Abercrombie & Fitch Stock Surges 37% as Q2 Earnings Beat Forecasts and 2026 Outlook is Raised

Shares of Abercrombie & Fitch Co. surged on Wednesday morning after the company reported second-quarter sales and earnings that exceeded Wall Street expectations, while simultaneously raising its outlook for the third quarter and the full year 2026.

This strong performance drove a 37 percent increase in the stock price, reaching $149.26, and marked the retailer’s 15th consecutive quarter of growth.

For the three months ended Aug. 1, the Abercrombie brand led the results with an 8 percent sales increase and a 4 percent comparable sales increase, while the Hollister brand saw sales rise 2 percent, though comparable sales were down 3 percent.

Second-quarter sales grew across all regions, with the Americas up 5 percent, Asia-Pacific up 19 percent, and Europe, Middle East and Africa up 2 percent. Overall, second-quarter sales increased 5 percent to $1.3 billion, up from $1.2 billion in the year-ago quarter.

Operating income rose to $252.7 million, up from $206.7 million in the year-ago period. Net income increased to $185.5 million, or $4.17 per diluted share, compared to $143.4 million, or $2.91 per diluted share, in the prior-year period.

“We’ve been on this journey for a long time and we’re super proud to continue this momentum,” Fran Horowitz, chief executive officer of Abercrombie & Fitch Co., told WWD. “It’s due to the work we have done with our team rebuilding this company and the foundation and operating model that we’ve created.”

Horowitz stressed that the results exceeded internal expectations and that the beat was achieved even without the impact of tariff refunds. A&F received about $100 million in tariff refunds, adding an estimated $1.75 per diluted share. An additional $20 million is expected in tariff refunds.

“We were off to a strong start to the season in August and the momentum has continued into the third quarter,” Horowitz said. “The customer is really voting for us. Product acceptance when it’s aligned with the right voice and experience is a winning formula for us.”

Going forward, “We’re starting to expand our channels. That’s really the next chapter for us. We got a little bit of a tease about that out there this quarter with our Target partnership and we just announced expanding our partnership with the NFL,” she said. Last June, a collection of Hollister bedding, decor, sleepwear and loungewear was launched at Target.

“What I see from the customer is they’re continuing to spend. When you offer them the right product, the right voice and experience, and a value equation of fashion at the right price, they are responding. They are loving the product, even the core basics.”

Asked why Hollister comps were down, Horowitz answered, “Truly our demand exceeded our inventory. We were chasing inventory literally all quarter. Now that we’re finally caught up, we have seen that business accelerate.”

Knits and wovens performed best at Abercrombie, while knits and shorts did best at Hollister, Horowitz said, though she added, “We like a balanced assortment here. Having one particular category dominate the business is not a healthy way to run it.”

Regarding how the company is utilizing the tariff refunds, Horowitz said, “The tariffs go into our capital allocation. The number-one most important thing we do is invest in the business, and then return money to our shareholders.”

The company raised its full-year outlook to net sales growth of around 5 percent, and net income per diluted share of $13.10 to $13.60. Previously, A&F projected for the year a 3 to 5 percent sales gain and net income of $10.20 to $11.

The company projects third-quarter net sales growth of 5 percent to 6 percent, and net income per diluted share of $2.90 to $3.20.

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