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]

Delivers 11th consecutive quarter of growth, with record net sales of $1.2 billion, up 7% from last year, exceeding outlookNet sales growth led by Americas up 8%, APAC up 12%, partially offset by 1% decline in EMEAHollister brands delivers its best ever second quarter net sales on growth of 19%, with Abercrombie brands down 5%Second quarter operating margin of 17.1% and earnings per share of $2.91 include a litigation settlement benefit of $39 million on pre-tax basis, $0.59 per share benefit on tax-adjuste ...

Core Insights - Abercrombie & Fitch (ANF) and PVH are set to report their Q2 results, attracting investor interest as potential buy-the-dip candidates due to a possible rate cut in September [1][2] Q2 Expectations - Abercrombie & Fitch is expected to report a nearly 5% year-over-year sales increase to $1.19 billion, but earnings per share (EPS) are projected to decline by 9% to $2.27 [4] - PVH's Q2 sales are anticipated to rise by 1% to $2.1 billion, while EPS is expected to drop over 34% to $1.97 [6] Performance History - Abercrombie & Fitch has surpassed sales expectations for 11 consecutive quarters and has exceeded the Zacks EPS Consensus for nine straight quarters, with an average earnings surprise of 11.24% [4][8] - PVH has exceeded sales estimates for six straight quarters and has surpassed the Zacks EPS Consensus for 17 consecutive quarters, with an average earnings surprise of 13.47% [8] Valuation Metrics - Both ANF and PVH stocks are trading under 10 times forward earnings and below 2 times sales, earning an "A" Zacks Style Scores grade for Value [10] Investment Outlook - The upcoming Q2 reports and guidance for both companies will be critical for determining potential upside, with both currently holding a Zacks Rank 3 (Hold) [12]

Core Viewpoint - Abercrombie & Fitch Co. (ANF) is set to report its second-quarter fiscal 2025 results on August 27, with expected revenues of $1.2 billion, indicating a 4.8% year-over-year growth [1][10]. Financial Performance - The consensus estimate for fiscal second-quarter earnings is $2.27 per share, reflecting a 9.2% decline from $2.50 in the prior year [2]. - Abercrombie's earnings have historically exceeded consensus estimates, with a 17.8% beat in the last reported quarter and an average earnings surprise of 11.2% over the past four quarters [2]. Earnings Predictions - The company has a positive Earnings ESP of +2.62% and a Zacks Rank of 3, indicating a likelihood of an earnings beat [3]. - Sales growth in the second quarter is anticipated to be driven by the Hollister brand and strong performance across the Americas, EMEA, and APAC regions [4][10]. Strategic Initiatives - Management is optimistic about future top-line performance due to brand positioning and strategic initiatives, including digital innovation and agile inventory management [5]. - Abercrombie is enhancing customer experience through improved delivery and product discovery, supported by investments in technology [6]. Sales Outlook - For the fiscal second quarter, ANF projects net sales to increase by 3-5% from $1.13 billion in the previous year, with a specific expectation of 4.1% growth [7]. - The Hollister brand is expected to grow by 6.1%, while the Abercrombie brand is projected to rise by 2.2% [7]. Cost Pressures - Elevated operating and freight costs are anticipated to impact margins, with operating margin expected to decline to 12-13% from 15.5% in the prior year [8][12]. - The company faces additional cost pressures from heightened tariffs, including a 10% duty on global imports and a 30% tariff on imports from China [9][11]. Market Performance - Abercrombie's shares have increased by 34.6% over the past three months, outperforming industry peers and the S&P 500 [14]. - The current share price of $98.46 is 42.3% below its 52-week high and 50.6% above its 52-week low, with a forward P/E ratio of 9.45X, lower than industry and S&P averages [17].

Core Insights - The National Football League (NFL) and Abercrombie & Fitch have entered a multi-year partnership, marking Abercrombie as the first official fashion partner of the NFL [1][3] Group 1: Partnership Overview - The partnership aims to redefine fan style by integrating athlete-led campaigns and player-designed apparel with a lifestyle assortment, blurring the lines between game day outfits and everyday wear for fans and players [2][4] - Abercrombie will activate its partnership across major NFL events, including international games and retail locations worldwide [2][3] Group 2: Strategic Goals - The NFL seeks to grow its fan base, particularly among female fans, who constitute nearly half of its audience, by merging fashion with sports [3][4] - Abercrombie's CEO emphasized the importance of this partnership in meeting the needs of an expanding audience and building fandom through fashion [4] Group 3: Marketing Initiatives - To celebrate the partnership, Abercrombie launched a national campaign called "Style Concierge," featuring NFL players known for their off-field style, representing the largest advertising investment in the sports sector for the brand [5][6] - The campaign will run across various platforms, including linear TV, CTV, HBO Max, and social media channels like Meta and TikTok [5] Group 4: Product Offerings - Abercrombie has introduced a range of men's and women's apparel, including hoodies, sweatshirts, t-shirts, and accessories representing all 32 NFL teams, available in select stores and online [8]

