Abercrombie & Fitch raises full-year outlook as Q2 earnings top estimates

Abercrombie & Fitch (NYSE:ANF) reported strong second quarter fiscal 2026 results, exceeding Wall Street estimates and raising its full-year outlook. The company posted adjusted earnings per diluted share of $4.17, outpacing the estimated $1.99. Quarter-to-date net sales grew by 5% year over year to $1.3 billion, surpassing expectations of $1.25 billion.

Operating income increased to $253 million, up from $207 million in the same period last year, with an operating margin of 19.9%, an improvement from 17.1% and 13.9% in the prior quarter. The quarter's success was driven by net sales growth across regions, including a 5% increase in the Americas, 19% in APAC, and 2% in EMEA. Abercrombie's record second-quarter sales were bolstered by the company's Hollister brand, which saw 2% growth, reaching record figures.

The company's CEO, Fran Horowitz, attributed the success to the ongoing focus on delivering compelling products, marketing, and experiences to customers. Horowitz also noted the company's updated full-year sales and operating margin outlook, with growth expectations raised to around 5% and operating margins forecasted to range between 14.5% and 15%.

The IEEPA tariff refund contributed approximately $1.75 per diluted share to the earnings, reducing the cost of sales. Additional growth initiatives include partnerships, distribution channels, and product categories. For the fiscal year, Abercrombie expects net sales growth of 5%, an operating margin increase to 14.5% to 15%, and net income per diluted share between $13.10 and $13.60.

The company has also increased its share repurchase target to at least $500 million. For the upcoming third quarter, Abercrombie anticipates 5% to 6% net sales growth, net income per diluted share between $2.90 and $3.20, and further share repurchases of at least $100 million.