NEW YORK, August 26, 2026, 09:31 EDT – Abercrombie’s stock soared 22% in early trading after a $100 million tariff refund boosted the company’s outlook for 2026.
- Abercrombie shares surged 22.09% to $133.00 as the retailer lifted its fiscal-2026 guidance.
- The second quarter’s earnings per share were $4.17, which incorporated a tariff-refund benefit of $1.75 per share.
- The midpoint for full-year EPS guidance increased by 25.9% to $13.35.
Abercrombie & Fitch Co. (NYSE:ANF) shares surged 22.09% to $133.00 in early trading on Wednesday as the company reported record quarterly revenue and raised its annual guidance. The headline earnings figure was boosted by a significant tariff refund, but the stock’s rise points to solid underlying operating performance beyond that one-time benefit.
The retailer posted earnings of $4.17 per diluted share in its fiscal second quarter. Roughly $1.75 of that stemmed from $100 million in IEEPA tariff refunds. Excluding this one-time gain, adjusted earnings stand at approximately $2.42, which is 21.6% higher than the $1.99 FactSet consensus cited by The Wall Street Journal.
Net sales rose by 4.8% to $1.267 billion, topping the LSEG projection of $1.25 billion. Sales for the Abercrombie brand climbed 8%, while Hollister saw a 2% increase Reuters.
The mix showed less consistency. Comparable sales for the company overall were unchanged. Abercrombie reported a 4% rise in comparable sales, while Hollister dropped 3%. Comparable sales in EMEA decreased 4%, compared with 1% growth in the Americas and a 13% increase in APAC.
The operating margin stood at 19.9%. The refund added 790 basis points, which suggests an underlying margin of approximately 12.0%, excluding its effect. This base figure was nearly two percentage points higher than management’s previous guidance of about 10% company results.
| Investor measure | Q2 / current outlook | Prior / benchmark | Read-through |
|---|---|---|---|
| Q2 EPS | $4.17 disclosed; approximately $2.42 excluding refund | $1.99 consensus | Underlying performance exceeds by 21.6% |
| Q2 operating margin | 19.9%; roughly 12.0% excluding refund | Prior expectation about 10% | Underlying result surpasses by around 200 basis points |
| FY2026 EPS | $13.10–$13.60 | $10.20–$11.00 | Midpoint increase of 25.9% |
| FY2026 operating margin | 14.5%–15.0% | 12.0%–12.5% | Midpoint higher by 250 basis points |
| FY2026 buybacks | No less than $500 million | Roughly $450 million | Minimum level up by 11.1% |
Management has raised its fiscal-2026 sales growth projection to around 5%, up from the earlier estimate of 3% to 5%. The operating margin outlook is now 14.5%–15.0%, compared to the prior range of 12.0%–12.5%.
The company anticipates receiving approximately $120 million in tariff refunds over the entire year, which contributes around 220 basis points to the yearly operating margin. The rest of the margin increase is less substantial, putting the emphasis on sales performance and cost management as the next focus for valuation.
Third-quarter guidance included an implicit buffer. The company projected sales to increase by 5%–6%, with earnings per share estimated in the range of $2.90 to $3.20. The Journal reported that analysts’ consensus was $2.82 per share.
Capital returns boost per-share expansion. Abercrombie bought back 2.0 million shares for $177 million in the quarter. Purchases since the start of the year totalled $282 million, cutting the initial share count by around 7%.
Liquidity is still sufficient but has decreased. Cash dropped to $628 million compared to $760 million at January 31. Year-to-date operating cash flow stood at $313 million, with overall liquidity totaling approximately $1.1 billion.
At $133.00 as of 09:31 EDT, shares are valued at roughly 10.0 times the updated annual EPS midpoint. The price surpassed the $122 average analyst target by 9.0% ahead of any revisions following the report. Of fourteen analysts, seven issued positive ratings and seven recommended hold S&P Global consensus.
Risks: Tariff refunds do not represent ongoing operating profit. Comparable sales remain flat overall, with softer performance at Hollister and in EMEA, while cash levels have declined, heightening the impact of a slowdown in the second half. Share repurchases may boost earnings per share but could also decrease financial flexibility.
Investors are turning their attention to back-to-school demand and third-quarter margins. For a sustained re-rating, the expected 12% underlying margin must be maintained once the boost from refunds subsides.
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