Abercrombie & Fitch posts strong quarter fueled by Hollister; raises outlook
Abercrombie & Fitch Co. reported a better-than-expected second quarter as another strong performance by its Hollister brand helped compensate for declining sales at its namesake division.
The apparel retailer also raised its full-year guidance even as it revealed on its earnings call that it expects about $90 million in net tariff costs, which is nearly double what it previously anticipated. The company also said it was not planning broad-based price increases this year.
Abercrombie released its results two days after the company announced it would be the NFL’s first “official fashion partner." The multi-year deal includes personal styling for athletes, athlete-led campaigns and player-designed apparel. In addition, Abercrombie will activate across NFL tentpole events, including select NFL international games and within its retail locations worldwide.
Second Quarter
Net income totaled $141 million, or $2.91 per share, for the quarter ended Aug. 2, up from $133 million, or $2.50 a share, in the year-ago period. Excluding the impact of a favorable litigation settlement, earnings were $2.32 per share. Analysts had expected earnings of $2.30 per share.
Operating income rose to $207 from $176 million last year. Sales rose 7% to $1.21 billion, up from $1.13 billion a year earlier and topping estimates of $1.20 billion. Comparable sales rose 3%.
Hollister delivered its best-ever second quarter, with net sales growth of 19%. Abercrombie brand sales were down 5%. Comparable sales rose 19% at Hollister and were down 11% at Abercrombie.
“We delivered record second quarter net sales, exceeding our expectations, with 7% growth to last year,” said CEO Fran Horowitz. "We continued to drive meaningful engagement with our teen customer in Hollister brands, growing 19% on strong summer and back-to-school demand. On the bottom line, we exceeded our second quarter profitability expectations, while also returning $50 million to shareholders through our sixth consecutive quarter of share repurchases.”
Horowitz said the the company entered the second half of 2025 on the “offense,” and was increasing its full year net sales outlook, reflecting “our strong positioning and growth trajectory, building on record 2024 results.”
The company now expects sales to rise 5% to 7%, compared with its previous guidance of 3% to 6% growth. It now expects earnings per share to be between $10.00 and $10.50, compared with its previous estimate of $9.50 to $10.50 per share.
