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ABERCROMBIE & FITCH CO /DE/ (ANF)·Q2 2026 Earnings Summary

Executive Summary

  • Record Q2 2026 net sales of $1.21B, up 7% YoY; adjusted operating margin of 13.9% and adjusted EPS of $2.32; GAAP operating margin of 17.1% and GAAP EPS of $2.91, both boosted by a $39M litigation settlement benefit .
  • Hollister delivered best-ever Q2 with net sales up 19% and comps +19%; Abercrombie brands declined 5% with comps -11% due to lower AUR from clearing carryover inventory; Americas +8%, APAC +12%, EMEA -1% .
  • Against S&P Global consensus, Q2 revenue modestly beat and adjusted EPS was in-line; EBITDA beat consensus; prior two quarters showed beats/in-line, evidencing estimate discipline and execution consistency [GetEstimates]* .
  • Guidance raised: FY2025 net sales growth now 5–7%, operating margin 13.0–13.5%, EPS $10.00–$10.50; Q3 outlook: net sales +5–7%, operating margin 11–12% with ~100bps higher marketing and ~$25M tariff impact; capex increased to ~$225M .

What Went Well and What Went Wrong

What Went Well

  • Hollister momentum: “Hollister Brands delivered record first half sales growing net sales 19% in the second quarter… with good balance across categories” .
  • Sales and margin outperformance vs company outlook: adjusted operating margin of 13.9% exceeded the 12–13% range; adjusted EPS of $2.32 exceeded $2.10–$2.30 guidance .
  • Strategic brand activations and partnerships driving traffic (Lollapalooza, Collegiate Collection, NFL partnership): “We were excited to announce Abercrombie & Fitch as an official NFL fashion partner” .

What Went Wrong

  • Abercrombie brand softness: net sales -5% YoY, comps -11% driven by lower AUR while clearing carryover inventory; A&F fell short of internal plan on AUR .
  • EMEA headwinds: regional net sales -1% YoY with softness in Germany and broader Europe offsetting UK strength .
  • Tariff impacts: ~$5M adverse Q2 gross margin impact; FY tariff net cost raised to ~$90M (170bps of net sales), pressuring margins into H2 .

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Revenue ($USD Millions)$1,584.9 $1,097.3 $1,208.6
Operating Income ($USD Millions)$256.1 $101.5 $206.7 (GAAP) / $168.1 (Adj)
Operating Margin (%)16.2% 9.3% 17.1% (GAAP) / 13.9% (Adj)
Diluted EPS ($)$3.57 $1.59 $2.91 (GAAP) / $2.32 (Adj)
Estimates vs ActualsQ4 2025Q1 2026Q2 2026
Revenue Consensus ($USD Millions)$1,568.1*$1,059.7*$1,199.2*
Revenue Actual ($USD Millions)$1,584.9 $1,097.3 $1,208.6
EPS Consensus ($)$3.555*$1.359*$2.315*
EPS Actual – Adjusted ($)$3.57 $1.59 $2.32
EBITDA Consensus ($USD Millions)n/an/a$197.9*
EBITDA Actual – Adjusted ($USD Millions)n/an/a$205.5

Values retrieved from S&P Global.*

Segment Net Sales ($USD Thousands)Q2 2026
Americas$974,200; comps +5%
EMEA$197,210; comps -5%
APAC$37,150; comps +1%
Total Company$1,208,560; comps +3%
Brand Net Sales ($USD Thousands)Q2 2026
Abercrombie Brands$551,868; -5% YoY; comps -11%
Hollister Brands$656,692; +19% YoY; comps +19%
Total Company$1,208,560; +7% YoY; comps +3%
KPIsQ2 2026
Comparable Sales (Total)+3%
Inventory ($USD Thousands)$592,966; units +7% YoY; ~1pt tariff cost impact
Cash & Equivalents ($USD Thousands)$572,730
Liquidity ($USD Billions)~$1.0
Diluted Weighted-Average Shares (Millions)48.551
Share Repurchases~$50M in Q2; YTD $250M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales GrowthFY20253%–6% 5%–7% Raised
Operating Margin (GAAP)FY202512.5%–13.5% 13.0%–13.5% Raised (midpoint)
Effective Tax RateFY2025~27% ~30% Raised
EPS (Diluted)FY2025$9.50–$10.50 $10.00–$10.50 Raised floor
Share RepurchasesFY2025$400M ~$400M Maintained
Diluted Wtd Avg SharesFY2025~49M ~49M Maintained
Capital ExpendituresFY2025~$200M ~$225M Raised
Real Estate ActivityFY202560 openings / 20 closures; 40 remodels 60 openings / 20 closures; 40 remodels Maintained
Q3 Net Sales GrowthQ3 2025n/a+5%–7% vs $1.2B base New detail
Q3 Operating MarginQ3 2025n/a11%–12% New detail
Q3 Tax RateQ3 2025n/a~31% New detail
Q3 EPS (Diluted)Q3 2025n/a$2.05–$2.25 New detail
Tariffs (Cost Impact)FY2025~$50M ~$90M (~170bps) Raised

