What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-12-04 compared with 2023-09-01 · 156 added, 135 removed, 554 unchanged (34% of the section changed)

3 unchanged sentences

(Thousands, except per share amounts)

Thirteen Weeks Ended Twenty-Six Weeks Ended

July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Net sales $ 1,056,431 $ 880,084 $ 2,827,770 $ 2,497,937

4 unchanged sentences

Asset impairment — 3,744 4,436 9,336

Other operating (income) loss, net ( 2,694 ) 953 ( 5,588 ) ( 2,889 )

Operating income (loss) 89,842 ( 2,191 ) 123,850 ( 11,917 )

Other operating loss (income), net 1,256 ( 1,005 ) ( 4,332 ) ( 3,894 )

Operating income 138,020 17,543 261,870 5,626

Interest expense, net 671 7,295 5,211 21,519

10 unchanged sentences

Diluted 52,624 49,486 52,154 50,673

Other comprehensive loss

Other comprehensive income (loss)

Foreign currency translation adjustments, net of tax $ ( 5,042 ) $ ( 11,021 ) $ ( 8,567 ) $ ( 26,338 )

Derivative financial instruments, net of tax 7,259 ( 1,206 ) 9,906 ( 1,223 )

Other comprehensive loss ( 1,594 ) ( 6,643 ) ( 878 ) ( 15,334 )

Other comprehensive income (loss) 2,217 ( 12,227 ) 1,339 ( 27,561 )

Comprehensive income (loss) 99,949 ( 12,945 ) 175,649 ( 57,867 )

7 unchanged sentences

(Thousands, except par value amounts)

July 29, 2023 January 28, 2023

October 28, 2023 January 28, 2023

Current assets:

28 unchanged sentences

Treasury stock, at average cost:

53,159 and 54,298 shares as of July 29, 2023 and January 28, 2023, respectively

52,899 and 54,298 shares as of October 28, 2023 and January 28, 2023, respectively

( 1,898,473 ) ( 1,953,735 )

10 unchanged sentences

(Thousands, except per share amounts)

Thirteen Weeks Ended July 29, 2023

Thirteen Weeks Ended October 28, 2023

Common Stock Paid-in

4 unchanged sentences

value Shares At average

Balance, April 29, 2023 50,062 $ 1,033 $ 400,699 $ 9,116 $ 2,344,522 $ ( 136,811 ) 53,238 $ ( 1,907,586 ) $ 710,973

Balance, July 29, 2023 50,141 $ 1,033 $ 410,398 $ 10,478 $ 2,400,032 $ ( 138,405 ) 53,159 $ ( 1,904,752 ) $ 778,784

Net income — — — 1,521 96,211 — — — 97,732

4 unchanged sentences

Distributions to noncontrolling interests, net — — — ( 1,994 ) — — — — ( 1,994 )

Ending balance at July 29, 2023 50,141 $ 1,033 $ 410,398 $ 10,478 $ 2,400,032 $ ( 138,405 ) 53,159 $ ( 1,904,752 ) $ 778,784

Thirteen Weeks Ended July 30, 2022

Ending balance at October 28, 2023 50,401 $ 1,033 $ 413,515 $ 10,005 $ 2,486,221 $ ( 136,188 ) 52,899 $ ( 1,898,473 ) $ 876,113

Thirteen Weeks Ended October 29, 2022

Common Stock Paid-in

4 unchanged sentences

value Shares At average

Balance, April 30, 2022 50,442 $ 1,033 $ 398,412 $ 9,444 $ 2,350,807 $ ( 123,397 ) 52,858 $ ( 1,931,494 ) $ 704,805

Balance, July 30, 2022 49,471 $ 1,033 $ 405,127 $ 11,139 $ 2,333,867 $ ( 130,040 ) 53,829 $ ( 1,948,199 ) $ 672,927

Net income (loss) — — — 1,496 ( 2,214 ) — — — ( 718 )

5 unchanged sentences

Distributions to noncontrolling interests, net — — — ( 2,801 ) — — — — ( 2,801 )

Ending balance at July 30, 2022 49,471 $ 1,033 $ 405,127 $ 11,139 $ 2,333,867 $ ( 130,040 ) 53,829 $ ( 1,948,199 ) $ 672,927

Ending balance at October 29, 2022 49,000 $ 1,033 $ 411,041 $ 9,834 $ 2,330,730 $ ( 142,267 ) 54,300 $ ( 1,954,306 ) $ 656,065

Abercrombie & Fitch Co.

