What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-09-06 compared with 2024-06-07 · 227 added, 154 removed, 502 unchanged (43% of the section changed)

3 unchanged sentences

(Thousands, except per share amounts)

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

Thirteen Weeks Ended Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Net sales $ 1,133,974 $ 935,345 $ 2,154,704 $ 1,771,339

19 unchanged sentences

Diluted 53,279 51,548 53,277 51,535

Other comprehensive (loss) income

Other comprehensive income (loss)

Foreign currency translation adjustments, net of tax $ 3,441 $ ( 3,836 ) $ 1,604 $ ( 3,525 )

Derivative financial instruments, net of tax ( 1,150 ) 2,242 ( 627 ) 2,647

Other comprehensive (loss) income ( 1,314 ) 716

Other comprehensive income (loss) 2,291 ( 1,594 ) 977 ( 878 )

Comprehensive income 137,670 57,137 251,434 75,700

7 unchanged sentences

(Thousands, except par value amounts)

May 4, 2024 February 3, 2024

August 3, 2024 February 3, 2024

Current assets:

28 unchanged sentences

Treasury stock, at average cost:

52,198 and 52,800 shares as of May 4, 2024 and February 3, 2024, respectively

52,231 and 52,800 shares as of August 3, 2024 and February 3, 2024, respectively

( 1,945,778 ) ( 1,895,143 )

10 unchanged sentences

(Thousands, except per share amounts)

Thirteen Weeks Ended May 4, 2024

Thirteen Weeks Ended August 3, 2024

Common Stock Paid-in

4 unchanged sentences

value Shares At average

Balance, May 4, 2024 51,102 $ 1,033 $ 400,807 $ 12,284 $ 2,745,382 $ ( 137,282 ) 52,198 $ ( 1,931,054 ) $ 1,091,170

Net income — — — 2,211 133,168 — — — 135,379

Purchase of Common Stock ( 84 ) — — — — — 84 ( 15,000 ) ( 15,000 )

Share-based compensation issuances and exercises 51 — ( 1,747 ) — ( 581 ) — ( 51 ) 276 ( 2,052 )

Share-based compensation expense — — 9,233 — — — — — 9,233

Derivative financial instruments, net of tax — — — — — ( 1,150 ) — — ( 1,150 )

Foreign currency translation adjustments, net of tax — — — — — 3,441 — — 3,441

Contribution from noncontrolling interests, net

— — — 129 — — — — 129

Ending balance at August 3, 2024 51,069 $ 1,033 $ 408,293 $ 14,624 $ 2,877,969 $ ( 134,991 ) 52,231 $ ( 1,945,778 ) $ 1,221,150

Thirteen Weeks Ended July 29, 2023

Common Stock Paid-in

capital Non-controlling interests Retained

earnings AOCL Treasury stock Total

stockholders’

outstanding Par

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

Net income — — — 1,837 56,894 — — — 58,731

Share-based compensation issuances and exercises 79 — ( 1,860 ) — ( 1,384 ) — ( 79 ) 2,834 ( 410 )

Share-based compensation expense — — 11,559 — — — — — 11,559

Derivative financial instruments, net of tax — — — — — 2,242 — — 2,242

Foreign currency translation adjustments, net of tax — — — — — ( 3,836 ) — — ( 3,836 )

Distribution to noncontrolling interests, net

— — — ( 475 ) — — — — ( 475 )

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

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Abercrombie & Fitch Co.

Condensed Consolidated Statements of Stockholders’ Equity

(Thousands, except per share amounts)

Twenty-Six Weeks Ended August 3, 2024

Common Stock Paid-in

capital Non-controlling interests Retained

earnings AOCL Treasury stock Total

stockholders’

outstanding Par

value Shares At average

Balance, February 3, 2024 50,500 $ 1,033 $ 421,609 $ 14,827 $ 2,643,629 $ ( 135,968 ) 52,800 $ ( 1,895,143 ) $ 1,049,987

5 unchanged sentences

Foreign currency translation adjustments, net of tax — — — — — 1,604 — — 1,604

Distributions to noncontrolling interests, net — — — ( 3,771 ) — — — — ( 3,771 )

Ending balance at May 4, 2024 51,102 $ 1,033 $ 400,807 $ 12,284 $ 2,745,382 $ ( 137,282 ) 52,198 $ ( 1,931,054 ) $ 1,091,170

