Abercrombie & Fitch raised its full-year sales and profit forecasts on Wednesday, citing sustained demand for its apparel brands. Following the announcement, shares of the New Albany, Ohio-based retailer rose more than 22% during early trading.
The company entered the back-to-school shopping season with reported momentum at its teen-focused Hollister brand. Chief Executive Fran Horowitz stated during a post-earnings conference call that this momentum continued as the company concluded its second quarter. Abercrombie & Fitch now projects full-year net sales to grow by 5%, an increase from its previous forecast of 3% to 5%.
For the second quarter, the retailer reported earnings of $4.17 per share, exceeding the $1.99 per share estimated by analysts. Quarterly revenue reached $1.27 billion, slightly higher than the $1.25 billion anticipated by analysts according to LSEG data. The company also adjusted its annual earnings per share forecast to a range of $13.10 to $13.60, up from the prior range of $10.20 to $11.00. This revision followed the receipt of tariff refunds under the International Emergency Economic Powers Act.
Regional performance showed that same-store sales in the Americas, the company's largest market, rose 1% during the quarter. In contrast, same-store sales in the Europe, Middle East, and Africa (EMEA) region fell 4%. Neil Saunders, managing director at GlobalData, attributed the company's overall growth primarily to the namesake Abercrombie brand, noting spending from core customers and a strong product assortment.
For the typical household, these corporate trends reflect broader shifts in fashion-conscious consumer spending among young shoppers. The company’s ability to beat earnings estimates by $2.18 per share indicates a significant gap between market expectations and actual retail activity. A person shopping at these stores may notice changes in product assortments as the company leans into brands like Hollister and Abercrombie to maintain its sales growth targets.
The receipt of tariff refunds under the International Emergency Economic Powers Act (IEEPA) provided a specific financial boost to the company's bottom line this year. This highlights how federal trade policies and legal actions regarding tariffs can directly influence the profitability of large retail corporations. As the company continues through the fiscal year, its performance will be compared against competitors such as American Eagle Outfitters, Gap, Urban Outfitters, and Zara in a market where EMEA sales have recently lagged behind those in the Americas. Following the Wednesday report, investors will monitor whether the company meets its new 5% annual growth target by the end of the fiscal year.