It has been about a month since the last earnings report for Abercrombie & Fitch (ANF Quick QuoteANF - Free Report) . Shares have lost about 9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Abercrombie due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

Abercrombie Q2 Earnings Top Estimates, Hollister Brand Up 19%

Abercrombie posted second-quarter fiscal 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Additionally, on a year-over-year basis, the company’s top line increased, but the bottom line declined.

Abercrombie’s earnings per share (EPS) of $2.32 in the fiscal second quarter declined 7.2% from $2.50 in the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of $2.27.

Net sales of $1.21 billion advanced 7% year over year on a reported basis and 6% on a constant-currency basis. The top line surpassed the Zacks Consensus Estimate of $1.19 billion. ANF’s comparable sales (comps) improved 3%. The top-line beat was driven by broad-based net sales growth across regions and exceptional growth at its Hollister brand.

Abercrombie & Fitch delivered another quarter of record results, marking its eleventh straight period of growth. Performance was led by Hollister, which achieved its strongest-ever second quarter, reflecting strong back-to-school and summer demand. Abercrombie brands faced a modest decline against exceptionally strong growth last year. The company improved profitability, supported by disciplined inventory management and strategic promotions, while also returning capital to its shareholders through ongoing share repurchases. Looking ahead, Abercrombie raised its full-year outlook, citing strong momentum and continued confidence in its global brands.

Abercrombie’s Regional & Brand Sales Drive Growth

Sales in the Americas increased 8% year over year to $974.2 million, EMEA sales fell 1% to $197.2 million and APAC sales gained 12% to $37.1 million. Comps rose 5% in the Americas, fell 5% in EMEA and were up 1% in APAC regions.

Net sales fell 5% year over year to $551.9 million for the Abercrombie brand. Moreover, sales increased 19% to $656.7 million at Hollister. The Abercrombie brand contributed 45.7% to the total company sales, whereas Hollister contributed 54.3% to sales. Comps fell 11% for Abercrombie and grew 19% for Hollister in the quarter.

ANF’s Quarterly Performance: Margins & Expenses

Abercrombie’s gross margin of 62.6% in the fiscal second quarter contracted 230 basis points (bps) year over year.

Selling expenses were $375.4 million, which fell 1.9% year over year. As a percentage of sales, selling expenses contracted 260 bps to 31.1%. General and administrative costs fell 1.6% to $175.3 million, while the metric, as a percentage of sales, decreased 120 bps to 14.5%.

The company reported an operating income of $206.7 million, up 17.7% from $175.6 million in the year-ago period. It registered an operating margin of 17.1%, up 160 bps from 15.5% in the year-ago quarter.

ANF’s Financial Health Looks Stable

Abercrombie ended the fiscal second quarter with cash and cash equivalents of $572.7 million, no net long-term borrowings and stockholders’ equity of $1.3 billion, excluding non-controlling interests.

The company had a liquidity of $1 billion at the end of the fiscal second quarter, which included cash and equivalents. Net cash provided by operating activities was $113 million as of Aug. 2, 2025.

In the second quarter of 2025, the company repurchased about 0.6 million shares for roughly $50 million. Year-to-date through Aug. 2, 2025, a total of 3.2 million shares were bought back for $250 million, reducing shares outstanding by 7% before the effect of stock compensation vesting. ANF still has $1.05 billion available under the repurchase program authorized in March 2025.

Abercrombie’s Q3 & FY25 Outlook

Abercrombie & Fitch increases its full-year net sales outlook, with profitability updated to reflect the current $90 million estimated tariff cost impact. For the third quarter of fiscal 2025, net sales are projected to rise 5-7% from the $1.21 billion recorded in the year-ago period. The operating margin for the quarter is expected to be 11-12%. It expects EPS to be in the band of $2.05-$2.25, lower than the $2.50 reported in the year-ago quarter. The effective tax rate is expected to be about 31%. The outlook incorporates share repurchases of at least $50 million and diluted weighted average shares of around 48 million.

For fiscal 2025, the company expects year-over-year sales growth in the range of 5-7% compared with 3-6% growth expected earlier. This upside is likely to be backed by growth across regions and brands. ANF anticipates an operating margin in the band of 13-13.5%, up from the previous guidance of 12.5-13.5%.

For fiscal 2025, management envisions weighted average shares of around $49 million, which reflects the impacts of 2025 share repurchases of $400 million. Combined with the tax rate , ANF predicts EPS to be in the bracket of $10-$10.50 compared with the $9.5-$10.40 guided earlier.

Abercrombie anticipates an effective tax rate of around 30% for fiscal 2025. Capital expenditure is estimated to be $225 million for the current fiscal year.

For fiscal 2025, Abercrombie plans 60 store openings, together with 40 remodels and rightsizes, and 20 closures.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -12.42% due to these changes.

VGM Scores

Currently, Abercrombie has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Abercrombie has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Abercrombie belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, Tapestry (TPR Quick QuoteTPR - Free Report) , has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Tapestry reported revenues of $1.72 billion in the last reported quarter, representing a year-over-year change of +8.3%. EPS of $1.04 for the same period compares with $0.92 a year ago.

For the current quarter, Tapestry is expected to post earnings of $1.21 per share, indicating a change of +18.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.4% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Tapestry. Also, the stock has a VGM Score of B.