Thirteen Weeks Ended April 29, 2023

Distribution to noncontrolling interests, net

— — — ( 3,642 ) — — — — ( 3,642 )

Ending balance at August 3, 2024 51,069 $ 1,033 $ 408,293 $ 14,624 $ 2,877,969 $ ( 134,991 ) 52,231 $ ( 1,945,778 ) $ 1,221,150

Twenty-Six Weeks Ended July 29, 2023

Common Stock Paid-in

10 unchanged sentences

Foreign currency translation adjustments, net of tax — — — — — ( 3,525 ) — — ( 3,525 )

Distributions to noncontrolling interests, net — — — ( 3,888 ) — — — — ( 3,888 )

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

Distribution to noncontrolling interests, net

— — — ( 4,363 ) — — — — ( 4,363 )

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

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

Abercrombie & Fitch Co.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

Operating activities

Net income $ 250,457 $ 76,578

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 77,044 72,411

1 unchanged sentence

Loss on disposal 2,170 1,622

Provision for deferred income taxes 3,064 9,689

Benefit from deferred income taxes ( 4,882 ) ( 822 )

Share-based compensation 20,596 19,647

7 unchanged sentences

Other liabilities 470 ( 3,514 )

Net cash provided by (used for) operating activities 95,010 ( 560 )

Net cash provided by operating activities 260,119 216,328

Investing activities

Purchases of marketable securities

Purchases of property and equipment ( 81,649 ) ( 89,780 )

1 unchanged sentence

Financing activities

Purchase of senior secured notes ( 9,425 ) —

Repayment/redemption of senior secured notes

( 223,331 ) —

Payment of debt modification costs and fees ( 2,716 ) ( 17 )

Purchases of Common Stock ( 30,000 ) —

4 unchanged sentences

Effect of foreign currency exchange rates on cash 101 ( 3,672 )

Net decrease in cash and equivalents, and restricted cash and equivalents ( 37,684 ) ( 70,905 )

Net (decrease) increase in cash and equivalents, and restricted cash and equivalents ( 163,390 ) 99,534

Cash and equivalents, and restricted cash and equivalents, beginning of period 909,685 527,569

40 unchanged sentences

The accompanying Condensed Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its financial position, results of operations and cash flows.

The Company has interests in Emirati and Kuwaiti business ventures with Majid al Futtaim Fashion L.L.C.

The Company has interests in Emirati and Kuwaiti business ventures with Majid al Futtaim Lifestyle L.L.C.

(“MAF”) and in a United States of America (the “U.S.”) business venture with Dixar L.L.C.

12 unchanged sentences

Interim financial statements

The Condensed Consolidated Financial Statements as of May 4, 2024, and for the thirteen week periods ended May 4, 2024 and April 29, 2023, 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 August 3, 2024, and for the thirteen and twenty-six week periods ended August 3, 2024 and July 29, 2023, 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 2023 filed with the SEC on April 1, 2024 (the “Fiscal 2023 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 global economic conditions such as the uncertainty regarding a slowing economy, rising interest rates, continued inflation, fluctuation in foreign exchange rates, the ongoing conflicts between Russia and Ukraine or Israel and Hamas which could 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 global economic conditions such as the uncertainty regarding a slowing economy, rising interest rates, continued inflation, fluctuation in foreign exchange rates, and geopolitical concerns, all of which could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Recent accounting pronouncements

The Company reviews recent accounting pronouncements on a quarterly basis and has excluded discussion of those not applicable to the Company and those that did not have, or are not expected to have, a material impact on the Company’s consolidated financial statements.

The following table provides a brief description of certain accounting pronouncements that the company has adopted.

The following table provides a brief description of certain accounting pronouncements the Company has not yet adopted and that could affect the Company’s financial statements.

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

3 unchanged sentences

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.

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

Other than the new disclosure requirements, the adoption of this guidance will not have a significant impact on the Company's consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740):

7 unchanged sentences

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 May 4, 2024 February 3, 2024 April 29, 2023 January 28, 2023

(in thousands) Location August 3, 2024 February 3, 2024 July 29, 2023 January 28, 2023

Cash and equivalents Cash and equivalents $ 738,402 $ 900,884 $ 617,339 $ 517,602

10 unchanged sentences

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 May 4, 2024 and February 3, 2024, $ 58.0 million and $ 72.4 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.

