Abercrombie & Fitch Navigates Market Currents: Strong Q2 and Revised Projections
Second Quarter Fiscal Year 2025 Financial Highlights
Abercrombie & Fitch (ANF) recently announced its financial outcomes for the second quarter of fiscal year 2025, revealing adjusted earnings per share of $2.32, which exceeded the consensus analyst estimate of $2.30. Concurrently, the company's quarterly revenue reached $1.209 billion, marking a 7% increase year-over-year and surpassing the Street's projection of $1.195 billion.
Brand Performance and Regional Sales Dynamics
A significant highlight from the second quarter was the exceptional performance of the Hollister brand, which recorded its highest-ever net sales for the period, demonstrating a robust 19% growth. In contrast, the Abercrombie brand experienced a 5% decrease in sales, particularly noteworthy as it followed a substantial 26% growth in the previous year. Geographically, sales growth was predominantly fueled by an 8% rise in the Americas and a 12% increase in the APAC region, while the EMEA region saw a modest 1% decline.
Profitability and Financial Position Review
The company's operating margin stood at 17.1% on a reported basis and 13.9% on an adjusted basis for the second quarter, indicating an improvement from 15.5% in the corresponding period of the previous year. As of the end of the quarter, Abercrombie & Fitch maintained a strong financial position with cash and equivalents totaling $573 million. Inventory levels were recorded at $593 million, an increase from $575 million at the close of February 2025 and $540 million as of August 2024.
Management's Strategic Commentary and Shareholder Returns
Fran Horowitz, CEO of Abercrombie & Fitch, commented on the company's progress in inventory management and the successful implementation of new product concepts. She emphasized exceeding profitability expectations for the quarter, which also facilitated the return of $50 million to shareholders through continuous share repurchases, marking the sixth consecutive quarter of such activity. Horowitz expressed optimism for the latter half of 2025, stating the company's readiness to pursue further opportunities.
Updated Fiscal Year 2025 Outlook
Looking ahead, Abercrombie & Fitch has raised its guidance for fiscal year 2025. The revised GAAP earnings per share are now projected to be in the range of $10.00 to $10.50, an increase from the earlier forecast of $9.50 to $10.50, and above the current estimate of $10.28. Sales guidance for the fiscal year has also been uplifted to a new range of $5.200 billion to $5.290 billion, compared to the prior estimate of $5.100 billion to $5.250 billion, and slightly higher than the $5.205 billion estimate. For the third quarter of 2025, the company anticipates GAAP earnings per share between $2.05 and $2.25, falling below the $2.55 estimate, with sales expected to be between $1.270 billion and $1.290 billion, surpassing the $1.261 billion estimate.