Abercrombie & Fitch Co. reported second-quarter net sales of $1.27 billion, up 5% from the prior-year period, marking the 15th consecutive quarter of growth. Operating income rose to $253 million, lifting the operating margin to 19.9%, a 600-basis-point increase from the adjusted 13.9% a year earlier and sharply above the May outlook of around 10%. Earnings per share totaled $4.17, surpassing the $1.80–$2.00 guidance range.
The company’s second-quarter results were bolstered by a $100 million refund under the International Emergency Economic Powers Act (IEEPA), which contributed approximately $1.75 per share to EPS and added 790 basis points to the operating margin. Excluding the one-time benefit, underlying operating margin expanded by roughly 200 basis points year-over-year, while tariff expenses increased by about $15 million in the quarter, or 100 basis points as a percentage of sales.
Net sales growth was led by the Americas region, up 5%, while Asia-Pacific sales climbed 19%. Comparable sales were flat overall, with Abercrombie brand comparable sales rising 4% and Hollister brand comparable sales declining 3%. The company ended the quarter with 846 owned stores and 61 franchise locations globally.
Abercrombie raised its full-year fiscal 2026 guidance, projecting net sales growth of around 5% to approximately $5.3 billion, up from the prior range of 3%–5%. Operating margin is now expected to reach 14.5%–15%, compared with the prior 12%–12.5% forecast. Earnings per share guidance was lifted to $13.10–$13.60 from $10.20–$11.00, with tariff refunds contributing an estimated $2.10 per share. The effective tax rate is projected at around 29%, down from the prior 30% assumption.
For the third quarter, Abercrombie forecasts net sales growth of 5%–6%, an operating margin of 13%–14%, and EPS of $2.90–$3.20, with an additional $20 million in IEEPA tariff refunds expected to contribute roughly $0.35 per share.
Shares of Abercrombie surged 28.83% to $140.30 following the results, near the 52-week high of $141.92. The company also announced plans to repurchase at least $500 million in shares during fiscal 2026 and increase capital expenditures to approximately $250 million.
