Abercrombie & Fitch (ANF) Shares Plunge 7.81% on JPMorgan Downgrade, Tariff Cost Hike

Abercrombie & Fitch (ANF) shares plunged 7.81% on Monday, marking a three-day losing streak with a cumulative decline of 9.61%. The stock hit its lowest level since June 2025, with an intraday drop of 8.26%, signaling intensifying investor concerns over the retailer’s operational and financial health.

The selloff was driven by a JPMorgan downgrade that slashed ANF’s price target to $103 from $145, citing underperformance at the core Abercrombie brand. Analyst Matthew Boss highlighted weaker-than-expected revenue, persistent challenges in conversion rates, and declining average unit retail (AUR) as key risks. While the Hollister brand showed stronger sell-throughs during Back-to-School season, these gains failed to offset broader revenue pressures. The downgrade compounded worries about the company’s ability to maintain sales momentum amid inflationary pressures and cautious consumer spending.

Compounding the negative sentiment, Abercrombie & Fitch raised its estimated U.S. trade tariff-related costs to $90 million for 2024, up from $50 million. This revision, disclosed in an August report, raised questions about margin resilience despite prior outperformance in quarterly earnings. Analysts remain divided, with an average price target of $110.56—lower than the pre-downgrade level—reflecting uncertainty about the company’s strategic execution and macroeconomic adaptability.

Despite some bullish arguments about the stock’s valuation and holiday season potential, the selloff underscores structural challenges. The brand’s reliance on discretionary spending and struggles with pricing strategies and inventory management have left it vulnerable to shifting consumer preferences. With the stock down nearly 50% year-to-date, investors are now weighing whether the decline represents a buying opportunity or a deeper misalignment with market dynamics.