[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section highlights Abercrombie & Fitch Co.'s strong Q2 fiscal 2025 performance, record sales, and increased full-year outlook [Q2 Fiscal 2025 Performance Highlights](index=1&type=section&id=Q2%20Fiscal%202025%20Performance%20Highlights) Abercrombie & Fitch Co. achieved record Q2 net sales of $1.2 billion, up 7% YoY, driven by Hollister's 19% growth and strong profitability - Achieved 11th consecutive quarter of growth with **record net sales of $1.2 billion**, up **7% YoY**, exceeding outlook[5](index=5&type=chunk) Q2 Fiscal 2025 Key Performance Indicators | Metric | Q2 Fiscal 2025 | Q2 Fiscal 2024 | YoY Change | | :-------------------------------- | :------------- | :------------- | :--------- | | Net Sales | $1.2 billion | $1.13 billion | +7% | | Operating Margin (Reported) | 17.1% | 15.5% | +1.6 pp | | Operating Margin (Adjusted non-GAAP) | 13.9% | 15.5% | -1.6 pp | | Diluted EPS (Reported) | $2.91 | $2.50 | +$0.41 | | Diluted EPS (Adjusted non-GAAP) | $2.32 | $2.50 | -$0.18 | - Net sales growth was led by Americas (**+8%**) and APAC (**+12%**), partially offset by a **1% decline in EMEA**; Hollister brands achieved its best-ever Q2 net sales with **19% growth**, while Abercrombie brands were down **5%**[5](index=5&type=chunk) - Q2 operating margin and EPS included a **$39 million pre-tax litigation settlement benefit** (**$0.59 per share benefit** on a tax-adjusted basis); excluding this, adjusted operating margin was **13.9%** and adjusted EPS was **$2.32**, exceeding outlook[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Fran Horowitz highlighted record Q2 net sales, driven by Hollister's 19% growth, exceeding profitability, and an increased full-year outlook - Delivered **record second quarter net sales**, exceeding expectations with **7% growth**[3](index=3&type=chunk) - Hollister brands grew **19%** due to strong summer and back-to-school demand, while Abercrombie brands net sales were down **5%**, lapping **26% growth** in the prior year[3](index=3&type=chunk) - Exceeded second quarter profitability expectations and returned **$50 million to shareholders** through share repurchases[3](index=3&type=chunk) - Increased full-year net sales outlook, reflecting strong positioning and growth trajectory, and remains focused on investing in long-term global brand opportunities[4](index=4&type=chunk) [Second Quarter Fiscal 2025 Financial Results](index=2&type=section&id=Second%20Quarter%20Fiscal%202025%20Financial%20Results) This section details Abercrombie & Fitch Co.'s Q2 fiscal 2025 net sales, profitability, and earnings per share performance [Net Sales Performance](index=2&type=section&id=Net%20Sales%20Performance) Total net sales for Q2 fiscal 2025 increased 7% to $1.21 billion, with comparable sales growing 3% Q2 Fiscal 2025 Net Sales Overview | Metric | Q2 Fiscal 2025 | Q2 Fiscal 2024 | 1 YR % Change | Comparable Sales | | :------- | :------------- | :------------- | :------------ | :--------------- | | Net Sales | $1,208,560 | $1,133,974 | 7% | 3% | [Net Sales by Segment](index=2&type=section&id=Net%20Sales%20by%20Segment) This section presents Q2 fiscal 2025 net sales performance broken down by geographic segment Q2 Fiscal 2025 Net Sales by Segment (in thousands) | Segment | Q2 Fiscal 2025 (in thousands) | Q2 Fiscal 2024 (in thousands) | 1 YR % Change | Comparable Sales | | :------ | :---------------------------- | :---------------------------- | :------------ | :--------------- | | Americas | $974,200 | $901,224 | 8% | 5% | | EMEA | $197,210 | $199,682 | (1)% | (5)% | | APAC | $37,150 | $33,068 | 12% | 1% | [Net Sales by Brand Family](index=2&type=section&id=Net%20Sales%20by%20Brand%20Family) This section details Q2 fiscal 2025 net sales performance for Abercrombie and Hollister brand families Q2 Fiscal 2025 Net Sales by Brand Family (in thousands) | Brand Family | Q2 Fiscal 2025 (in thousands) | Q2 Fiscal 2024 (in thousands) | 1 YR % Change | Comparable Sales | | :----------- | :---------------------------- | :---------------------------- | :------------ | :--------------- | | Abercrombie | $551,868 | $582,416 | (5)% | (11)% | | Hollister | $656,692 | $551,558 | 19% | 19% | [Profitability Metrics](index=5&type=section&id=Profitability%20Metrics) Q2 fiscal 2025 reported operating income increased to $206.7 million (17.1% of net sales), with adjusted operating income at 13.9% Q2 Fiscal 2025 Operating Income and Margin | Metric | Q2 Fiscal 2025 (Reported) | % of Net Sales | Q2 Fiscal 2024 | % of Net Sales | | :---------------- | :------------------------ | :------------- | :------------- | :------------- | | Operating Income | $206,658 | 17.1% | $175,625 | 15.5% | | Operating Income (Adjusted non-GAAP) | $168,084 | 13.9% | $175,625 | 15.5% | [Earnings Per Share](index=5&type=section&id=Earnings%20Per%20Share) Q2 fiscal 2025 diluted EPS was $2.91, increasing from $2.50, with adjusted non-GAAP diluted EPS at $2.32 Q2 Fiscal 2025 Diluted Net Income Per Share | Metric | Q2 Fiscal 2025 | Q2 Fiscal 2024 | | :-------------------------------- | :------------- | :------------- | | Diluted Net Income Per Share (GAAP) | $2.91 | $2.50 | | Diluted Net Income Per Share (Adjusted non-GAAP) | $2.32 | $2.50 | [Financial Position and Liquidity](index=2&type=section&id=Financial%20Position%20and%20Liquidity) This section provides an overview of the company's balance sheet, cash flow, and capital allocation strategies [Balance Sheet Overview](index=12&type=section&id=Balance%20Sheet%20Overview) As of August 2, 2025, total assets were $3.30 billion, with cash and equivalents at $572.7 million and total stockholders' equity at $1.31 billion Selected Balance Sheet Items (in thousands) | Item | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Cash and equivalents | $572,730 | $772,727 | $738,402 | | Marketable securities | $30,795 | $116,221 | $15,014 | | Inventories | $592,966 | $575,005 | $539,759 | | Total current assets | $1,489,115 | $1,673,431 | $1,516,653 | | Total assets | $3,301,941 | $3,299,887 | $3,049,558 | | Total current liabilities | $1,038,041 | $1,126,944 | $1,051,656 | | Total long-term liabilities | $956,696 | $821,620 | $776,752 | | Total stockholders' equity | $1,307,204 | $1,351,323 | $1,221,150 | [Cash Flow and Capital Allocation](index=2&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) Year-to-date net cash from operations decreased to $113 million, with $250 million used for share repurchases and total liquidity at $1.0 billion Year-to-Date Cash Flow Activities (in thousands) | Activity | YTD August 2, 2025 | YTD August 3, 2024 | | :-------------------------------- | :----------------- | :----------------- | | Net cash provided by operating activities | $112,893 | $260,119 | | Net cash used for investing activities | $(31,943) | $(96,649) | | Net cash used for financing activities | $(290,713) | $(326,961) | - Repurchased **3.2 million shares for $250 million** year-to-date, representing a **7% reduction** in shares outstanding; **$1.05 billion** remains on the share repurchase authorization[8](index=8&type=chunk) - Total liquidity (cash and equivalents plus available borrowing capacity) was approximately **$1.0 billion** as of August 2, 2025[10](index=10&type=chunk) [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%202025%20Outlook) This section outlines the company's updated financial projections for the full fiscal year 2025 and the upcoming third quarter [Full Year Outlook](index=3&type=section&id=Full%20Year%20Outlook) The company increased its full-year fiscal 2025 net sales growth outlook to 5-7%, with operating margin projected at 13.0-13.5% and EPS at $10.00-$10.50 Fiscal 2025 Full Year Outlook Comparison | Metric | Current Full Year Outlook | Previous Full Year Outlook | Change | | :-------------------------- | :------------------------ | :----------------------- | :----- | | Net sales growth | 5% to 7% | 3% to 6% | Increased | | Operating margin | 13.0% to 13.5% | 12.5% to 13.5% | Increased lower end | | Effective tax rate | Around 30% | Around 27% | Increased | | Net income per diluted share | $10.00 to $10.50 | $9.50 to $10.50 | Increased lower end | | Share repurchases | Around $400 million | $400 million | No change | | Capital expenditures | ~$225 million | ~$200 million | Increased | - The full-year outlook includes an estimated **$90 million of net tariff expense** (**170 basis points** as a percent of net sales) and a **$39 million pre-tax benefit** from a litigation settlement[11](index=11&type=chunk) [Third Quarter Outlook](index=3&type=section&id=Third%20Quarter%20Outlook) For Q3 fiscal 2025, net sales growth is expected to be 5-7%, with operating margin at 11-12% and diluted EPS at $2.05-$2.25 Fiscal 2025 Third Quarter Outlook | Metric | Third Quarter Outlook | | :-------------------------- | :-------------------- | | Net sales growth | 5% to 7% | | Operating margin | 11% to 12% | | Effective tax rate | Around 31% | | Net income per diluted share | $2.05 to $2.25 | | Share repurchases | At least $50 million | [Non-GAAP Financial Measures and Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's non-GAAP financial measures and provides reconciliations to GAAP results for various periods [Explanation of Non-GAAP Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP measures like comparable sales, constant currency, EBITDA, and Adjusted EBITDA to clarify operating performance and comparability - Non-GAAP measures are used to evaluate performance, manage operations, and provide a clearer understanding of comparability across periods by excluding certain items not reflecting future operating outlook[24](index=24&type=chunk) - **Comparable sales** are defined as the year-over-year percentage change in sales for stores open at least one year (without significant square footage changes) and digital net sales, both converted at current year's foreign currency exchange rates[25](index=25&type=chunk) - **Constant currency basis** removes the impact of foreign currency exchange rate fluctuations by applying current year average exchange rates to prior year results[26](index=26&type=chunk) - **EBITDA** is net income before interest, income taxes, depreciation, and amortization; **Adjusted EBITDA** further adjusts EBITDA for specific items like litigation settlements[27](index=27&type=chunk)[37](index=37&type=chunk) [Reconciliation of GAAP to Adjusted Non-GAAP (Q2)](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20Non-GAAP%20(Q2)) This section reconciles Q2 fiscal 2025 GAAP results to adjusted non-GAAP figures, excluding a $38.6 million litigation settlement Q2 Fiscal 2025 GAAP to Adjusted Non-GAAP Reconciliation (in thousands) | Metric | GAAP | Excluded item (Litigation settlement) | Adjusted non-GAAP | | :-------------------------------- | :----- | :------------------------------------ | :---------------- | | Operating income | $206,658 | $38,574 | $168,084 | | Income before income taxes | $209,132 | $38,574 | $170,558 | | Net income attributable to A&F | $141,383 | $28,625 | $112,758 | | Net income per diluted share attributable to A&F | $2.91 | $0.59 | $2.32 | [Reconciliation of GAAP to Adjusted Non-GAAP (YTD)](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20Non-GAAP%20(YTD)) This section reconciles year-to-date fiscal 2025 GAAP results to adjusted non-GAAP figures, excluding a $38.6 million litigation settlement YTD Fiscal 2025 GAAP to Adjusted Non-GAAP Reconciliation (in thousands) | Metric | GAAP | Excluded item (Litigation settlement) | Adjusted non-GAAP | | :-------------------------------- | :----- | :------------------------------------ | :---------------- | | Operating income | $308,191 | $38,574 | $269,617 | | Income before income taxes | $317,448 | $38,574 | $278,874 | | Net income attributable to A&F | $221,796 | $28,625 | $193,171 | | Net income per diluted share attributable to A&F | $4.47 | $0.58 | $3.90 | [Reconciliation of Constant Currency Financial Measures (Q2)](index=10&type=section&id=Reconciliation%20of%20Constant%20Currency%20Financial%20Measures%20(Q2)) This section reconciles Q2 fiscal 2025 financial measures to a constant currency basis, showing a 6% net sales change Q2 Fiscal 2025 Constant Currency Reconciliation (in thousands) | Metric | Q2 Fiscal 2025 (GAAP) | Q2 Fiscal 2024 (GAAP) | Impact from FX | Q2 Fiscal 2024 (Constant