March 4 (Reuters) – Apparel retailer Abercrombie & Fitch on Wednesday forecast muted sales growth for the year and said it was including an estimated impact of 15% U.S. tariffs in its books.
Shares of the company fell about 7% in premarket trading.
U.S. President Donald Trump said in late February that he would raise a temporary tariff from 10% to 15%, the maximum level allowed under the law, after a Supreme Court decision to strike down Trump’s broad tariffs imposed under the International Emergency Economic Powers Act (IEEPA).
Retailers so far have accounted for the uncertainty around tariffs in different ways – Swiss sneaker maker On Holding and Best Buy excluded the impact of tariffs in their annual forecasts, citing a volatile environment, while also acknowledging a lower rate than last year.
Abercrombie on the other hand said its annual outlook included an impact of a 15% tariff on all goods imported into the United States, based on an announcement by the U.S. presidential administration on February 21.
U.S. Treasury Secretary Scott Bessent said earlier on Wednesday the new temporary global tariff rate of 15% was expected to take effect sometime this week. The rate would remain well below the additional 20% duty imposed last year on countries such as Vietnam and Indonesia, key sourcing hubs for companies like Abercrombie and On.
Abercrombie now expects net sales for fiscal 2026 to grow between 3% and 5%, compared with analysts’ expectations of a 4.2% rise, according to data compiled by LSEG.
It expects annual net income per share to be between $10.20 and $11, the midpoint of which is above analysts’ expectations of $10.36.
The forecast assumes a year-over-year tariff impact as a percentage of net sales of about 70 basis points for the full year, the company said, adding that it does not include any potential refunds or recoveries of the struck-down duties.
The company earlier this year had warned of pressured sales and a tariff impact of 170 basis points for 2025.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Maju Samuel)
