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Hollister Boosts Abercrombie's Profits While Flagship Brand Declines

Hollister Boosts Abercrombie's Profits While Flagship Brand Declines

Bitget-RWA2025/11/25 14:08
By:Bitget-RWA

- Abercrombie & Fitch shares jumped 18% premarket after Q3 earnings beat estimates, driven by Hollister's 16% sales surge to $673M. - Hollister's 15% comparable sales growth contrasted with Abercrombie brand's 2% sales decline and 7% comparable store drop. - CEO Fran Horowitz cited inventory challenges for Abercrombie's struggles but raised full-year sales guidance to 6%-7% growth. - Analysts highlight Hollister's youth appeal but note retail headwinds, with Q4 guidance aligning slightly below analyst expe

Shares of Abercrombie & Fitch Co. (ANF) jumped 18% in premarket trading on November 25 after the company

that beat analyst projections, largely thanks to strong gains from its Hollister division. The retailer reported adjusted earnings of $2.36 per share, topping the $2.16 consensus, and revenue increased 7% from a year earlier to $1.29 billion, in line with Wall Street’s expectations. This marks the twelfth straight quarter of sales growth for the company.

Hollister was the main driver, with sales rising 16% to $673.27 million, fueled by high demand during the back-to-school period and autumn season. Comparable sales at Hollister were up 15%, a sharp contrast to the

label, which to $617.35 million and saw comparable sales fall 7%. CEO Fran Horowitz pointed to inventory issues and markdowns as reasons for Abercrombie’s weaker performance, but stressed that Hollister would be central to the company’s holiday sales approach.

Hollister Boosts Abercrombie's Profits While Flagship Brand Declines image 0
Even though the Abercrombie brand underperformed, Abercrombie & Fitch raised its full-year net sales outlook to 6%-7% growth, up from the previous 5%-7% range, and to $10.20-$10.50, which is above the $10.06 average analyst estimate. The company kept its operating margin forecast at 13.0%-13.5%, though the third-quarter margin slipped to 12.0% due to a 210 basis point hit from tariffs. The retailer also continued its share buybacks, spending $100 million in the quarter and bringing the year’s total to $350 million.

Analysts observed that these results signal a strategic pivot, with Hollister now driving most of the company’s growth. "

" the brand remains popular among younger consumers, as evidenced by the 15% increase in comparable sales and strong store traffic and conversion. Still, the broader retail environment faces challenges from inflation and more cautious spending habits. $1 trillion in holiday sales, but expects growth to slow to 6% from 14% in 2024, reflecting more budget-conscious shoppers.

For the fourth quarter, Abercrombie & Fitch is projecting sales growth of 4%-6% and earnings per share between $3.40 and $3.70, which is close to but slightly below analyst forecasts of 5.6% revenue growth and $3.55 per share. The stock has rebounded sharply after a 56% drop in 2025, which was caused by weaker discretionary spending and tariff challenges. While the company’s updated guidance shows optimism for the holiday season, investors are expected to closely watch management’s plans to revive the Abercrombie brand during the upcoming earnings call.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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