Currency) | % Change (Constant Currency) | | :-------------------------------- | :-------------------- | :-------------------- | :------------- | :--------------------------------- | :--------------------------- | | Net sales | $1,208,560 | $1,133,974 | $10,707 | $1,144,681 | 6% | | Operating income (Adjusted non-GAAP) | $168,084 | $175,625 | $2,272 | $177,897 | (160) BPS | | Net income per diluted share (Adjusted non-GAAP) | $2.32 | $2.50 | $0.03 | $2.53 | $(0.21) | [Reconciliation of EBITDA and Adjusted EBITDA (Q2)](index=11&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA%20(Q2)) This section reconciles Q2 fiscal 2025 EBITDA and Adjusted EBITDA, with Adjusted EBITDA at $205.5 million (17.0% of net sales) Q2 Fiscal 2025 EBITDA and Adjusted EBITDA (in thousands) | Metric | Q2 Fiscal 2025 | % of Net Sales | Q2 Fiscal 2024 | % of Net Sales | | :---------------- | :------------- | :------------- | :------------- | :------------- | | Net income | $143,388 | 11.9% | $135,379 | 11.9% | | EBITDA | $244,082 | 20.2% | $214,980 | 19.0% | | Adjusted EBITDA | $205,508 | 17.0% | $214,980 | 19.0% | [Reconciliation of EBITDA and Adjusted EBITDA (YTD)](index=11&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA%20(YTD)) This section reconciles year-to-date fiscal 2025 EBITDA and Adjusted EBITDA, with Adjusted EBITDA at $345.6 million (15.0% of net sales) YTD Fiscal 2025 EBITDA and Adjusted EBITDA (in thousands) | Metric | YTD Fiscal 2025 | % of Net Sales | YTD Fiscal 2024 | % of Net Sales | | :---------------- | :-------------- | :------------- | :-------------- | :------------- | | Net income | $225,127 | 9.8% | $250,457 | 11.6% | | EBITDA | $384,191 | 16.7% | $382,518 | 17.8% | | Adjusted EBITDA | $345,617 | 15.0% | $382,518 | 17.8% | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations (Q2)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Q2)) This section presents Q2 fiscal 2025 condensed consolidated statements of operations, showing $1.21 billion in net sales and $2.91 diluted EPS Q2 Fiscal 2025 Condensed Consolidated Statements of Operations (in thousands) | Item | August 2, 2025 | % of Net Sales | August 3, 2024 | % of Net Sales | | :------------------------------------------ | :------------- | :------------- | :------------- | :------------- | | Net sales | $1,208,560 | 100.0% | $1,133,974 | 100.0% | | Cost of sales, exclusive of D&A | $451,590 | 37.4% | $397,712 | 35.1% | | Operating income | $206,658 | 17.1% | $175,625 | 15.5% | | Net income attributable to A&F | $141,383 | 11.7% | $133,168 | 11.7% | | Diluted Net income per share attributable to A&F | $2.91 | | $2.50 | | [Condensed Consolidated Statements of Operations (YTD)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(YTD)) This section presents year-to-date fiscal 2025 condensed consolidated statements of operations, with $2.31 billion net sales and $4.47 diluted EPS YTD Fiscal 2025 Condensed Consolidated Statements of Operations (in thousands) | Item | August 2, 2025 | % of Net Sales | August 3, 2024 | % of Net Sales | | :------------------------------------------ | :------------- | :------------- | :------------- | :------------- | | Net sales | $2,305,871 | 100.0% | $2,154,704 | 100.0% | | Cost of sales, exclusive of D&A | $868,723 | 37.7% | $740,985 | 34.4% | | Operating income | $308,191 | 13.4% | $305,474 | 14.2% | | Net income attributable to A&F | $221,796 | 9.6% | $247,018 | 11.5% | | Diluted Net income per share attributable to A&F | $4.47 | | $4.64 | | [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the condensed consolidated balance sheets as of August 2, 2025, showing total assets of $3.30 billion and total equity of $1.31 billion Condensed Consolidated Balance Sheets (in thousands) | Item | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Total current assets | $1,489,115 | $1,673,431 | $1,516,653 | | Total assets | $3,301,941 | $3,299,887 | $3,049,558 | | Total current liabilities | $1,038,041 | $1,126,944 | $1,051,656 | | Total long-term liabilities | $956,696 | $821,620 | $776,752 | | Total stockholders' equity | $1,307,204 | $1,351,323 | $1,221,150 