Retail Specialty Apparel and Accessories 1Q26 Preview

Goldman Sachs lowered 1Q26 EPS estimates for ANF to $1.24 while maintaining AEO estimates, citing increased promotional activity at Hollister. Both firms show strong digital traffic but face concerns regarding conversion and year-over-year margin comparisons.

Key Takeaways

• 1.Goldman Sachs trimmed ANF 1Q26 adjusted EPS estimates by -4c to $1.24 due to increased discounting in the Hollister banner.
• 2.AEO estimates remain unchanged with 1Q26 total comp expected at 9.0%, driven by outsized growth in the Aerie banner (+22%).
• 3.Both retailers are facing inventory and conversion challenges, with Hollister seeing weaker conversion despite positive foot traffic.

Table of Contents

• Table of Contents
• What investors are saying
• ANF model changes
• Our Expectations for AEO
• Abercrombie & Fitch Co. (ANF)
• Volume and AUR assumptions by banner
• A&F
• Hollister
• Online Discounting
• A&F Banner Discounting
• Hollister Banner Discounting
• In-store Performance and Web Traffic
• Observed Sales
• Foot and Online Traffic
• HundredX
• Valuation & Risks
• American Eagle Outfitters Inc. (AEO)
• In-store and Digital Picture
• Online Discounting
• HundredX
• Valuation & Risks
• Disclosure Appendix

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