Abercrombie & Fitch Cuts Sales, EPS Outlook; UBS, JPMorgan Slash Targets
Abercrombie & Fitch forecasts 2026 sales growth of 3%-5%, down from last year’s 6.2%, and EPS guidance of $9.35-$10.35 versus the Street’s $10.47. UBS lowered its price target to $149 and JPMorgan trimmed theirs to $102, citing cautious guidance and tariff headwinds.
1. Analyst Price Target Reductions
UBS lowered its price target on Abercrombie & Fitch to $149 from $160 and maintained a Buy rating, while JPMorgan cut its target to $102 from $128 and kept a Neutral stance. Both firms pointed to decelerating same-store sales trends and conservative guidance as reasons for the reductions.
2. Slower Growth and EPS Guidance
Management projected 2026 sales growth of 3%-5%, a slowdown from last year’s 6.2% increase, and set EPS guidance at $9.35-$10.35 compared with the Street’s $10.47 consensus. The outlook reflects moderating demand and rising costs, particularly from recent tariff measures.
3. New Tariff Refund Order
A federal judge issued an order on tariff refunds, described internally as a “bit of a bomb,” which could affect cash flow timing and liability recognition. The ruling introduces uncertainty around duties paid on imported goods and potential refund receivables.
4. Expansion into Baby and Toddler Apparel
Abercrombie Kids launched its first baby and toddler collection in early February, aiming to capture family-wide apparel demand from newborns through older children. The move addresses customer requests and diversifies the brand’s product mix amid a challenging retail environment.