Quick Summary
- Fourth quarter adjusted EPS reached $3.68, surpassing analyst projections of $3.57
- Revenue hit $1.67 billion, meeting Street forecasts; comp sales climbed 1%
- Shares declined 2.3% during Wednesday’s premarket session following the quarterly report
- Year-to-date losses through Tuesday stood at 21% for 2026
- Company projects 2026 revenue expansion of 3%–5%, trailing last year’s 6% increase
Abercrombie & Fitch delivered a solid fourth quarter performance but disappointed investors with its cautious 2026 revenue outlook and tariff headwinds, pushing shares down.
The apparel retailer posted adjusted profit of $3.68 per share in its fiscal fourth quarter, exceeding the Street’s $3.57 forecast compiled by FactSet.
Revenue totaled $1.67 billion, matching consensus projections. The company reported a 1% year-over-year increase in comparable-store sales.
Even with the earnings success, ANF shares tumbled 2.3% before the opening bell Wednesday. The market’s negative response wasn’t entirely unexpected — the stock has already shed 21% in 2026 through Tuesday, following a trimmed fourth quarter outlook issued in January.
The primary concern centers on future performance.
Growth Trajectory Shows Deceleration
Looking ahead to fiscal 2026, the retailer projects revenue growth in the 3% to 5% range. This represents a pullback from the 6% expansion achieved in 2025, though it aligns with Wall Street’s 4.2% growth estimate.
Adjusted earnings per share for the full year are anticipated to land between $10.20 and $11. The midpoint around $10.60 actually exceeds the analyst consensus of $10.36 from LSEG.
The bottom-line forecast appears reasonable. The concern lies with the slowing revenue trajectory.
Trade Policy Creates Additional Pressure
The company highlighted tariff exposure in its 2026 guidance. Abercrombie relies significantly on manufacturing from Vietnam, Indonesia, and Cambodia — nations that faced heightened U.S. import levies before the Supreme Court invalidated Trump’s expansive IEEPA-based tariffs.
Following the court’s decision eliminating those emergency measures, a temporary 10% universal tariff now applies to imports, with indications pointing toward a 15% rate.
Management incorporated a 70 basis point tariff drag into its annual forecast.
The retailer emphasized that its projections exclude any potential reimbursements related to the overturned duties — suggesting possible upside if refunds materialize, though the company isn’t banking on it.
While the 70 basis point impact appears manageable, it adds another challenge alongside decelerating revenue growth.
Abercrombie stated it’s planning based on the existing tariff landscape without making assumptions about policy shifts ahead.
The stock’s 21% year-to-date plunge entering Wednesday’s earnings release signals investor anxiety that the company’s impressive growth trajectory may be cooling off.
Fourth quarter adjusted earnings of $3.68 exceeded estimates by $0.11, and the full-year earnings midpoint beats consensus — yet these positives couldn’t overcome concerns about the more subdued sales outlook.
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