Abercrombie & Fitch Co. Q3 FY2025 earnings call

• The company achieved its 12th consecutive quarter of growth with net sales reaching a record $1.3 billion, up 7%. - $100 million worth of shares were repurchased in the quarter, bringing the total year-to-date repurchases to $350 million. - In the Americas, EMEA, and APAC regions, there were varied performances with Americas and EMEA showing growth and APAC experiencing decline. - Abercrombie Brands made sequential improvements, with Women's leading the way, and Hollister Brands continued its strong growth. - Investments were made in marketing, stores, and talent, with plans to open new stores and refresh existing ones. - Technology investments were also made, including deploying AI agents and partnering with PayPal and SymBio to enhance the customer experience.

Abercrombie & Fitch reported record net sales of $1.3 billion for the third quarter of Fiscal Year 2025, an increase of 7%. Regionally, Americas net sales grew 7%, EMEA total sales rose 7% with comparable sales up 2%, while APAC net sales declined 6% with comparable sales down 12%. For brands, Abercrombie Brands had net sales down 2% and comparable sales down 7%, whereas Hollister Brands saw net sales jump 16% with comparable sales up 15%.

• The full-year sales outlook was narrowed towards the upper end of the range provided in August, with net sales growth expected to be in the range of 6% to 7% from $4.95 billion in 2024. - Full-year GAAP operating margin is anticipated to be in the range of 13% to 13.5%. - For the fourth quarter of 2025, net sales are expected to be up 4% to 6% compared to the Q4 2024 level of $1.6 billion, and operating margin is projected to be around 14%.

• Tariff impact is a significant risk, with an expected $60 million tariff impact net of mitigation efforts in the fourth quarter and approximately 170 basis points of tariff cost impact for 2025.

Q: Dana Telsey asked about Abercrombie brand trends and international regions.

A: Fran Horowitz-Bonadies mentioned that Abercrombie brand traffic is positive, the customer file is growing, and the team is excited for the fourth quarter; Robert Ball discussed the EMEA and APAC regions, noting the strong performance in the U.K. in EMEA and the focus on building brand awareness in other regions.

Q: Corey Tarlowe inquired about Hollister momentum into 2026.

A: Fran Horowitz-Bonadies stated that Hollister has balanced growth across genders and categories, AUR is growing on lower discounts, and there is great momentum heading into the holiday season.

Q: Matthew Boss asked about Abercrombie brand trends in November and inventory composition.

A: Robert Ball talked about inventory being in good shape, up 5% year-over-year at cost, and factors affecting gross margin.

Q: Marni Shapiro asked about collaborations and their global reach.

A: Fran Horowitz-Bonadies said collaborations are authentic brand moments that are bringing in new customers and will continue to be based on listening to customers.

Q: Katy Delahunt asked about Abercrombie's return to sales growth timeline.

A: Robert Ball said Abercrombie is seeing sequential improvement, marketing is resonating, and the goal is to hold the brand flat for the holiday season.

Q: Mauricio Serna asked about marketing plans and Abercrombie comp breakdown.

A: Robert Ball talked about marketing focusing on brand building and provided insights into AUR vs units in Abercrombie.

Q: Rick Patel asked about SG&A and regional variability.

A: Robert Ball discussed SG&A with increased marketing but leverage in other areas and mentioned that regional variability balances out.

Q: Janine Stichter asked about Men's side of Abercrombie and tariffs in 2026.

A: Fran Horowitz-Bonadies said Men's in Abercrombie is seeing sequential improvement; Robert Ball talked about the sourcing footprint and tariff mitigation.

Q: Janet Kloppenburg asked about tariff cadence, A&F assortment, and promos.

A: Robert Ball discussed tariff mitigation taking hold in 2026, pricing adjustments in spring, and Fran Horowitz-Bonadies talked about A&F assortment improvement and promo cadence.