Abercrombie & Fitch Soars 37% on a $100M Tariff Refund and Raised Guidance, Ross and Kohl’s Hold Steady

David Moadel

Wed, August 26, 2026 at 6:30 PM GMT+3 5 min read

Quick Read

ANF surged 34% after a $100M tariff refund pushed EPS to $4.17, more than doubling estimates and triggering a sharp full-year guidance raise.
Ross Stores priced in its identical tariff refund last week, while Kohl's barely moved as investors rejected the same windfall on a contracting top line.
Even excluding the $1.75 tariff contribution, Abercrombie beat guidance, but flat companywide comps and Hollister's 3% comp decline signal a traffic problem bulls must defend.
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Abercrombie & Fitch (NYSE:ANF) stock is surging 37% to $148.91 in mid-morning Wednesday trading after a large earnings beat, a $100 million tariff refund, and a raised full-year guidance. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is practically unchanged at $765.57, framing this as an idiosyncratic apparel repricing rather than a market move.

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For peer context, Ross Stores (NASDAQ:ROST) stock is down 0.5% to $240.09 after its own tariff-refund quarter landed last week, while Kohl's (NYSE:KSS) stock is up 0.4% to $17.75 after reporting the same catalyst before the open. Also notably, the State Street SPDR S&P Retail ETF (NYSE ARCA:XRT) is up 1% to $88.58.

Abercrombie stock had been down 13% year to date through Tuesday's close, so today's session is repricing a name the market had already written down.

Tariff Refund and Raised Guidance Drive the Move

Abercrombie reported adjusted earnings of $4.17 per diluted share, well above the $1.99 consensus and its own prior guide of $1.80 to $2.00. Its net sales rose 5% to $1.27 billion.

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Abercrombie's operating margin came in at 19.9%, against 13.9% adjusted a year earlier. Its Abercrombie brand net sales rose 8% and its Hollister brand net sales rose 2%, with both banners setting second-quarter records.

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The company received a $100 million pre-tax IEEPA tariff refund booked as a reduction of cost of sales, contributing $1.75 per diluted share. Abercrombie raised its full-year outlook to $13.10 to $13.60 per diluted share from a prior $10.20 to $11.00, with 220 basis points of the margin upgrade tied to the refund.

By region, Abercrombie's Asia Pacific net sales grew 19% and its Americas net sales grew 5%, with EMEA net sales up 2%. APAC comparable sales grew 13%, so the geographic breadth is the piece of the quarter that would survive without the refund.

Reading Past the One-Time Windfall

The tariff refund alone contributed $1.75 of Abercrombie's $4.17 result and 220 basis points of its raised operating margin outlook. Abercrombie stock still gets credit for a 19.9% operating margin against 13.9% adjusted last year, which is a meaningful operational improvement even after backing out the refund benefit.

CEO Fran Horowitz stated that Abercrombie's operating margin and earnings per share beat guidance in excess of the refund itself. Its Abercrombie brand delivered 4% comparable sales growth, marking a return to positive comps at its namesake banner.

The tension worth naming is that Abercrombie's companywide comparable sales were flat. Its Hollister brand comps declined 3%, so reported net sales growth is being carried by AUR gains and new stores rather than by traffic through the existing base. That's the line the bull case has to defend into the back half of fiscal 2026.

Same Catalyst, Very Different Reactions

Ross stock is down 0.5% today because its tariff refund and guidance raise landed last Wednesday, and its shares had already run before this session. The Ross earnings report carried the stock to a 34% year-to-date gain through Tuesday's close, so its tariff mechanic was priced in before Abercrombie reported.

Kohl's stock is barely moved today despite reporting the same tariff-refund tailwind and raised guidance before the open. Coming into Wednesday, Kohl's shares had been down 12% year to date, and investors appear reluctant to reward a tariff windfall bolted onto a still-declining top line.

The tariff mechanic is identical across all three retailers. The demand stories underneath diverge sharply, with Ross Stores' traffic-led comps on one end and Kohl's contracting revenue on the other, leaving Abercrombie somewhere in the middle with flat comps and a strong AUR story.

What to Watch Next

Investors can watch for whether Abercrombie stock holds its gains through the close, since a 34% single-session move on a name that was negative year to date invites profit-taking. The next scheduled catalyst is the third-quarter report, where Abercrombie's management guided to $2.90 to $3.20 in EPS on 5% to 6% sales growth.

For position sizing, this is a name that just repriced by a third in one session on a one-time item. Investors comfortable with Abercrombie's operating story can scale in modestly rather than chase the gap higher, and can trim into strength if its comparable sales fail to turn positive next quarter. Sizing should reflect the reality that a rally built partly on a tariff refund can fade as quickly as it arrived.