Abercrombie & Fitch Co. reported fiscal third‑quarter 2025 results that surpassed expectations, with net sales of $1.29 billion—up 7% year‑over‑year—and adjusted earnings per share of $2.36, beating the consensus estimate of $2.14 by $0.22, a 10% lift. The company’s record net sales were driven largely by a 16% jump in Hollister brand sales, while its namesake Abercrombie brand saw a modest 2% decline, reflecting a shift in consumer preference toward the more fashion‑forward Hollister line.
The operating margin contracted to 12.0% from 14.8% in the same quarter a year earlier. Management attributed the 2.8‑percentage‑point compression to increased marketing, digital, and technology investments, as well as a 210‑basis‑point adverse tariff impact that raised cost of goods sold. Despite the margin squeeze, the company maintained profitability through disciplined cost management and selective price increases in high‑margin categories.
In light of the strong performance, Abercrombie & Fitch raised its full‑year net sales guidance to 6%–7% growth, up from the previous 5%–6% range, and reaffirmed an operating margin target of 13.0%–13.5%. The company also narrowed its EPS guidance to $10.20–$10.50, reflecting confidence in sustaining earnings momentum while managing the cost pressures that contributed to the margin decline.
CEO Fran Horowitz highlighted the company’s “strong execution” and expressed confidence that the brand portfolio would continue to generate top‑line growth. CFO Robert Ball noted that the firm is entering the next tariff phase from a position of strength and that targeted price increases will help offset the remaining tariff impact. Both executives emphasized ongoing investments in omnichannel capabilities and inventory optimization as key drivers of future performance.
Investors reacted positively to the earnings release, with analysts noting the significant EPS beat and the upward revision of full‑year guidance as signals of robust demand and effective cost control. The market’s enthusiasm underscores confidence in the company’s ability to navigate current headwinds while capitalizing on growth opportunities in its core brands.
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