Abercrombie & Fitch shares fall as tariff headwinds cloud 2026 outlook

The retailer posted grounds fourth-quarter nett income of $1.67 billion, up 5% year-over-year, marking its thirteenth consecutive 4th of growth. Comparable income roseate 1%.

Operating income came successful astatine $236 million, down from $256 cardinal a twelvemonth earlier, portion operating borderline contracted to 14.1% from 16.2%. Net income per diluted stock roseate to $3.68 from $3.57 past year.

Despite the top-line maturation and an net bushed comparative to expectations, investors appeared focused connected signs of slowing momentum and borderline compression.

CEO Fran Horowitz said the institution delivered grounds fiscal 2025 nett income maturation of 6% and achieved its 3rd consecutive twelvemonth of double-digit operating margins.

However, the fiscal 2026 outlook suggests a much challenging situation ahead.

The institution guided for full-year nett income maturation of 3% to 5%, operating margins betwixt 12% and 12.5%, and nett income per diluted stock of $10.20 to $11. For the archetypal quarter, absorption expects income maturation of conscionable 1% to 3% and operating margins astir 7%, reflecting an estimated 290-basis-point headwind from tariffs.

Analysts astatine Jefferies described the fourth-quarter show arsenic solid, noting EPS of $3.68 modestly up of expectations. However, they characterized first-quarter guidance arsenic light, with moderating maturation and borderline normalization ahead.

Tariffs were flagged arsenic a cardinal near-term unit point.