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Investors should take note of small-cap stock Abercrombie & Fitch (NYSE: $ANF ) as the worst may now be over for the battered clothing retailer.

ANF stock has jumped 45% higher in the last five trading sessions after the company known for its trendy outfits reported strong third-quarter financial results and offered bullish guidance.

It's a huge reversal for Abercrombie & Fitch, whose share price has been badly beaten over the last 18 months due to growth concerns and worries that the U.S. consumer is pulling back.

Even with the big rally of the last five days, ANF stock is still down 34% this year, presenting investors with an opportunity to buy now as the share price recovers and continues rallying.

Abercrombie & Fitch's stock also remains cheap trading at less than 10 times future earnings estimates, and with a market capitalization that has fallen below $5 billion U.S.

The stock remains nearly 40% below its 52-week high of $164.80 U.S. a share. In June 2024, ANF stock peaked at nearly $200 U.S. per share.

The rally of the past week was sparked after Abercrombie & Fitch reported earnings per share (EPS) of $2.36 U.S., which was well ahead of the $2.16 U.S. expected on Wall Street.

Revenue of $1.29 billion U.S. edged past consensus forecasts of $1.28 billion U.S. Sales were up 7% from a year earlier.

However, it was the company's forward guidance that really lit a fuse under the shares. For the full year, management now expects sales to rise between 6% and 7%.

That's ahead of the 6.2% growth expected on Wall Street. Abercrombie & Fitch also said that it is getting a big boost from its Hollister brand, where sales jumped 16% in Q3 from a year ago.

Entering the busy year-end holiday shopping season, investors and analysts are once again bullish on ANF stock, presenting an opportunity as the brand and its shares rebound.