The following table provides activity in the SCF program for the thirteen weeks ended May 4, 2024

Thirteen Weeks Ended

(in thousands) May 4, 2024

As of August 3, 2024 and February 3, 2024, $ 97.2 million and $ 72.4 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.

The following table provides activity in the SCF program for the twenty-six weeks ended August 3, 2024:

Twenty-Six Weeks Ended

(in thousands) August 3, 2024

Confirmed obligations outstanding at the beginning of the period $ 72,376

7 unchanged sentences

Contract liabilities

The following table details certain contract liabilities representing unearned revenue as of May 4, 2024, February 3, 2024, April 29, 2023 and January 28, 2023:

(in thousands) May 4, 2024 February 3, 2024 April 29, 2023 January 28, 2023

The following table details certain contract liabilities representing unearned revenue as of August 3, 2024, February 3, 2024, July 29, 2023 and January 28, 2023:

(in thousands) August 3, 2024 February 3, 2024 July 29, 2023 January 28, 2023

Gift card liability (1)

1 unchanged sentence

Loyalty programs liability 29,535 27,937 23,969 25,640

(1) Includes $ 9.9 million and $ 13.4 million of revenue recognized during the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively, that was included in the gift card liability at the beginning of February 3, 2024 and January 28, 2023, respectively.

The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

(1) Includes $ 14.8 million and $ 26.4 million of revenue recognized during the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively, that was included in the gift card liability at the beginning of February 3, 2024 and January 28, 2023, 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 August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Revenue associated with gift card redemptions and gift card breakage $ 32,831 $ 24,426 $ 63,492 $ 48,650

4 unchanged sentences

Net income 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 per share attributable to A&F for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following table provides additional information pertaining to net income per share attributable to A&F for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

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

4 unchanged sentences

Anti-dilutive shares (1)

204 1,453 237 1,779

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

7 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 May 4, 2024 and February 3, 2024:

Assets and Liabilities at Fair Value as of May 4, 2024

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 August 3, 2024 and February 3, 2024:

Assets and Liabilities at Fair Value as of August 3, 2024

(in thousands) Level 1 Level 2 Level 3 Total

1 unchanged sentence

$ 135,547 $ 27,609 $ — $ 163,156

Derivative instruments (2)

Marketable securities (2)

— 15,014 — 15,014

Derivative instruments (3)

Rabbi Trust assets (4)

20 unchanged sentences

Total liabilities $ — $ 539 $ — $ 539

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

(1) Level 1 assets consisted of investments in money market funds and U.S.

treasury bills.

Level 2 assets consisted of time deposits.

Level 2 assets consisted of time deposits with original maturities of less than three months .

( 2) Level 2 assets consisted of time deposits with original maturities greater than three months, but less than one year.

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

1 unchanged sentence

Level 2 assets consisted of trust-owned life insurance policies.

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

The Company’s Level 2 assets and liabilities consisted of:

• Trust-owned life insurance policies, which were valued using the cash surrender value of the life insurance policies;

• Time deposits, which were valued at cost, approximating fair value, due to the short-term nature of these investments;

• Time deposits with original maturities of three months or less were recorded at cost, approximating fair value, due to the short-term nature of these investments;

• Time deposits with original maturities greater than three months were recorded at fair value, which approximates their carrying value, and are primarily based upon quoted vendor or broker priced securities in active markets;

• Derivative instruments, primarily foreign currency exchange forward contracts, which were valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk.

Fair value of long-term borrowings

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 May 4, 2024 and February 3, 2024:

(in thousands) May 4, 2024 February 3, 2024

Gross borrowings outstanding, carrying amount $ 213,906 $ 223,214

Gross borrowings outstanding, fair value (1)

215,510 226,004

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

The Company’s borrowings were carried at historical cost in the accompanying Condensed Consolidated Balance Sheet as of February 3, 2024.

On July 15, 2024 (the “Redemption Date”), Abercrombie & Fitch Management Co.

(“A&F Management”) redeemed all of its outstanding senior secured notes at par value, which had a fixed 8.75 % interest rate and were scheduled to mature on July 15, 2025 (the “Senior Secured Notes”).

As of the Redemption Date, the Senior Secured Notes were no longer deemed outstanding.

