Abercrombie & Fitch (NYSE: ANF) shares surged over 30% on Wednesday, following stronger-than-expected Q2 results and a significant increase in full-year guidance. The company reported record Q2 sales of $1.27 billion, a 5% year-over-year increase, exceeding the Zacks Consensus estimate of $1.24 billion. Excluding a one-time tariff benefit, adjusted earnings rose 4% to $2.42 per share, surpassing expectations by 24%.
Management raised its fiscal 2026 sales growth forecast to approximately 5% and adjusted earnings per share (EPS) expectation to $13.10-$13.60, up from a previous range of $10.20-$11.00. The raised guidance reflects a total of $120 million in tariff refunds, with a $20 million benefit anticipated in Q3. Abercrombie also increased its share repurchase target to at least $500 million.
Despite the stock’s dramatic rise, ANF shares are still trading at about 10 times forward earnings based on the new EPS guidance, indicating potential for further upside. However, analysts suggest investors may want to wait for a more favorable entry point before pursuing the shares immediately, given the stock’s recent climb and flat comparable sales.
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