Abercrombie & Fitch Co. (NYSE:ANF) stock rose Wednesday after the apparel retailer reported first-quarter earnings that topped Wall Street expectations, helped by strong growth in the Asia-Pacific region despite softer demand in Europe and the Middle East.

Investors also focused on the company's artificial intelligence investments, tariff relief and international expansion plans as management navigates ongoing geopolitical uncertainty.

Quarterly Results

The company reported first-quarter adjusted earnings of $1.47 per share, beating the analyst consensus estimate of $1.27 per share. Quarterly sales increased 2% year over year to record $1.114 billion but missed Wall Street expectations of $1.124 billion.

Net sales growth during the quarter was driven by a 24% increase in the Asia-Pacific region and a 3% gain in the Americas. Those gains were partially offset by a 10% decline in the Europe, Middle East and Africa region.

"In EMEA, demand softened as the Middle East conflict ramped up, particularly impacting Hollister Brands, and we are proactively managing inventory and marketing to support the region," CEO Fran Horowitz said.

Brand performance was led by 3% growth in Abercrombie brands, while Hollister brands posted flat results.

Operating margin as a percentage of sales declined to 8.0% from 9.3% a year earlier.

Abercrombie said cash and cash equivalents totaled $594 million at quarter-end, compared with $760 million as of Jan. 31, 2026, and $511 million as of May 3, 2025.

Expansion, Tariffs And AI Investments

During the quarterly conference call, Abercrombie highlighted strong growth in the Asia-Pacific region while evaluating additional expansion opportunities across the market.

The company said lower tariff rates helped ease pressure during the quarter, although higher freight costs could weigh on results in the second half of the year.

Abercrombie also said it applied for about $100 million in tariff refunds but excluded any potential benefit from its assumptions. Management added that a major ERP upgrade and ongoing AI investments are expected to support faster decision-making, digital growth and customer engagement.

Executives said they remain cautious amid geopolitical uncertainty by tightly managing inventory, promotions and regional demand trends.

Outlook

The company affirmed fiscal 2026 GAAP earnings guidance of $10.20 to $11.00 per share, compared with analyst estimates of $10.77 per share.

Abercrombie also maintained its fiscal 2026 sales outlook of $5.424 billion to $5.529 billion, versus Wall Street estimates of $5.464 billion.

For the second quarter, the company expects GAAP earnings in the range of $1.80 to $2.00 per share, below analyst expectations of $2.53 per share.

ANF Price Action: Abercrombie & Fitch shares were up 11.75% at $83.56 at the time of publication on Wednesday, according to Benzinga Pro data.

Photo by Chris Redan via Shutterstock