What trends can investors expect from ANF's earnings in 2026?

**Abercrombie & Fitch's (ANF) earnings in 2026 are expected to show continued growth and improvement**, driven by several key trends:

1. **Revenue Growth**: S&P Global Ratings anticipates a steady increase in revenue, with a forecasted growth of about 5% in 2025 and further growth of 3.8% in 2026. This expansion is supported by the strengthening of brand positioning and normalization of growth rates.
2. **Profitability Enhancement**: The company's adjusted EBITDA is expected to remain robust, with forecasts indicating a maintenance of the 24% margin area over the next two years. Despite a modest decline in margins in 2025 due to higher freight costs and carryover inventory, the overall profitability trend is positive.
3. **Digital Transformation**: ANF's strategic focus on digital channels is expected to continue to optimize its store fleet and reduce fixed costs. The digital contribution to sales is projected to stabilize at nearly 50%, which will further solidify profitability margins.
4. **Brand Performance**: Both Abercrombie and Hollister brands have shown strong performance, with comparable sales increasing significantly. This trend is expected to continue, supporting overall company growth.
5. **Financial Health**: The company's financial health indicators, such as ROA and ROE, are expected to remain stable and positive. The leverage ratio is anticipated to remain stable, and the company's capital intensity is expected to be well-managed.
6. **Market Positioning**: ANF's partnership with the McLaren Formula 1 team and its positioning in the luxury goods market are expected to contribute positively to brand awareness and sales. The demand for premium and curated collections is projected to align well with ANF's product offering.

In conclusion, investors can expect ANF's earnings in 2026 to reflect sustained growth, improved profitability, and a strong market presence, supported by strategic initiatives and favorable market conditions.