Abercrombie stock jumps 12% after Q1 earnings beat

Abercrombie & Fitch reported adjusted first-quarter earnings of $1.47 per share for the quarter ended May 2, topping analyst estimates of $1.28 and sending the stock up about 12% in trading. The company’s shares had fallen roughly 41% earlier this year after disappointing holiday sales and a weaker fiscal-year outlook.

Net sales for the quarter were $1.11 billion, a 1.5% increase from a year earlier and slightly below expectations of $1.12 billion. Comparable sales declined 1% overall, with the Abercrombie brand flat and Hollister down 2%. Adjusted profit declined from $1.59 per share a year earlier; analysts had been forecasting 0.3% comparable-sales growth.

Chief Executive Fran Horowitz said demand varied by region, with strength in the Americas and Asia-Pacific and weaker results across Europe, the Middle East and Africa amid escalating geopolitical tensions. She added, “We are proactively managing inventory and marketing to support the region,” and said the company is continuing to invest in stores to strengthen its brands and customer experience.

Abercrombie kept its full-year outlook unchanged, forecasting net sales growth of 3% to 5% and annual earnings of $10.20 to $11.00 per share. For the second quarter, the company projected EPS of $1.80 to $2.00 and sales growth of 2% to 4%, below analysts’ EPS expectations near $2.54.

Chief Financial Officer Robert Ball said tariff-related costs in the first quarter were lower than previously expected because of the timing and level of tariff rates. Updated assumptions now imply about a 20-basis-point gross margin headwind for the full year, versus roughly 70 basis points projected in March. Ball added that that relief is expected to be offset by elevated freight costs and continued investments in marketing and stores. Management maintained a full-year operating margin outlook of 12% to 12.5%.

Analysts reacted cautiously. William Blair kept a Market Perform rating, and analyst Dylan Carden warned that margins remain fragile and that the largest risk is worsening profitability. Some analysts expressed caution about management’s expectations for stronger sales and margin performance in the second half of the year.

Investors pushed the stock higher on the quarterly beat while the company reiterated guidance and outlined assumptions on tariffs, freight and regional demand.