Abercrombie & Fitch sales growth slowed again in its fiscal second quarter as the apparel company struggles to top the surge it enjoyed last fiscal year.
During the quarter, sales at the namesake Abercrombie brand fell 5% while comparable sales dropped 11%.
But the success of teen-focused Hollister brand helped to salvage the quarter. Overall, Abercrombie & Fitch sales climbed 7%, led by 19% growth at Hollister – the brand’s best-ever second-quarter net sales growth, the company said. Comparable sales across the business rose 3%, led by Hollister, which also saw comparable sales grow 19%.
Abercrombie narrowly beat Wall Street expectations on the top and bottom lines. The company also hiked its full-year revenue outlook and now expects sales to climb 5% to 7%, compared with previous guidance of 3% to 6% growth. Much of that range would top Wall Street expectations of 5.2% growth, according to LSEG.
Shares fell nearly 4% in premarket trading.
Here’s how the company did in its second fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
Earnings per share: $2.32 adjusted vs. $2.30 expectedRevenue: $1.21 billion vs. $1.20 billion expected
The company’s reported net income for the three-month period that ended August 2 was $141 million, or $2.91 per share, compared with $133 million, or $2.50 a share, a year earlier. Excluding the impact of a favorable litigation settlement, Abercrombie saw earnings of $2.32 per share.
Sales rose to $1.21 billion, up about 7% from $1.13 billion a year earlier.
“We entered the second half of 2025 on offense,” CEO Fran Horowitz said in a news release. “We are increasing our full year net sales outlook, reflecting our strong positioning and growth trajectory, building on record 2024 results. Our team remains focused on delivering for our customers while investing to capitalize on the significant, long-term opportunities for our global brands.”
For its current quarter, Abercrombie’s also gave a better-than-expected sales outlook. It anticipates revenue will rise between 5% and 7%, beating expectations of 4.3% growth, according to LSEG.
Meanwhile, its profit outlook for the fiscal third quarter is weaker than expected. The company anticipates earnings per share will be between $2.05 and $2.25, far below expectations of $2.53, according to LSEG.
Abercrombie said it expects its operating margin, a closely watched metric on Wall Street, to be between 11% and 12% during its current quarter, also lower than Wall Street expectations of 13.3%, according to StreetAccount.
For the full year, Abercrombie tightened its earnings outlook and now expects earnings per share to be between $10.00 and $10.50. That compares with a previous range of $9.50 to $10.50 per share.
Abercrombie’s guidance incorporates about $90 million in net tariff costs – nearly double what it previously anticipated. When it announced fiscal first quarter earnings in May, Abercrombie said it was expecting a $70 million hit from tariffs that it could reduce to $50 million through mitigation.
At the time, President Donald Trump’s so-called reciprocal tariffs were held at 10% across most of the globe. But now Abercrombie faces higher duties on goods from Vietnam, Cambodia and India, key manufacturing regions for the company.
At the time, the company said it wasn’t planning broad price increases as part of its mitigation efforts. It’s unclear if Abercrombie will change that stance now that tariffs have increased across Asia.
Abercrombie & Fitch, once a forgotten mall brand, has been on a rocket ship of growth over the last few years. But the surge has started to slow at its namesake banner.
The company has turned to new categories, such as dresses, athleisure and bridal, to stimulate growth. It’s also working to expand internationally and lean on partnerships.
On Monday, the company announced it would be the NFL’s first “official fashion partner” – a multiyear deal that will include personal styling for athletes, athlete-led campaigns and player-designed apparel. The partnership comes after Abercrombie launched an assortment of NFL licensed products in 2022, a category that has performed well for the company.
It has teamed up with star players like Christian McCaffrey, Tee Higgins and CeeDee Lamb to advertise the partnership and designed limited-edition co-designed apparel that will be available for sale during the upcoming season.
The partnership reflects the steps retailers are taking to ensure they can continue to grow sales and stay relevant with consumers at a time when shoppers are pulling back on nice-to-have items like new clothes and accessories. Competitors like Levi, American Eagle and Gap have teamed up with celebrities in recent marketing campaigns ahead of the back to school and fall shopping seasons.
Still, the slowdown raises questions about how the brand will grow in the quarters ahead, especially as competition continues to heat up, said Neil Saunders, managing director of GlobalData, in a note.
“Better numbers… will probably come through as the prior year comparatives start to ease, but they also need to be engineered by the company. We believe there are some good initiatives in play here, including the overseas expansion of the brand,” said Saunders. “Our recent channel checks at new stores in London were all positive, although we believe the stores can reach a higher potential once the consumer economy in the UK strengthens.”‘
Internationally, Abercrombie’s efforts to expand are paying off in some parts of the world. During the quarter, sales in its Asia Pacific region grew 12%, while comparable sales climbed 3%. That was offset by a slowdown in Europe, the Middle East and Africa, where sales slid 1% and comparable sales were down 5%.
Abercrombie has also started to expand into wholesale for its Abercrombie Kids brand. The company has a very small share of the overall market, which was worth $82.1 billion last year, Saunders said.
“This leaves considerable headroom for growth,” said Saunders. “Expanding through wholesale is a sensible strategy: it provides relatively fast access to new customers and requires far less capital than opening additional stores – of which Abercrombie Kids still has relatively few.”
