Abercrombie & Fitch Warns Tariffs to Cut $40M Costs, Revenue Growth Slides to 3–5%
Abercrombie & Fitch projected fiscal 2026 revenue growth of only 3–5%, down from last year’s 6%, and warned that $40 million in new import tariffs will shave roughly 70 basis points off profit margins. Shares plunged 7.8% after the company reported Q4 sales of $1.67 billion and operating margin slipping to 14.1%.
1. Q4 Performance
Abercrombie & Fitch reported fourth-quarter sales of $1.67 billion, beating revenue expectations, but operating margin fell to 14.1% from 16.2% a year earlier as same-store sales growth slowed to 1%. Earnings per share topped forecasts, yet attention quickly shifted to weaker forward guidance.
2. Fiscal 2026 Guidance
The company forecasted fiscal 2026 revenue growth between 3% and 5%, a slowdown from last year’s 6% expansion, and set first-quarter revenue guidance at $1.12 billion, below consensus estimates, with EPS guidance also missing analyst targets.
3. Tariff-Related Costs & Stock Reaction
New import tariffs are expected to add $40 million in expenses, reducing full-year profit margin by about 70 basis points. Following the outlook, shares tumbled 7.8% as investors weighed decelerating growth and margin pressure against solid quarterly results.