3 unchanged sentences

(Thousands, except per share amounts)

Twenty-Six Weeks Ended July 29, 2023

Thirty-Nine Weeks Ended October 28, 2023

Common Stock Paid-in

11 unchanged sentences

Distributions to noncontrolling interests, net — — — ( 6,357 ) — — — — ( 6,357 )

Ending balance at July 29, 2023 50,141 $ 1,033 $ 410,398 $ 10,478 $ 2,400,032 $ ( 138,405 ) 53,159 $ ( 1,904,752 ) $ 778,784

Twenty-Six Weeks Ended July 30, 2022

Ending balance at October 28, 2023 50,401 $ 1,033 $ 413,515 $ 10,005 $ 2,486,221 $ ( 136,188 ) 52,899 $ ( 1,898,473 ) $ 876,113

Thirty-Nine Weeks Ended October 29, 2022

Common Stock Paid-in

12 unchanged sentences

Distributions to noncontrolling interests, net — — — ( 6,611 ) — — — — ( 6,611 )

Ending balance at July 30, 2022 49,471 $ 1,033 $ 405,127 $ 11,139 $ 2,333,867 $ ( 130,040 ) 53,829 $ ( 1,948,199 ) $ 672,927

Ending balance at October 29, 2022 49,000 $ 1,033 $ 411,041 $ 9,834 $ 2,330,730 $ ( 142,267 ) 54,300 $ ( 1,954,306 ) $ 656,065

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Twenty-Six Weeks Ended

July 29, 2023 July 30, 2022

Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022

Operating activities

6 unchanged sentences

Share-based compensation 29,331 23,426

Loss (gain) on extinguishment of debt 1,276 ( 52 )

Changes in assets and liabilities:

9 unchanged sentences

Proceeds from the sale of property and equipment 615 11,891

Withdrawal of funds from Rabbi Trust assets — 12,000

Net cash used for investing activities ( 127,986 ) ( 96,391 )

Financing activities

Purchase of senior secured notes ( 50,933 ) ( 7,862 )

Payment of debt modification costs and fees ( 180 ) ( 181 )

41 unchanged sentences

Corporate functions and other income and expenses are evaluated on a consolidated basis and are not allocated to the Company’s segments, and therefore are included as a reconciling item between segment and total operating income (loss).

There was no impact on consolidated net sales, operating income (loss) or net income (loss) per share as a result of these changes.

There was no impact on consolidated net sales, operating income (loss) or net income (loss) as a result of these changes.

All prior periods presented are recast to conform to the new segment presentation.

The Company’s brands include Abercrombie brands, which includes the Company’s Abercrombie & Fitch and abercrombie kids brands, and Hollister brands, which includes the Company’s Hollister, Gilly Hicks, and Social Tourist brands.

The Company’s brands include Abercrombie brands, which includes Abercrombie & Fitch and abercrombie kids, and Hollister brands, which includes Hollister, Gilly Hicks, and Social Tourist.

These brands share a commitment to offering unique products of enduring quality and exceptional comfort that allow customers around the world to express their own individuality and style.

5 unchanged sentences

(“Dixar”), each of which meets the definition of a variable interest entity (“VIE”).

The purpose of the business ventures with MAF is to operate stores in the United Arab Emirates and Kuwait and the purpose of the business venture with Dixar is to hold the intellectual property related to the Social Tourist brand.

The Company is deemed to be the primary beneficiary of these VIEs;

9 unchanged sentences

Interim financial statements

The Condensed Consolidated Financial Statements as of July 29, 2023, and for the thirteen and twenty-six week periods ended July 29, 2023 and July 30, 2022, are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim consolidated financial statements.

The Condensed Consolidated Financial Statements as of October 28, 2023, and for the thirteen and thirty-nine week periods ended October 28, 2023 and October 29, 2022, are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim consolidated financial statements.

