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Abercrombie's Shares Rise 36% on Q2 Earnings Beat on Tariff Refunds
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Key Takeaways
Abercrombie posted record Q2 sales as revenues rose 5%, marking its 15th consecutive quarter of growth.
ANF raised its fiscal 2026 sales-growth and operating-margin outlook on stronger performance.
Strong cash flow flexibility supported $177 million in Q2 share repurchases and plans for capital returns.
Abercrombie & Fitch Co. (ANF - Free Report) delivered second-quarter fiscal 2026 results that topped expectations. It reported earnings per share (EPS) of $2.42 and adjusted EPS of $4.17. The Zacks Consensus Estimate is pegged at $1.95. Revenues rose 4.8% year over year to $1.27 billion, beating the consensus estimate of $1.24 billion by 1.9%.
The quarter benefited from record net sales, broad-based regional growth and a strong operating performance. Comparable sales were flat on a constant-currency basis, while both Abercrombie and Hollister brands posted record second-quarter sales.
As a result, ANF’s shares have gained 35.7% during trading hours yesterday. This Zacks Rank #2 (Buy) company stock has surged 51.8% in the past six months against the industry’s 14.4% decline.
Image Source: Zacks Investment Research
ANF's Record Sales Drive Growth
Abercrombie reported net sales of $1.27 billion in the second quarter of fiscal 2026, up 5% year over year. The company marked its 15th consecutive quarter of growth, supported by higher sales across regions and brands.
The Americas remained the largest contributor, with sales increasing 5% year over year to $1.02 billion and comparable sales rising 1%. APAC sales climbed 19% to $44.2 million, with comparable sales up 13%, while EMEA sales grew 2% to $202 million despite comparable sales declining 4%.
Abercrombie Brands Lead Portfolio Gains
Abercrombie brand generated net sales of $596.8 million, up 8% year over year, with comparable sales increasing 4%. Hollister sales reached $669.9 million, up 2%, although comparable sales declined 3%. We had expected sales to rise 2.1% year over year to $563.7 million for Abercrombie and 4% to $683.1 million for Hollister.
The brand performance highlighted continued strength in the company’s core lifestyle offerings. Management noted that both brands achieved record second-quarter net sales, with Abercrombie brands leading overall growth.
Abercrombie & Fitch Company Price, Consensus and EPS Surprise
ANF posted adjusted operating income of $252.7 million, up 50.3% from the year-ago quarter. Adjusted operating margin improved to 19.9% from 13.9%. The company benefited from approximately $100 million of IEEPA tariff refunds, which reduced cost of sales and supported profitability.
Selling expense increased to $444 million, up 18.3% from the year-ago quarter, while general and administrative expense rose to $204.8 million, up 16.8% from the year-ago quarter. Higher investments in stores, marketing and payroll partially offset the benefit from stronger sales and tariff refunds.
ANF Maintains Strong Financial Flexibility
ANF ended the quarter with cash and equivalents of $627.7 million and total liquidity of approximately $1.1 billion, including available borrowing capacity under its ABL facility. Inventory stood at $591.7 million compared with $593 million in the prior-year period.
The company continued returning capital to shareholders, repurchasing 2 million shares for approximately $177 million during the quarter. Year to date, ANF repurchased 3.2 million shares for $282 million, reducing shares outstanding by 7% from the beginning of the year.
Abercrombie Raises Fiscal 2026 Outlook
Abercrombie raised its fiscal 2026 outlook, now expecting net sales growth of around 5% compared with the prior forecast of 3-5%. The company also increased its operating margin outlook to 14.5-15% from 12-12.5%.
For the fiscal year, ANF expects net income per diluted share of $13.10-$13.60 and share repurchases of at least $500 million. Capital expenditures are projected at around $250 million, while the company continues to plan approximately 30 net store openings, 80 remodels and rightsizes, and 20 closures.
Other Stocks to Consider
We have highlighted three other top-ranked stocks, namely, Target Corporation (TGT - Free Report) , American Eagle Outfitters (AEO - Free Report) and Boot Barn Holdings, Inc. (BOOT - Free Report) .
Target offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS indicates growth of 4.4% and 11.4%, respectively, from the year-ago reported numbers. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company currently carries a Zacks Rank of 2.
The consensus estimate for AEO’s current financial-year sales and EPS indicates growth of 5.7% and 17.3%, respectively, from the year-ago reported numbers. AEO delivered a trailing four-quarter earnings surprise of 48.5%, on average.
Boot Barn is a leading lifestyle retailer in the United States, specializing in western and work-related footwear, apparel, and accessories, which currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS is expected to rise 15.7% and 22.6%, respectively, from the year-ago reported figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.
