Dive Brief:
- Abercrombie & Fitch Co.’s Q4 net sales rose over 5% year on year to $1.67 billion, with comps up 1%. Comparable sales rose 3% at its teen Hollister brand but dropped 1% at its namesake, the apparel retailer said Wednesday.
- Operating margin contracted to 14.1% from last year’s 16.2%, which includes a 360-basis point tariff hit. Net income dropped nearly 8% to $174.8 million.
- For the year, net sales rose 6% to a record $5.3 billion, and comps rose 3%, with Abercrombie comps down 7% and Hollister comps up 13%. In the Americas, the retailer opened 24 net new stores and 11 Hollister stores.
Dive Insight:
For the fourth straight year, across both its brands, Abercrombie & Fitch Co. in 2025 opened more stores than it closed. In 2026, plans are to open about 30 net new stores and remodel or right-size 70 locations.
“I think Q4 — what it defines, honestly — is a balanced performance, which is growth across brands, regions and channels,” CEO Fran Horowitz told analysts Wednesday. “And that is definitely our objective in 2026.”
Abercrombie & Fitch Co. has worked to turn around its brand image, especially at its namesake. But the super-charged sales improvements stemming from that effort are likely over. Still, the picture is nuanced, according to GlobalData Managing Director Neil Saunders.
“Overall, Abercrombie & Fitch is driving more revenue through the business and is reaching record levels in most quarters,” he said in emailed comments. “And both the main brands continue to resonate with customers, which provide opportunities for expansion which supports topline growth.”
The company expects full year 2026 net sales to grow between 3% to 5% and operating margin to reach 12% to 12.5%.
This “implies moderating growth and margin normalization, in our view, with tariffs a near‑term headwind,” Jefferies analysts led by Corey Tarlowe said in a Wednesday client note.
One way to reignite momentum would be to acquire or launch another brand, Saunders said.
“Neither are imperative but they could add weight to future growth prospects,” he said. “All in all, the outlook for Abercrombie & Fitch is solid. The company is well run, has focus and knows what it is about.”
Executives said they are monitoring upheaval in the Middle East, which could disrupt some sourcing operations, as well as franchise and joint venture partners, and “anticipate a slight sales headwind.”
“I do want to acknowledge the situation the Middle East, with associates and stores in the region, our focus continues to be on their safety and well being,” Horowitz said before she opened the conference call Wednesday morning.
