Abercrombie’s $1.27B Quarter Is Turning HeadsAbercrombie & Fitch Co. Class ABATS:ANFmoonyptoAbercrombie & Fitch just delivered its 15th consecutive quarter of sales growth, with Q2 FY2026 net sales reaching a record $1.27 billion, up 5% YoY. The company also produced $4.17 diluted EPS and a 19.9% operating margin, both well above its previous outlook. But there is an important detail behind that monster EPS number Abercrombie received approximately $100 million in IEEPA tariff refunds, adding an estimated $1.75 per share to quarterly EPS. Even without that windfall, the underlying business still showed meaningful improvement 🔥 Abercrombie brand is doing the heavy lifting The company’s namesake Abercrombie brands continued to outperform, with quarterly sales rising 8% to $596.8 million, while Hollister sales increased 2% to $669.9 million. By geography, APAC was the standout, with revenue up 19%, while the Americas grew 5% and EMEA increased 2%. Comparable sales for the company were flat, so the headline growth is coming more from brand momentum, stores and digital expansion than from a broad surge in same-store demand. Still, both brand families posted their best ever second quarter sales, which is a pretty strong signal for the business 💰 The buyback machine is running Abercrombie is also aggressively returning cash to shareholders. The company repurchased $177 million of stock during Q2, bringing year to date repurchases to $282 million, equivalent to a 7% reduction in shares outstanding from the beginning of the fiscal year. Meanwhile, it ended the quarter with $628 million in cash, just $592 million of inventory, and approximately $1.1 billion of total liquidity including available borrowing capacity. Year to date operating cash flow reached $313 million, giving management plenty of flexibility to keep investing while buying back shares 🌎 Management is raising the bar Management increased its full year outlook and now expects FY2026 sales growth of around 5%, compared with the previous 3% to 5% range. It also raised its EPS outlook to $13.10 to $13.60, from $10.20 to $11.00, while increasing planned share repurchases to at least $500 million. For Q3, the company expects sales growth of 5% to 6% and EPS of $2.90 to $3.20, with another at least $100 million of buybacks planned. Management is also looking for additional growth through partnerships, distribution channels and new product categories 🌕 The real test starts after the tariff boost Abercrombie’s latest quarter looks impressive, but investors need to separate business performance from the one-time tariff benefit. The company is clearly growing, its brands are producing record sales, APAC is accelerating and buybacks are shrinking the share count. At the same time, flat comparable sales and the tariff refund mean the headline $4.17 EPS should not be treated as a clean run rate number. The next few quarters will show whether Abercrombie can keep delivering high margin growth without relying on temporary benefits. For now, the most interesting part of the story is that management is still expanding the business while simultaneously returning significant amounts of capital to shareholders.