Abercrombie & Fitch shares detonated higher on Wall Street Wednesday, rocketing as much as 36 percent after the New Albany, Ohio retailer blew past second-quarter profit targets and raised its full-year outlook by nearly 30 percent, capping the biggest single-day pop for the stock in years. Investors were still digesting the numbers Thursday morning as analysts raced to update price targets on the parent of Hollister and the Abercrombie namesake brand, a move first detailed by Bloomberg.

The company posted adjusted earnings of $4.17 a share on net sales of roughly $1.3 billion, up 5 percent from a year earlier. Wall Street had been bracing for closer to $1.98 a share, meaning Abercrombie beat consensus by more than two dollars a share, a rare margin for a mall-based apparel chain still working to shed its 2000s-era image, according to Investing.com's earnings breakdown. It marked the company's 15th straight quarter of sales growth.

Tariff refunds, but not just tariff refunds

Roughly $100 million in pre-tax tariff refunds tied to the International Emergency Economic Powers Act padded the quarter, contributing about $1.75 per diluted share. But the underlying business also outperformed: the Abercrombie brand posted 8 percent sales growth and the Asia-Pacific region surged 19 percent, even as Hollister growth cooled to 2 percent and comparable sales came in flat companywide, per figures reported by RTTNews.

We delivered record second quarter net sales and our 15th consecutive quarter of growth, reflecting our teams' continued focus on serving customers.

Management leaned into the momentum by lifting full-year adjusted earnings guidance to a range of $13.10 to $13.60 per share, up sharply from the prior $10.20-to-$11.00 range, and nudged full-year net sales growth guidance to roughly 5 percent from a 3-to-5-percent band. Third-quarter guidance of $2.90 to $3.20 a share also topped the roughly $2.85 consensus analysts had penciled in.

The retailer has already bought back about $282 million of stock this year, retiring roughly 7 percent of shares outstanding, and now plans at least $500 million in repurchases for 2026, according to The Motley Fool. Operating margin for the quarter came in around 20 percent, roughly double the level executives had guided toward heading into the print — an outcome Fool analysts credited partly to the tariff windfall but also to tighter inventory discipline and stronger full-price sell-through on new arrivals.

The rally lands at a rough moment for mall retail broadly, with several footwear-linked names sliding this week on weaker demand signals and a fresh analyst downgrade for Nike. Abercrombie's pop suggests the pain is not evenly distributed across apparel retail this earnings season, with company-specific execution and tariff relief separating winners from losers. Shares remained well above their pre-earnings level into Thursday's session, though the stock has swung sharply on earnings days throughout 2026 and could give back gains if broader market sentiment sours.