War in the Middle East took a toll on Abercrombie & Fitch’s first-quarter bottom line and sales, but the profit picture nonetheless exceeded both the company’s and Wall Street’s expectations.
For the quarter ended May 2, operating income was $89 million, down from $102 million a year earlier. Operating margin as a percent of sales slipped to 8 percent from 9.3 percent.
Net income fell to $68.12 million, or $1.47 per diluted share, from $81.74 million, or $1.59 per diluted share. The $1.47 per share was 15.7 percent above analysts’ consensus estimates.
Sales rose nearly 2 percent to $1.11 billion — a record level for the business — from $1.09 billion in the year-ago period, but were still slightly below Wall Street’s expectation. Comparable sales slipped 1 percent.
“I am actually very proud about our quarter. We came into the year with momentum and now we started 2026 with momentum,” Fran Horowitz told WWD in an interview Wednesday. “On the profit side, don’t foreget we had a tariff headwind. We didn’t have that last year for this quarter. That was a big piece of that. But that aside, with both brands we are excited about the customer and the product acceptance we’re seeing. We had AUR [average unit retail price] growth. Our inventories are really fresh and in line with sales. We have an opportunity to continue to chase into what’s working. So we’re optimistic heading into the rest of the year.”
