Key Takeaways
- Fourth-quarter adjusted EPS reached $3.68, surpassing the Street’s $3.57 forecast
- Revenue of $1.67 billion aligned with analyst projections; comp sales increased 1%
- Shares declined 2.3% in Wednesday premarket trading following the earnings release
- Year-to-date through Tuesday, ANF had already retreated 21% in 2026
- 2026 revenue growth projection of 3%–5% trails the 6% expansion recorded in 2025
Abercrombie & Fitch delivered fourth-quarter results that exceeded expectations but provided a cautious 2026 outlook citing decelerated sales momentum and a 70 basis point tariff headwind, pressuring shares lower.
The apparel retailer posted adjusted quarterly earnings of $3.68 per share, beating the analyst consensus of $3.57 compiled by FactSet.
Revenue totaled $1.67 billion, matching Wall Street’s projections. Comparable sales registered a 1% year-over-year increase.
Even with the earnings beat, ANF shares slipped 2.3% during Wednesday’s premarket session. The negative reaction wasn’t entirely unexpected — the stock had already tumbled 21% year-to-date through Tuesday’s close, partially due to a revised Q4 outlook issued in January.
The primary concern for shareholders centers on forward guidance.
Sales Growth Trajectory Shows Deceleration
For the full 2026 fiscal year, Abercrombie projected revenue growth in the 3% to 5% range. This represents a slowdown from the 6% expansion achieved in 2025 and aligns closely with Wall Street’s 4.2% growth estimate.
The company forecasts adjusted earnings per share between $10.20 and $11 for the year. The midpoint of approximately $10.60 exceeds the analyst consensus of $10.36 from LSEG.
While the profit outlook appears solid, it’s the revenue deceleration that’s triggering investor concern.
Tariff Headwinds Add Pressure
The retailer highlighted tariff exposure as a factor in its 2026 guidance. Abercrombie relies substantially on manufacturing from Vietnam, Indonesia, and Cambodia — nations that faced increased U.S. import levies before the Supreme Court invalidated Trump’s expansive IEEPA tariff orders.
Following the removal of those emergency measures, a temporary 10% blanket tariff remains in effect on imports, with administration officials signaling a potential increase to 15%.
Abercrombie incorporated a 70 basis point tariff-related impact into its full-year projections.
The company clarified that its forecast excludes any possible refunds or reimbursements connected to the invalidated tariffs — suggesting potential upside if recoveries materialize, though management isn’t banking on it.
While the 70 basis point hit represents a manageable headwind, it compounds the challenge of decelerating topline performance.
Management emphasized that its outlook reflects the existing tariff landscape without speculation on future policy shifts.
The stock’s 21% year-to-date decline entering Wednesday’s report signals investor anxiety that the brand’s recent growth trajectory may be cooling.
The fourth-quarter adjusted EPS of $3.68 exceeded forecasts by $0.11, and the full-year EPS midpoint surpasses consensus — yet these achievements weren’t sufficient to counterbalance concerns over moderating sales expansion.