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents year-to-date fiscal 2025 condensed consolidated statements of cash flows, with $112.9 million from operations Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Twenty-Six Weeks Ended August 2, 2025 | Twenty-Six Weeks Ended August 3, 2024 | | :-------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash provided by operating activities | $112,893 | $260,119 | | Net cash used for investing activities | $(31,943) | $(96,649) | | Net cash used for financing activities | $(290,713) | $(326,961) | | Net decrease in cash and equivalents | $(200,063) | $(163,390) | | Cash and equivalents, end of period | $580,332 | $746,295 | [Company Information and Forward-Looking Statements](index=4&type=section&id=Company%20Information%20and%20Forward-Looking%20Statements) This section provides company background, a safe harbor statement regarding forward-looking information, and contact details [About Abercrombie & Fitch Co.](index=4&type=section&id=About%20Abercrombie%20%26%20Fitch%20Co.) Abercrombie & Fitch Co. is a global, digitally-led omnichannel retailer of apparel and accessories, operating Abercrombie and Hollister brands - Abercrombie & Fitch Co. is a global, digitally-led, omnichannel specialty retailer of apparel and accessories for kids through millennials[16](index=16&type=chunk) - Operates brands including Abercrombie and Hollister, with approximately **810 stores globally** and e-commerce sites[17](index=17&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) This section contains forward-looking statements subject to inherent risks and uncertainties, including global trade, economic conditions, and competition - Contains forward-looking statements about future business and events, subject to risks and uncertainties[13](index=13&type=chunk) - Key risk factors include global trade policy (tariffs), economic and financial conditions (inflation, consumer spending), global operations, geopolitical conflicts, natural disasters, customer engagement, competition, and cybersecurity threats[13](index=13&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) This section provides contact information for investor relations and media inquiries - Investor Contact: Mo Gupta, (614) 283-6751, Investor_Relations@anfcorp.com[18](index=18&type=chunk) - Media Contact: Kate Wagner, (614) 283-6192, Public_Relations@anfcorp.com[18](index=18&type=chunk)

Core Viewpoint - Concerns about tariffs overshadowed Abercrombie & Fitch's strong second-quarter performance, leading to a decline in stock price despite impressive earnings results [1] Group 1: Financial Performance - Abercrombie & Fitch achieved a record revenue of $1.19 billion for the quarter, representing a 7% year-over-year increase [2] - The non-GAAP adjusted net income was nearly $113 million, equating to $2.32 per share [2] - Both revenue and adjusted net income exceeded analyst expectations, which were $1.19 billion and $2.27 per share, respectively [4] Group 2: Sales Drivers - The increase in sales was attributed to strong demand for the Hollister brand, aimed at affluent young consumers [4] - Notable growth was observed in the Asia-Pacific region with a 12% increase in sales, and an 8% increase in the Americas, which offset a 1% decline in Europe, the Middle East, and Africa [4] Group 3: Future Guidance - Management raised its full-year 2025 guidance, now expecting annual net sales growth of 5% to 7%, up from a previous forecast of 3% to 6% [5] - The per-share net income estimate was also increased to a range of $10 to $10.50, compared to the prior estimate of $9.50 to $10.50 [5] Group 4: Tariff Impact - The company warned that increased tariffs on imports from countries like India, Vietnam, and Indonesia will raise costs by $90 million, significantly higher than the previously estimated $50 million [6]

