Don't Buy This Hot Retail Stock

The following video is from Wednesday's MarketFoolery podcast, in which host Chris Hill, along with analysts Austin Smith and Jason Moser, discuss the top business and investing stories.

Abercrombie & Fitch's Q3 earnings are out, and they're up 40%, which has share prices up a whopping 27%. Obviously an incredible sign for A&F, right? Not exactly. In this video, the guys discuss how a pop like this can sometimes occur when earnings estimates are bleak, and the report comes in less bleak than projected. We hear about how a company facing market saturation domestically and in Europe, which has same-store sales down 3%, experienced a big pop that definitely shouldn't be an invitation for investors to get on board.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in our special report. Uncovering these top picks is free today; just click here to read more.

The article Don't Buy This Hot Retail Stock originally appeared on Fool.com.

Austin Smith owns shares of Coach. Chris Hill and Jason Moser have no positions in the stocks mentioned above. The Motley Fool owns shares of Aeropostale and Coach. Motley Fool newsletter services recommend American Eagle Outfitters, Coach, and Gap. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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