Abercrombie sales growth slows again, but retailer hikes revenue outlook as Hollister surges

Abercrombie & Fitch Co. is scheduled to release earnings figures on August 28

But the success of the teen-focused Hollister brand helped to salvage the quarter

Overall, Abercrombie & Fitch sales climbed 7%, led by 19% growth at Hollister – the brand's best-ever second-quarter net sales growth, the company said

Much of that range would top Wall Street expectations of 5.2% growth, according to LSEG.The company's s were up more than 1% in morning trading.Here's how the company did in its fiscal second quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:Earnings per : $2.32 adjusted vs. $2.30 expectedRevenue: $1.21 billion vs. $1.20 billion expectedAbercrombie's reported net income for the three-month period that Aug. 2 was $141 million, or $2.91 per , compared with $133 million, or $2.50 a , a year earlier

Excluding the impact of a favorable litigation settlement, Abercrombie saw earnings of $2.32 per .Sales rose to $1.21 billion, up 7% from $1.13 billion a year earlier. "We entered the second half of 2025 on offense," CEO Fran Horowitz said in a news release. "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 dering for our customers while to capitalize on the significant, long-term opportunities for our global brands."For its current quarter, Abercrombie's also gave a better-than-expected sales outlook

It anticipates revenue will rise between 5% and 7%, beating expectations of 4.3% growth, according to LSEG.Meanwhile, its fit outlook for the fiscal third quarter is weaker than expected

The company anticipates earnings per will be between $2.05 and $2.25, far below expectations of $2.53, according to LSEG

Abercrombie said it expects its operating margin, a closely watched metric on Wall Street, to be between 11% and 12% during its current quarter, also lower than Wall Street expectations of 13.3%, according to StreetAccount

The company said a $25 million tariff cost, net of mitigation efforts, is expected to weigh on its operating income in the current quarter.For the full year, Abercrombie tightened its earnings outlook and now expects earnings per to be between $10.00 and $10.50

When it announced fiscal first quarter earnings in May, Abercrombie said it was expecting a $70 million hit from tariffs that it could reduce to $50 million through mitigation.At the time, President Donald Trump's so-called recical tariffs were held at 10% across most of the globe

But now Abercrombie faces higher duties on goods from Vietnam, Cambodia and India, key manufacturing regions for the company

The company reiterated during a conference call with analysts that it is not planning broad price increases, saying higher prices are not part of its outlook.Abercrombie & Fitch, once a forgotten mall brand, has been on a rocket ship of growth over the last few years

But the surge has started to slow at its namesake banner

On the call, Horowitz attributed the decline in sales during the quarter to old inventory that it needed to mark down to sell through, which reduced the average selling price of ducts

She expects the brand to be back to growth by the end of the year."We did take a little bit of a step back, but we are very confident in where we're headed

The brand is in great shape

Our traffic is strong," said Horowitz. "We are confident we're on a path to imvement."In the meantime, Hollister has been fueling the overall performance, especially with the recent launch of its Y2K asment, which brings back some of the brand's beloved styles from the early 2000s and a touch of the old Abercrombie, including graphic tees and short skirts.To boost growth at Abercrombie, the brand has turned to new , such as dresses, athleisure and bridal, to stimulate growth

It's also working to expand internationally and lean on partnerships

On Monday, the company announced it would be the NFL's first "official fashion partner" – a multiyear deal that will include personal styling for athletes, athlete-led campaigns and player-designed apparel

It has teamed up with star players Christian McCaffrey, Tee Higgins and CeeDee Lamb to advertise the partnership and designed limited-edition co-designed apparel that will be available for sale during the upcoming season. "Who would have dreamed a few years ago to partner with an iconic global brand the NFL?" Horowitz told analysts.The partnership reflects the steps retailers are taking to ensure they can continue to grow sales and stay relevant with consumers at a time when shoppers are pulling back on nice-to-have items new clothes and accessories

Competitors Levi, American Eagle and Gap have teamed up with celebrities in recent marketing campaigns ahead of the back to school and fall shopping seasons.Still, the slowdown raises questions how the brand will grow in the quarters ahead, especially as competition continues to heat up, said Neil Saunders, managing director of GlobalData, in a note."Better numbers... will bably come through as the prior year comparatives start to ease, but they also need to be engineered by the company

We believe there are some good initiatives in play here, including the overseas expansion of the brand," said Saunders. "Our recent channel checks at new stores in London were all positive, although we believe the stores can reach a higher potential once the consumer economy in the UK strengthens."'Internationally, Abercrombie's efforts to expand are paying off in some parts of the world

Abercrombie has also started to expand into wholesale for its Abercrombie Kids brand, which most recently launched in Macy's

The company has a very small of the overall market, which was worth $82.1 billion last year, Saunders said."This leaves considerable headroom for growth," said Saunders. "Expanding through wholesale is a sensible strategy: it vides relatively fast access to new customers and requires far less capital than opening additional stores – of which Abercrombie Kids still has relatively few."Don’t miss these insights from CNBC Morgan Stanley says nu power is gaining momentum, recommends these stocksWells Fargo hikes S&P 500 target as U.S. tariffs get delayed againMorgan Stanley maintains bullish stance on Nvidia heading into earnings, raises price targetWhy UBS just raised its gold forecast again as the precious metal hovers near record high