Abercrombie shares jump on record Q2 brand sales and tariff refunds

Abercrombie & Fitch (NYSE: ANF ) shares are rocketing on Wednesday after the company witnessed best-ever brand sales in the second quarter.

The second-quarter performance combined with the tariff refund led to one of the best trading days in Abercrombie’s history, with the stock going as high as 50% at its peak for Wednesday.

Both Abercrombie and Hollister posted record sales, with Abercrombie revenue up 8% and comparable sales up 4%.

Hollister sales rose 2% and comparable sales declined 3%; growth came across regions and genders, led by knits, shorts and non-denim bottoms.

Also, Hollister’s Target partnership exceeded expectations, with products now available at more than 1,500 Target stores.

Apart from this, Regional sales grew 5% in the Americas, 19% in APAC and 2% in EMEA, with comparable sales up 1%, 13% and down 4%, respectively.

APAC remained a standout, supported by 13% comparable sales growth.

Inventory remained controlled, with ending inventory at cost roughly flat year over year and units up low single digits, consistent with expected unit sales growth in the quarter.

The company plans roughly 130 net new store experiences, including 50 new stores and 80 remodels/right-sizes, alongside about 20 closures in the year.

Tariff Refund — An Icing On the Cake The company exceeded quarterly earnings and revenue expectations, with approximately $100 million in IEEPA tariff refunds adding 790 basis points to operating margin and $1.75 to diluted EPS.

Abercrombie expects approximately $120 million of IEEPA tariff refunds, which is projected to add about 220 basis points to operating margin and $2.10 to diluted EPS in FY2026.

Also, the company anticipates tariff refunds of $20 million in the third quarter, which is projected to contribute 160 basis points to margin and 35 cents to EPS.

Strong Buyback Expectations Abercrombie & Fitch returned $177 million to shareholders through share repurchases, taking year-to-date repurchases to $282 million.

The company had around $568 million remaining under its repurchase authorization.

The company now expects to buy back at least $500 million of shares in 2026.

Abercrombie expects to repurchase at least $100 million in the third quarter, with modest AUR growth and slight operating-expense deleverage from incremental payroll and ERP-related amortization.

Tariff expense favorability is expected to more than offset modest freight pressure on gross margin.

Above-Consensus Guidance Abercrombie raised its fiscal year 2026 EPS outlook to $13.10-$13.60 from $10.20-$11, well above the $10.71 analyst estimate.

Full-year sales are now expected at about $5.529 billion, above the prior $5.424 billion-$5.529 billion range and the $5.464 billion estimate.

For the third quarter, the company expects EPS of $2.90-$3.20 and sales of $1.355 billion-$1.367 billion, compared with analyst estimates of $2.84 and $1.345 billion, respectively.

ANF Price Action: Abercrombie & Fitch shares were up 33.65% at $145.54 at the time of publication on Wednesday.

The stock is trading at a new 52-week high, according to Pro data.

Read Also: Abercrombie & Fitch Likely To Report Lower Q2 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call Photo via Shutterstock