Accordingly, the Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in A&F’s Annual Report on Form 10-K for Fiscal 2022 filed with the SEC on March 27, 2023 (the “Fiscal 2022 Form 10-K”).

6 unchanged sentences

Due to the inherent uncertainty involved with estimates, actual results may differ.

Additionally, these estimates and assumptions may change as a result of the impact of conditions affecting the global economy, such as the uncertainty regarding the economy, rising interest rates, continued inflation, fluctuation in foreign exchange rates, and the ongoing conflict in Ukraine, and result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Additionally, these estimates and assumptions may change as a result of the impact of conditions affecting the global economy, such as the uncertainty regarding the economy, rising interest rates, continued inflation, fluctuation in foreign exchange rates, and geopolitical conflict, armed conflict, the conflicts between Russia and Ukraine or Israel and Hamas, and result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Recent accounting pronouncements

2 unchanged sentences

Accounting Standards Update (ASU) Description Date of adoption Effect on the financial statements or other significant matters

Standards adopted

ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50):

6 unchanged sentences

The adoption of this guidance did not have a significant impact on the Company's condensed consolidated financial statements.

Standards not yet adopted

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

The update modifies the disclosure/presentation requirements of reportable segments.

The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit and loss, The amendments also require disclosure of all other segment items by reportable segment and a description of its composition.

Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and accompanying notes

Supply Chain Finance Program

3 unchanged sentences

The Company’s responsibility is limited to making payment on the terms originally negotiated by the Company with each vendor, regardless of whether the vendor sells its receivable to a financial institution.

If a vendor chooses to participate in the SCF program, the Company pays the financial institution the stated amount of confirmed merchandise invoices on the stated maturity date, which are primarily 75 days from the invoice date.

The agreement with the financial institution does not require the Company to provide assets pledged as security or other forms of guarantees for the SCF program.

As of July 29, 2023 and January 28, 2023, $ 79.8 million and $ 68.4 million of SCF program liabilities were recorded in accounts payable in the Condensed Consolidated Balance Sheet, respectively, and reflected as a cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows when settled.

The agreement

Abercrombie & Fitch Co.

2023 3Q Form 10-Q

with the financial institution does not require the Company to provide assets pledged as security or other forms of guarantees for the SCF program.

As of October 28, 2023 and January 28, 2023, $ 117.3 million and $ 68.4 million of SCF program liabilities were recorded in accounts payable in the Condensed Consolidated Balance Sheets, respectively, and reflected as a cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows when settled.

Condensed Consolidated Statements of Cash Flows reconciliation

The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Condensed Consolidated Statements of Cash Flows:

(in thousands) Location July 29, 2023 January 28, 2023 July 30, 2022 January 29, 2022

(in thousands) Location October 28, 2023 January 28, 2023 October 29, 2022 January 29, 2022

Cash and equivalents Cash and equivalents $ 649,489 $ 517,602 $ 257,332 $ 823,139

3 unchanged sentences

Disaggregation of revenue

All revenues are recognized in net sales in the Condensed Consolidated Statements of Operations and Comprehensive Income.

All revenues are recognized in net sales in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

For information regarding the disaggregation of revenue, refer to Note 14, “ SEGMENT REPORTING .

Contract liabilities

The following table details certain contract liabilities representing unearned revenue as of July 29, 2023, January 28, 2023, July 30, 2022 and January 29, 2022:

(in thousands) July 29, 2023 January 28, 2023 ⁽¹⁾ July 30, 2022 January 29, 2022 ⁽¹⁾

The following table details certain contract liabilities representing unearned revenue as of October 28, 2023, January 28, 2023, October 29, 2022 and January 29, 2022:

(in thousands) October 28, 2023 January 28, 2023 October 29, 2022 January 29, 2022

Gift card liability (1)

1 unchanged sentence

Loyalty programs liability 24,521 25,640 22,930 22,757

(1) Includes $ 26.4 million and $ 23.9 million of revenue recognized during the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively, that was included in the gift card liability at the beginning of January 28, 2023 and January 29, 2022, respectively.

