Abercrombie & Fitch, riding momentum with its Hollister teen brand, posted a strong second quarter, marked by sales and profit gains.
Net income rose 11.7 percent to $141.4 million in the quarter ended Aug. 2, from $133.2 million in the year-ago period. Net income per diluted share rose to $2.91, compared to $2.50 in the 2024 quarter.
Operating income rose to $207 million as compared to operating income last year of $176 million.
Net sales of $1.2 billion were up 7 percent from $1.13 billion in the year-ago period, with comparable sales rising 3 percent.
Operating margin as a percent of sales of 17.1 percent compared to 15.5 percent last year.
The New Albany, Ohio-based specialty fashion retailer raised its sales gain outlook for 2025 to 5 to 7 percent growth, up from its previous forecast of 3 to 6 percent. The company also raised its profit outlook for 2025 to $10 to $10.50 per diluted share, from its previous outlook of $9.50 to $10.
Fran Horowitz
Sari P PHOTOGRAPHY
“We delivered record second quarter net sales, exceeding our expectations, with 7 percent growth to last year,” Fran Horowitz, chief executive officer, said Wednesday in a statement. “We continued to drive meaningful engagement with our teen customer in Hollister brands, growing 19 percent on strong summer and back-to-school demand.
“While we made progress on key inventory initiatives by leveraging promotions and testing new product concepts, Abercrombie brands net sales were down 5 percent, lapping 26 percent growth in the prior year. On the bottom line, we exceeded our second quarter profitability expectations, while also returning $50 million to shareholders through our sixth consecutive quarter of share repurchases.
“We entered the second half of 2025 on offense,” Horowitz added. “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.”
Hollister brands delivered its best-ever second quarter net sales on growth of 19 percent to $657 million from $552 million in the year-ago period. But the Abercrombie brands were down 5 percent to $552 million from $582 million in the year-ago period.
Still, while A&F continues its winning ways, Wall Street was apparently concerned about the impact of tariffs, and the Abercrombie brand’s need to reverse declining sales. A&F’s stock price declined 4.7 percent, or $4.59, to $92.15, in pre-market trading Wednesday morning.
“Net of planned mitigation efforts, the full year outlook assumes approximately $90 million of tariff expense, or 170 basis points as a percent of net sales,” the retailer reported.
“Abercrombie and Fitch posted a strong beat and raise on the back of the Hollister brand’s outstanding sales growth, along with impressive cost discipline that expanded operating margins,” Emarketer principal analyst Sky Canaves wrote in a note on A&F. “These are no small feats for mature brands in discretionary categories, given the current environment of higher tariffs and softer consumer demand.
“The key challenge for the rest of the year will be reversing Abercrombie & Fitch’s sales declines against tough comparisons,” Canaves added. “Its recently announced a deal to become the NFL’s official brand partners is well-timed to fuel brand heat during the upcoming football and holiday seasons. It will capitalize on renewed attention to the league and player fashion from emerging fan demographics, including Gen Z and women.”
