net income increase of 5.9 per cent compared to the year prior.  Overall, it was “a very solid quarter for Abercrombie & Fitch, with overall sales growing well above those for the whole apparel market,” said Global Data’s managing director Neil Saunders. However, Abercrombie & Fitch’s namesake brand did experience a 5 per cent sales decline, which Saunders attributed to core consumers buying a bit more modestly. To keep up the brand’s momentum and make up for the softer sales, Fran Horowitz, Abercrombie & Fitch’s CEO, stated that the corporation will be entering the second half of 2025 “on offense”. “We are increasing our full-year net sales outlook, reflecting our strong positioning and growth trajectory, building on record 2024 results. Our team remains focused on delivering for our customers while investing to capitalize on the significant, long-term opportunities for our global brands,” said Horowitz.  Despite a $90 million estimate of net tariff cost, Abercrombie & Fitch Co now expects net sales for fiscal year 2025 to grow between 5-7 per cent, compared with its previous forecast of 3-6 per cent.  Where Abercrombie & Fitch’s namesake brand needs to pick up the pace Christine Russo, the principal of Retail Creative and Consulting Agency (RCCA) and the host of retail podcast What Just Happened, told Inside Retail that inventory control and sourcing are two key issues the retailer needs to address. “In past quarters, the brand was celebrated and the stock was rewarded for tight inventory management, leading to high sell-throughs and margins with minimal markdowns,” she said. However, now, the retailer “may have inventory levels that are too tight and are chasing sales,” she added. Abercrombie & Fitch reported that it was slightly promotional, “which is less of an indication about inventory issues and more of an indication about the product style missing the mark,” Russo said. Additionally, she remarked that the retailer increased its estimated tariff hit from $50 million to $90 million, which could indicate its sourcing is less flexible, especially compared to its peers. Similarly, Retail Strategy Group’s Liza Amlani said that Abercrombie & Fitch is working through inventory challenges. “Excess seasonal inventory, markdowns and margin pressure suggest they’ve missed the mark on the right product at the right time,” she told Inside Retail. “Once inventory is cleaned up, the priority should be avoiding over-assorting and not trying to do it all. Abercrombie & Fitch needs to sharpen its focus. Abercrombie Kids’ wholesale strategy is another bright spot, with room to expand into new markets alongside the brand’s international direct-to-consumer push,” said Amlani. As Horowitz indicated earlier, Abercrombie & Fitch has several plans in place for the remainder of 2025 to drive consumer interest.  For instance, earlier this month, the retailer announced the launch of a getaway-inspired store design concept to attract younger consumers.  “We translated our customer’s mindset into a real-world immersive experience,” said Joanna Ewing, Abercrombie & Fitch Co’s senior vice president of creative marketing and global brands.  “The fitting rooms have been optimized with customizable lighting and chic design elements. Their affinity for travel is captured in the store’s hotel lobby-like vibe, complete with a check-in desk. The entire design of these new stores is the unique getaway mindset of our customers brought to life in a way that communicates elevated ease, which is exactly what Abercrombie represents,” she said. Also, just this week, Abercrombie & Fitch announced that it has secured a multi-year partnership with the National Football League to develop an athlete-inspired fashion range for NFL fans. As the NFL’s official fashion sponsor, Abercrombie said it wants to redefine fan style by creating a joint collection that combines game-day and casual apparel for players and their supporters. How Hollister is lifting Abercrombie & Fitch’s earnings  A significant portion of Abercrombie & Fitch Co’s Q2 growth can be attributed to the Hollister brand, which delivered its best-ever second-quarter with net sales growth of 19 per cent.  Saunders explained that several factors contributed to the positive result, including “great product, some great initiatives like the Grad Shop and a strong back-to-school set. The brand continues to gain ground with teens.” Melissa Minkow, CI&T’s global director of retail strategy, partially chalked up Hollister’s growth to Gen Z’s rising interest in millennial-favorite brands, such as Gap and J Crew.  “In general, the ‘Millennial revival’ brands had been doing super well the last couple of years, and now I believe we’re seeing the brands that are leaning into the Gen Z and Gen Alpha audiences be the successful ones. The focus on assortment and social media strategy are clearly paying off for Hollister,” she said. “It’s still a win to see Hollister doing well – not every brand can grow every quarter within a portfolio, so this is still a demonstration of relevance and audience alignment,” said Minkow.  Similarly, Russo commented, “The brand is perfectly positioned for an engaged Gen Z customer with a voracious appetite for denim.” Russo explained that Hollister was already positioned as a go-to denim destination for this age group, as it has been able to keep inventory in step with broader trends. It has also been drawing in younger consumers through its price-accessible merchandise.  “For the Hollister client, the parents are mostly the source of funds. Parent will look for a price value as their tween kids fill their baskets. Hollister’s has benefited from their pricing aligning with their base,” explained Russo.  Overall, Saunders concluded that “the outlook for the year remains solid, cementing Abercrombie & Fitch’s position as a well-run, merchant-led company.Why