The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

(1) Includes $ 15.5 million and $ 14.2 million of revenue recognized during the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively, that was included in the gift card liability at the beginning of January 28, 2023 and January 29, 2022, respectively.

The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Revenue associated with gift card redemptions and gift card breakage $ 24,741 $ 21,194 $ 73,391 $ 66,847

Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs 13,710 11,767 37,628 32,578

Abercrombie & Fitch Co.

2023 3Q Form 10-Q

NET INCOME (LOSS) PER SHARE

Net income (loss) per basic and diluted share attributable to A&F is computed based on the weighted-average number of outstanding shares of A&F’s Class A Common Stock, $0.01 par value (“Common Stock”).

The following table provides additional information pertaining to net income (loss) per share attributable to A&F for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides additional information pertaining to net income (loss) per share attributable to A&F for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Shares of Common Stock issued 103,300 103,300 103,300 103,300

6 unchanged sentences

(1) Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net income (loss) per diluted share because the impact would have been anti-dilutive.

Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieve up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion.

Abercrombie & Fitch Co.

2023 2Q Form 10-Q

Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieved from zero up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

5 unchanged sentences

The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The following table provides the three levels of the hierarchy and the distribution of the Company’s assets measured at fair value on a recurring basis, as of July 29, 2023 and January 28, 2023:

Assets and Liabilities at Fair Value as of July 29, 2023

The following table provides the three levels of the hierarchy and the distribution of the Company’s assets measured at fair value on a recurring basis, as of October 28, 2023 and January 28, 2023:

Assets and Liabilities at Fair Value as of October 28, 2023

(in thousands) Level 1 Level 2 Level 3 Total

2 unchanged sentences

Derivative instruments (2)

— 5,132 — 5,132

Rabbi Trust assets (3)

22 unchanged sentences

Level 2 assets consisted of time deposits.

Abercrombie & Fitch Co.

2023 3Q Form 10-Q

(2) Level 2 assets and liabilities consisted primarily of foreign currency exchange forward contracts.

7 unchanged sentences

The Company’s borrowings under its senior secured notes, which have a fixed 8.75 % interest rate and mature on July 15, 2025 (the “Senior Secured Notes”), are carried at historical cost in the accompanying Condensed Consolidated Balance Sheets.

The following table provides the carrying amount and fair value of the Company’s long-term gross borrowings as of July 29, 2023 and January 28, 2023:

(in thousands) July 29, 2023 January 28, 2023

The following table provides the carrying amount and fair value of the Company’s long-term gross borrowings as of October 28, 2023 and January 28, 2023:

(in thousands) October 28, 2023 January 28, 2023

Gross borrowings outstanding, carrying amount $ 249,730 $ 299,730

2 unchanged sentences

(1) Classified as Level 2 measurements within the fair value hierarchy.

Abercrombie & Fitch Co.

2023 2Q Form 10-Q

PROPERTY AND EQUIPMENT, NET

The following table provides property and equipment, net as of July 29, 2023 and January 28, 2023:

(in thousands) July 29, 2023 January 28, 2023

The following table provides property and equipment, net as of October 28, 2023 and January 28, 2023:

(in thousands) October 28, 2023 January 28, 2023

Property and equipment, at cost $ 2,499,779 $ 2,517,862

1 unchanged sentence

Property and equipment, net $ 546,935 $ 551,585

R efer to Note 8, “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022.

R efer to Note 8, “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during the thirty-nine weeks ended October 28, 2023 and thirteen and thirty-nine weeks ended October 29, 2022.

The Company is a party to leases related to its Company-operated retail stores as well as for certain of its distribution centers, office space, information technology and equipment.

The following table provides a summary of the Company’s operating lease costs for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides a summary of the Company’s operating lease costs for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Single lease cost (1)

8 unchanged sentences

(1) Included amortization and interest expense associated with operating lease right-of-use assets and the impact from remeasurement of operating lease liabilities.

(2) Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as the benefit of $ 1.0 million and $ 1.1 million of rent abatements during the thirteen and twenty-six weeks ended July 29, 2023, respectively, related to the effects of the COVID-19 pandemic that resulted in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract.

The benefit related to rent abatements recognized during the thirteen and twenty-six weeks ended July 30, 2022 was $ 0.9 million and $ 2.6 million, respectively.

