TLDR
- Abercrombie & Fitch (ANF) shares surged 18% after Q3 earnings of $2.36 per share topped estimates of $2.16
- Hollister brand posted 16% sales growth to $673.27 million with 15% comparable sales increase
- Abercrombie brand sales dropped 2% with comparable sales falling 7% during the quarter
- Fourth-quarter sales guidance of 4%-6% growth slightly missed Wall Street expectations of 5.6%
- Full-year net sales forecast raised to 6%-7% growth from previous 5%-7% range
Abercrombie & Fitch delivered a strong earnings beat Tuesday, pushing shares up 18% in premarket trading. The retailer posted third-quarter earnings of $2.36 per share, crushing analyst expectations of $2.16.
Revenue hit $1.29 billion for the quarter ended November 1, up 7% from the same period last year. The top-line figure matched Wall Street forecasts.
The results provided relief for investors after a tough year. ANF stock has dropped 56% in 2025 through Monday’s close.
Tale of Two Brands
The quarter revealed a dramatic split between the company’s two main brands. Hollister emerged as the clear winner with sales climbing 16% to $673.27 million.
That figure blew past analyst estimates of $649.7 million. Comparable sales at Hollister jumped 15% year-over-year.
Meanwhile, the Abercrombie brand struggled. Sales fell 2% to $617.35 million, missing analyst expectations of $631.8 million. Comparable sales dropped 7%.
This marks the third straight quarter where Hollister has outperformed while the namesake brand falters. The trend represents a reversal from recent years when Abercrombie drove the company’s turnaround.
CEO Fran Horowitz expects Abercrombie brand sales to stay flat in the current quarter. She previously blamed the slowdown on old inventory requiring price cuts.
Holiday Outlook and Guidance
The company issued fourth-quarter guidance that came in just below Wall Street targets. Sales are expected to grow 4%-6% in the period, compared to analyst estimates of 5.6%.
Earnings per share should land between $3.40 and $3.70. Analysts had projected $3.55 per share.
Despite the challenges at Abercrombie brand, management raised full-year guidance. Net sales are now forecast to increase 6%-7% for fiscal 2025, up from the prior range of 5%-7%.
The updated net income per share guidance stands at $10.20 to $10.50, versus the earlier $10 to $10.50 range. Net income for the third quarter totaled $113 million.
Hollister will carry the company through the holiday season based on current trends. The brand continues to resonate with younger shoppers while Abercrombie searches for its footing.
Investors will be watching the company’s conference call closely. Management faces questions about specific plans to restart growth at the Abercrombie brand after missing expectations for multiple quarters.
The earnings beat and raised guidance offer some optimism. But the company needs to address the performance gap between its two brands. Hollister’s 15% comparable sales growth shows what’s possible when a brand connects with customers.
Weak consumer discretionary spending and tariff headwinds have pressured the retailer throughout 2025. The third-quarter results demonstrate that execution still matters even in a tough environment.
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