ANF

ANF trades at just 8.5x FY2026 diluted EPS of $10.46 and 0.8x sales despite delivering a 51.1% gross margin, 13.3% operating margin, and a striking 36.1% ROE on a debt-free balance sheet ($760M cash, $0 long-term debt per the FY2025 balance sheet). Revenue grew 6.4% to $5.27B and the multi-year trajectory ($3.71B in FY2022 → $5.27B in FY2026) shows the brand turnaround is durable, not a one-quarter blip. At a ~$4B market cap with $619M of operating cash flow, the free-cash yield is roughly mid-teens — unusual for a profitable, growing specialty retailer.

The MD&A confirms the FY2026 EPS dip is more cosmetic than structural. On a constant-currency, adjusted basis, operating income was $660.6M vs. $733.7M — a 220 bps margin compression, not a collapse — and adjusted diluted EPS of $9.86 vs. $10.60 reflects roughly an 80 bps GAAP operating-margin step-down from FY2024's peak (a $38.6M payment-card interchange settlement gain in FY2024 flatters the comparison). Selling expense scaled with sales (34.4% of revenue, in line), while cost of sales rose faster — a mix/promo signal worth watching but not a thesis-breaker given the absolute margin level.