(3) Refer to Note 8, “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges.

1 unchanged sentence

Financial Statements and Supplementary Data” of the Fiscal 2022 Form 10-K.

Sublease income is recognized in other operating (income) loss, net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company had minimum commitments related to operating lease contracts that have not yet commenced, primarily for certain Company-operated retail stores, of approximately $ 21.8 million as of July 29, 2023.

Sublease income is recognized in other operating loss (income), net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Abercrombie & Fitch Co.

1 unchanged sentence

ASSET IMPAIRMENT

The following table provides asset impairment charges for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides asset impairment charges for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Operating lease right-of-use asset impairment $ — $ 1,205 $ 1,414 $ 4,693

1 unchanged sentence

Total asset impairment $ — $ 3,744 $ 4,436 $ 9,336

Asset impairment charges for the thirteen weeks ended July 30, 2022 and twenty-six weeks ended July 29, 2023 and July 30, 2022 related to certain of the Company’s assets including stores across certain brands, geographies and store formats.

The store impairment charges for the twenty-six weeks ended July 29, 2023 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $ 6.1 million, including $ 3.2 million related to operating lease right-of-use assets.

Asset impairment charges for the thirteen weeks ended October 29, 2022 and thirty-nine weeks ended October 28, 2023 and October 29, 2022 related to certain of the Company’s assets including stores across certain brands, geographies and store formats and other assets.

The quarterly provision for income taxes is based on the current estimate of the annual effective income tax rate and the tax effect of discrete items occurring during the quarter.

4 unchanged sentences

Impact of valuation allowances

During the thirteen and twenty-six weeks ended July 29, 2023, the Company did not recognize income tax benefits on $ 22.7 million and $ 43.0 million, respectively, of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 3.4 million and $6.5 million, respectively.

As of July 29, 2023, the Company had net deferred tax assets of approximately $ 11.2 million, $ 8.3 million, and $ 16.6 million in China, Japan and the United Kingdom, respectively.

During the thirteen and thirty-nine weeks ended October 28, 2023, the Company did not recognize income tax benefits on $ 20.0 million and $ 63.0 million, respectively, of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 3.0 million and $ 9.6 million, respectively.

As of October 28, 2023, the Company had foreign net deferred tax assets of approximately $ 47.2 million, including $ 11.3 million, $ 7.8 million, and $ 14.8 million in China, Japan and the United Kingdom, respectively.

While the Company believes that these net deferred tax assets are more-likely-than-not to be realized, it is not a certainty, as the Company continues to evaluate and respond to emerging situations.

1 unchanged sentence

Additional valuation allowances would result in additional tax expense.

During the thirteen and twenty-six weeks ended July 30, 2022, the Company did not recognize income tax benefits on $ 26.4 million and $ 39.8 million, respectively, of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 4.8 million and $ 7.2 million, respectively.

During the thirteen and thirty-nine weeks ended October 29, 2022, the Company did not recognize income tax benefits on $ 30.0 million and $ 69.7 million, respectively, of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 5.6 million and $ 12.8 million, respectively.

As of January 28, 2023, there were approximately $ 8.0 million, $ 9.1 million, and $ 15.6 million of net deferred tax assets in China, Japan, and the United Kingdom, respectively.

Share-based compensation

Refer to Note 11, “ SHARE-BASED COMPENSATION ,” for details on income tax benefits and charges related to share-based compensation awards during the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022.

Refer to Note 11, “ SHARE-BASED COMPENSATION ,” for details on income tax benefits and charges related to share-based compensation awards during the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022.

Abercrombie & Fitch Co.

2023 3Q Form 10-Q

The following table provides details on the Company’s long-term borrowings, net, as of July 29, 2023 and January 28, 2023 :

(in thousands) July 29, 2023 January 28, 2023

The following table provides details on the Company’s long-term borrowings, net, as of October 28, 2023 and January 28, 2023 :

(in thousands) October 28, 2023 January 28, 2023

Long-term portion of borrowings, gross at carrying amount $ 249,730 $ 299,730

2 unchanged sentences

Senior Secured Notes

During the thirteen weeks ended October 28, 2023, A&F Management purchased $ 50.0 million of outstanding Senior Secured Notes in the open market and incurred a $ 1.3 million loss on extinguishment of debt, comprised of a premium of $ 0.9 million and the write-off of unamortized fees of $ 0.4 million, recognized in interest expense, net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The terms of the Senior Secured Notes have remained unchanged from those disclosed in Note 12, “BORROWINGS,” of the Notes to Consolidated Financial Statements contained in “Item 8.