Core Insights - Abercrombie & Fitch Co. (ANF) reported second-quarter fiscal 2025 results with both revenue and earnings exceeding Zacks Consensus Estimates, although year-over-year earnings per share (EPS) declined [1][9] - The company raised its full-year sales growth outlook to 5-7%, reflecting strong brand momentum and performance, particularly from the Hollister brand [3][15] Financial Performance - Abercrombie's EPS for the second quarter was $2.32, down 7.2% from $2.50 in the same quarter last year, but above the expected $2.27 [1][9] - Net sales reached $1.21 billion, a 7% increase year-over-year, surpassing the Zacks Consensus Estimate of $1.19 billion [2][9] - Comparable sales improved by 3%, driven by broad-based growth across regions and strong performance from Hollister, which saw a 19% increase in sales [2][8] Regional and Brand Performance - Sales in the Americas rose 8% to $974.2 million, while EMEA sales fell 1% to $197.2 million, and APAC sales increased 12% to $37.1 million [7] - The Abercrombie brand experienced a 5% decline in sales to $551.9 million, while Hollister's sales increased by 19% to $656.7 million [8] Profitability and Expenses - Abercrombie's gross margin contracted by 230 basis points year-over-year to 62.6%, while selling expenses decreased by 1.9% to $375.4 million [10] - Operating income increased by 17.7% to $206.7 million, with an operating margin of 17.1%, up 160 basis points from the previous year [11] Financial Health - The company ended the quarter with cash and cash equivalents of $572.7 million and no net long-term borrowings, indicating a stable financial position [12] - Abercrombie repurchased approximately 0.6 million shares for about $50 million in the second quarter, with a total of 3.2 million shares repurchased year-to-date for $250 million [13] Future Outlook - For the third quarter of fiscal 2025, Abercrombie projects net sales to rise 5-7% from the previous year's $1.21 billion, with an expected EPS range of $2.05-$2.25 [14] - The company anticipates a full-year operating margin of 13-13.5%, up from previous guidance, and plans to open 60 new stores while remodeling 40 and closing 20 [15][17]

Welcome back. Abbercrombie reporting better than expected earnings and revenue despite falling sales for its namesake brand. CNBC.com's Gabrielle Pon Rouge just spoke with the CEO and joins us now. What did he have to say. Uh yeah, she thanks Contessa.I just got off the phone with Abberrombi CEO Fran Herowitz and she reiterated that the Abbercrombie brand is strong. During the quarter, sales at its namesake brand were down 5% with comps down 11%. But she blamed that decline on carryover inventory the brand ...

Core Insights - Abercrombie & Fitch Co reported strong second-quarter earnings of $2.32 per share on revenue of $1.21 billion, surpassing estimates of $2.30 per share and $1.20 billion in revenue, despite a decline in comparable sales by 11% [1] - The company raised its full-year outlook, indicating resilience against $90 million in tariff costs [1] Stock Performance - Abercrombie & Fitch stock increased by 1.6% to $98.20, recovering from earlier negative territory, supported by the 80-day moving average [2] - Year-to-date, the stock is down 34.3%, although it has been climbing since reaching a 52-week low of $65.40 on April 8 [2] Options Activity - In the options market, 14,000 calls and 15,000 puts have been traded today, which is 2.1 times the average daily options volume [3] - The most popular options contracts include the weekly 8/29 82-strike put and the September 95 call, with new positions opening in both [3] Short Interest - Abercrombie & Fitch has significant short squeeze potential, with short interest accounting for 14.6% of the available float [4] - It would take nearly three days for short positions to be fully covered at the average trading pace [4]

Between 2020 and mid-2024, Abercrombie & Fitch's ( ANF ) stock soared by an astonishing 1790%. An investment of $2,000 could have yielded a profit of $39,000. These types of deep value re-ratings present significant opportunities and often occurI'm an analyst, trader and portfolio manager. I write independently for Seeking Alpha. I remain anonymous so that I can give my full honest opinion. Like my work? Follow me. In my personal portfolio, I use a long/short strategy and often use options to maximize Risk/ ...