View the Zacks #1 Rank List
Image: Bigstock
Abercrombie's Shares Rise 36% on Q2 Earnings Beat on Tariff Refunds
Key Takeaways
Abercrombie & Fitch Co. (ANF - Free Report) delivered second-quarter fiscal 2026 results that topped expectations. It reported earnings per share (EPS) of $2.42 and adjusted EPS of $4.17. The Zacks Consensus Estimate is pegged at $1.95. Revenues rose 4.8% year over year to $1.27 billion, beating the consensus estimate of $1.24 billion by 1.9%.
The quarter benefited from record net sales, broad-based regional growth and a strong operating performance. Comparable sales were flat on a constant-currency basis, while both Abercrombie and Hollister brands posted record second-quarter sales.
As a result, ANF’s shares have gained 35.7% during trading hours yesterday. This Zacks Rank #2 (Buy) company stock has surged 51.8% in the past six months against the industry’s 14.4% decline.
Image Source: Zacks Investment Research
ANF's Record Sales Drive Growth
Abercrombie reported net sales of $1.27 billion in the second quarter of fiscal 2026, up 5% year over year. The company marked its 15th consecutive quarter of growth, supported by higher sales across regions and brands.
The Americas remained the largest contributor, with sales increasing 5% year over year to $1.02 billion and comparable sales rising 1%. APAC sales climbed 19% to $44.2 million, with comparable sales up 13%, while EMEA sales grew 2% to $202 million despite comparable sales declining 4%.
Abercrombie Brands Lead Portfolio Gains
Abercrombie brand generated net sales of $596.8 million, up 8% year over year, with comparable sales increasing 4%. Hollister sales reached $669.9 million, up 2%, although comparable sales declined 3%. We had expected sales to rise 2.1% year over year to $563.7 million for Abercrombie and 4% to $683.1 million for Hollister.
The brand performance highlighted continued strength in the company’s core lifestyle offerings. Management noted that both brands achieved record second-quarter net sales, with Abercrombie brands leading overall growth.
Abercrombie & Fitch Company Price, Consensus and EPS Surprise
Abercrombie & Fitch Company price-consensus-eps-surprise-chart | Abercrombie & Fitch Company Quote
ANF Expands Margins With Refund Benefit
ANF posted adjusted operating income of $252.7 million, up 50.3% from the year-ago quarter. Adjusted operating margin improved to 19.9% from 13.9%. The company benefited from approximately $100 million of IEEPA tariff refunds, which reduced cost of sales and supported profitability.
Selling expense increased to $444 million, up 18.3% from the year-ago quarter, while general and administrative expense rose to $204.8 million, up 16.8% from the year-ago quarter. Higher investments in stores, marketing and payroll partially offset the benefit from stronger sales and tariff refunds.
ANF Maintains Strong Financial Flexibility
ANF ended the quarter with cash and equivalents of $627.7 million and total liquidity of approximately $1.1 billion, including available borrowing capacity under its ABL facility. Inventory stood at $591.7 million compared with $593 million in the prior-year period.
The company continued returning capital to shareholders, repurchasing 2 million shares for approximately $177 million during the quarter. Year to date, ANF repurchased 3.2 million shares for $282 million, reducing shares outstanding by 7% from the beginning of the year.
Abercrombie Raises Fiscal 2026 Outlook
Abercrombie raised its fiscal 2026 outlook, now expecting net sales growth of around 5% compared with the prior forecast of 3-5%. The company also increased its operating margin outlook to 14.5-15% from 12-12.5%.
For the fiscal year, ANF expects net income per diluted share of $13.10-$13.60 and share repurchases of at least $500 million. Capital expenditures are projected at around $250 million, while the company continues to plan approximately 30 net store openings, 80 remodels and rightsizes, and 20 closures.
Other Stocks to Consider
We have highlighted three other top-ranked stocks, namely, Target Corporation (TGT - Free Report) , American Eagle Outfitters (AEO - Free Report) and Boot Barn Holdings, Inc. (BOOT - Free Report) .
Target offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS indicates growth of 4.4% and 11.4%, respectively, from the year-ago reported numbers. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. The company currently carries a Zacks Rank of 2.
The consensus estimate for AEO’s current financial-year sales and EPS indicates growth of 5.7% and 17.3%, respectively, from the year-ago reported numbers. AEO delivered a trailing four-quarter earnings surprise of 48.5%, on average.
Boot Barn is a leading lifestyle retailer in the United States, specializing in western and work-related footwear, apparel, and accessories, which currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS is expected to rise 15.7% and 22.6%, respectively, from the year-ago reported figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.