PROPERTY AND EQUIPMENT, NET

The following table provides property and equipment, net as of May 4, 2024 and February 3, 2024:

(in thousands) May 4, 2024 February 3, 2024

The following table provides property and equipment, net as of August 3, 2024 and February 3, 2024:

(in thousands) August 3, 2024 February 3, 2024

Property and equipment, at cost $ 2,554,699 $ 2,509,184

1 unchanged sentence

Property and equipment, net $ 552,453 $ 538,033

R efer to Note 8, “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during the thirteen weeks ended May 4, 2024 and thirteen weeks ended April 29, 2023.

R efer to Note 8, “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during the thirteen and twenty-six ended August 3, 2024 and July 29, 2023.

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 weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following table provides a summary of the Company’s operating lease costs for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Single lease cost (1)

3 unchanged sentences

Operating lease right-of-use asset impairment (3)

472 — 811 1,414

Sublease income

4 unchanged sentences

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

The Company had minimum commitments related to operating lease contracts that have not yet commenced, primarily for certain Company-operated retail stores, of approximately $ 72.1 million as of May 4, 2024.

Abercrombie & Fitch Co.

1 unchanged sentence

ASSET IMPAIRMENT

The following table provides asset impairment charges for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following table provides asset impairment charges for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Operating lease right-of-use asset impairment $ 471 $ — $ 810 $ 1,414

1 unchanged sentence

Total asset impairment $ 701 $ — $ 1,567 $ 4,436

Asset impairment charges for the thirteen weeks ended May 4, 2024 and April 29, 2023 related to certain of the Company’s store assets.

The store impairment charges for the thirteen weeks ended May 4, 2024 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $ 8.3 million, including $ 6.7 million related to operating lease right-of-use assets.

Asset impairment charges for the twenty-six weeks ended August 3, 2024 and July 29, 2023 related to certain of the Company’s store assets.

The store impairment charges for the twenty-six weeks ended August 3, 2024 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $ 6.0 million, including $ 5.3 million related to operating lease right-of-use 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 weeks ended May 4, 2024, the Company did not recognize income tax benefits on $ 7.6 million of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 1.1 million.

As of May 4, 2024, the Company had foreign net deferred tax assets of approximately $ 38.3 million, including $ 8.1 million, $ 7.4 million, and $ 12.7 million in China, Japan and the United Kingdom, respectively.

During the thirteen and twenty-six weeks ended August 3, 2024, the Company did not recognize income tax benefits on $ 7.0 million and $ 14.6 million respectively, of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 1.1 million and $ 2.2 million, respectively.

As of August 3, 2024, the Company had foreign net deferred tax assets of approximately $ 40.3 million, including $ 9.7 million, $ 7.7 million, and $ 13.0 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 weeks ended April 29, 2023, the Company did not recognize income tax benefits on $ 20.3 million of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 3.1 million.

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 of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 3.4 million and $ 6.5 million, respectively.

As of February 3, 2024, there were approximately $ 7.6 million, $ 7.5 million, and $ 12.6 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 weeks ended May 4, 2024 and April 29, 2023.

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 August 3, 2024 and July 29, 2023.

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

The following table provides details on the Company’s long-term borrowings, net, as of May 4, 2024 and February 3, 2024 :

(in thousands) May 4, 2024 February 3, 2024

Long-term portion of borrowings, gross at carrying amount $ 213,906 $ 223,214

Unamortized fees ( 804 ) ( 1,095 )

Long-term borrowings, net $ 213,102 $ 222,119

Senior Secured Notes

During the thirteen weeks ended May 4, 2024, A&F Management purchased $ 9.3 million of outstanding Senior Secured Notes in the open market and incurred a $ 0.2 million loss on extinguishment of debt, recognized in interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Income.

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.

Financial Statements and Supplementary Data” of the Fiscal 2023 Form 10-K.

The terms of the Company’s senior secured revolving credit facility of up to $ 400.0 million (the “ABL Facility”) have remained unchanged from those disclosed in Note 12, “ BORROWINGS ,” of the Notes to Consolidated Financial Statements contained in “Item 8.

Financial Statements and Supplementary Data” of the Fiscal 2023 Form 10-K.

The Company did not have any borrowings outstanding under the ABL Facility as of May 4, 2024 or as of February 3, 2024.

As of May 4, 2024, availability under the ABL Facility was $ 325.2 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 $ 292.7 million as of May 4, 2024.

On the Redemption Date, A&F redeemed all of its outstanding 8.75 % Senior Secured Notes due July 15, 2025 , which had an aggregate principal amount of $ 214 million, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest to, but excluding, the Redemption Date, and incurred a $ 0.9 million loss on extinguishment of debt, recognized in interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Income.

During the twenty-six weeks ended August 3, 2024, A&F Management repurchased $ 9.3 million in the open market and redeemed $ 214 million of its Senior Secured Notes and incurred a loss on extinguishment of debt of $ 1.1 million.

As of the Redemption Date, the Senior Secured Notes were no longer deemed outstanding and interest on the Senior Secured Notes ceased to accrue.

On August 2, 2024, A&F, as parent and a guarantor, A&F Management, as lead borrower, and certain of A&F’s direct and indirect wholly-owned subsidiaries, as additional borrowers and guarantors, entered into the Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”), together with the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent for the lenders.

The Second Amendment amends the existing Amended and Restated Credit Agreement, dated as of April 29, 2021 (the “ABL Credit Agreement”), which provided for a $400 million senior secured asset-based revolving credit facility.

The Company incurred customary fees and expenses in connection with the entry into the Second Amendment.

The Second Amendment amended the ABL Credit Agreement to, among other things:

• increase the aggregate commitments thereunder to $ 500 million;

• establish a $100 million sub-facility for the benefit of Abfico Netherlands Distribution B.V.

(“Abfico”) and AFH Stores UK Limited (“AFH UK”) that is (i) secured by a first priority security interest in all assets (subject to specified exclusions) of each of Abfico and AFH UK, (ii) guaranteed by A&F and certain of its domestic direct and indirect wholly-owned subsidiaries and (iii) subject to a borrowing base as described therein;

• extend the maturity date from April 29, 2026 to August 2, 2029 ;

• increase the letter of credit sub-limit from $ 50 million to $ 62.5 million;

• decrease the swing line availability from $ 50 million to $ 30 million;

• decrease the unused line fee from a variable rate of 25 basis points to 37.5 basis points to a flat rate of 25 basis points;

• increase pricing of the interest rate margin applicable to borrowings as follows:

◦ from 1.25 % to 1.50 % when average availability is greater than or equal to 50% of the Loan Cap (as defined in the Second Amendment);

◦ from 1.50 % to 1.75 % when average availability is less than 50% of the Loan Cap.

The ABL Facility is subject to a borrowing base, consisting primarily of inventory located in the U.S., the United Kingdom and the Netherlands, with a letter of credit sub-limit of $ 62.5 million, a swing line loan sub-limit of $ 30 million, and an accordion feature allowing A&F to increase the revolving commitment by up to $ 150 million subject to specified conditions.

The ABL Facility is available for working capital, capital expenditures, and other general corporate purposes.

As of August 3, 2024, availability under the ABL Facility was $ 478.4 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 $36 million under the ABL Facility, borrowing capacity available to the Company under the ABL Facility was $ 430.5 million as of August 3, 2024.

Representations, warranties and covenants

The agreements related to the Senior Secured Notes and the ABL Facility contain various representations, warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of the Company and its subsidiaries to:

The agreements related to the ABL Facility contain various representations, warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of the Company and its subsidiaries to:

grant or incur liens;

4 unchanged sentences

change the nature of their business;

and consolidate or merge with or into, or sell substantially all of the assets of the Company or Abercrombie & Fitch Management Co.

(“A&F Management”) to another entity.

The Senior Secured Notes are guaranteed on a senior secured basis, jointly and severally, by A&F and each of the existing and future wholly-owned domestic restricted subsidiaries of A&F that guarantee or will guarantee A&F Management’s Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) or certain future capital markets indebtedness.

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 May 4, 2024.

and consolidate or merge with or into, or sell substantially all of the assets of the Company or A&F Management to another entity.

Certain of the agreements related to 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 August 3, 2024.

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 weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following table provides share-based compensation expense and the related income tax impacts for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Share-based compensation expense $ 9,233 $ 11,559 $ 20,596 $ 19,647

Income tax benefits associated with share-based compensation expense recognized

The following table provides discrete income tax benefits and charges related to share-based compensation awards during the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

1,240 1,079 2,518 2,083

The following table provides discrete income tax benefits and charges related to share-based compensation awards during the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Income tax discrete benefits realized for tax deductions related to the issuance of shares

3 unchanged sentences

$ 2,778 $ 325 $ 17,332 $ 1,341

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 weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

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 thirteen weeks ended May 4, 2024:

The following table provides the summarized activity for restricted stock units for the twenty-six weeks ended August 3, 2024:

Service-based Restricted

16 unchanged sentences

Forfeited ( 56,716 ) 33.84 — — — —

Unvested at May 4, 2024 (1)

Unvested at August 3, 2024 (1)

1,235,592 $ 46.61 424,541 $ 40.76 212,287 $ 58.95

1 unchanged sentence

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.

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 May 4, 2024:

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Service-based Restricted

4 unchanged sentences

Remaining weighted-average period cost is expected to be recognized (years) 1.3 1.4 1.4

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

The following table provides additional information pertaining to restricted stock units for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following table provides additional information pertaining to restricted stock units for the twenty-six weeks ended August 3, 2024 and July 29, 2023:

Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023

Service-based restricted stock units:

7 unchanged sentences

Total grant date fair value of awards vested 7,574 16,040

The following table provides the weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

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 August 3, 2024 and July 29, 2023:

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

Grant date market price $ 120.56 $ 28.36

7 unchanged sentences

Stock appreciation rights

The following table provides the summarized stock appreciation rights activity for the thirteen weeks ended May 4, 2024:

The following table provides the summarized stock appreciation rights activity for the twenty-six weeks ended August 3, 2024:

Shares Weighted-Average

7 unchanged sentences

Forfeited or expired — —

Outstanding at May 4, 2024

Outstanding at August 3, 2024

— $ — $ — 0.0

Stock appreciation rights exercisable at May 4, 2024 — $ — $ — 0.0

The following table provides additional information pertaining to stock appreciation rights exercised during the thirteen weeks ended May 4, 2024 and April 29, 2023:

(in thousands) May 4, 2024 April 29, 2023

Stock appreciation rights exercisable at August 3, 2024 — $ — $ — 0.0

As of August 3, 2024, no stock appreciation rights remain outstanding.

The following table provides additional information pertaining to stock appreciation rights exercised during the twenty-six weeks ended August 3, 2024 and July 29, 2023:

(in thousands) August 3, 2024 July 29, 2023

Total grant date fair value of awards exercised $ 267 $ 115

15 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 May 4, 2024, 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 August 3, 2024, 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 May 4, 2024.

As of May 4, 2024, foreign currency exchange forward contracts that were entered into to hedge foreign-currency-denominated net monetary assets and liabilities were as follows:

Dollar notional amounts outstanding as of August 3, 2024.

As of August 3, 2024, 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)

1 unchanged sentence

(1) Amounts reported are the U.S.

Dollar notional amounts outstanding as of May 4, 2024 .

Dollar notional amounts outstanding as of August 3, 2024 .

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 May 4, 2024 and February 3, 2024:

(in thousands) Location May 4, 2024 February 3, 2024 Location May 4, 2024 February 3, 2024

(in thousands) Location August 3, 2024 February 3, 2024 Location August 3, 2024 February 3, 2024

Derivatives designated as cash flow hedging instruments Other current assets

4 unchanged sentences

$ 390 $ 1,092 $ 360 $ 539

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 weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

Gain (loss) recognized in AOCL (1)

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

(Loss) gain recognized in AOCL (1)

$ ( 587 ) $ 558 $ 442 $ 51

Gain (loss) reclassified from AOCL to cost of sales, exclusive of depreciation and amortization (2)

527 ( 1,708 ) $ 1,010 $ ( 2,614 )

(1) Amount represents the change in fair value of derivative instruments.

3 unchanged sentences

2024 2Q 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 weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

Gain (loss) recognized in other operating income, net

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

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

$ ( 219 ) $ ( 540 ) $ 443 $ ( 1,087 )

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables provide activity in AOCL fo r the thirteen weeks ended May 4, 2024:

Thirteen Weeks Ended May 4, 2024

The following tables provide activity in AOCL fo r the thirteen and twenty-six weeks ended August 3, 2024:

Thirteen Weeks Ended August 3, 2024

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

Beginning balance at May 4, 2024 $ ( 138,369 ) $ 1,087 $ ( 137,282 )

Other comprehensive income (loss) before reclassifications 3,441 ( 587 ) 2,854

Reclassified gain from AOCL (1)

— ( 527 ) ( 527 )

Tax effect — ( 36 ) ( 36 )

Other comprehensive income (loss) after reclassifications 3,441 ( 1,150 ) 2,291

Ending balance at August 3, 2024 $ ( 134,928 ) $ ( 63 ) $ ( 134,991 )

Twenty-Six Weeks Ended August 3, 2024

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

Beginning balance at February 3, 2024 $ ( 136,532 ) $ 564 $ ( 135,968 )

Other comprehensive (loss) income before reclassifications ( 1,837 ) 1,029 ( 808 )

Other comprehensive income before reclassifications 1,604 442 2,046

Reclassified gain from AOCL (1)

1 unchanged sentence

Tax effect — ( 59 ) ( 59 )

Other comprehensive (loss) income after reclassifications ( 1,837 ) 523 ( 1,314 )

Ending balance at May 4, 2024 $ ( 138,369 ) $ 1,087 $ ( 137,282 )

Other comprehensive income (loss) after reclassifications 1,604 ( 627 ) 977

Ending balance at August 3, 2024 $ ( 134,928 ) $ ( 63 ) $ ( 134,991 )

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

The following tables provide activity in AOCL for the thirteen weeks ended April 29, 2023:

Thirteen Weeks Ended April 29, 2023

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

Thirteen Weeks Ended July 29, 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 )

Other comprehensive (loss) income before reclassifications ( 3,836 ) 558 ( 3,278 )

Reclassified loss from AOCL (1)

— 1,708 1,708

Tax effect — ( 24 ) ( 24 )

Other comprehensive (loss) income after reclassifications ( 3,836 ) 2,242 ( 1,594 )

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

Twenty-Six Weeks Ended July 29, 2023

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

Beginning balance at January 28, 2023 $ ( 132,653 ) $ ( 4,874 ) $ ( 137,527 )

Other comprehensive income (loss) before reclassifications 311 ( 507 ) ( 196 )

Other comprehensive (loss) income before reclassifications ( 3,525 ) 51 ( 3,474 )

Reclassified loss from AOCL (1)

— 2,614 2,614

Tax effect — ( 18 ) ( 18 )

Other comprehensive income after reclassifications 311 405 716

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

Other comprehensive (loss) income after reclassifications ( 3,525 ) 2,647 ( 878 )

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

(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.

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

SEGMENT REPORTING

1 unchanged sentence

The Company manages its business on a geographic basis, consisting of three reportable segments:

Europe, the Middle East and Africa (EMEA);

and Asia-Pacific (APAC).

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.

4 unchanged sentences

All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance.

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

The group comprised of the Company’s (i) Chief Executive Officer and (ii) Chief Financial Officer and Chief Operating Officer functions as the Company’s CODM.

1 unchanged sentence

Net sales by segment are presented by attributing revenues on the basis of the segment that fulfills the order.

Operating income (loss) for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributed to the segment.

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

technology, finance, treasury, legal, human resources, and other corporate support services, as well as certain globally managed components of the planning, merchandising, and marketing functions.

Operating income for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributed to the segment.

Corporate/other expenses include expenses incurred that are not directly attributed to a reportable segment and primarily relate to corporate or global functions such as design, sourcing, brand management, corporate strategy, information technology, finance, treasury, legal, human resources, and other corporate support services, as well as certain globally managed components of the planning, merchandising, and marketing functions.

The Company reports inventories by segment as that information is used by the CODM in determining allocation of resources to the segments.

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 May 4, 2024 and February 3, 2024, and for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following tables provide the Company’s segment information as of August 3, 2024 and February 3, 2024, and for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Americas $ 901,224 $ 731,427 $ 1,721,345 $ 1,396,850

3 unchanged sentences

Operating Income (Loss)

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Americas $ 275,120 $ 177,063 $ 527,467 $ 333,508

7 unchanged sentences

Total operating income $ 175,625 $ 89,842 $ 305,474 $ 123,850

(in thousands) May 4, 2024 February 3, 2024

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

(in thousands) August 3, 2024 February 3, 2024

Americas $ 438,076 $ 372,371

6 unchanged sentences

Brand Information

The following table provides additional disaggregated revenue information, which is categorized by brand, for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

(in thousands) May 4, 2024 April 29, 2023

The following table provides additional disaggregated revenue information, which is categorized by brand, for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(in thousands) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023

Abercrombie (1)

8 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