Abercrombie & Fitch raises full-year outlook as Q2 earnings top estimates
Abercrombie & Fitch (NYSE:ANF) shares rose about 13% on Wednesday after the apparel retailer reported second quarter fiscal 2026 results that exceeded Wall Street expectations and raised its full-year outlook.
The company reported adjusted earnings per diluted share of $4.17, compared with analyst estimates of roughly $1.99.
The quarter included an approximately $100 million pre-tax refund of IEEPA tariffs, which contributed about $1.75 per diluted share to earnings.
Net sales increased 5% year over year to $1.3 billion, topping expectations of about $1.25 billion. The company reported flat comparable sales and described the quarter as its 15th consecutive quarter of sales growth.
Sales increased across the company’s regions, with the Americas up 5%, APAC up 19% and EMEA up 2%. By brand, Abercrombie sales increased 8%, while Hollister sales rose 2%, with both brands reaching record second-quarter sales.
Operating income was $253 million, compared with $207 million a year earlier. Operating margin was 19.9%, up from 17.1% on a reported basis and 13.9% on an adjusted basis in the prior-year quarter. The company noted that the tariff refund was reflected as a reduction of cost of sales.
Abercrombie also continued its share repurchase program, buying back $177 million of stock during the quarter. Year to date, the company has repurchased $282 million of shares, equivalent to 7% of shares outstanding at the beginning of the year.
“We delivered record second quarter net sales and our 15th consecutive quarter of growth, reflecting our teams’ continued focus on serving customers with compelling product, marketing and experiences,” Abercrombie CEO Fran Horowitz wrote in the earnings release.
“Growth was balanced across our brands and regions, highlighted by accelerating momentum in the Americas and improving trends in EMEA.”
Horowitz also noted that the company was updating its full-year sales and operating margin outlook while pursuing additional growth opportunities through partnerships, distribution channels and product categories.
For fiscal 2026, Abercrombie now expects net sales growth of around 5%, compared with its previous forecast for growth of 3% to 5%. The company raised its expected operating margin to a range of 14.5% to 15%, from 12% to 12.5%, and now expects net income per diluted share of $13.10 to $13.60, compared with its previous range of $10.20 to $11.
The updated outlook includes an estimated 220-basis-point benefit from the IEEPA tariff refund. Abercrombie also increased its share repurchase target to at least $500 million from around $450 million previously.
For the third quarter, the company expects net sales growth of 5% to 6% and net income per diluted share of $2.90 to $3.20. It also expects to repurchase at least $100 million of shares during the quarter.