Two of the most well liked stocks on Wednesday were the retailers Abercrombie & Fitch (NYSE:ANF) and Dick‘s Sporting Goods (NYSE:DKS). Clothing retailer Abercrombie & Fitch jumped 27% on Wednesday to $193 per share while sporting goods chain Dick’s Sporting Goods rose 16% to $227 per share.

Each stocks soared to all-time highs on blowout earnings reports posted Wednesday morning. To this point, this has been a powerful yr for retail stocks, that are up about 20% yr to this point (YTD).

Blowout earnings results

Each retail chains destroyed their respective earnings estimates.

For the primary fiscal quarter that ended on May 4, Abercrombie & Fitch posted net sales of $1 billion, up 22% yr over yr with same-store sales rising 21%. Analysts had projected about $958 million in sales for the quarter.

As well as, the retailer’s gross profit rate jumped 540 basis points to 66.4%. Meanwhile, Abercrombie and Fitch’s operating income got here in at $130 million, skyrocketing some 282% yr over yr, while its net income per share was $2.14 per share, up from 32 cents per share in the identical quarter a yr ago.

“We successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations. Growth was broad-based across regions and types with Abercrombie brands registering 31% growth and Hollister brands delivering growth of 12%,” CEO Fran Horowitz said within the earnings report.

Dick’s Sporting Goods also had an enormous quarter, smashing earnings estimates. For the quarter that ended on May 4, Dick’s generated $3 billion in net sales, up 6.2% from the identical quarter a yr ago. That beat estimates of $2.94 billion.

Same-store sales climbed 5.6%, which was higher than the three.6% increase in the identical quarter a yr ago. Dicks’ net income fell 10% to $275 million or $3.30 per share, but that easily beat estimates.

The retailer’s net income fell attributable to higher expenses, including the opening of two latest House of Sport experiential concept stores.

“Our core strategies and execution are delivering strong results, and we’re continuing to realize market share as consumers prioritize Dick’s Sporting Goods to satisfy their needs. Due to our strong Q1 performance, our expectations for continued robust demand from athletes and the arrogance we’ve got in our business, we’re raising our full yr outlook,” said President and CEO Lauren Hobart within the earnings report.

A brighter outlook

Investors weren’t only thrilled with the outcomes from each retailers; they were also pleased with the outlooks for each of those firms.

Based on its robust sales, Abercrombie & Fitch raised its guidance, calling for a ten% increase in net sales for this fiscal yr. The retailer’s previous outlook had projected net sales growth of 4% to six, so this can be a significant increase. The corporate also bumped its operating-margin outlook as much as 14% from 12%.

For the present quarter, Abercrombie & Fitch sees strong net sales growth within the mid-teens with an operating margin of 13% to 14%, up from 9.6% in the identical quarter a yr ago.

Dick’s Sporting Goods also elevated its outlook, raising its net sales projection for the fiscal yr to between $13.1 billion and $13.2 billion, up from the previous guidance of $13 billion to $13.1 billion.

Further, the retailer boosted its same-store sales guidance to a 2%-to-3% increase, up from the previous 1% to 2% increase. Finally, the brand new earnings per share guidance is $13.35 to $13.75, up from the previous guidance of $12.85 to $13.25.

Do you have to buy either stock?

Abercrombie & Fitch received a slew of sizable price-target increases on Wednesday following the discharge of its earnings reports, while Dick’s Sporting Goods also got a couple of smaller upgrades.

Abercrombie & Fitch stock is now up a whopping $108% yr to this point (YTD), and it remains to be trading at an inexpensive valuation with a P/E ratio of 24. Meanwhile, Dick’s Sporting Goods stock can also be surging, up 54.7% YTD, including Wednesday’s gains. It’s even cheaper with a P/E of 16.

I feel these are each still reasonable buys based on their outlooks and valuations. Consumer confidence is rising, and inflation has been declining. Dick’s might be the marginally higher buy attributable to its lower valuation and market-share gains, but Abercrombie & Fitch could even have more room to run.