TLDR
- ANF stock surged nearly 35% to an 18-month high after Q2 earnings beat expectations
- $100 million in tariff refunds pushed operating income to $253 million
- EPS came in at $4.17, more than double the $1.99 analyst forecast
- Net sales rose 5% year over year to $1.3 billion, the 15th straight quarter of growth
- Abercrombie raised its full-year operating margin outlook by 2.5%, now forecasting 14.5% to 15%
Abercrombie & Fitch stock hit its highest level since January 2025 on Wednesday, closing up roughly 35% after the company posted a blowout second quarter backed by tariff refunds and steady sales growth.
The stock opened the session at $108.90 and hit an intraday high of $154.58, a level not seen in over 18 months.
The big headline was $100 million in tariff refunds, which gave operating income a major lift. Operating income came in at $253 million, up from $207 million in the same period last year.
Earnings per share landed at $4.17 adjusted, more than double the $1.99 consensus estimate from analysts polled by FactSet. That is not a small beat.
Net sales reached $1.3 billion for the quarter, up 5% year over year. That marked the retailer’s 15th consecutive quarter of top-line growth.
Growth Across the Board
All major geographic regions posted gains. The Asia-Pacific segment led the way with sales up 19%. Both the Abercrombie and Hollister brands delivered record Q2 revenue, with sales up 8% and 2% respectively.
Hollister also launched a new partnership with Target in June, expanding into the home and decor category. CEO Fran Horowitz called it the brand’s “first meaningful wholesale and category expansion in the U.S.” and said it performed well above expectations in the quarter.
The tariff refunds came after the Supreme Court struck down President Trump’s “Liberation Day” tariffs. The U.S. Court of International Trade then ruled that companies which had paid those tariffs were entitled to refunds.
Abercrombie had reported $90 million in tariff expenses in 2025, which had weighed on margins. The refunds effectively reversed much of that hit.
Buybacks and Raised Guidance
Management used the stronger profits to accelerate its buyback program. The company has repurchased $282 million worth of its own stock so far in 2026, equal to about 7% of outstanding stock.
Abercrombie is targeting at least $500 million in total buybacks for fiscal 2026.
Full-year guidance was raised. Management now sees net sales growing 5% for the year, with earnings per share in the range of $13.10 to $13.60.
The company also raised its full-year operating margin outlook by 2.5 percentage points, now forecasting between 14.5% and 15%.
Looking ahead, Abercrombie expects an additional $20 million in tariff refunds in Q3, though that is well below the Q2 windfall.
Abercrombie is not alone in receiving tariff refunds. U.S. retailers reported over $5 billion in refunds last week, with Walmart receiving $2.9 billion, Target $994 million, Home Depot $730 million, and TJX $331 million.
The 52-week range for ANF is now $65.45 to $154.58, with Wednesday’s rally pushing the stock to the top of that range.
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