Abercrombie & Fitch posts $1.27B Q2 sales, raises full-year EPS

Abercrombie & Fitch reported record Q2 net sales of $1.27 billion, up 5% from a year earlier, extending its growth streak to 15 consecutive quarters.

"Sales growth was above the expectation we set in May and was balanced across regions and brands," Chief Executive Officer Fran Horowitz said.

Operating income totaled $252.7 million, an operating margin of 19.9%, helped by about $100 million in IEEPA tariff refunds recorded as a reduction of cost of sales. Diluted EPS of $4.17 compared with $2.91 a year earlier and topped the company's guidance of $1.80 to $2.00. Americas sales rose 5% to $1.02 billion, APAC climbed 19% to $44.2 million and EMEA gained 2% to $202 million. Abercrombie brand sales increased 8% to $596.8 million, while Hollister rose 2% to $669.9 million.

Metric	Actual	Guidance	Beat
Net sales	$1.27B	~$1.21B implied	+5%
Diluted EPS	$4.17	$1.80-$2.00	+$2.17+

The company raised its full-year outlook, now expecting sales growth of about 5% and diluted EPS of $13.10 to $13.60, including an estimated $2.10 benefit from IEEPA tariff refunds. It repurchased $282 million of shares in the first half, about 7% of shares outstanding, and now targets at least $500 million in buybacks for fiscal 2026.

Comparable sales were flat for the quarter, while average unit retail rose by the mid-single digits. Chief Financial Officer Robert Ball said the tariff refunds contributed roughly 790 basis points to operating margin and about $1.75 per diluted share, with the remaining outperformance reflecting stronger gross margin and operating leverage on sales that surpassed expectations.

Hollister's collaboration with Target, spanning more than 1,500 locations, contributed to growth and marked the brand's first meaningful U.S. wholesale expansion. The company also plans to broaden NFL merchandise distribution this fall through nflshop.com, stadium stores and Fanatics.com, entering its second year as the league's official fashion partner.

Third-quarter sales are expected to rise 5% to 6%, with EPS of $2.90 to $3.20. The company ended the quarter with $628 million in cash and about $1.1 billion in liquidity.

The guidance raise signals management expects momentum to hold into the back-to-school season, with Hollister growth accelerating in August. Investors will watch third-quarter results for whether tariff refunds and the Target partnership sustain the pace.

This article is for informational purposes only and does not constitute investment advice.