US government declared that it can no longer produce oil in Venezuela.

In a world of conflicting economic messages, taking a peek into the brains of US central bankers can be invaluable for investors trying to find a signal in all the noise. That’s why the minutes from the Federal Open Market Committee’s last meeting on May 6 and 7 are well worth a read.

Some highlights:

• Central bankers “viewed the possibility that the economy would enter a recession to be almost as likely as the baseline forecast.”
• They also expect the labor market to “weaken substantially,” forecasting that the unemployment rate will move higher and remain elevated through 2027.
• The economic outlook has become more uncertain, and the FOMC will “take a cautious approach until the net economic effects of the array of changes to government policies become clearer.”

There was one other quote that stood out: “Participants noted that the Committee might face difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken,” the minutes read. Jerome Powell commented on this difficult balancing act after the last meeting, noting how the Fed’s dual mandate to contend with rising inflation and falling employment puts it between a rock and a hard place. For now, it seems likely that the Fed will continue to keep rates right where they are during its June 17 and 18 meeting.

One of this month’s best-performing stocks is KindlyMD. You’d be forgiven if you’re not familiar with this little-known healthcare company, but it exploded 250% higher on the day it announced it was merging with a bitcoin investment company.

It’s not the only stock enjoying big gains simply by muttering the word “cryptocurrency.” In fact, it seems like a lot of companies are turning to crypto as a new method for producing value out of thin air.

Today, GameStop announced it officially purchased 4,710 bitcoins worth over half a billion dollars, following through on its new bitcoin play it laid out earlier this year. And yesterday, Trump Media said it was raising $2.5 billion to start buying bitcoin.

Meme stocks aren’t the only companies going cuckoo for crypto. Penny stock and logistics firm Freight Technologies reported earlier this month that it plans to buy between $1 million and $20 million worth of Donald Trump’s memecoin as a treasury asset. Or, look at health tech firm Coeptis Therapeutics, which merged with Dogecoin miner Z Squared in April. Just last week, medical equipment company Semler Scientific completed its third-largest bitcoin purchase of 455 bitcoins since it started buying the digital asset about a year ago.

This trend is rapidly accelerating: At the start of April, just 89 publicly traded companies held bitcoin. Now, 114 firms hold over 800,000 bitcoins worth roughly $88 billion, according to BitcoinTreasuries.net.

The OG

Whether they’re merging with crypto miners or buying cryptocurrencies outright, these companies are all pulling from the MicroStrategy playbook.

Strategy (which dropped the “Micro” earlier this year) has transformed from an obscure software firm into the largest corporate bitcoin holder in the world by zealously buying bitcoin since 2020. The company, run by bitcoin bull Michael Saylor, currently owns over 580,250 bitcoins worth over $62 billion.

The strategy has worked wonders for Strategy. Retail traders use the publicly traded company as a bitcoin play, and have pushed the stock 115% higher over the past 12 months—dramatically outpacing both the S&P 500’s gain of 11% and bitcoin’s 57% return over the same period.

But not every company can necessarily mimic Strategy’s success. After all, as Bloomberg columnist Matt Levine pointed out, Strategy had the advantage of being the first on the trend, and caught the bitcoin wave at a crucial moment.

Is this…a good idea?

It’s awesome to see your stock picks pop just because they bought a couple of crypto coins, but remember: they’re not creating real value. At least, not in the sense that Benjamin Graham and Warren Buffett define value.

After all, a lot of Strategy’s growth has been speculation: Strategy’s market cap has risen to $101 billion, outpacing the value of its actual bitcoin holdings, which is theoretically what investors are paying to gain exposure to.

Plus, now that spot bitcoin ETFs are on the market, there’s an easier way for investors to get direct exposure to bitcoin in their portfolios. Why complicate that?

It seems like investors may be starting to agree: Trump Media closed 10% lower after its announcement yesterday and fell another 6.77% today, while GameStop sank 10.85% this afternoon. Then again, KindlyMD is still up over 540% since it pivoted to bitcoin.—LB

• Forget frequent flyer miles: Shake Shack rolled out a new loyalty reward program for its biggest eaters.
• Elliott Investment Management keeps racking up wins: After adding two new directors to Phillips 66’s board, it’s now plugged another director into Honeywell’s board.
• The SmartCockpit car, a joint project between Amazon and Stellantis, appears to be dead.
• Mortgage rates rose to their highest level since January.
• YouTube outpaced Disney, Netflix, and Paramount for the largest share of TV viewership in April.
• Crypto is coming to 401(k) plans after the Trump Administration rescinded regulatory guidelines.

There are plenty of economic reports on deck tomorrow, including initial jobless claims and pending home sales. But the first revision of Q1 GDP will likely steal headlines, as economists and investors alike will want to know if first-quarter economic growth was as disappointing as previously estimated, or if things aren’t as bad as they seem.

Meanwhile on the earnings front, we’ve got a bunch of big names dropping their latest numbers, including Costco, Best Buy, Dell, Marvell Technology, Zscaler, Li Auto, Ulta Beauty, The Gap, Bath & Bodyworks, Burlington Stores, and Cracker Barrel.

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