Abercrombie & Fitch Outlook Tightens on Tariff Headwind
Abercrombie & Fitch outlook narrows after the company cited a $90M tariff headwind, and retained buybacks with higher capex could pressure shares.
KEY TAKEAWAYS
- Company narrowed fiscal 2025 net-sales growth to at least 6% and tightened Q4 guidance to around 5%.
- Outlook included about $90M of tariff expense, equal to roughly 170 basis points of sales.
- Management kept a $450M share-repurchase plan and raised capex to about $245M.
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Abercrombie & Fitch Co. (ANF) narrowed its full-year and fourth-quarter sales outlook in a January 12, 2026 press release, citing a tariff headwind while reaffirming record quarter-to-date sales through December.
Narrowed Fiscal 2025 Outlook and Tariff Impact
The company reduced its fiscal 2025 net sales growth forecast to at least 6%, down from a prior range of 6% to 7%, and narrowed fourth-quarter net sales growth to around 5%, from 4% to 6%. This outlook incorporates about $90 million in tariff expenses, net of mitigation, equivalent to roughly 170 basis points of sales, based on U.S. trade policies as of January 9, 2026. It excludes any future policy changes.
Management projected an operating margin near 13% for the year and diluted earnings per share between $10.30 and $10.40, assuming an effective tax rate of about 28% and approximately 48 million diluted shares. For the fourth quarter, it forecast an operating margin around 14% and diluted EPS of $3.50 to $3.60 on about 47 million diluted shares. The company plans roughly $450 million in share repurchases for fiscal 2025, including about $100 million in the fourth quarter, and raised capital spending guidance to approximately $245 million, up from $225 million.
Brand Momentum, Store Plans, and Capital Allocation
Abercrombie & Fitch reported record quarter-to-date net sales through December, with balanced growth across regions, brands, and channels. Fran Horowitz, chief executive, said, "Hollister Brands had a strong holiday and is positioned to deliver another year of mid-teens net sales growth for fiscal 2025." Abercrombie Brands saw a strong customer response over the holidays and now expects low single-digit net sales growth in the fourth quarter, building on a record prior-year result.
The company plans about 60 store openings and 20 closures in fiscal 2025, resulting in roughly 40 net new locations, alongside approximately 40 remodels or right-sizings. The decision to increase capital spending while maintaining an aggressive share repurchase program reflects management’s focus on balancing investment and shareholder returns despite tariff-related costs.