Abercrombie & Fitch (ANF) Q2 2026 Earnings Call August 27, 2025 08:30 AM ET Company ParticipantsMohit Gupta - VP - IRFran Horowitz - CEO & DirectorRobert Ball - SVP & CFODana Telsey - CEO & Chief Research OfficerScott Lipesky - EVP & COOCorey Tarlowe - SVP - Equity ResearchPaul Lejuez - Managing DirectorMarni Shapiro - Managing PartnerAlex Straton - Equity Research Managing DirectorMauricio Serna - Executive DirectorJanet Kloppenburg - PresidentConference Call ParticipantsMatt Boss - Equity Research Analyst ...

Financial Data and Key Metrics Changes - The company reported record net sales of $1,210,000,000 for Q2 2025, representing a 7% increase compared to the previous year, exceeding expectations [7][19] - Operating margin was 13.9% of sales, above the outlook range provided in May, with operating income of $168,000,000 compared to $176,000,000 last year [22][23] - Adjusted net income per diluted share was $2.32, above the outlook, compared to $2.50 last year [24] Business Line Data and Key Metrics Changes - Hollister brands achieved a 19% increase in net sales for Q2, with comparable sales also up 19%, driven by strong cross-channel traffic [9][21] - Abercrombie brands saw a 5% decline in net sales, with comparable sales down 11%, primarily due to lower average unit retail (AUR) as inventory was cleared [11][21] Market Data and Key Metrics Changes - The Americas region reported an 8% increase in net sales, marking its twelfth consecutive quarter of growth [8][20] - APAC region grew by 12%, while EMEA experienced a 1% decline in net sales, impacted by softness in Germany and other European markets [8][20] Company Strategy and Development Direction - The company plans to increase full-year net sales growth expectations based on strong year-to-date results and brand positioning [16][27] - The company is focusing on maintaining strong brand health and engaging customers through partnerships, such as the collaboration with the NFL [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth by the end of the year, citing strong traffic and successful product launches [36][100] - The company is navigating a new tariff landscape from a position of strength, with plans to mitigate costs through various strategies [17][72] Other Important Information - The company repurchased $50,000,000 worth of shares in Q2, totaling $250,000,000 in repurchases for the year [7][25] - Inventory levels were reported to be in a clean position, with inventory at cost up 10% and units up 7% [23][51] Q&A Session Summary Question: What are the markers for acceleration for the Abercrombie brand? - Management highlighted strong traffic, exciting partnerships, and successful store openings as key indicators of future growth [34][36] Question: Can you clarify the credit card settlement inclusion/exclusion? - The $39,000,000 net benefit from the credit card settlement was included in the operating margin guidance, offset by increased tariffs [37][38] Question: How is the Abercrombie Kids launch going? - The launch has received positive feedback, and the company is excited about expanding its operating model [40][42] Question: What is driving the momentum in Hollister? - Management noted that everything is working well for Hollister, with strong consumer engagement and successful product launches [47][49] Question: What is the state of carryover inventory? - The company reported significant progress in managing carryover inventory, with a clean and current position heading into the back half of the year [50][51] Question: What gives confidence for Abercrombie's future performance? - Management cited strong traffic, successful campaigns, and a solid start to Q3 as reasons for confidence in returning to growth [100][102] Question: Can you elaborate on the tariff impact? - The company is facing a $90,000,000 cost impact from tariffs, with ongoing efforts to mitigate these costs through various strategies [26][72] Question: How is the EMEA business performing? - The UK market is performing well, while Germany has faced challenges; however, management remains optimistic about future growth in the region [75][76]