Core Insights - Analysts project Abercrombie & Fitch (ANF) will report quarterly earnings of $2.27 per share, a decline of 9.2% year over year, with revenues expected to reach $1.19 billion, an increase of 4.8% from the same quarter last year [1] Earnings Estimates - The consensus EPS estimate has been revised downward by 0.3% over the past 30 days, indicating a collective reassessment by analysts [2] - Revisions to earnings estimates are crucial for predicting investor actions, as empirical research shows a strong correlation between earnings estimate trends and short-term stock price performance [3] Key Metrics Projections - Analysts estimate 'Net sales- Hollister' will reach $614.55 million, reflecting a year-over-year increase of 11.4% - 'Net sales- Abercrombie' is projected at $579.33 million, indicating a slight decline of 0.5% year over year - The estimated 'Comparable store sales - Total - YoY change' is 3.0%, down from 21.0% in the previous year [5] Comparable Store Sales - 'Comparable store sales - Hollister - YoY change' is expected to be 11.7%, down from 17.0% last year - 'Comparable store sales - Abercrombie - YoY change' is projected at -6.3%, a significant drop from 26.0% in the same quarter last year [6] Store Count - The consensus estimate for 'Number of stores - Total (EOP)' is 806, compared to 750 in the previous year [6] Stock Performance - Abercrombie shares have returned -1% over the past month, while the Zacks S&P 500 composite has increased by 1.1% - With a Zacks Rank 3 (Hold), ANF is expected to perform in line with the overall market in the near future [7]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Abercrombie & Fitch, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Abercrombie & Fitch is expected to report quarterly earnings of $2.27 per share, reflecting a year-over-year decrease of 9.2% [3][19]. - Revenue is projected to be $1.19 billion, which is an increase of 4.8% compared to the same quarter last year [3][19]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.28% over the last 30 days, indicating a reassessment by analysts [4][19]. - Despite the downward revision, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.62% [12][19]. Earnings Surprise Potential - A positive Earnings ESP suggests a likelihood of beating the consensus EPS estimate, especially given the company's Zacks Rank of 3 (Hold) [12][20]. - Historically, Abercrombie has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +17.78% in the last reported quarter [13][14]. Industry Context - Abercrombie & Fitch operates within the Zacks Retail - Apparel and Shoes industry, where it is positioned as a compelling earnings-beat candidate [18][20].

Group 1 - The second quarter earnings season has revealed that tariffs are increasingly affecting many companies' bottom lines [1] - Companies have been able to navigate some of the impacts of tariffs thus far [1] Group 2 - A small covered call position in ANF was taken during a significant market sell-off in early April due to the announcement of reciprocal tariffs [3]

Core Insights - The Retail-Wholesale sector is expected to show growth in sales and earnings, influenced by consumer sentiment and spending trends [1][2] - Anticipated top-line growth of 5.6% year-over-year and bottom-line growth of 12.6% for the second quarter of 2025 [2] Company Performance - Walmart Inc. (WMT) is positioned for stability and growth with a Zacks Rank of 2 and an Earnings ESP of +1.26%, expecting a 9% increase in earnings per share [9][11] - Abercrombie & Fitch Co. (ANF) has a Zacks Rank of 3 and an Earnings ESP of +2.62%, with a consensus estimate suggesting a 9.2% decrease in earnings per share [12][13] - Urban Outfitters, Inc. (URBN) holds a Zacks Rank of 3 and an Earnings ESP of +3.60%, with a consensus estimate indicating a 16.1% increase in earnings per share [14][15] - Burlington Stores, Inc. (BURL) has a Zacks Rank of 3 and an Earnings ESP of +6.06%, with a consensus estimate suggesting a 5.8% increase in earnings per share [16][17] Market Trends - Retail earnings are influenced by consumer preferences shifting towards essentials and value-oriented products due to inflation [4] - Retailers focusing on competitive pricing and product diversification are likely to see improved foot traffic and conversion rates [4] - E-commerce growth and omnichannel capabilities are critical for retail success, with companies enhancing online shopping experiences [6] - Efficient inventory management is essential for profitability, with advanced analytics aiding in stock optimization [7]

Group 1 - Abercrombie & Fitch Co. is currently trading at a lower valuation compared to most companies in the retail sector [1] - The thesis suggests that if Abercrombie continues to execute its plans and maintain current financial trends, it could present a potential investment opportunity [1]