Abercrombie & Fitch shares fall on sales outlook, US tariffs

4th Mar 2026 15:58

(Sharecast News) - Shares in Abercrombie & Fitch fell on Wednesday despite the apparel retailer reporting stronger-than-expected fourth-quarter earnings, as investors focused on a slower sales outlook for the year ahead and the impact of new US tariffs.

The company reported adjusted earnings of $3.68 per share for the quarter ended 31 January, up from $3.57 a year earlier and above analysts' expectations of $3.57.

Quarterly revenue rose 5.4% to $1.67bn, broadly in line with Wall Street forecasts, while net income reached $172.13m.

Abercrombie said the results capped a strong holiday quarter, with comparable-store sales rising 1% and marking the company's 13th consecutive quarter of growth.

Chief executive Fran Horowitz said the retailer delivered record fourth-quarter sales and completed its third consecutive year of double-digit operating margins.

For the full financial year, revenue increased 6% year-on-year to $5.3bn, with operating margins reaching 13.3%.

Performance across brands diverged, however, with Hollister posting record growth of 15% while the Abercrombie brand recorded a 1% decline in annual sales.

Despite the earnings beat, the retailer forecast slower growth in the current fiscal year.

Abercrombie expected net sales to rise by 3% to 5% in 2026, compared with 6% growth in 2025, while first-quarter sales were projected to increase by only 1% to 3%, below analysts' expectations of around 4.9%.

The company guided for full-year diluted earnings per share of $10.20 to $11.00 and an operating margin of 12% to 12.5%.

The outlook incorporated the impact of new tariffs on imported goods in the United States, which the retailer expects would add around 290 basis points to costs in the first quarter and about 70 basis points for the full year after mitigation efforts.

Investors reacted cautiously to the guidance, with Abercrombie shares falling about 5% in premarket trading after the announcement and down more than 21% so far this year.

The company also outlined plans to continue returning capital to shareholders, after generating $619m in operating cash flow during fiscal 2025 and repurchasing 5.4 million shares for $450m.

Abercrombie said it planned to buy back a further $450m of stock in 2026.

At 1145 ET (1645 GMT), shares in Abercrombie & Fitch were down 3.55% in New York at $95.70.

Reporting by Josh White for Sharecast.com.