Abercrombie & Fitch generated a sharp increase in operating cash flow during the first half of fiscal 2026 while aggressively repurchasing shares, reducing its share count by approximately 7% from the beginning of the year.
Net cash provided by operating activities reached $313.4 million for the 26 weeks ended August 1, 2026, compared with $112.9 million in the prior-year period. That represents an increase of about 178%, meaning operating cash flow nearly tripled year over year.
Stronger cash generation gave Abercrombie additional flexibility to return capital to shareholders while continuing to invest in stores, digital capabilities, technology, and marketing.
During the second quarter, the company repurchased approximately 2 million shares for $177 million.
For the first six months of fiscal 2026, Abercrombie repurchased 3.2 million shares for $282 million. Those repurchases reduced shares outstanding by about 7% from the beginning of the fiscal year.
Management is now planning to accelerate that capital-return program.
Abercrombie increased its fiscal 2026 share-repurchase outlook to at least $500 million from its previous expectation of approximately $450 million. The company still had $568 million remaining under the share-repurchase authorization established in March 2025 as of the end of the second quarter.
The retailer also expects to repurchase at least $100 million of shares during the fiscal third quarter.
Abercrombie’s stronger cash generation came alongside another quarter of record sales.
Second-quarter net sales increased 5% year-over-year to $1.27 billion, marking the company’s 15th consecutive quarter of revenue growth. Abercrombie brands increased sales 8%, while Hollister sales rose 2%.
Operating income reached $252.7 million, compared with $206.7 million a year earlier, while diluted EPS increased to $4.17 from $2.91.
However, the quarter included approximately $100 million of IEEPA tariff refunds, which contributed about 790 basis points to operating margin and approximately $1.75 per diluted share.
Abercrombie ended the quarter with approximately $628 million in cash and equivalents and about $1.1 billion of total liquidity, including borrowing availability under its revolving credit facility.
The company also raised its full-year outlook. Abercrombie now expects fiscal 2026 net sales growth of around 5%, operating margin of 14.5% to 15% and diluted EPS of $13.10 to $13.60.
KEY QUOTES:
“Year-to-date, we continued to use our strong balance sheet to invest in the business across stores, digital, technology and marketing, while also repurchasing 7% of shares outstanding as of the beginning of the year.”
“For the year, we expect to grow sales and earnings per share, underpinned by double-digit operating margins, while delivering strong cash flow and returns of cash to shareholders through at least $500 million of share repurchases.”
Fran Horowitz, Chief Executive Officer of Abercrombie & Fitch Co.
