Abercrombie & Fitch, a brand infamous for its shirtless male models in the early aughts, may have actually managed to claw its way back to popularity all over again.
Shares surged 14.67% on Wednesday after the preppy apparel purveyor surpassed Wall Street’s expectations on both top and bottom lines in the first quarter, with record-high net sales of $1.10 billion—up about 8% from $1.02 billion a year earlier.
Hollister, ANF’s younger, hipper offshoot, led the recovery with 22% growth, achieving its best first-quarter net sales in history. Meanwhile, the Abercrombie brand declined 4%, although it may simply be settling down after its sizable 31% sales growth last year. Earnings per share also easily surpassed expectations at $1.59 versus $1.39.
Abercrombie seems to be regaining the momentum it built over the past two years, when shares surged by over 550%—before plummeting 50% on the news of President Trump’s tariffs. The company expects levies to take a $50 million toll on earnings this year, but management forecasts net sales will rise 3% to 6% for the rest of the fiscal year, though they did cut EPS estimates.
Inside Abercrombie’s makeover
Abercrombie’s recent rally shows that tariffs haven’t completely killed the apparel industry quite yet. True, American Eagle is down 35% year to date, Nike has sunk 16%, and Lululemon is 15% lower than where it started in 2025. So, what is Abercrombie doing right?
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“Abercrombie’s surge, despite slashing profit guidance, is a fascinating case study in how markets are pricing resilience over near-term headwinds,” said Aether Holding CEO Nicolas Lin. “What’s particularly impressive is their supply chain agility. Reducing China exposure from 30% to low single digits while maintaining margins shows operational excellence that most retailers lack.”
In addition to dispersing its supply chain to other countries, the brand has bent over backward to become relevant to young consumers. “The company ditched its moody mall-era baggage: Out went the shirtless greeters and exclusionary ethos; in came inclusive sizing and quiet confidence for shoppers who now prefer oat milk to Axe body spray,” explained Chief Investment Officer at Running Point Capital Advisors Michael Ashley Schulman.
But some are skeptical whether Abercrombie fever will remain this high—at least when it comes to the stock.
“The rally feels overdone from a risk/reward perspective,” said Lin. “When a stock jumps on objectively challenging news—EPS guidance cut by roughly 10%, operating margins compressed 150-200 basis points—it typically signals short covering rather than new fundamental conviction.”
Tariffs will also continue to play a role in the retailer’s future. If Trump’s tariffs on Vietnam, Cambodia, and India go into effect, that could destroy margins or raise prices and kill demand, no matter how cute those Hollister printed jeans may be.—JD