Abercrombie & Fitch Co. has reported its second quarter fiscal 2025 results, delivering its 11th consecutive quarter of growth with record net sales of $1.2 billion, marking a 7% increase from the previous year. The net sales growth was led by a strong performance in the Americas, which saw an 8% increase, and the APAC region, which experienced a 12% growth, partially offset by a 1% decline in EMEA.
Hollister brands achieved its best ever second quarter net sales, posting an impressive 19% growth, while Abercrombie brands saw a 5% decline in net sales. The second quarter operating margin was reported at 17.1%, with earnings per share (EPS) reaching $2.91, including a litigation settlement benefit of $39 million on a pre-tax basis, translating to a $0.59 per share benefit on a tax-adjusted basis.
Excluding the favorable litigation settlement impact, the adjusted operating margin for the second quarter was 13.9%, and the adjusted EPS was $2.32, both of which exceeded the company's outlook. The company also increased its full-year net sales outlook and provided an update on profitability, factoring in the current estimated net tariff cost impact of $90 million.
In terms of financial position and liquidity, as of August 2, 2025, the company had cash and equivalents of $573 million, marketable securities of $31 million, and inventories of $593 million. Abercrombie & Fitch Co. also disclosed that it had a borrowing capacity of $500 million under the senior-secured asset-based revolving credit facility, with net borrowing available of $450 million, resulting in a total liquidity of approximately $1.0 billion.
Regarding cash flow and capital allocation, the company reported net cash provided by operating activities of $113 million, net cash used for investing activities of $32 million, and net cash used for financing activities of $291 million. Moreover, during the second quarter of 2025, the company repurchased 0.6 million shares for approximately $50 million, and for the year-to-date period ended August 2, 2025, it repurchased 3.2 million shares for $250 million.
Looking ahead, for fiscal 2025, Abercrombie & Fitch Co. now expects a growth in net sales in the range of 5% to 7%, an operating margin in the range of 13.0% to 13.5%, and an effective tax rate of around 30%. The company also anticipates net income per diluted share in the range of $10.00 to $10.50 and plans to allocate around $400 million for share repurchases.
The market has reacted to these announcements by moving the company's shares 2.06% to a price of $97.32. For the full picture, make sure to review ABERCROMBIE & FITCH CO /DE/'s 8-K report.
