Abercrombie & Fitch Sales growth has slowed down again in its second tax quarter while the clothing company is struggling to exceed the sharp increase in exercise.
During the quarter, sales of the homonymous Abercrombie brand dropped by 5% while comparable sales dropped by 11%.
But the success of the Hollister brand focused on adolescents helped save the quarter. Overall, Abercrombie & Fitch Sales increased by 7%, led by 19% growth to Hollister – the best growth in net trimester in the brand, said the company. Comparable sales throughout the company have increased by 3%, led by Hollister, who also found that comparable sales would increase by 19%.
Abercrombie narrowly beat Wall Street’s expectations on the upper and lower lines. The company has also increased its prospects for income in the year and now expects sales to increase from 5% to 7%, compared to previous indications from 3% to 6%. A large part of this fork greater than the growth of Wall Street of growth of 5.2%, according to LSEG.
The company’s shares have increased by more than 1% in the morning trade.
Here is how the company did in its second tax quarter compared to what Wall Street provided, on the basis of a survey of LSEG analysts:
- Profit by action: $ 2.32 adjusted Against $ 2.30 expected
- Income: $ 1.21 billion against $ 1.20 billion expected
The declared net profit of Abercrombie for the period of three months which ended on August 2 was $ 141 million, or $ 2.91 per share, against $ 133 million, or $ 2.50 per share, a year earlier. Excluding the impact of a favorable dispute settlement, Abercrombie experienced a profit of $ 2,32 per share.
Sales reached $ 1.21 billion, up approximately 7%, compared to $ 1.13 billion a year earlier.
“We entered the second half of 2025 in attack,” French CEO said in a press release. “We are increasing our prospects for net sales of the full year, reflecting our solid positioning and growth trajectory, building record results in 2024. Our team remains focused on the delivery of our customers while investing in capitalizing on important and long -term opportunities for our global brands.”
For his current quarter, Abercrombie also gave more than expected sales prospects. It provides that income will increase between 5%and 7%, beating expectations of 4.3%, according to LSEG.
Meanwhile, his prospects for profit for the third tax quarter are lower than expected. The company provides that profit per share will be between $ 2.05 and $ 2.25, well below $ 2.53 expectations, according to LSEG.
Abercrombie said that it expects its operating margin, a metric closely looked at Wall Street, between 11% and 12% during its current quarter, also lower than Wall Street of 13.3%, according to Streetaccount. The company said that a price cost of $ 25 million, a net of mitigation efforts, should weigh on its operating income during the current quarter.
During the full year, Abercrombie tightened his profit prospects and now expects the profit per share to be between $ 10.00 and $ 10.50. This is compared to a previous beach of $ 9.50 to $ 10.50 per share.
Abercrombie guidelines include around $ 90 million in net rate costs – almost double what he predicted before. When she announced a tax profit in the first quarter in May, Abercrombie said he was expecting $ 70 million in prices which he could reduce to $ 50 million thanks to attenuation.
At the time, the so-called reciprocal rates of President Donald Trump took place at 10% in most of the globe. But now, Abercrombie faces higher tasks on the goods of Vietnam, Cambodia and India, of the main manufacturing regions of the company.
The company reiterated during a conference call with analysts that it does not plan to increase large price increases, saying that higher prices were not part of its prospects.
Abercrombie & Fitch, formerly a forgotten Mall brand, has been on a growth rocket in recent years. But overvoltage began to slow down to its homonymous banner. During the call, Horowitz awarded the drop in sales during the quarter to the old inventory he needed to mark to sell, which reduced the average sale price of products. It expects the brand to return to growth by the end of the year.
“We have taken a little step back, but we are very confident in the place where we are heading. The brand is in great shape. Our traffic is strong,” said Horowitz. “We are convinced that we are on the path of improvement.”
In the meantime, Hollister has fueled the company’s overall performance, in particular with the recent launch of its Y2K assortment, which brings some of the beloved styles of the brand of the early 2000s and a touch of the old Abercrombie, including graphic t-shirts and short skirts.
To increase growth in Abercrombie, the brand has turned to new categories, such as dresses, athleist and the bride, to stimulate growth. It also strives to expand internationally and rely on partnerships.
On Monday, the company announced that it would be the first “official fashion partner” of the NFL – a multi -year agreement which will include a personal style for athletes, the campaigns led by athletes and the clothes designed by players. The partnership comes after Abercrombie launched an assortment of products under NFL license in 2022, a category that has performed well for the company.
He has teamed up with star players like Christian McCaffrey, Tee Higgins and Ceedee Lamb to announce the partnership and designed limited co-publishing clothes that will be available for sale during the next season.
“Who would have dreamed a few years ago to join an emblematic world brand like the NFL?” Horowitz told analysts.
The partnership reflects the stages that retailers take to ensure that they can continue to increase sales and remain relevant with consumers at a time when buyers are retreating from pleasant items such as new clothes and accessories. Competitors like Levi,, American eagle And Gap You are associated with celebrities during recent marketing campaigns before shopping seasons at school and fall.
However, the slowdown raises questions about how the brand will develop in future neighborhoods, especially since competition continues to warm up, said Neil Saunders, general manager of Globaldata, in a note.
“Better figures … will probably occur as the comparisons of the previous year are starting to facilitate ease, but they must also be designed by the company. We believe that there are good initiatives at stake here, including expansion abroad of the brand,” said Saunders. “Our recent channel checks in new stores in London were all positive, although we think that stores can reach higher potential once the UK consumer economy is strengthening.”
Internationally, the efforts of Abercrombie to develop are paid in certain parts of the world. During the quarter, sales in its Asia-Pacific region increased by 12%, while comparable sales increased by 3%. This was offset by a slowdown in Europe, the Middle East and Africa, where sales slipped 1% and comparable sales fell 5%.
Abercrombie also started to develop basically for its brand Abercrombie Kids, which recently launched Macy. The company has a very small part of the global market, which was worth $ 82.1 billion last year, said Saunders.
“This leaves a considerable height for growth,” said Saunders. “Expansion through the Big is a reasonable strategy: it offers relatively rapid access to new customers and requires much less capital than to open additional stores – of which Abercrombie Kids still has relatively little.”