Abercrombie & Fitch stock bounces back following share repurchase plan

Abercrombie & Fitch (NYSE:ANF) shares moved higher on Friday, with investors backing the retailer amid broader concerns about consumer spending and the tariff impacts.

The company recently announced a $1.3 billion share repurchase program and is trading at a relatively low valuation compared to historical levels and its peers, making it attractive to investors.

The company’s strong management execution, brand momentum and an underappreciated margin trajectory have attracted a repeat ‘Buy’ rating from Jefferies analysts.

The firm visited the company’s headquarters and fulfillment center in Ohio, meeting with key executives including CFO Robert Ball and VP of IR Mo Gupta.

The visit reinforced Jefferies’ view that Abercrombie is a well-run business with an agile supply chain, supported by an increasingly efficient “test, bulk-buy, and chase” merchandise strategy.

“We see sales momentum continuing as multi-year efforts spanning marketing, product, and in-store presentation have yielded distinctive brands that strongly resonate with their particular audiences,” they wrote.

Jefferies said the company's eCommerce distribution center showcased automation that should help mitigate markdown risk over time by enabling faster response to trends.

Tariffs causing headwinds

Despite this, Jefferies flagged uncertainty around tariffs as a potential headwind. In fiscal 2025, about 64% of Abercrombie's merchandise receipts came from countries with steep proposed tariffs, including China (7% of receipts at 34% tariff), Vietnam (35% at 46%), and Cambodia (22% at 49%).

Management did not comment on how they plan to navigate this risk, Jefferies wrote.

The analysts believe a mid-teens operating margin is sustainable long-term, though tariff volatility could create short-term noise.

“The company has guided this year to 14% to 15% operating margin, which we think is achievable in a typical year, but given the level of uncertainty at present, risk to this target lies ahead,” they wrote.

The firm repeated its $170 price target on Abercrombie, implying upside of 142% from its share price at the time of writing.  

“Looking ahead, we believe Abercrombie shares have significant potential upside, and tariffs remain a question mark; but overall, the business is well-positioned for the long term,” analysts concluded.

Shares of Abercrombie added 6.8% at $75 in the early afternoon on Friday.