Topline
Abercrombie and Fitch shares spiked to an 18-month high Wednesday, reporting a large boost in operating income fueled by $100 million worth of tariff refunds in its second quarter earnings.
Abercrombie & Fitch expect further tariff refunds next quarter.
Photo by Spencer Platt/Getty Images
Key Facts
Abercrombie shares were up 34.8% as of 45 minutes before markets closed, reaching their highest point since January 2025.
The apparel company benefited from about $100 million in tariff refunds, which boosted operating income to $253 million, up from $207 million in the same period last year, according to its earnings report.
Earnings per share reached $4.17, a massive expectations beat, topping the $1.99 EPS analysts forecasted, according to FactSet.
The retailer also recorded net sales of $1.3 billion in the second quarter, up 5% compared to last year.
After the Supreme Court ruled against President Donald Trump’s “Liberation Day” tariffs earlier this year, the U.S. Court of International Trade ruled several U.S. companies that paid the tariffs were entitled to refunds.
Abercrombie reported $90 million in tariff expenses last year, dropping its full-year operating margin outlook by 1.7% and representing about 16% of the company’s entire net income in 2025.
What To Watch For
Abercrombie expects to receive $20 million in tariff refunds for its third quarter.
Big Number
At least 2.5%. That is how much Abercrombie raised its operating margin outlook for the full year by, forecasting a range between 14.5% and 15%.
Key Background
Abercrombie is one of several U.S. companies that has reported tariff refunds this month. U.S. retailers reported over $5 billion in refunds last week alone, with Walmart accounting for a whopping $2.9 billion of those refunds. Other companies reporting tariff refunds included Target ($994 million), Home Depot ($730 million) and TJ Maxx owner TJX ($331 million). Many retailers have suggested they plan to reinvest their tariff refunds into their companies as opposed to passing them on to consumers who paid higher retail prices. Walmart has said it intends to deploy as much of its refund back into lowering prices for consumers, while Costco has said it plans to do the same, though it is not yet clear how much money in tariff refunds the big-box store has received.
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