Abercrombie & Fitch Posts Strong Q2, Raises 2025 Outlook
- David Moin
- Sep 9
- 4 min read
CEO Fran Horowitz tells WWD Hollister continues to resonate on all fronts, and that the Abercrombie brand should return to growth later this year.
Hollister had another strong quarter. George Chinsee/WWD
Abercrombie & Fitch, riding momentum with its Hollister teen brand, posted a strong second quarter, marked by sales and profit gains.
Net income rose 11.7 percent to $141.4 million in the quarter ended Aug. 2, from $133.2 million in the year-ago period. Net income per diluted share rose to $2.91, compared to $2.50 in the 2024 quarter.
Operating income rose to $207 million as compared to operating income last year of $176 million.
Net sales of $1.2 billion were up 7 percent from $1.13 billion in the year-ago period, with comparable sales rising 3 percent.
Operating margin as a percent of sales of 17.1 percent compared to 15.5 percent last year.
The New Albany, Ohio-based specialty fashion retailer raised its sales gain outlook for 2025 to 5 to 7 percent growth, up from its previous forecast of 3 to 6 percent. The company also raised its profit outlook for 2025 to $10 to $10.50 per diluted share, from its previous outlook of $9.50 to $10.
Fran Horowitz Sari P PHOTOGRAPHY
“It was a very good quarter. I’m very proud of the results,” A&F’s chief executive officer Fran Horowitz told WWD. “We’re expecting more growth on growth in the back half of the year. 2025 is expected to beat 2024 which was a record year for us.”
Hollister brands delivered its best second-quarter net sales on growth of 19 percent to $657 million from $552 million in the year-ago period. But the Abercrombie brands were down 5 percent to $552 million from $582 million in the year-ago period.
Asked what went right at Hollister, which caters to teens, Horowitz said, “Everything — the product, the voice, the experience, both genders, all categories. The team is absolutely dialed in with the consumer.” The merchandise, she said, is very trend driven, and the brand’s recent Y2K and homecoming collections resonated. Among the categories selling were styles for going out, sleepwear, denim, fleece, swim. “It was an all-around win,” Horowitz said.
Hollister style Courtesy image
Regarding the Abercrombie brands, she said she expects to see a return to growth later this year, with a focus on BoHo and Western styles as contributors.
During her conference call Wednesday with investors and industry analysts Horowitz said the company delivered its 11th consecutive quarter of growth and exceed its top- and bottom-line expectations.
“Our team continues to leverage our strong foundation to balance reading and reacting to the current environment while diligently investing to realize the long-term global potential for our business. Our strong first half and start to the third quarter gives us confidence to increase our full-year net sales forecast, building on a record 2024.”
The CEO said A&F is entering the back half of the year with momentum to deliver sales growth, top-tier profitability and drive shareholder return.
“With Hollister, we saw a great response to our brand activations at Lollapalooza in Chicago. Leading into August, we released our updated collegiate collection which included several exciting social and in-store campaigns, with more on the way. We continue to find fun, effective ways to engage with the team, fueling Hollister brands’ impressive growth.
“For Abercrombie, the quarter was slightly below our expectations and similar to the first quarter overall,” Horowitz said.
Through the licensing partnership announced in 2024, Abercrombie Kids launched with department stores including Nordstrom and Macy’s.
Horowitz also said Abercrombie opened 17 new stores in the first half and 20 more scheduled in the second half.
“We delivered record second-quarter net sales, exceeding our expectations, with 7 percent growth to last year,” Horowitz said in her prepared statement. “We continued to drive meaningful engagement with our teen customer in Hollister brands, growing 19 percent on strong summer and back-to-school demand.
“While we made progress on key inventory initiatives by leveraging promotions and testing new product concepts, Abercrombie brands net sales were down 5 percent, lapping 26 percent growth in the prior year. On the bottom line, we exceeded our second-quarter profitability expectations, while also returning $50 million to shareholders through our sixth consecutive quarter of share repurchases.
“We entered the second half of 2025 on offense,” Horowitz added. “We are increasing our full-year net sales outlook, reflecting our strong positioning and growth trajectory, building on record 2024 results.
Our team remains focused on delivering for our customers while investing to capitalize on the significant, long-term opportunities for our global brands.”
Still, while A&F continues its winning ways, Wall Street pulled the stock price down 1.4 percent, or $1.38, to close at $95.36 on Wednesday.
“Net of planned mitigation efforts, the full-year outlook assumes approximately $90 million of tariff expense, or 170 basis points as a percent of net sales,” the retailer reported.
“Abercrombie and Fitch posted a strong beat and raise on the back of the Hollister brand’s outstanding sales growth, along with impressive cost discipline that expanded operating margins,” Emarketer principal analyst Sky Canaves wrote in a note on A&F. “These are no small feats for mature brands in discretionary categories, given the current environment of higher tariffs and softer consumer demand. “The key challenge for the rest of the year will be reversing Abercrombie & Fitch’s sales declines against tough comparisons,” Canaves added. “Its recently announced a deal to become the NFL’s official brand partners is well-timed to fuel brand heat during the upcoming football and holiday seasons. It will capitalize on renewed attention to the league and player fashion from emerging fan demographics, including Gen Z and women.”
After interviewing a number of A&F executives, Natasha Nair, analyst at Third Bridge, a research firm serving private equity firms, credit investors, hedge funds and strategy consultants, reported: “Abercrombie & Fitch has significantly reduced its exposure to China over the years. However, India has become a key base and is now the primary concern in terms of tariff exposure, but the company’s flexible supply chain and presence in multiple countries mean it can shift production to lower tariff markets such as Vietnam, Bangladesh or Sri Lanka if needed.
“Our experts believe Abercrombie will eventually have to raise prices to offset tariff-related cost pressures,” Nair added. “However, they add that the brand’s core customers are less price sensitive than the average consumer. As long as the product is strong, a modest increase at the register is unlikely to deter demand. Looking ahead, growth opportunities lie in sports and lifestyle partnerships. The company has already expanded collaborations with the NFL and NBA, which our experts see as a promising avenue to reach new consumers and strengthen brand relevance. They also highlight that product quality and expansion into emerging markets will be critical to sustaining growth momentum.”
From Abercrombie & Fitch Courtesy image
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