2 unchanged sentences

Financial Statements and Supplementary Data” of the Fiscal 2022 Form 10-K.

The Company did not have any borrowings outstanding under the ABL Facility as of July 29, 2023 or as of January 28, 2023.

As of July 29, 2023, availability under the ABL Facility was $ 396.7 million, net of $ 0.4 million in outstanding stand-by letters of credit.

As the Company must maintain excess availability equal to the greater of 10% of the loan cap or $30 million under the ABL Facility, borrowing capacity available to the Company under the ABL Facility was $ 356.9 million as of July 29, 2023.

The Company did not have any borrowings outstanding under the ABL Facility as of October 28, 2023 or as of January 28, 2023.

As of October 28, 2023, availability under the ABL Facility was $ 399.6 million, net of $ 0.4 million in outstanding stand-by letters of credit.

Representations, warranties and covenants

10 unchanged sentences

Certain of the agreements related to the Senior Secured Notes and the ABL Facility also contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance and providing additional guarantees and collateral in certain circumstances.

The Company was in compliance with all debt covenants under these agreements as of July 29, 2023.

The Company was in compliance with all debt covenants under these agreements as of October 28, 2023.

Abercrombie & Fitch Co.

2 unchanged sentences

Financial statement impact

The following table provides share-based compensation expense and the related income tax impacts for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides share-based compensation expense and the related income tax impacts for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Share-based compensation expense $ 9,684 $ 7,310 $ 29,331 $ 23,426

Income tax benefit associated with share-based compensation expense recognized 1,079 1,015 2,083 1,980

The following table provides discrete income tax benefits and charges related to share-based compensation awards during the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Income tax benefits associated with share-based compensation expense recognized

1,080 635 3,163 2,615

The following table provides discrete income tax benefits and charges related to share-based compensation awards during the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Income tax discrete benefits (charges) realized for tax deductions related to the issuance of shares $ 861 $ ( 29 ) $ 2,303 $ 1,970

1 unchanged sentence

Total income tax discrete benefits (charges) related to share-based compensation awards $ 861 $ ( 39 ) $ 2,202 $ 1,757

The following table provides the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting and the exercise of stock appreciation rights for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting and the exercise of stock appreciation rights for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Employee tax withheld upon issuance of shares (1)

2 unchanged sentences

Restricted stock units

The following table provides the summarized activity for restricted stock units for the twenty-six weeks ended July 29, 2023:

The following table provides the summarized activity for restricted stock units for the thirty-nine weeks ended October 28, 2023:

Service-based Restricted

16 unchanged sentences

Forfeited ( 98,726 ) 24.97 ( 7,123 ) 29.89 ( 3,562 ) 43.46

Unvested at July 29, 2023 (1)

Unvested at October 28, 2023 (1)

1,959,432 $ 27.15 551,570 $ 30.00 275,798 $ 43.81

(1) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above.

Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved at up to 200% of their target vesting amount.

The following table provides the unrecognized compensation cost and the remaining weighted-average period over which these costs are expected to be recognized for restricted stock units as of July 29, 2023:

Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved from zero up to 200% of their target vesting amount.