Earnings Call Themes & Trends

TopicQ4 2025 (Prev)Q1 2026 (Prev)Q2 2026 (Current)Trend
Tariffs/MacroFY2025 margin outlook included tariff risk; initial FY guide 14%–15% margin FY guide cut to 12.5%–13.5% on ~$50M tariff assumption Tariff impact raised to ~$90M; ~$5M in Q2, ~$25M in Q3, ~$60M in Q4; margin headwind quantified Increasing headwind; mitigation to FY2026
Brand PerformanceA&F +2% YoY; Hollister +16% in Q4 A&F -4%; Hollister +22% A&F -5% (comps -11%), Hollister +19% (comps +19%) Hollister strength persists; A&F normalizing after 2024 surge
Regional TrendsAmericas +11%, APAC -4%, EMEA +2% (Q4) Americas +7%, EMEA +12%, APAC +5% Americas +8%, APAC +12%, EMEA -1% (Germany soft; UK strong) Americas/APAC resilient; EMEA mixed
Supply Chain/InventoryClean inventory not a focus in Q4 releaseInventories +20% YoY; managing inflow “Clean current position”; units +7%; freight normalized; selective early clears vs tariffs Improved quality and flexibility
Marketing/Partnershipsn/an/aIncreased Q3 marketing by >100bps; NFL partnership; Lollapalooza, denim events Stepping up brand investment
Store ExpansionFY plan ~40 net openings FY plan reiterated ~60 openings and ~40 net new experiences; net store openers; A&F tilted Accelerating omnichannel footprint
Digital/OmnichannelEmphasis in investor materials n/aTraffic growth across direct channels; omnichannel balance Healthy direct engagement

Management Commentary

  • “We delivered record second quarter net sales, exceeding our expectations… We entered the second half of 2025 on offense.” — Fran Horowitz, CEO .
  • “On tariffs… net of planned actions, the assumed tariffs carry a cost impact of around $90 million for 2025… impacting our full year operating margin outlook by 170 basis points.” — Robert Ball, CFO .
  • “Hollister Brands delivered record… net sales 19%… The Collegiate Collection is off to a good start… exciting time.” — Fran Horowitz .
  • “For Abercrombie… the miss in Q2… was really the AUR… carryover inventory drove the AUR down.” — Fran Horowitz .
  • “We expect net sales up 5%–7% in Q3… operating margin 11%–12%… increasing marketing investments by over 100 basis points.” — Robert Ball .

Q&A Highlights

  • A&F brand trajectory: Management emphasized AUR pressure from inventory clearance as key driver of Q2 softness; confident in return to growth by year-end with Boho/Western and denim trends .
  • Tariff timing and mitigation: Detailed phasing ($5M in Q2, $25M in Q3, $60M in Q4) with diversified sourcing (16 countries), vendor negotiations, OpEx efficiencies, and targeted pricing actions; broad ticket increases not planned in H2 .
  • Marketing spend: Over 100bps YoY increase in Q3 to support NFL partnership and fall campaigns with balanced mix across social and events (e.g., Lollapalooza) .
  • Inventory quality: “Clean and current” with units aligned to outlook; freight normalized, helping gross margin vs prior dislocations .
  • Stores strategy: ~60 openings in FY, ~20 closures; more A&F stores to enhance omnichannel acquisition and experience; net store openers .

Estimates Context

  • Q2 2026: Revenue beat ($1,208.6M actual vs $1,199.2M consensus), adjusted EPS in-line ($2.32 vs $2.315), EBITDA beat ($205.5M vs $197.9M). Mix-driven: Hollister growth and operating expense leverage offset tariff and EMEA headwinds; GAAP EPS benefited from settlement [GetEstimates]* .
  • Q1 2026: Beat on revenue ($1,097.3M vs $1,059.7M) and EPS ($1.59 vs $1.359), aided by Hollister strength and broad regional growth [GetEstimates]* .
  • Q4 2025: In-line with revenue ($1,584.9M vs $1,568.1M) and EPS ($3.57 vs $3.555), consistent execution against high base [GetEstimates]* .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Hollister continues to be the growth engine with durable demand and brand activations; expect continued outperformance vs A&F into Q3 even as A&F normalizes and positions for year-end growth .
  • Near-term margin pressure from tariffs and stepped-up marketing (Q3 OM 11–12%) is well-telegraphed; the company’s mitigation playbook historically delivers over multi-quarters—watch FY2026 margin recovery narrative .
  • Balance sheet strength (cash $573M, ~$1.0B liquidity) and ~$400M buyback target provide downside support; share count reduction enhances EPS trajectory .
  • Raised FY outlook (sales +5–7%, EPS $10.00–$10.50) despite tariff headwinds indicates confidence in demand, store expansion, and direct channel traffic; monitor Q3 marketing ROI and holiday chase capability .
  • Regional divergence: EMEA softness (Germany) vs UK strength; Americas and APAC resilient—track EMEA strategy export of UK playbook for signs of stabilization .
  • Trading implications: Expect near-term volatility around margin headwinds and marketing spend; any upside to Q3 comps or EMEA stabilization could catalyze multiple support; downbeat tariff headlines already embedded .
  • Medium-term thesis: Omnichannel expansion, licensing (Kids globally), partnerships (NFL), and disciplined inventory/AUR management underpin durable growth and cash generation into FY2026 .