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Abercrombie & Fitch Co. ANF posted strong fourth-quarter fiscal 2025 results, wherein the top line came in line with the Zacks Consensus Estimate and the bottom line surpassed the same. Meanwhile, the company’s sales and earnings increased year over year.
Abercrombie’s earnings per share (EPS) of $3.68 in the fiscal fourth quarter increased 3.1% from $2.57 reported in the year-ago quarter. Also, the bottom line beat the Zacks Consensus Estimate of $3.56 per share.
Abercrombie & Fitch Company price-consensus-eps-surprise-chart | Abercrombie & Fitch Company Quote
Net sales of $1.67 billion advanced 5% year over year on a reported basis and 4% on a constant-currency basis. ANF’s comparable sales (comps) improved 1%. The top-line growth was driven by broad-based net sales growth across most regions, brands and channels.
ANF marked its thirteenth straight quarter of sales growth, delivering record fourth-quarter and full-year net sales that increased from the prior year, supported by broad-based momentum across regions, brands and channels. Profitability stayed healthy, earnings per share beat expectations, and management emphasized ongoing strategic investments and share repurchases, along with a positive outlook for continued sales and earnings growth in the upcoming fiscal year.
Shares of this Zacks Rank #3 (Hold) company have lost 2.7% in the past six months compared with the industry's 4% drop.
Sales in the Americas increased 5% year over year to $1.4 billion, EMEA sales grew 8% to $241.4 million and APAC sales rose 9% to $44.5 million. Comps rose 2% in the Americas, while the metric was down 2% in EMEA and 0% in the APAC region.
Net sales rose 4% year over year to $806.5 million for the Abercrombie brand. Moreover, sales increased 6% to $863.3 million at Hollister. The Abercrombie brand contributed 48.4% to the total company sales, whereas Hollister contributed 51.8% to sales. Comps fell 1% for Abercrombie but grew 3% for Hollister in the quarter.
Our model predicted sales growth of 2.2% for the Abercrombie brand and 8.1% for Hollister. We estimated sales to increase 5.2% in the Americas, 5.7% in EMEA and 4.5% in APAC.
Selling expenses were $574.8 million, which rose 9.2% year over year. As a percentage of sales, selling expenses expanded 120 basis points (bps) to 34.4%. General and administrative costs fell 6.5% to $181.8 million, while the metric, as a percentage of sales, decreased 140 bps to 10.9%.
The company reported an operating income of $235.9 million, down 7.9% from $256.1 million in the year-ago period. It registered an operating margin of 14.1%, down 210 bps from the year-ago quarter.
Abercrombie ended the fiscal year with cash and cash equivalents of $759.5 million and stockholders’ equity of $1.42 billion, excluding non-controlling interests.
The company had a liquidity of $1.2 billion at the end of the fiscal year, which included cash and equivalents and borrowing available under the ABL Facility. Net cash provided by operating activities was $619 million as of Jan. 31, 2026.
In the fourth quarter of fiscal 2025, the company bought back about 0.9 million shares for roughly $100 million. For the fiscal year ended Jan. 31, 2026, it repurchased 5.4 million shares totaling $450 million, resulting in an 11% reduction in shares outstanding compared with the start of the year. ANF still has $850 million available under the repurchase program authorized in March 2025.
Management provided the view for the first quarter and fiscal 2026. For the first quarter of fiscal 2026, net sales are projected to rise 1-3% from $1.1 billion recorded in the year-ago period. The operating margin for the fiscal first quarter is expected to be 7%. It expects EPS to be in the band of $1.20-$1.30, lower than $1.59 reported in the year-ago quarter. The effective tax rate is expected to be about 26%.The company expects share repurchase of $100 million in the first quarter of fiscal 2026.
For fiscal 2026, the company expects year-over-year sales growth in the range of 3-5% from $5.3 billion registered last fiscal. This upside is likely to be backed by growth across regions and brands. The company anticipates an operating margin in the band of 12-12.5%.
For fiscal 2026, management envisions weighted average shares of around $45 million, which reflects the impacts of 2026 share repurchases. Combined with the tax rate, ANF predicts EPS to be in the bracket of $10.20-$11.00 compared with $10.46 delivered in fiscal 2025.
Abercrombie anticipates an effective tax rate of around 29% for fiscal 2026. Capital expenditure is estimated to be in the range of $200-$225 million.
For fiscal 2026, Abercrombie plans 30 net store openings, together with 70 remodels and rightsizes, and 25 closures.
Some better-ranked stocks are American Eagle Outfitters Inc. AEO, Williams-Sonoma Inc. WSM and Boot Barn Holdings Inc. BOOT.
American Eagle is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15-25 years. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle’s fiscal 2025 sales indicates growth of 2.6%, from the year-ago reported number, while earnings suggest a year-over-year decline of 20.7%. AEO has a trailing four-quarter earnings surprise of 35.1%, on average.
Williams-Sonoma is a multichannel specialty retailer of premium-quality home products. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Williams-Sonoma’s fiscal 2025 sales indicates growth of 1.9% from the previous year’s reported figure, while the estimate for earnings suggests a year-over-year decline of 1%. WSM has a trailing four-quarter average earnings surprise of 8.6%.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year sales and earnings indicates growth of 17.6% and 26%, respectively, from the year-ago reported numbers. BOOT has a trailing four-quarter earnings surprise of 4.9%, on average.
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This article originally published on Zacks Investment Research (zacks.com).
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