Story Stocks®
Abercrombie & Fitch (ANF) shares are surging after the company posted a strong Q3 (Oct) EPS beat, overcoming tariff-related margin pressure. Revenue was in-line, but investors are more focused on the steady, in-line Q4 (Jan) holiday outlook, which is a relief after last quarter's sharp guide down. Management also expects flat Q4 sales for the Abercrombie brand despite lapping last year's record, signaling that the long-lagging banner may be stabilizing.
Key Metrics:
- Comps +3%, matching Q2. Hollister: +15% comps (vs +19% in Q2) — still the primary growth engine. Abercrombie: -7% comps (vs -11% in Q2) — sequential improvement.
- Strong back-to-school season boosted Hollister; Abercrombie progressed as expected.
- Inventory at Abercrombie being tightly managed heading into Q4 holiday.
- We commend ANF for being aggressive with share buybacks as it sees value in its shares down here. It repurchased $100 mln worth of shares in Q3, bringing its total to $350 mln or 9% of shares outstanding YTD.
- Tariffs continue to weigh on margins but aren't halting momentum.
Context: After a tough start to 2025 — driven by tariff worries and back-to-back guidance cuts — ANF has now delivered three solid quarters (Q1--Q3). Momentum at Hollister remains brisk, and Abercrombie appears to be turning the corner.
Briefing.com Analyst Insight
ANF's Q3 print offers a compelling case that the company's turnaround narrative is gaining traction. While Hollister continues to carry the load, the incremental improvement at the Abercrombie brand—combined with an in-line holiday outlook that avoids another reset—helps rebuild investor confidence. Tariffs and a still-recovering Abercrombie banner keep a lid on enthusiasm, but solid execution, disciplined inventory management, and aggressive share repurchases make this a more interesting setup than earlier in the year. If its Abercrombie banner can deliver on its goal for flat holiday sales against a tough comparison, it could mark a meaningful inflection point for the story.
