Abercrombie Fitch 2026 Q3 Earnings Revenue Rises 6.8% Despite EPS Decline

Abercrombie & Fitch (ANF) reported fiscal 2026 Q3 earnings on Nov 26, 2025, with revenue exceeding estimates and guidance raised for full-year growth. The company’s 6.8% revenue increase to $1.29 billion and improved holiday outlook drove a 40% stock surge, though EPS and net income declined year-over-year.

Revenue

Abercrombie & Fitch’s total revenue rose 6.8% to $1.29 billion in Q3 2026, outpacing the $1.21 billion reported in the prior-year period. The Hollister brand was a key driver, with sales surging 16% year-over-year to $673.27 million, reflecting strong back-to-school demand and 15% comparable sales growth. Meanwhile, the Abercrombie brand faced headwinds, with sales declining 2% to $617.35 million, though the segment improved from a 11% comps decline in Q2. Regional expansion in EMEA and APAC, coupled with inventory discipline, supported overall revenue growth.

Earnings/Net Income

The company’s EPS fell 6.9% to $2.41 in Q3 2026, compared to $2.59 in Q3 2025, while net income dropped 14.0% to $115.10 million from $133.86 million. The EPS decline reflects margin pressures from tariffs and litigation costs, though the revenue beat and improved operating margin of 12% signaled resilience. Despite the earnings dip, the company’s strategic focus on AUR trends and inventory management underpinned long-term confidence.

Post-Earnings Price Action Review

The strategy of buying ANF when earnings beat and selling after 30 days delivered strong results, with a 353.93% return, vastly outperforming the benchmark’s 84.71% return. The strategy’s Sharpe ratio of 0.58 indicated good risk-adjusted returns, and it had a maximum drawdown of 0, suggesting effective risk management.

CEO Commentary

CEO Fran Horowitz-Bonadies highlighted 12 consecutive quarters of growth, with $1.3 billion in record sales and 7% year-over-year revenue growth. She credited Hollister’s 16% sales surge and Abercrombie’s sequential improvement to inventory discipline, AUR trends, and collaborations like Kemo Sabe and Taco Bell. With 30 new stores opened in Q3 and 36 planned for the year, regional expansion in EMEA and APAC remains a priority. Leadership emphasized AI-driven customer service and agentic commerce partnerships to bolster holiday readiness.

Guidance

Abercrombie & Fitch narrowed its full-year 2025 EPS guidance to $10.20–$10.50, reflecting $38.6M litigation benefits. Q4 targets include 4–6% revenue growth ($1.6B in Q4 2024) and EPS of $3.40–$3.70, with a 14% operating margin. Tariff impacts of ~$60M and 150 bps freight tailwinds are factored in. Capital allocation includes $225M CAPEX, 100 new stores, and $450M share repurchases, with inventory aligned to trends and AUR growth expected to continue.

Additional News

UBS raised ANF’s price target to $130 from $125, citing Hollister’s 15% comparable sales growth and a projected 14% EPS CAGR. The company also announced $350M in share repurchases year-to-date, with $100M spent in Q3 alone. CEO Fran Horowitz reiterated confidence in holiday readiness, leveraging AI-driven customer service and agentic commerce partnerships. Meanwhile, insider sales of 7,964 shares in the past 90 days prompted mixed analyst sentiment, with a consensus “Hold” rating and average target of $102.33.

Key Takeaways

Abercrombie & Fitch’s Q3 results underscored its resilience amid margin pressures, with Hollister emerging as a growth engine. While the Abercrombie brand faces challenges, strategic investments in digital innovation, store expansion, and inventory discipline position the company for long-term gains. UBS’s upgraded price target and robust share buybacks reflect renewed investor confidence, though insider sales and mixed analyst ratings highlight ongoing uncertainties. The stock’s 40% post-earnings surge and improved guidance suggest a favorable outlook for the holiday season and beyond.