Shares of Abercrombie & Fitch (ANF) are tumbling despite topping its second quarter earnings estimates and raising its outlook. CFRA analyst Zachary Warring joins Morning Brief to discuss Abercrombie's results and how other retailers are faring in a tight consumer environment.

"Investors might be a little bit scared that this could be peak growth for them," Warring says of the stock's movement. However, he believes there are other catalysts for the retail name moving forward: "The company has now got a clean balance sheet. They have no debt. So they have plenty of room over the next 12 to 24 months to buy back shares."

He calls Abercrombie "the best-performing apparel brand in the US right now," explaining its effective marketing on social media platforms like TikTok and Instagram Reels. He believes the company has "plenty of room to grow," although he expects growth to decelerate over the next two years.

While many retailers have prioritized promotions and discounts as consumers increasingly seek value, Warring argues that Foot Locker (FL) "is almost a complete opposite of Abercrombie." He notes that the footwear retail chain is battling long-term headwinds as Nike (NKE) experiences a significant slowdown. In addition, he explains that Foot Locker is closing stores globally and believes that "there's at least a few more quarters of underperformance" for the company.

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This post was written by Melanie Riehl