Core Viewpoint - Abercrombie & Fitch has revised its fiscal 2025 outlook, maintaining most projections while refining certain assumptions regarding sales growth and operating margins [1][4]. Group 1: Financial Projections - For the full year, net sales growth is now anticipated to be at least 6%, narrowing from the previous guidance of 6% to 7% [1]. - Operating margin is projected to be around 13%, down from the earlier expectation of 13.0% to 13.5% [1]. - Earnings per diluted share for the year are forecasted to be between $10.30 and $10.40, compared to the earlier range of $10.20 to $10.50 [2]. - For the fourth quarter, net sales growth is expected to be around 5%, consistent with the prior guidance range of 4% to 6% [4]. - Quarterly net income per diluted share is now expected to fall between $3.50 and $3.60, compared to earlier guidance of $3.40 to $3.70 [4]. Group 2: Capital Expenditure and Share Repurchases - Planned share repurchases remain at approximately $450 million for the year, with around $100 million planned for the fourth quarter [2][5]. - Capital expenditure guidance has been increased to $245 million, up from roughly $225 million previously [2]. Group 3: Operational Plans - The company's real estate plans remain unchanged, with around 40 net store additions expected, including 60 openings and 20 closures [3]. - The updated outlook incorporates estimated tariff-related costs of around $90 million, equivalent to 170 basis points of net sales [5]. - A $39 million pre-tax benefit linked to a litigation settlement is also reflected in the guidance [6].

Core Insights - Flex Ltd. reported lower profit in its second quarter but exceeded market estimates, and it raised its fiscal 2025 forecast above Wall Street expectations [1][4] Group 1: Second Quarter Performance - The company's net income for the second quarter was $199 million, or $0.52 per share, compared to $214 million, or $0.54 per share, in the previous year [4] - Adjusted earnings for the period were $300 million, or $0.79 per share, up from $255 million, or $0.64 per share, a year ago, surpassing analysts' expectations of $0.76 per share [4] - Net sales increased by 4 percent to $6.804 billion from $6.545 billion last year, exceeding the Street's expectation of $6.71 billion [5] Group 2: Third Quarter Outlook - For the third quarter, the company projects adjusted earnings per share between $0.74 and $0.80, adjusted operating income of $405 million to $435 million, and net sales of $6.65 billion to $6.95 billion [2] - Wall Street analysts expect earnings of $0.77 per share on net sales of $6.73 billion [2] Group 3: Fiscal 2025 Forecast - The company now projects adjusted earnings per share for fiscal 2025 to be between $3.09 and $3.17, with adjusted operating margins between 6.2 percent and 6.3 percent, and net sales of $26.7 billion to $27.3 billion [3] - Previously, the company expected adjusted earnings per share of $2.86 to $3.06 and net sales of $25.9 billion to $27.1 billion [3] - Analysts anticipate earnings of $3.04 per share on net sales of $26.71 billion for the year [3] Group 4: Factors Influencing Outlook - The revision in outlook is attributed to strong demand in data centers within the Power and Cloud businesses and continued disciplined execution [4]