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Retail Picture: What Abercrombie & Birkenstock EPS Suggest
The 2025 Holiday season was generally strong, as expected. However, Abercrombie and Fitch shares are falling today for a few different reasons, including:
1. A High Bar: After a successful, multi-year, store optimization and brand refresh, Abercrombie achieved record earnings-per-share in 2025. Although ANF's holiday results were robust, the stock is up more than threefold over the past five years, and investors with profits are likely using the liquidity of earnings to take some chips off the table
2. Luke Warm Guidance: U.S. stock investors are known to be hyper-focused on quarterly results and have a forward-looking "what have you done for me lately?" mindset. In the conference call, management suggested that sales growth will be in the middle of its previous guidance range (at least 6%). With the strong 2025 performance, investors were looking for a stronger number. Additionally, many investors see a weaker consumer into 2026.
3. CAPEX & Tariff Impact: ANF announced that it will increase its capital expenditures, suggesting that, in order to compete, the company will need to spend more capital. Meanwhile, the company incurred a $90 million tariff expense in 2025, which will likely continue into 2026 and pressure margins.
Despite the concerns, ANF is still one of the strongest and most consistent retail brands. Zacks Consensus Estimates suggest that revenue will continue to soar into 2027.
Additionally, ANF shares are approaching a high reward-to-risk zone after they pull into the rising 50-day moving average for the first time since a strong end-of-2025 rally.
Birkenstock Steadies After Initial Post-EPS Dump
Birkenstock shares took a post-EPS beating even though Q4 Adj. EPS $0.14 beat $0.08 est, Sales $407.67M beat $303.31M est. The company is expecting a modest headwind to adj. EBITDA margins due to planned ramp-up costs & an initial under-absorption in Pasewalk. Overall, the company is becoming a growth darling of sorts with double-digit top-and-bottom-line growth. As a result, shares are rebounding after the initial knee-jerk reaction.
Gauging the Overall Retail Picture: Discount Retailers Lead
The current retail picture is muddied due to tariffs and weak consumer confidence. Nevertheless, it's hard to argue with record-breaking global holiday sales of $1.29 trillion. That said, the retail market is highly bifurcated. While companies like BIRK and ANF continue to perform well on both price action and fundamental fronts, consumers are moving more towards discount retailers like Dollar Tree and TJX. Meanwhile, this trend can be seen in ANF itself, with more strength in its low-cost Hollister brand than its high-end ANF brand.
Bottom Line
While the market's immediate "knee-jerk" reaction to retail earnings suggests cooling sentiment, the fundamental story for premium retailers remains intact.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Abercrombie and Fitch, Birkenstock, Dollar Tree and TJX
For Immediate Release
Chicago, IL – January 13, 2026 – Today, Zacks Investment Ideas feature highlights Abercrombie and Fitch (ANF - Free Report) , Birkenstock (BIRK - Free Report) , Dollar Tree (DLTR - Free Report) and TJX (TJX - Free Report) .
Retail Picture: What Abercrombie & Birkenstock EPS Suggest
The 2025 Holiday season was generally strong, as expected. However, Abercrombie and Fitch shares are falling today for a few different reasons, including:
1. A High Bar: After a successful, multi-year, store optimization and brand refresh, Abercrombie achieved record earnings-per-share in 2025. Although ANF's holiday results were robust, the stock is up more than threefold over the past five years, and investors with profits are likely using the liquidity of earnings to take some chips off the table
2. Luke Warm Guidance: U.S. stock investors are known to be hyper-focused on quarterly results and have a forward-looking "what have you done for me lately?" mindset. In the conference call, management suggested that sales growth will be in the middle of its previous guidance range (at least 6%). With the strong 2025 performance, investors were looking for a stronger number. Additionally, many investors see a weaker consumer into 2026.
3. CAPEX & Tariff Impact: ANF announced that it will increase its capital expenditures, suggesting that, in order to compete, the company will need to spend more capital. Meanwhile, the company incurred a $90 million tariff expense in 2025, which will likely continue into 2026 and pressure margins.
Despite the concerns, ANF is still one of the strongest and most consistent retail brands. Zacks Consensus Estimates suggest that revenue will continue to soar into 2027.
Additionally, ANF shares are approaching a high reward-to-risk zone after they pull into the rising 50-day moving average for the first time since a strong end-of-2025 rally.
Birkenstock Steadies After Initial Post-EPS Dump
Birkenstock shares took a post-EPS beating even though Q4 Adj. EPS $0.14 beat $0.08 est, Sales $407.67M beat $303.31M est. The company is expecting a modest headwind to adj. EBITDA margins due to planned ramp-up costs & an initial under-absorption in Pasewalk. Overall, the company is becoming a growth darling of sorts with double-digit top-and-bottom-line growth. As a result, shares are rebounding after the initial knee-jerk reaction.
Gauging the Overall Retail Picture: Discount Retailers Lead
The current retail picture is muddied due to tariffs and weak consumer confidence. Nevertheless, it's hard to argue with record-breaking global holiday sales of $1.29 trillion. That said, the retail market is highly bifurcated. While companies like BIRK and ANF continue to perform well on both price action and fundamental fronts, consumers are moving more towards discount retailers like Dollar Tree and TJX. Meanwhile, this trend can be seen in ANF itself, with more strength in its low-cost Hollister brand than its high-end ANF brand.
Bottom Line
While the market's immediate "knee-jerk" reaction to retail earnings suggests cooling sentiment, the fundamental story for premium retailers remains intact.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.