Service-based Restricted

6 unchanged sentences

2023 3Q Form 10-Q

The following table provides additional information pertaining to restricted stock units for the twenty-six weeks ended July 29, 2023 and July 30, 2022:

Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022

The following table provides additional information pertaining to restricted stock units for the thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022

Service-based restricted stock units:

7 unchanged sentences

Total grant date fair value of awards vested 16,040 4,105

The following table provides the weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during the twenty-six weeks ended July 29, 2023 and July 30, 2022:

Twenty-Six Weeks Ended

July 29, 2023 July 30, 2022

The following table provides the weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during the thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022

Grant date market price $ 28.36 $ 30.24

7 unchanged sentences

Stock appreciation rights

The following table provides the summarized stock appreciation rights activity for the twenty-six weeks ended July 29, 2023:

The following table provides the summarized stock appreciation rights activity for the thirty-nine weeks ended October 28, 2023:

Shares Weighted-Average

7 unchanged sentences

Forfeited or expired ( 23,700 ) 45.69

Outstanding at July 29, 2023

Outstanding at October 28, 2023

34,200 $ 31.65 $ 926 0.8

Stock appreciation rights exercisable at July 29, 2023 153,101 $ 27.47 $ 1,914 1.3

The following table provides additional information pertaining to stock appreciation rights exercised during the twenty-six weeks ended July 29, 2023:

(in thousands) July 29, 2023

Stock appreciation rights exercisable at October 28, 2023 34,200 $ 31.65 $ 926 0.8

The following table provides additional information pertaining to stock appreciation rights exercised during the thirty-nine weeks ended October 28, 2023:

(in thousands) October 28, 2023

Total grant date fair value of awards exercised $ 1,292

No stock appreciation rights were exercised during the twenty-six weeks ended July 30, 2022.

No stock appreciation rights were exercised during the thirty-nine weeks ended October 29, 2022.

Abercrombie & Fitch Co.

14 unchanged sentences

The Company has chosen not to apply hedge accounting to these instruments because there are no anticipated differences in the timing of gain or loss recognition on the hedging instruments and the hedged items.

As of July 29, 2023, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany transactions:

As of October 28, 2023, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany transactions:

(in thousands) Notional Amount (1)

3 unchanged sentences

(1) Amounts reported are the U.S.

Dollar notional amounts outstanding as of July 29, 2023.

Dollar notional amounts outstanding as of October 28, 2023.

As of October 28, 2023, foreign currency exchange forward contracts that were entered into to hedge foreign-currency-denominated net monetary assets and liabilities were as follows:

(in thousands) Notional Amount (1)

United Arab Emirates dirham $ 22,058

(1) Amounts reported are the U.S.

Dollar notional amounts outstanding as of October 28, 2023 .

The fair value of derivative instruments is determined using quoted market prices of the same or similar instruments, adjusted for counterparty risk.

The following table provides the location and amounts of derivative fair values of foreign currency exchange forward contracts on the Condensed Consolidated Balance Sheets as of July 29, 2023 and January 28, 2023:

(in thousands) Location July 29, 2023 January 28, 2023 Location July 29, 2023 January 28, 2023

(in thousands) Location October 28, 2023 January 28, 2023 Location October 28, 2023 January 28, 2023

Derivatives designated as cash flow hedging instruments Other current assets

$ 5,114 $ 32 Accrued expenses

Derivatives not designated as hedging instruments

Other current assets

18 — Accrued expenses

$ 5,132 $ 32 $ 10 $ 4,986

The following table provides information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Gain recognized in AOCL (1)

5 unchanged sentences

Substantially all of the unrealized gain will be recognized in costs of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) over the next twelve months .

The following table provides additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

(Loss) gain, net recognized in other operating (income) loss, net

$ ( 540 ) $ 631 $ ( 1,087 ) $ 1,772

Abercrombie & Fitch Co.

2023 3Q Form 10-Q

The following table provides additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Gain (loss) recognized in other operating loss (income), net

$ 2,193 $ 504 $ ( 239 ) $ 2,276

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables provide activity in AOCL fo r the thirteen and twenty-six weeks ended July 29, 2023:

Thirteen Weeks Ended July 29, 2023

The following tables provide activity in AOCL fo r the thirteen and thirty-nine weeks ended October 28, 2023:

Thirteen Weeks Ended October 28, 2023

(in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total

Beginning balance at April 29, 2023 $ ( 132,342 ) $ ( 4,469 ) $ ( 136,811 )

Beginning balance at July 29, 2023 $ ( 136,178 ) $ ( 2,227 ) $ ( 138,405 )

Other comprehensive (loss) income before reclassifications ( 5,042 ) 7,151 2,109

Reclassified loss from AOCL (1)

