Abercrombie & Fitch (ANF) shares surged 31.6% to $143.40 following its better-than-expected second-quarter fiscal 2026 results and an upward revision of its full-year guidance. The retailer reported net sales of $1.267 billion, a 5% increase year-over-year, surpassing the consensus estimate of $1.248 billion. Adjusted diluted earnings per share (EPS) came in at $2.42, beating the consensus estimate of $1.99 by 21.61% and representing a 4.31% increase over the $2.32 per share earned in the prior year.
The company achieved its 15th consecutive quarter of sales growth, with both flagship brands reaching record second-quarter sales. The Abercrombie brand led with 8% growth and a 4% comparable sales increase, driven by improvements in conversion and average unit revenue from full-price selling. Hollister posted 2% growth, accelerating from a flat first quarter, supported by strong performance in knits, shorts, and non-denim bottoms. Regionally, Americas net sales rose 5%, APAC surged 19%, and EMEA grew 2%.
Abercrombie & Fitch received approximately $100 million in IEEPA tariff refunds, which contributed an estimated $1.75 per share on a pre-tax basis. Excluding this one-time benefit, the adjusted non-GAAP EPS of $2.42 still demonstrated underlying operational strength, exceeding the prior year's $2.32. CEO Fran Horowitz noted that the operating margin and earnings surpassed the company's outlook even without the tariff-refund benefit.
Looking ahead, the company raised its full-year outlook, now anticipating net sales of approximately $5.529 billion (a 5% growth from $5.27 billion in FY25) and diluted EPS of $13.10 to $13.60, a significant increase from its previous guidance of $10.20 to $11.00. This revised full-year outlook includes approximately $120 million in total IEEPA tariff refunds, contributing an estimated $2.10 to full-year diluted EPS. For the third quarter, Abercrombie & Fitch forecasts net sales between $1.355 billion and $1.367 billion, with diluted EPS ranging from $2.90 to $3.20.
Analysts reacted to the news with varied adjustments. While some maintained their positive ratings and raised price targets (e.g., UBS analyst Mauricio Serna maintained a Buy rating with a $153 target), Raymond James analyst Rick Patel downgraded the stock from Outperform to Market Perform.
