TCF POST Report
NEW ALBANY, Ohio, Aug. 26, 2026 — Abercrombie & Fitch Co. delivered another record quarter as strong international momentum, particularly in Asia-Pacific, complemented continued growth in the Americas and improving performance in EMEA.
The apparel and accessories retailer reported second-quarter fiscal 2026 net sales of $1.27 billion, up 5% year on year, extending its streak to 15 consecutive quarters of sales growth. Comparable sales were flat, reflecting a stronger contribution from new and recently expanded business while underlying demand remained mixed. Profitability improved sharply. Operating income rose to $253 million from $207 million, producing a 19.9% operating margin, compared with 17.1% a year earlier. Diluted earnings per share increased to $4.17 from $2.91.
The results, however, benefited materially from an approximately $100 million pre-tax refund of IEEPA tariffs, which contributed an estimated $1.75 to diluted EPS. Even excluding that benefit, management said operating margin and EPS exceeded its quarterly outlook. The company also cited higher average unit retail prices and operating leverage from higher sales as contributors to margin expansion.
CEO Fran Horowitz said the quarter reflected the company’s continued focus on product, marketing and customer experience. “We delivered record second quarter net sales and our 15th consecutive quarter of growth,” Horowitz said, highlighting “compelling product, marketing, and experiences.” She said growth was balanced across brands and regions, with accelerating momentum in the Americas and improving trends in EMEA.
APAC emerges as the fastest-growing major market
APAC was the standout regional performer, with Q2 net sales rising 19% year on year, compared with 5% growth in the Americas and 2% in EMEA. APAC sales reached approximately $47 million, up from $44 million a year earlier. The region’s comparable sales also rose 13%, substantially ahead of the Americas’ 1% and EMEA’s 2%.
The acceleration reinforces Abercrombie & Fitch’s broader strategy of expanding through a combination of owned stores, franchising, joint ventures, licensing and other partnerships. The company describes APAC as including Asia and Oceania. Its physical footprint in APAC was 68 stores at the end of Q2, comprising 54 owned-and-operated locations and 14 franchise stores. That compares with 67 total APAC stores a year earlier, while the company has continued to use franchising to expand in developing markets. The presentation points to Pondok Indah, Indonesia, which opened in March 2026, as part of the company’s geographic expansion, alongside new owned stores in other international markets.
Abercrombie brands lead brand performance
By brand, Abercrombie brands were the strongest performer, generating Q2 sales growth of 8%, while Hollister grew 2%. Total company sales increased 5%. Abercrombie brands generated approximately $670 million in Q2 sales, compared with $657 million a year earlier, while Hollister sales increased to about $597 million from $552 million. The differing trajectories underline the stronger current momentum of the Abercrombie banner, although both brands reached record second-quarter sales.
The company’s multi-brand strategy remains central to its growth model. Abercrombie & Fitch says its global lifestyle brands are designed around distinct customer groups, with product extending beyond core apparel into complementary lifestyle categories. Its stated growth priorities include lifestyle-driven assortments, multi-point distribution and geographic expansion.
Category expansion broadens sourcing and distribution opportunities
Beyond its traditional apparel offer, the company is expanding its addressable market through additional categories and channels. Its current initiatives include footwear, prescription eyewear and sunglasses, as well as bedding and other non-apparel products.
Distribution partnerships include NFLShop.com and Macy’s for A&F Kids, while Hollister has expanded through Target, including dorm bedding. The company also identifies footwear as an expansion category.
The strategy is significant from a sourcing perspective because Abercrombie is increasingly pursuing a head-to-toe lifestyle proposition rather than relying solely on apparel. The company explicitly identifies “customer-specific non-apparel product needs” and head-to-toe dressing as components of its growth priorities.
Sourcing and tariff pressure remain central to the outlook
Despite the strong quarter, trade policy remains a major variable for the company and its global sourcing network.
Abercrombie reported approximately $15 million of tariff expense in Q2, but this was more than offset by the approximately $100 million IEEPA tariff refund, producing an estimated $85 million net tariff benefit for the quarter. Year over year, the total tariff impact represented a benefit of approximately $90 million.
For the remainder of fiscal 2026, management has revised its assumed effective tariff rate to 10%-12.5%, down from the previous 15% assumption. The company nevertheless continues to identify global trade policy, international trade disputes, sourcing-country conditions, freight costs and supply-chain disruption among key risks to its business.
This makes the tariff refund an important contributor to quarterly profitability, but not a substitute for underlying operating performance. The company’s sales growth, brand momentum, international expansion and higher average unit retail prices remain the more durable drivers of its business.
Stronger balance sheet supports expansion and shareholder returns
Abercrombie entered the second half with $628 million in cash and equivalents, compared with $573 million a year earlier, while inventory was broadly stable at $592 million. Total liquidity stood at approximately $1.1 billion, including $450 million of availability under its revolving credit facility.
The company also accelerated capital returns. It repurchased $177 million of shares during Q2, taking year-to-date repurchases to approximately $282 million, equivalent to about 7% of shares outstanding at the beginning of the year. Since the start of 2021, it has repurchased approximately 25 million shares for about $1.5 billion.
Meanwhile, operating cash generation strengthened substantially: net cash provided by operating activities reached $313 million year to date, compared with $113 million in the comparable period last year.
Full-year outlook raised
Following the second-quarter performance, Abercrombie raised its fiscal 2026 outlook. It now expects net sales growth of around 5%, compared with its previous range of 3%-5%, and an operating margin of 14.5%-15.0%, versus the previous 12.0%-12.5% range.
The company raised its diluted EPS outlook to $13.10-$13.60, from $10.20-$11.00 previously, while increasing its expected share repurchases to at least $500 million from around $450 million. Capital expenditure is now expected at approximately $250 million, with about 30 net store openings planned.
For Q3, management expects sales to rise 5%-6%, operating margin of 13%-14%, diluted EPS of $2.90-$3.20 and at least $100 million of share repurchases.
The company is therefore entering the second half with a combination of accelerating APAC growth, recovering EMEA performance, solid Americas momentum, stronger Abercrombie brand sales and an expanding multi-category distribution strategy. The key test will be whether those underlying gains can continue to offset tariff and sourcing pressures once the unusually large IEEPA refund benefit fades.
