MW Abercrombie's stock back in rally mode as outlook shows tariffs won't hurt sales

By Steve Gelsi

Stock heads for its best day in two years after a quarterly earnings beat fueled by a big jump in Hollister sales and an improved outlook for sales growth

Abercrombie & Fitch Co.'s stock gained back a chunk of its losses for the year on Wednesday as a big jump in sales from its more affordable Hollister teen-clothing line powered stronger-than-expected results from the retailer.

The company also nudged up its full-year sales growth outlook but lowered its profit outlook, suggesting it will eat some of the cost of tariffs.

Abercrombie's stock $(ANF)$ soared 19% in midday trading.

CFRA analyst Zachary Warring reiterated a strong buy rating on Abercrombie & Fitch's stock and said the shares "remain undervalued even after the 25% increase, and we believe the company is well positioned to outperform peers and return significant capital."

Earlier, the stock jumped 26%, which would be its biggest one-day gain in two years. The stock had tumbled 48.4% in 2025 through Tuesday after gaining more than 550% over the previous two years.

Abercrombie & Fitch's fiscal first-quarter net income fell 29.4% from a year ago to $80.4 million, while earnings per share of $1.59 beat the FactSet consensus estimate of $1.36 a share.

Net sales rose 8% to a record level for the first quarter of $1.1 billion, ahead of the analyst estimate of $1.06 billion, as Hollister brand sales surged 22.3% to $549.4 million while Abercrombie sales declined 4.1% to $547.9 million.

For the full fiscal 2025, the company now expects net sales to rise 3% to 6%, compared with previous guidance of 3% to 5% growth, but the EPS outlook was trimmed to a range of $9.50 to $10.50 from a range of $10.40 to $11.40.

The company said the guidance includes the estimated impact of the current 30% tariff on imports from China and the 10% tariff on all other imports. The earnings outlook also includes a tariff expense of $50 million.

-Steve Gelsi

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May 28, 2025 12:18 ET (16:18 GMT)

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