Abercrombie & Fitch (ANF) stunned Wall Street this week with a first-quarter performance.
The earnings report blew past expectations, sending its stock soaring over 25% in early trading Wednesday—its biggest single-day jump since 2023. The young adult apparel retailer reported adjusted earnings of $1.59 per share, easily outpacing analysts' forecast of $1.36. Revenue rose 8% year over year to $1.1 billion, exceeding the expected $1.06 billion.
Leading the charge was the company’s once-floundering Hollister brand, which posted a stunning 23% increase in comparable store sales. That more than offset a 10% decline in the namesake Abercrombie brand, which struggled against tough comparisons after a blockbuster 2024. This marks Hollister’s eighth consecutive quarter of comp gains, fueled by renewed appeal among Gen Z and Gen Alpha teens drawn to its retro aesthetic.
Sales grew across all major geographies, including a 12% jump in Europe, the Middle East, and Africa, and a 7% increase in the Americas. CEO Fran Horowitz credited “broad-based growth across our three regions” and described Hollister’s performance as its “best ever” for a first quarter.
Tariff Pressures Weigh on Outlook
Despite the blowout quarter, Abercrombie trimmed its full-year profit forecast, reflecting the impact of trade tariffs and shifting consumer dynamics. The company now anticipates full-year earnings per share to land between $9.50 and $10.50, down from its earlier estimate of $10.40 to $11.40. Operating margin projections were also reduced to a range of 12.5% to 13.5%.
Management said it expects to absorb about $50 million in tariff-related costs this year, driven primarily by a 30% duty on goods imported from China and a 10% tariff on imports from other countries. However, CFO Robert Ball noted that the company has been actively diversifying its supply chain, sourcing from 16 countries and reducing China exposure to the low single digits.
“We’ve been preparing for this,” Ball said. “We built our 2025 outlook assuming the tariffs stay in place.”
Even with the headwinds, the company raised the top end of its full-year sales outlook, now projecting growth of 3% to 6%—a modest but meaningful upgrade from the previous 3% to 5% range.
Despite the blowout quarter, Abercrombie trimmed its full-year profit forecast, reflecting the impact of trade tariffs and shifting consumer dynamics. The company now anticipates full-year earnings per share to land between $9.50 and $10.50, down from its earlier estimate of $10.40 to $11.40. Operating margin projections were also reduced to a range of 12.5% to 13.5%.
Management said it expects to absorb about $50 million in tariff-related costs this year, driven primarily by a 30% duty on goods imported from China and a 10% tariff on imports from other countries. However, CFO Robert Ball noted that the company has been actively diversifying its supply chain, sourcing from 16 countries and reducing China exposure to the low single digits.
“We’ve been preparing for this,” Ball said. “We built our 2025 outlook assuming the tariffs stay in place.”
Even with the headwinds, the company raised the top end of its full-year sales outlook, now projecting growth of 3% to 6%—a modest but meaningful upgrade from the previous 3% to 5% range.
Market Responds to Signs of Strength
Investors cheered the report, not just for the headline beats, but for what it signaled: resilience. The stock rally stood in stark contrast to a largely muted broader market, with the S&P 500 down slightly on the day.
Amid broader concerns over tariffs and shifting consumer sentiment, Abercrombie's numbers offered a rare note of optimism in retail. While competitors like Macy’s and American Eagle have struggled with guidance uncertainty, Abercrombie’s consistency—even with adjusted forecasts—struck a more confident tone.
Another key point: the company repurchased $200 million worth of stock in the quarter, buying back 5% of its outstanding shares. The aggressive buyback signals management’s confidence that shares remain undervalued, even after the week’s run-up.
In a landscape where fashion trends can change as fast as TikTok scrolls, Abercrombie has managed to stay relevant—and profitable. That’s a storyline investors seem willing to follow, even as the industry braces for ongoing economic and trade volatility.
Investors cheered the report, not just for the headline beats, but for what it signaled: resilience. The stock rally stood in stark contrast to a largely muted broader market, with the S&P 500 down slightly on the day.
Amid broader concerns over tariffs and shifting consumer sentiment, Abercrombie's numbers offered a rare note of optimism in retail. While competitors like Macy’s and American Eagle have struggled with guidance uncertainty, Abercrombie’s consistency—even with adjusted forecasts—struck a more confident tone.
Another key point: the company repurchased $200 million worth of stock in the quarter, buying back 5% of its outstanding shares. The aggressive buyback signals management’s confidence that shares remain undervalued, even after the week’s run-up.
In a landscape where fashion trends can change as fast as TikTok scrolls, Abercrombie has managed to stay relevant—and profitable. That’s a storyline investors seem willing to follow, even as the industry braces for ongoing economic and trade volatility.
Considering a $1,000 investment in these companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and unearth the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or our Trading Room. Take advantage of our special offer today, starting at just $1 in the first month.
Unlock the secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
And if you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading course and technical trading course, where you can learn trading, analyze stocks, delve into chart patterns for stocks, and gain invaluable insights for making the best company investments.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up-to-date with regular market updates. Learn trading, basics of investing, and how to pick the best stocks to buy. Whether you're a beginner or seasoned investor and trader, we've got you covered. Get started for free, today!