Executive Summary
Abercrombie & Fitch Co reported QQ1 2025 results with revenue of USD 1.097B, down 3.23% year-over-year and down 30.77% quarter-over-quarter, reflecting seasonality and a promotional environment. Gross margin remained approximately 61.99%, but declined about 7.6 percentage points versus prior year, signaling pricing/mix pressure even as the business preserved operating profitability. EBITDA stood at USD 147.6M and operating income USD 101.5M, while net income reached USD 80.4M and diluted EPS was USD 1.59. Free cash flow was negative at USD -54.8M driven by working capital dynamics and capital expenditure, with cash and cash equivalents of USD 510.6M and total gross debt of USD 1.026B (net debt ~USD 515.3M). The balance sheet shows solid liquidity (current ratio ~1.38x; quick ratio ~0.72x when excluding inventory), and a leverage profile that remains meaningful but manageable in the context of ongoing DTC investments and brand initiatives.
Key Performance Indicators
QoQ: -30.77% | YoY:-3.23%
QoQ: -30.17% | YoY:-7.62%
QoQ: -60.35% | YoY:-42.19%
QoQ: -57.05% | YoY:-39.62%
QoQ: -56.18% | YoY:-37.31%
Key Insights
Revenue: USD 1,097.311M; YoY change: -3.23%; QoQ change: -30.77%
Gross Profit: USD 680.178M; Gross Margin: 61.99%; YoY change in margin: -7.62%; QoQ change: -30.17%
Operating Income: USD 101.533M; Operating Margin: 9.25%; YoY change: -42.19%; QoQ change: -60.35%
Net Income: USD 80.413M; Net Margin: 7.33%; YoY change: -39.62%; QoQ change: -57.05%
EPS (GAAP): USD 1.63; EPS (Diluted): USD 1.59; YoY EPS change: -37.31%; QoQ EPS change: -56.18%
EBITDA: USD 147.553M; EBITDA Margin: 13.45%
Cash Flow: N...
Financial Highlights
Revenue: USD 1,097.311M; YoY change: -3.23%; QoQ change: -30.77%
Gross Profit: USD 680.178M; Gross Margin: 61.99%; YoY change in margin: -7.62%; QoQ change: -30.17%
Operating Income: USD 101.533M; Operating Margin: 9.25%; YoY change: -42.19%; QoQ change: -60.35%
Net Income: USD 80.413M; Net Margin: 7.33%; YoY change: -39.62%; QoQ change: -57.05%
EPS (GAAP): USD 1.63; EPS (Diluted): USD 1.59; YoY EPS change: -37.31%; QoQ EPS change: -56.18%
EBITDA: USD 147.553M; EBITDA Margin: 13.45%
Cash Flow: Net cash from operating activities USD -4.0M; Free Cash Flow USD -54.764M; Capex USD -50.764M; Net change in cash USD -261.87M; Cash at end of period USD 518.525M; Cash at beginning USD 780.395M
Balance Sheet: Total assets USD 3,096.178M; Total liabilities USD 1,893.582M; Total stockholders’ equity USD 1,189.127M; Cash & equivalents USD 510.563M; Total debt USD 1,025.902M; Net debt USD 515.339M; Current assets USD 1,374.170M; Current liabilities USD 998.870M; Inventory USD 542.059M; Net receivables USD 113.311M
Leverage & liquidity indicators: Current ratio ~1.38x; Quick ratio ~0.72x; Debt/Equity ~0.86x; Net debt/EBITDA ~3.5x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.10B |
-3.23% |
-30.77% |
| Gross Profit |
680.18M |
-7.62% |
-30.17% |
| Operating Income |
101.53M |
-42.19% |
-60.35% |
| Net Income |
80.41M |
-39.62% |
-57.05% |
| EPS |
1.63 |
-37.31% |
-56.18% |
Management Commentary
Transcript data not provided in the input. Key themes to watch in the absence of quotes include: (1) Direct-to-consumer growth and optimization of the online/offline mix as a driver of margin; (2) Inventory management and promotional discipline given a softer quarterly revenue trajectory; (3) Cost containment and SG&A leverage to support profitability amid top-line pressure. Pending access to the earnings call transcript, the synthesis relies on disclosed financials and typical strategic anchors for a specialty retailer.
Forward Guidance
No formal numeric guidance was disclosed in the provided data for QQ1 2025. In our assessment, a cautious-to-modestly optimistic H2 path depends on: (i) stabilization or acceleration of direct-to-consumer growth, (ii) successful inventory optimization and disciplined promo activity to protect gross margins, (iii) ongoing cost controls to convert DTC investments into sustainable profitability, and (iv) macro consumer demand stability in key geographies. Investors should monitor latest quarterly commentary on sell-through, promo intensity, inventory levels, gross margin progression, and the trajectory of working capital investments, as these factors will largely drive the earnings trajectory through the rest of 2025.