Abercrombie shares posted their best single-day gain since 2025 following a strong earnings report
Clothing Retailer's Strategy Is Paying Off
Abercrombie & Fitch shares posted their biggest single-session gain since 2025 / Photo: Sorbis / Shutterstock
Shares of retailer Abercrombie & Fitch posted their best one-day gain since 2025 during trading on August 26: the stock rose by nearly half. The company’s revenue for the last quarter exceeded forecasts. This signals a recovery for the apparel manufacturer, despite a prolonged period of slow sales growth, Bloomberg notes.
What the company reported in its report
Abercrombie & Fitch shares rose as much as 42% during Wednesday’s trading session, reaching $154.58. Prior to this surge, however, they were down 13% from the start of 2026. Short positions (betting on a decline) account for about 9% of outstanding shares, which could potentially increase volatility, Bloomberg reported, citing data from S3 Partners.
In the second quarter, which ended on August 1, Abercrombie posted a 5% increase in revenue compared with the same period last year, reaching a record $1.27 billion. Analysts had expected $1.25 billion, according to LSEG data cited by Reuters. Total comparable sales remained flat due to a slowdown in growth at the Hollister brand, which targets teens and young adults, Bloomberg reports. However, company executives remain optimistic about the rest of the year amid an acceleration in August, the agency reports, citing statements made during a conference call.
Abercrombie, known for its polo shirts and logo-emblazoned hoodies, has become one of the most successful companies in the apparel industry in recent years, according to Bloomberg. CEO Fran Horowitz’s strategy to transform the company into a premium lifestyle brand has paid off—especially among older customers who grew up with the brand, the agency reports.
Total sales for the company’s namesake brand rose 8% year-over-year in the last quarter, although comparable sales increased by only 4%—partly due to growth in full-price sales and an expanded product lineup. The company’s brand portfolio also includes Hollister, abercrombie kids, and Gilly Hicks.
The company now expects adjusted earnings per share for fiscal year 2027 to reach up to $13.6 per share, compared with its previous forecast, which had an upper limit of $11. The retailer also reported that it expects net sales to grow by 5%—the upper end of its previous forecast.
“We’ve come a long way and have truly rebuilt this entire company from the ground up and from the top down. We’re winning across all gender categories, brands, and regions,” Horowitz said (as quoted by Bloomberg).
What Analysts Are Saying
Abercrombie's sales exceeded expectations amid improving trends at the company and easing pressure in the EMEA (Europe, Middle East, and Africa) region for Hollister, noted Dana Telsey, an analyst at Telsey Advisory Group. Her comments were reported by Reuters.
Of the 15 analysts covering the company's stock, nine recommend buying it, while the remaining six recommend holding it, according to MarketWatch. The analysts' average price target implies a 12% increase in the stock price relative to the most recent closing price.
This article was AI-translated and verified by a human editor
