Hollister’s first significant push into U.S. wholesale is bringing in new customers and encouraging parent company Abercrombie & Fitch Co. to explore further expansion beyond apparel.
In more than 1,500 Target stores this summer, the teen brand launched a dorm collection spanning bedding, bath accessories, storage and soft furnishings. On Abercrombie & Fitch Co.’s second-quarter earnings call on Wednesday, CEO Fran Horowitz said the partnership had performed “very well against expectations” and contributed to Hollister’s quarterly sales growth.
Management did not disclose sales or sell-through figures for the collection, but said it had seen evidence that the partnership was reaching new consumers. The response to the products was “absolutely terrific,” Horowitz said, citing the viral reception to products including Hollister’s pillows and comforters.
Publicly visible figures on Target’s website offer some indication of The Hollister Collection’s demand. As of August 26, the navy Study Buddy pillow had recorded more than 4,000 purchases over the previous month, while a floral hooded blanket had surpassed 3,000 and a gray reversible comforter had exceeded 2,000. Several additional bedding and apparel products showed more than 1,000 monthly purchases each.
The collection has also appeared across sponsored creator content using #HollisterPartner and #ad, alongside broader discovery tags including #college, #dormlife and #target. Neither company has disclosed aggregate social views or engagement for the campaign.
The results offer an early indication that Target could become more than an additional sales channel for Hollister. It also allows the company to test new categories at scale without the cost of developing a standalone home business or substantially expanding its store footprint.
“Target has a very broad audience and, for the most part, is located off-mall,” said Neil Saunders, managing director of consulting company GlobalData Retail. “It allows Hollister to test the offer with a wide range of customers, many of whom may not already be part of its audience.”
Saunders added that Target’s strength in back-to-school, college and non-apparel categories makes it a useful testing ground for Hollister, including against competing brands. “This really allows them to understand how strong their assortment is,” he said.
The partnership also fits into Target’s push to use focused assortments from culturally relevant brands to generate newness and attract additional customers. On its second-quarter earnings call last week, Target said its limited-time partnerships do “far more” than create short-term attention, helping the retailer attract new shoppers and reinforce its cultural relevance.
Target did not specifically discuss Hollister or its other retailer partners, like Pacsun. However, the retailer said it will continue to combine differentiated owned brands with exclusive partnerships during the third quarter, as it works to improve its apparel and home businesses. Target acknowledged that performance in both categories remains below its expectations, with further work planned through 2027 and beyond.
Unlike a conventional limited-edition designer collaboration, the Hollister agreement is a multi-season partnership. Its first drop includes nearly 60 apparel and bedding products, giving Target a focused back-to-college assortment while allowing Hollister to test home without launching a full standalone category.
“We’ve got proof points now that Hollister can certainly expand way beyond apparel, and there’s significant opportunity there,” Horowitz said.
Hollister’s app and website also carried products from the collection, allowing its existing customers to shop the brand across more of their dorm-room needs. Abercrombie & Fitch Co. did not say whether consumers acquired through Target had subsequently visited Hollister’s owned channels or purchased its apparel.
CFO Robert Ball said it was too early to quantify the longer-term opportunity or the collection’s contribution to the quarter. The company is currently examining customer response, sell-through and whether the partnership can create sustainable incremental growth.
“The main thing Hollister needs to understand is whether its core customer is receptive to an offer that extends beyond apparel,” Saunders said. “Hollister is a very apparel-centric brand, so it’s important to assess acceptance of a broader lifestyle offer. The early signs from the Target partnership are encouraging.”
The Target launch forms part of a broader attempt by Abercrombie & Fitch Co. to diversify its brands beyond its traditional apparel and direct-to-consumer businesses. Other growth areas cited by management include footwear, accessories, home goods, licensing and third-party distribution.
The company said these models can broaden its addressable market and introduce its brands to consumers in new contexts without requiring significant capital investment. Abercrombie is separately expanding the distribution of its NFL collection this fall through NFL stadium stores, NFLShop.com, official team websites and Fanatics.com.
Hollister reported second-quarter sales of $669.9 million, up 2% year over year, while comparable sales declined 3%. The decline came against 19% comparable-sales growth in the same period last year, according to a note from analyst Dana Telsey after earnings.
New stores and third-party channels helped create the gap between Abercrombie & Fitch Co.’s total sales growth and comparable sales performance during the quarter. That provides some early evidence of incremental revenue from expanded distribution, although the company has not broken out Target’s contribution.
Management also said demand for Hollister exceeded available inventory at several points during the quarter, leaving some stores with particularly lean stock. Across Abercrombie & Fitch Co., inventory declined 0.2% even as sales increased 4.8%, Dana Telsey said in a post-earnings note. Hollister’s inventory has since caught up, and its sales growth accelerated in August as the back-to-school season progressed.
Total company sales reached $1.27 billion during the quarter. Abercrombie brand sales rose 8.1% to $596.8 million. The company raised its full-year sales forecast to growth of approximately 5%, from its previous range of 3-5%, and expects Hollister to deliver the highest annual sales in the brand’s history.
“Management is confident in its future growth and cited new partnerships, distribution channels and product categories,” said Telsey in the note. The firm maintained its Outperform rating on Abercrombie & Fitch Co. following the results.
While the Target partnership remains small relative to Hollister’s overall business, management’s emphasis on customer acquisition and category expansion suggests it is being treated as a test case for the brand’s next stage of growth. Saunders said the collection’s limited scope reduces the risk that Target could dilute Hollister’s positioning. “If anything, this widens the audience and likely wins Hollister some new customers,” he said. However, he added that any expansion in distribution or product range should remain controlled so that the brand does not become “too diffused.”
“I see little danger of this, as management has a pretty firm grip on the strategy,” Saunders said.