Financial Data and Key Metrics Changes - The company reported record net sales of $1,210,000,000 for Q2 2025, representing a 7% increase compared to the previous year, exceeding expectations [7][19] - Operating margin was 13.9% of sales, above the outlook range provided in May, with operating income of $168,000,000 compared to $176,000,000 last year [22][23] - Adjusted net income per diluted share was $2.32, above the outlook, compared to $2.50 last year [24] Business Line Data and Key Metrics Changes - Hollister brands achieved a 19% increase in net sales for Q2, with comparable sales also up 19%, driven by strong cross-channel traffic [9][21] - Abercrombie brands saw a 5% decline in net sales, with comparable sales down 11%, primarily due to lower average unit retail (AUR) as inventory was cleared [11][21] Market Data and Key Metrics Changes - The Americas region reported an 8% increase in net sales, marking its twelfth consecutive quarter of growth [8][20] - APAC region grew by 12%, while EMEA experienced a 1% decline in net sales, impacted by softness in Germany and other European markets [8][20] Company Strategy and Development Direction - The company is focused on leveraging its strong foundation to balance current market conditions while investing for long-term global potential [6] - Plans include opening 60 new stores and remodeling 40 existing locations, with a net increase of around 40 stores expected by year-end [29][92] - The company aims to enhance brand positioning through partnerships, such as the recent collaboration with the NFL [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to net sales growth by the end of the year, supported by strong brand health and clean inventory [16][36] - The company anticipates a $90,000,000 impact from tariffs for 2025, with strategies in place to mitigate costs through various operational adjustments [26][112] - Management highlighted the importance of maintaining customer value without broad-based price increases, focusing on brand experience [70][112] Other Important Information - The company repurchased $50,000,000 worth of shares in Q2, totaling $250,000,000 in repurchases for the year [7][25] - Inventory levels were reported as clean, with inventory at cost up 10% and units up 7% [23][50] Q&A Session Summary Question: What markers give confidence for Abercrombie's acceleration? - Management highlighted strong traffic, new partnerships, and successful store openings as key indicators of confidence for future growth [34][36] Question: How is the Abercrombie Kids launch going? - The launch has received positive feedback, and management is excited about expanding the operating model [40][42] Question: What contributed to Hollister's 19% growth? - Management noted that strong consumer engagement and successful product launches contributed to Hollister's performance [47][49] Question: What is the state of carryover inventory? - Management reported significant progress in managing carryover inventory, with a clean position heading into the back half of the year [50][51] Question: What is the outlook for gross margin in Q3? - Management expects some margin pressure due to tariffs and marketing investments, but remains focused on maintaining AUR [59][61] Question: How is the company addressing tariff impacts? - The company is employing a strategic approach to mitigate tariff impacts, including vendor negotiations and operational efficiencies [70][112] Question: What is the outlook for the EMEA region? - Management remains optimistic about the UK market while acknowledging challenges in Germany, with plans to replicate successful strategies [72][73]

Q2 2025 Financial Performance - Net sales increased by 7% year-over-year to $1208560 thousand[108] - Americas net sales increased by 8% year-over-year[66, 68] - EMEA net sales decreased by 1% year-over-year[66, 68] - APAC net sales increased by 12% year-over-year[66, 68] - Abercrombie brands net sales decreased by 5% year-over-year[71] - Hollister brands net sales increased by 19% year-over-year[71] - Operating income was $206658 thousand, representing 171% of net sales[108] - Net income per diluted share was $291[66] Fiscal Year 2025 Outlook - Net sales are expected to grow in the range of 5% to 7%[82] - Operating margin is projected to be in the range of 130% to 135%[82] Share Repurchases - The company has approximately $11 billion remaining under its current share repurchase authorization[95]