— 1,708 1,708

Tax effect — ( 218 ) ( 218 )

Other comprehensive (loss) income after reclassifications ( 5,042 ) 7,259 2,217

Ending balance at July 29, 2023 $ ( 136,178 ) $ ( 2,227 ) $ ( 138,405 )

Twenty-Six Weeks Ended July 29, 2023

Ending balance at October 28, 2023 $ ( 141,220 ) $ 5,032 $ ( 136,188 )

Thirty-Nine Weeks Ended October 28, 2023

(in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total

5 unchanged sentences

Other comprehensive (loss) income after reclassifications ( 8,567 ) 9,906 1,339

Ending balance at July 29, 2023 $ ( 136,178 ) $ ( 2,227 ) $ ( 138,405 )

Ending balance at October 28, 2023 $ ( 141,220 ) $ 5,032 $ ( 136,188 )

(1) Amount represents loss reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The following tables provide activity in AOCL for the thirteen and twenty-six weeks ended July 30, 2022:

Thirteen Weeks Ended July 30, 2022

The following tables provide activity in AOCL for the thirteen and thirty-nine weeks ended October 29, 2022:

Thirteen Weeks Ended October 29, 2022

(in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total

Beginning balance at April 30, 2022 $ ( 131,092 ) $ 7,695 $ ( 123,397 )

Beginning balance at July 30, 2022 $ ( 136,006 ) $ 5,966 $ ( 130,040 )

Other comprehensive (loss) income before reclassifications ( 11,021 ) 2,723 ( 8,298 )

3 unchanged sentences

Other comprehensive loss after reclassifications ( 11,021 ) ( 1,206 ) ( 12,227 )

Ending balance at July 30, 2022 $ ( 136,006 ) $ 5,966 $ ( 130,040 )

Twenty-Six Weeks Ended July 30, 2022

Ending balance at October 29, 2022 $ ( 147,027 ) $ 4,760 $ ( 142,267 )

Thirty-Nine Weeks Ended October 29, 2022

(in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total

5 unchanged sentences

Other comprehensive loss after reclassifications ( 26,338 ) ( 1,223 ) ( 27,561 )

Ending balance at July 30, 2022 $ ( 136,006 ) $ 5,966 $ ( 130,040 )

Ending balance at October 29, 2022 $ ( 147,027 ) $ 4,760 $ ( 142,267 )

(1) Amount represents loss reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

20 unchanged sentences

The Company does not report its other assets by segment as that information is not used by the CODM in assessing segment performance or allocating resources.

The following tables provide the Company’s segment information as of July 29, 2023 and January 28, 2023, and for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following tables provide the Company’s segment information as of October 28, 2023 and January 28, 2023, and for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Americas $ 867,566 $ 713,860 $ 2,264,415 $ 1,949,066

3 unchanged sentences

Operating Income (loss)

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Americas $ 257,440 $ 125,726 $ 590,948 $ 297,826

2 unchanged sentences

Segment total $ 274,974 $ 123,538 $ 633,846 $ 306,805

Operating Income (loss) not attributed to Segments:

Operating (loss) income not attributed to Segments:

Stores and distribution expense ( 3,202 ) ( 1,254 ) ( 8,205 ) ( 5,972 )

1 unchanged sentence

Other operating (loss) income, net ( 1,256 ) 1,006 4,328 3,901

Total operating income (loss) $ 89,842 $ ( 2,191 ) $ 123,850 $ ( 11,917 )

Total operating income $ 138,020 $ 17,543 $ 261,870 $ 5,626

Abercrombie & Fitch Co.

2023 3Q Form 10-Q

(in thousands) July 29, 2023 January 28, 2023

(in thousands) October 28, 2023 January 28, 2023

Americas $ 481,288 $ 404,040

5 unchanged sentences

Brand Information

The following table provides additional disaggregated revenue information, which is categorized by brand, for the thirteen and twenty-six weeks ended July 29, 2023 and July 30, 2022:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

The following table provides additional disaggregated revenue information, which is categorized by brand, for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(in thousands) October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Abercrombie $ 547,728 $ 422,332 $ 1,446,483 $ 1,174,445

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements