Abercrombie & Fitch Stock Soars 36.2% After Record Q2 Sales
The company's stock price surged after reporting $1.27 billion in net sales, exceeding Wall Street expectations and raising its full-year guidance
Abercrombie & Fitch's stock price skyrocketed 36.2% after the company reported record second-quarter sales and earnings that exceeded Wall Street expectations. The company's net sales reached $1.27 billion, a 5% increase from the same period a year earlier.
The company's operating income rose to $253 million in Q2 FY26, a significant increase compared to $207 million on a reported basis last year. This improvement was partly attributed to the IEEPA tariff refunds, which reduced cost of sales and contributed to a higher operating margin of 19.9%, up from 17.1% a year earlier on a reported basis.
Abercrombie & Fitch's reported net income per diluted share rose to $4.17, compared to $2.91 in the prior year. The company received approximately $100 million in tariff refunds, which contributed $1.75 per diluted share. Both operating margin and earnings per share exceeded the company's outlook even before factoring in the one-off benefit from the tariff refunds.
The company's brands performed well, with Abercrombie brand sales increasing 8% year over year, while Hollister sales increased 2%. Sales in the Americas increased 5%, while APAC delivered the strongest regional growth with a 19% increase, and EMEA sales advanced 2%.
Abercrombie & Fitch raised its full-year 2026 guidance, now expecting net sales growth of around 5%, up from the previous range of 3% to 5%. Operating margin is now projected between 14.5% and 15%, compared to the earlier estimate of 12% to 12.5%. The company expects net income per diluted share to be between $13.10 and $13.60, up from $10.20 to $11.00.
## What happens next The company's strong performance and raised guidance have led to a surge in its stock price, with the S&P 500 gaining 1.1% and the Nasdaq Composite rising 1.8% in comparison. As the company continues to deliver strong sales and earnings, it is likely to remain a focus for investors and analysts.
## Why it matters Abercrombie & Fitch's strong performance is a significant indicator of the company's ability to deliver growth and exceed expectations. The company's focus on serving customers with compelling product, marketing, and experiences has led to its 15th consecutive quarter of net sales growth. As the company continues to expand its brands and regions, it is likely to remain a major player in the retail industry.
