Abercrombie & Fitch (ANF) earnings Q1 2026
Abercrombie and Fitch The company said it reported mixed first-quarter results on Wednesday and weaker-than-expected guidance after noting that the conflict in the Middle East “directly impacted” sales.
Despite those challenges, shares rose nearly 12% in afternoon trading as the company easily beat Wall Street’s earnings estimates.
Sales in Abercrombie’s Europe, Middle East and Africa region fell 10% in the quarter as demand for the brand’s Hollister flag slowed as the dispute escalated, finance chief Robert Ball said on a call with analysts.
Overall, the retailer said its outlook reduced total company net sales growth in the first quarter by more than 0.5 percentage points.
“We’ve focused on the things we can control, including our inventory levels and marketing investments, ensuring we can respond to what’s happening in real time,” CEO Fran Horowitz added on the call. “Despite these headwinds in EMEA, we expect total sales growth in the second quarter as well as the full year 2026, which will be our fourth consecutive year of net sales growth.”
According to LSEG, Abercrombie expects earnings per share to be between $1.80 and $2 for the current quarter; This falls well short of estimates of $2.54.
Although the company’s outlook for this quarter was worse than analysts expected, it reaffirmed its full-year forecast. Abercrombie projects net sales for the fiscal year will increase 3% to 5% and earnings per share will be between $10.20 and $11.
Despite the slowdown in EMEA, which represents approximately 15% of total company sales, Abercrombie’s companywide sales increased 2%. Ball said, though, that growth isn’t coming from organic consumer demand, but rather new store openings and favorable exchange rates.
Here’s how the apparel company performed in the first fiscal quarter compared to Wall Street’s expectations, according to a survey of analysts by LSEG:
- Earnings per share: $1.47 versus expectations of $1.28
- Revenue: $1.11 billion, expected $1.12 billion
The company’s reported net income for the three months ending May 2 was $67.13 million, or $1.47 per share, compared to $80.41 million, or $1.59 per share, a year earlier.
Sales increased from $1.10 billion to $1.11 billion, up nearly 2% from the previous year.
Asked about the current quarter outlook and what he expects to change in the back half of the year, Ball cited not an expected improvement in demand but easier comparisons with last year’s results and lower marketing spend, among other factors.
“There is a balanced story here. As we come to the end of the year, tariffs and freight will fluctuate slightly from year to year,” Ball explained. Ball said that despite the challenges it faces in the Middle East and EMEA region, the company has seen moderate growth in average retail sales, which has funded the investments it has made and kept it in line with an operating margin of 12% to 12.5%.
Unlike many of its peers, Abercrombie is factoring in recent reductions in tariff rates after the U.S. Supreme Court ruled that President Donald Trump’s so-called reciprocal tariffs were illegal, which has helped its financial outlook.
The company expects the tariffs to impact profitability by 0.2 percentage points in fiscal 2026, compared to previous expectations of around 0.7 percentage points. It said it had applied for a tariff rebate of about $100 million but did not include that potential flow in its outlook.
