Abercrombie & Fitch Q2 CY2025: Hollister Drives Growth, Abercrombie Faces Inventory Reset and Tariff Pressures

Abercrombie & Fitch Q2 CY2025 revenue rose 6.6% YoY to $1.21 billion, beating estimates. GAAP profit was $2.91 per share, a 26.6% beat. Hollister drove growth, while Abercrombie faced inventory reset and tariff pressures. Guidance for Q3 CY2025 revenue was $1.28 billion, above estimates.

Young adult apparel retailer Abercrombie & Fitch (NYSE:ANF) reported its Q2 2025 results, delivering a 6.6% year-on-year (YoY) increase in revenue to $1.21 billion, which exceeded analyst estimates of $1.20 billion. The company's GAAP profit of $2.91 per share was 26.6% above Wall Street's consensus estimates of $2.30 per share. However, the company faced challenges such as inventory management issues and tariff pressures, which impacted its Abercrombie brand sales, down 5% compared to the prior year. Despite these challenges, the company's Hollister brand drove significant growth, with sales increasing by 19% due to effective marketing and customer engagement.

The company provided guidance for the next quarter, with revenue expected to reach $1.28 billion, which is above analyst estimates of $1.26 billion. For the full year, the company expects GAAP EPS of $10.25, which is roughly in line with analyst expectations.

In addition to its financial performance, Abercrombie & Fitch also reported strong operational metrics. The company's operating margin improved to 17.1% from 15.5% in the same quarter last year, while its free cash flow margin declined to 4.2% from 10.8% in the same quarter last year. The company's same-store sales rose 3% YoY, a deceleration from its historical levels but still a positive sign of growth.

Looking ahead, Abercrombie & Fitch plans to open approximately 60 stores in 2025, with around 20 closures, and expects to invest $225 million in capital expenditures. The company is also focusing on cost structure reengineering and adapting its store footprint to evolving consumer behavior, which increasingly favors digital channels.

References:
[1] https://finance.yahoo.com/news/abercrombie-fitch-nyse-anf-q2-114234127.html
[2] https://www.ainvest.com/news/abercrombie-fitch-q2-2025-earnings-call-contradictions-emerge-tariff-mitigation-inventory-management-store-strategy-2508/