Abercrombie & Fitch Co. (ANF) is hitting the retail sweet spot with teens and 20-somethings. This Zacks Rank #1 (Strong Buy) recently raised its full year sales growth target.Abercrombie & Fitch is a specialty retailer of apparel and accessories for men, women and children. It operates 750 stores under 5 brands, including Abercrombie & Fitch, abercrombie kids, Hollister, Gilly Hicks and Social Tourist, in North America, Europe, Asia and the Middle East. It also operates e-commerce sites for each of those brands. A Big Earnings Beat in the Fiscal Third QuarterOn Nov 21, 2023, Abercrombie & Fitch reported its fiscal third quarter 2023 results and crushed the Zacks Consensus by 60.5%. Earnings were $1.83 versus the consensus of just $1.14. It was the third big beat in a row.Net sales jumped 20% to $1.1 billion year-over-year with the Abercrombie brands were up 30% and the Hollister brands gained 11%. Hollister gains were due to back-to-school assortment which resonated with the teen customer.By segment, sales were up 22% in the Americas, 14% in EMEA and 13% in APAC.Comparable sales, an important metric for retailers, were also strong, up 16% from last year. Comps were up 26% at Abercrombie brands and 7% at Hollister.Inventory, which had been an issue last year as the supply chain was still in flux, is lower this year. Inventories as of Oct 28, 2023, fell 20% to $595 million compared to Oct 29, 2022.Gross profit was up 570 basis points to 64.9% from last year due to 250 basis points from year-over-year AUR growth, about 200 basis points from lower freight costs and 200 basis points due to lower inventory write downs. However, the benefits were partially offset by 80 basis points in higher raw material costs.As of Oct 28, 2023, Abercrombie had cash and equivalents of $649 million, up from $257 million as of Oct 29, 2022. Bullish Fourth Quarter OutlookWith the holiday season in full swing, Abercrombie is feeling confident its assortment is resonating. It expects net sales growth to be up low double-digits compared to the year ago quarter, to $1.2 billion. That includes the benefit of 375 basis points from the 53rd financial reporting week.Operating margin is forecast in the range of 12% to 14% compared to 7.7% in Q4 2022 driven by higher gross profit rate on lower freight costs and higher AURs.Analysts Raise Fiscal 2024 and 2025 Earnings EstimatesAfter a third big beat in a row, the analysts are feeling bullish about the full year. 6 estimates have been revised higher since the earnings report, including 1 in the last week, for fiscal 2024. The Zacks Consensus has jumped to $5.74 from $4.43 during that time.That is huge growth compared to last year of 2196% as the company only made $0.25 in fiscal 2023.Analysts expect the good times to continue, with 6 estimates higher for fiscal 2025 in the last 30 days as well. It has pushed the Zacks Consensus up to this year’s level, at $5.75.Image Source: Zacks Investment Research Shares Soar to 5-Year HighsWhat recession? Abercrombie is one of the hottest stocks of 2023, with shares up 253% year-to-date to new 5-year highs. That is crushing the return of the S&P 500 and ranks up there with NVIDIA’s return this year. Image Source: Zacks Investment ResearchYet, the stock is still cheap, with a forward P/E of just 14.2. It doesn’t pay a dividend.For those looking for a red-hot retailer with rising earnings estimates, Abercrombie should be on your short list.More By This Author:Will There Be A Recession In 2024? Loser Stocks: Buy More, Hold Or Sell? Bull Of The Day: Matador Resources