Abercrombie and Fitch (NYSE:ANF) Reports Q4 CY2025 In Line With Expectations

Young adult apparel retailer Abercrombie & Fitch (NYSE:ANF)

in Q4 CY2025, with sales up 5.4% year on year to $1.67 billion. On the other hand, next quarter’s revenue guidance of $1.12 billion was less impressive, coming in 2.8% below analysts’ estimates. Its GAAP profit of $3.68 per share was 3.1% above analysts’ consensus estimates.

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Fran Horowitz, Chief Executive Officer, said, “Our record fourth quarter net sales marked our thirteenth consecutive quarter of growth, with both operating margin and earnings per share at the high end of expectations we shared in early January.

Company Overview

Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE:ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $5.27 billion in revenue over the past 12 months, Abercrombie and Fitch is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Abercrombie and Fitch’s 12.5% annualized revenue growth over the last three years was solid as it opened new stores and increased sales at existing, established locations.

This quarter, Abercrombie and Fitch grew its revenue by 5.4% year on year, and its $1.67 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 4.4% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is admirable and implies the market is baking in success for its products.

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Store Performance

Number of Stores

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Abercrombie and Fitch opened new stores quickly over the last two years, averaging 3.2% annual growth, faster than the broader consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Note that Abercrombie and Fitch reports its store count intermittently, so some data points are missing in the chart below.

Same-Store Sales

A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.

Abercrombie and Fitch has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 10%. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives Abercrombie and Fitch multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.

In the latest quarter, Abercrombie and Fitch’s same-store sales rose 1% year on year. This was a meaningful deceleration from its historical levels. We’ll be watching closely to see if Abercrombie and Fitch can reaccelerate growth.

Key Takeaways from Abercrombie and Fitch’s Q4 Results

It was great to see Abercrombie and Fitch’s full-year EPS guidance top analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 2.7% to $96.57 immediately after reporting.

Abercrombie and Fitch may have had a tough quarter, but does that actually create an opportunity to invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock.