What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-09-06 compared with 2024-06-07 · 271 added, 115 removed, 351 unchanged (52% of the section changed)

8 unchanged sentences

Factors that could cause results to differ from those expressed in the Company’s forward-looking statements include, but are not limited to, the risks described or referenced in Part I, Item 1A.

“Risk Factors,” in the Company’s Fiscal 2023 Form 10-K and otherwise in our reports and filings with the SEC, as well as the following:

“Risk Factors,” in the Company’s Fiscal 2023 Form 10-K and in our subsequent reports and filings with the SEC, as well as the following:

• risks related to changes in global economic and financial conditions, including inflation, and the resulting impact on consumer spending generally and on our operating results, financial condition, and expense management, and our ability to adequately mitigate the impact;

• risks related to geopolitical conflict, armed conflict, such as the conflicts between Russia and Ukraine or Israel and Hamas and the possible expansion of conflict in the surrounding areas , including the impact of such conflicts on international trade, supplier delivery or increased freight costs, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience;

• risks related to the geopolitical landscape and conflicts, such as the recent attacks on marine vessels in the Red Sea, and the potential escalation of such conflicts and the impact of such conflicts on international trade, supplier delivery or increased freight costs, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience;

• risks related to natural disasters and other unforeseen catastrophic events;

18 unchanged sentences

As used herein, “Abercrombie & Fitch Co.,” “the Company,” “we,” “us,” “our,” and similar terms include Abercrombie & Fitch Co.

and its subsidiaries, unless the context indicates otherwise.

(“A&F”) and its subsidiaries, unless the context indicates otherwise.

Abercrombie & Fitch Co.

4 unchanged sentences

• Current Trends and Outlook .

A discussion related to certain of the Company’s focus areas for the current fiscal year and discussion of certain risks and challenges, as well as a summary of the Company’s performance for the thirteen weeks ended May 4, 2024 and April 29, 2023.

A discussion related to certain of the Company’s focus areas for the current fiscal year and a discussion of certain risks and challenges, as well as a summary of the Company’s performance for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023.

• Results of Operations .

An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen weeks ended May 4, 2024 and April 29, 2023.

An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023.

• Liquidity and Capital Resources .

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of May 4, 2024, which includes (i) an analysis of financial condition as compared to February 3, 2024;

(ii) an analysis of changes in cash flows for the thirteen weeks ended May 4, 2024, as compared to the thirteen weeks ended April 29, 2023;

and (iii) an analysis of liquidity, including availability under the Company’s ABL Facility, the Company’s share repurchase program, and outstanding debt and covenant compliance.

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of August 3, 2024, which includes (i) an analysis of financial condition as compared to February 3, 2024;

(ii) an analysis of changes in cash flows for the twenty-six weeks ended August 3, 2024, as compared to the twenty-six weeks ended July 29, 2023;

and (iii) an analysis of liquidity, including availability under the Company’s ABL Facility (as defined below), the Company’s share repurchase program, and outstanding debt and covenant compliance.

• Recent Accounting Pronouncements .

A discussion, as applicable, of the recent accounting pronouncements the Company has adopted or is currently evaluating, including the dates of adoption and/or expected dates of adoption, and anticipated effects on the Company’s Condensed Consolidated Financial Statements.

A discussion, as applicable, of the recent accounting pronouncements that the Company has adopted or is currently evaluating, including the dates of adoption and/or expected dates of adoption, and anticipated effects on the Company’s Condensed Consolidated Financial Statements.

• Critical Accounting Estimates .

2 unchanged sentences

MD&A provides a discussion of certain financial measures that have been determined to not be presented in accordance with GAAP.

This section includes certain reconciliations between GAAP and non-GAAP financial measures and additional details on non-GAAP financial measures, including information as to why the Company believes the non-GAAP financial measures provided within MD&A are useful to investors.

This section includes certain reconciliations between GAAP and non-GAAP financial measures and additional details on non-GAAP financial measures, including information as to why the Company believes that the non-GAAP financial measures provided within MD&A are useful to investors.

Abercrombie & Fitch Co.

43 unchanged sentences

In periods of perceived or actual unfavorable economic conditions, consumers may reallocate available discretionary spending, which may adversely impact demand for our products.

The Company continues to experience pricing volatility with respect to cotton, raw materials and freight costs.

While cotton and raw material costs have decreased from prior year-end levels, freight costs have recently been increasing.

In addition, while cotton and raw material costs stabilized during the second quarter of Fiscal 2024, freight costs have been increasing since the start of the second quarter of Fiscal 2024.

Continued inflationary pressures and pricing volatility could further impact expenses and have a long-term impact on the Company because increasing costs may impact its ability to maintain satisfactory margins.

Global events and supply chain disruptions

As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, management is mindful of macroeconomic risks, global challenges and the changing global geopolitical environment, including the ongoing armed conflicts between Russia and Ukraine or Israel and Hamas, and conflict in the surrounding areas, which could adversely impact certain areas of the business.

Starting in late Fiscal 2023, disruptions to ocean vessels in the Red Sea resulted in delayed deliveries to the EMEA region.

Such disruptions have also increased freight costs, which may impact the Company through the remainder of Fiscal 2024.

The Company has taken certain mitigating actions in response to these events, including increasing air freight usage where appropriate and prioritizing critical orders earlier to allow for longer lead times.

Such disruptions have also increased freight costs, which may continue to impact the Company through the remainder of Fiscal 2024.

The Company has taken certain mitigating actions in response to these disruptions, including increasing air freight usage where appropriate and prioritizing critical orders earlier to allow for longer lead times.

Further mitigating actions may be needed, particularly if there is prolonged or escalating conflict in the Red Sea.

Management continues to monitor global events and assess the potential impacts that these events and similar events may have on the business in future periods.

Management continues to monitor global events and assess the potential impacts that these and similar events may have on the business in future periods.

Although management also develops and updates contingency plans to assist in mitigating potential impacts, it is possible that the Company’s preparations for such events are not adequate to mitigate their impact, and that these events could further adversely affect its business and results of operations.

1 unchanged sentence

The Company has a goal of finding the right size, right location and right economics for omni-enabled stores that cater to local customers.

The Company continues to use data to inform its focus on aligning store square footage with digital penetration, and during the year-to-date period of Fiscal 2024, the Company opened 1 new store, while closing 13 stores.

As part of this focus, the Company has updated and increased its store investment plan to include approximately 60 new stores, while closing approximately 40 stores, during Fiscal 2024, pending negotiations with our landlord partners.

The Company continues to use data to inform its focus on aligning store square footage with digital penetration, and has delivered new store experiences across brands during Fiscal 2024.

Through the end of the second fiscal quarter, the Company opened 18 new stores, remodeled 23 stores and right-sized seven stores while closing 26 stores.

As part of this focus, the Company’ store investment plan includes delivering approximately 60 new stores, along with approximately 60 remodels and rightsizes, while closing approximately 40 stores, during Fiscal 2024, pending negotiations with our landlord partners.

Future closures could be completed through natural lease expirations, while certain other leases include early termination options that can be exercised under specific conditions.

12 unchanged sentences

Summary of results

A summary of results for the thirteen weeks ended May 4, 2024 and April 29, 2023 was as follows:

The following provides a summary of results for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023:

GAAP Non-GAAP (1)

Thirteen Weeks Ended May 4, 2024

April 29, 2023

Thirteen Weeks Ended August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Net sales (in thousands)

6 unchanged sentences

Operating income margin

12.7 % 4.1 % 12.7 % 4.6 %

Net income attributable to A&F (in thousands)

1 unchanged sentence

Net income per share attributable to A&F 2.50 1.10

Twenty-Six Weeks Ended

Net sales $ 2,154,704 $ 1,771,339

Change in net sales 21.6 % 9.5 %

Comparable sales (2)

Gross profit rate 65.6 % 61.8 %

Operating income $ 305,474 $ 123,850 $ 128,286

Operating income margin

14.2 % 7.0 % 7.2 %

Net income attributable to A&F $ 247,018 $ 73,465 $ 76,694

Net income per share attributable to A&F 4.64 1.43 1.49

(1) Discussion as to why the Company believes that these non-GAAP financial measures are useful to investors and a reconciliation of the non-GAAP measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided below under “ NON-GAAP FINANCIAL MEASURES .”

1 unchanged sentence

Refer to the discussion below in “ NON-GAAP FINANCIAL MEASURES ,” for further details on the comparable sales calculation.

Certain components of the Company’s Condensed Consolidated Balance Sheets as of May 4, 2024 and February 3, 2024 were as follows:

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

Certain components of the Company’s Condensed Consolidated Balance Sheets as of August 3, 2024 and February 3, 2024 were as follows:

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

Cash and equivalents $ 738,402 $ 900,884

1 unchanged sentence

Gross long-term borrowings outstanding, carrying amount — 223,214

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirteen week periods ended May 4, 2024 and April 29, 2023 were as follows:

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

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

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the twenty-six week periods ended August 3, 2024 and July 29, 2023 were as follows:

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

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

Net cash used for investing activities (96,649) (89,780)

Net cash used for financing activities (326,961) (23,342)

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

RESULTS OF OPERATIONS

1 unchanged sentence

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

The Company’s net sales by reportable segment for the thirteen weeks ended May 4, 2024 and April 29, 2023 were as follows:

The Company’s net sales by reportable segment for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) May 4, 2024 April 29, 2023 $ Change % Change Comparable

(in thousands, except ratios) August 3, 2024 July 29, 2023 $ Change % Change Comparable

Americas $ 901,224 $ 731,427 $ 169,797 23 % 18 %

2 unchanged sentences

Total $ 1,133,974 $ 935,345 $ 198,629 21 18

Twenty-Six Weeks Ended

(in thousands, except ratios) August 3, 2024 July 29, 2023 $ Change % Change Comparable

Americas $ 1,721,345 $ 1,396,850 $ 324,495 23 % 19 %

EMEA 364,460 310,068 54,392 18 19

APAC 68,899 64,421 4,478 7 22

Total $ 2,154,704 $ 1,771,339 $ 383,365 22 19

(1) Comparable sales are calculated on a constant currency basis.

2 unchanged sentences

2024 2Q Form 10-Q

For the first quarter of Fiscal 2024, net sales increased 22%, as compared to the first quarter of Fiscal 2023, primarily due to broad-based net sales growth across segments, mainly driven by a higher AUR as a result of lower promotional activity.

The year-over-year increase in net sales reflects a positive comparable sales of 21%, as compared to the first quarter of Fiscal 2023, with double-digit comparable sales growth in the Americas, EMEA and APAC segments.

The Company’s net sales by brand for the thirteen weeks ended May 4, 2024 and April 29, 2023 were as follows:

For the second quarter of Fiscal 2024, net sales increased 21% as compared to the second quarter of Fiscal 2023.

The increase was primarily attributable to a double-digit increase in average unit retail (“AUR”) from lower promotional activity and category mix into higher ticket items.

Mid-single digit growth in unit volume also contributed to the increase in net sales, following increases in traffic and transactions in company owned and operated channels.

Additionally, there was a benefit of approximately $30 million due to the timing of sales volume based on the impact of the calendar shift in Fiscal 2024 due to the 53rd selling week in Fiscal 2023.

The year-over-year increase in net sales reflects positive comparable sales of 18%, as compared to the second quarter of Fiscal 2023.

• Net sales growth in the Americas region of 23%.

The increase was attributable to a higher AUR from lower promotional activity and category mix into higher ticket items.

Growth in unit volume as a result of increased traffic and transactions in company owned and operated stores and digital channels also contributed to the increase in net sales.

• Net sales growth in the EMEA region of 16%.

The increase was attributable to a higher AUR from lower promotional activity and category mix into higher ticket items.

Growth in unit volume as a result of increased traffic and transactions in company owned and operated stores and digital channels also contributed to the increase in net sales.

• In the APAC region net sales grew 3% and 21% on a comparable sales basis.

Comparable sales growth percentage is higher than net sales growth percentage, as comparable sales excludes the impact of store closures during the period and the effects of foreign currency, both of which had a negative impact on net sales growth.

For the year-to-date period of Fiscal 2024, net sales increased 22%, as compared to the year-to-date period of Fiscal 2023.

The increase was primarily attributable to a double-digit increase in AUR from lower promotional activity and category mix into higher ticket items.

Mid-single digit growth in unit volume also contributed to the increase in net sales, following increases in traffic and transactions in company owned and operated channels.

Additionally, there was a benefit of approximately $40 million due to the timing of sales volume based on the impact of the calendar shift in Fiscal 2024 due to the 53rd selling week in Fiscal 2023.

The year-over-year increase in net sales reflects positive comparable sales of 19%, as compared to the year-to-date period of Fiscal 2023.

• Net sales growth in the Americas region of 23%.

The increase was attributable to a higher AUR from lower promotional activity and category mix into higher ticket items.

Growth in unit volume as a result of increased traffic and transactions in company owned and operated stores and digital channels also contributed to the increase in net sales.

• Net sales growth in the EMEA region of 18%.

The increase was attributable to a higher AUR from lower promotional activity and category mix into higher ticket items.

Growth in unit volume as a result of increased traffic and transactions in company owned and operated stores and digital channels also contributed to the increase in net sales.

• In the APAC region net sales grew 7% and 21% on a comparable sales basis.

The Company’s net sales by brand for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) May 4, 2024 April 29, 2023 $ Change % Change Comparable

(in thousands, except ratios) August 3, 2024 July 29, 2023 $ Change % Change Comparable

Abercrombie (2)

3 unchanged sentences

Total $ 1,133,974 $ 935,345 $ 198,629 21 18

Twenty-Six Weeks Ended

(in thousands, except ratios) August 3, 2024 July 29, 2023 $ Change % Change Comparable

Abercrombie (2)

$ 1,153,929 $ 898,755 $ 255,174 28 % 25 %

Hollister (3)

1,000,775 872,584 128,191 15 14

Total $ 2,154,704 $ 1,771,339 $ 383,365 22 19

(1) Comparable sales are calculated on a constant currency basis.

2 unchanged sentences

(3) Includes Hollister and Gilly Hicks.

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Cost of sales, exclusive of depreciation and amortization

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Cost of sales, exclusive of depreciation and amortization $ 397,712 35.1 % $ 350,965 37.5 % (240)

For the first quarter of Fiscal 2024, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 540 basis points, as compared to the first quarter of Fiscal 2023.

The year-over-year percentage decline was primarily attributable to lower cotton and raw material costs as well as increased average unit retail.

Year-over-year decreases in the Americas and EMEA region were primarily driven by lower discounts and clearance selling.

The APAC region also benefited from lower raw material costs, partially offset by the impact of changes in foreign currency.

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Cost of sales, exclusive of depreciation and amortization $ 740,985 34.4 % $ 677,165 38.2 % (380)

For the second quarter of Fiscal 2024, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 240 basis points, as compared to the second quarter of Fiscal 2023.

The percentage decline was primarily attributable to cost of sales leverage from a higher AUR on reduced promotions, as well as a benefit in product costs, as certain raw material prices have declined.

These benefits were partially offset by higher freight costs compared to the second quarter of Fiscal 2023.

For the year-to-date period of Fiscal 2024, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 380 basis points as compared to the year-to-date period of Fiscal 2023.

These benefits were partially offset by higher freight costs compared to the year-to-date period of Fiscal 2023.

Gross profit, exclusive of depreciation and amortization

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Gross profit, exclusive of depreciation and amortization $ 736,262 64.9 % $ 584,380 62.5 % 240

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Gross profit, exclusive of depreciation and amortization $ 1,413,719 65.6 % $ 1,094,174 61.8 % 380

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Stores and distribution expense

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Stores and distribution expense $ 390,233 34.4 % $ 352,730 37.7 % (330)

For the first quarter of Fiscal 2024, stores and distribution expense, as a percentage of net sales decreased, as compared to the first quarter of Fiscal 2023.

The decrease was primarily driven by expense leverage as a result of net sales growth, slightly offset with increases in distribution center and order fulfillment costs as compared to the first quarter of 2023.

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Stores and distribution expense $ 761,919 35.4 % $ 688,779 38.9 % (350)

For the second quarter of Fiscal 2024, stores and distribution expense increased by $38 million compared to the second quarter of 2023.

Stores and distribution expense as a percentage of net sales decreased 330 basis points, as compared to the second quarter of Fiscal 2023.

The decrease in rate was primarily driven by expense leverage as a result of net sales growth, including approximately 300 basis points in stores expense, primarily relating to store occupancy and store payroll, and 30 basis points in distribution center and order fulfillment costs as compared to the second quarter of Fiscal 2023.

For the year-to-date period of Fiscal 2024, stores and distribution expense increased by $73 million and decreased 350 basis points, as a percentage of net sales, as compared to the year-to-date period of Fiscal 2023.

The decrease as a percent of net sales was primarily driven by expense leverage as a result of net sales growth, including approximately 340 basis points in stores expense, primarily relating to store occupancy and store payroll, and 20 basis points in distribution center costs compared to the year-to-date period of Fiscal 2023.

Marketing, general and administrative expense

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Marketing, general and administrative expense $ 170,471 15.0 % $ 144,502 15.4 % (40)

For the first quarter of Fiscal 2024, marketing, general and administrative expense, as a percentage of net sales, increased 30 basis points, as compared to the first quarter of Fiscal 2023, primarily driven by an increase in marketing expense and investments in technology and people.

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Marketing, general and administrative expense $ 348,351 16.2 % $ 287,133 16.2 % —

For the second quarter of Fiscal 2024, marketing, general and administrative expense increased by $26 million compared to the second quarter of Fiscal 2023.

Marketing, general and administrative expense as a percentage of net sales decreased 40 basis points, as compared to the second quarter of Fiscal 2023.

The decrease in rate was primarily driven by expense leverage as a result of net sales growth, including approximately 40 basis points in compensation expense slightly offset by a 30 basis point increase in marketing expense.

For the year-to-date period of Fiscal 2024, marketing, general and administration expense increased by $61 million and remained approximately flat, as a percentage of net sales, as compared to the year-to-date period of Fiscal 2023, with a 20 basis point decrease in compensation and other expense, offset by a 30 basis point increase in marketing expense.

Other operating income, net

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Other operating income, net $ 67 — % $ 2,694 0.3 % (30)

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Other operating income, net $ 2,025 0.1 % $ 5,588 0.3 % (20)

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Operating income

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Operating income $ 175,625 15.5 % $ 89,842 9.6 % 590

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Operating income $ 305,474 14.2 % $ 123,850 7.0 % 720

Excluded items:

3 unchanged sentences

(1) Refer to “ NON-GAAP FINANCIAL MEASURES ” for further details.

For the second quarter of Fiscal 2024, operating income increased by $86 million, or 590 basis points, as a percentage of net sales, as compared to the second quarter of Fiscal 2023.

• Operating income for the Americas region increased $98 million or 630 basis points as a percentage of net sales, as compared to the second quarter of Fiscal 2023.

The increase as a percent of sales primarily relates to positive comparable sales of 18%, relating to higher unit volume, increased AUR on reduced promotions, and expense leverage relating to payroll and occupancy expenses.

• Operating income for the EMEA region increased $8 million or 170 basis points as a percentage of net sales, as compared to the second quarter of Fiscal 2023.

The increase as a percent of sales primarily relates to positive comparable sales of 17%, relating to higher unit volume, increased AUR on reduced promotions, and expense leverage relating to payroll and occupancy expenses.

• Operating (loss) for the APAC region increased by $(3) million or (840) basis points as a percentage of net sales, as compared to the second quarter of Fiscal 2023.

The decrease as a percent of sales primarily relates to increased marketing investments.

For the year-to-date period of Fiscal 2024, operating income increased by $182 million, or 720 basis points, as a percentage of net sales as compared to the year-to-date period of Fiscal 2023.

• Operating income for the Americas increased $194 million or 680 basis points as a percentage of net sales as compared to the year-to-date period of Fiscal 2023.

The increase as a percent of sales primarily relates to positive comparable sales of 19%, relating to higher unit volume, increased AUR on reduced promotions, and expense leverage relating to payroll and occupancy expenses.

• Operating income for EMEA increased $34 million or 800 basis points as a percentage of net sales as compared to the year-to-date period of Fiscal 2023.

• Operating (loss) for APAC increased $(1) million or (50) basis points as a percentage of net sales as compared to the year-to-date period of Fiscal 2023 as a result of increased marketing investments.

Abercrombie & Fitch Co.

2 unchanged sentences

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

2 unchanged sentences

Interest (income) expense, net $ (5,203) (0.5) $ 1,097 0.1 (60)

For the first quarter of Fiscal 2024, interest (income) expense, net decreased $8.5 million, as compared to the first quarter of Fiscal 2023, as a result of lower borrowings due to the purchase of Senior Secured Notes as well as an increase in interest income due to the increase in balance and rates received on deposits and money market accounts.

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net Sales % of Net Sales BPS Change

Interest expense $ 10,969 0.5 % $ 15,093 0.9 % (40)

Interest income (21,195) (1.0) (10,553) (0.6) (40)

Interest (income) expense, net $ (10,226) (0.5) $ 4,540 0.3 (80)

For the second quarter of Fiscal 2024, interest (income) expense, net increased $6.3 million, as compared to the second quarter of Fiscal 2023.

The increase was a result of an increase in interest income due to the increase in balance and rates received on deposits and money market accounts as well as lower borrowings due to repurchases of Senior Secured Notes in the open market.

For the year-to-date period of Fiscal 2024, interest expense, net increased $14.8 million, as compared to the year-to-date period of Fiscal 2023.

The increase was a result of higher interest income due to the increase in balance and rates received on deposits and money market accounts as well as lower borrowings due to repurchases of Senior Secured Notes in the open market.

Income tax expense

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) Effective Tax Rate Effective Tax Rate

Income tax expense $ 45,449 25.1 % $ 30,014 33.8 %

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) Effective Tax Rate Effective Tax Rate

Income tax expense $ 65,243 20.7 % $ 42,732 35.8 %

Excluded items:

3 unchanged sentences

Refer to “ Operating income ” and “ NON-GAAP FINANCIAL MEASURES ” for details of pre-tax excluded items.

Compared with the first quarter of Fiscal 2023, the change in the effective tax rates during the first quarter of Fiscal 2024 is due to higher levels of pre-tax income offset by a larger tax benefit on share based compensation.

Compared with the second quarter of Fiscal 2023, the change in the effective tax rates during the second quarter of Fiscal 2024 is due to jurisdictional mix and higher levels of pre-tax income.

Compared with the year-to-date period of 2023, the change in the effective tax rates during Fiscal 2024 is due to jurisdictional mix and higher levels of pre-tax income offset by a larger tax benefit on share based compensation.

Refer to Note 9, “ INCOME TAXES .”

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Net income attributable to A&F

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands) % of Net sales % of Net sales BPS Change

Net income attributable to A&F $ 133,168 11.7 % $ 56,894 6.1 % 560

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands) % of Net Sales % of Net Sales BPS Change

Net income attributable to A&F $ 247,018 11.5 % $ 73,465 4.1 % 740

Excluded items, net of tax (1)

4 unchanged sentences

(2) Refer to “ NON-GAAP FINANCIAL MEASURES ” for further details.

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

Net income per share attributable to A&F

Thirteen Weeks Ended

May 4, 2024 April 29, 2023 $ Change

August 3, 2024 July 29, 2023 $ Change

Net income per diluted share attributable to A&F

$ 2.50 $ 1.10 $ 1.40

Impact from changes in foreign currency exchange rates — (0.02) 0.02

Adjusted non-GAAP net income per diluted share attributable to A&F on a constant currency basis (2)

$ 2.50 $ 1.08 $ 1.42

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023 $ Change

Net income per diluted share attributable to A&F

$ 4.64 $ 1.43 $ 3.21

Excluded items, net of tax (1)

7 unchanged sentences

(2) Refer to “ NON-GAAP FINANCIAL MEASURES ” for further details.

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

EBITDA and adjusted EBITDA

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

4 unchanged sentences

$ 214,980 19.0 % $ 126,225 13.5 % 550

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands, except ratios) % of Net sales % of Net sales BPS Change

Net income $ 250,457 11.6 % $ 76,578 4.3 % 730

Income tax expense 65,243 3.0 42,732 2.4 60

Interest (income) expense, net (10,226) (0.5) 4,540 0.3 (80)

Depreciation and amortization 77,044 3.7 72,411 4.1 (40)

$ 382,518 17.8 % $ 196,261 11.1 % 670

Excluded items:

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Adjusted EBITDA is EBITDA adjusted for asset impairment.

Refer to “ NON-GAAP FINANCIAL MEASURES ” for further details.

Abercrombie & Fitch Co.

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The Company believes that it will have adequate liquidity to fund operating activities for the next twelve months.

The Company monitors financing market conditions and may in the future determine whether and when to amend, modify, repurchase, or restructure its ABL Facility and/or the Senior Secured Notes or repurchase shares of its Common Stock.

The Company monitors market conditions and may in the future determine whether and when to repurchase shares of its Common Stock.

For a discussion of the Company’s share repurchase activity and suspended dividend program, please see below under “ Share repurchases and dividends .”

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The Company’s business has two principal selling seasons:

the spring season, which includes the first and second fiscal quarters (“Spring”) and the fall season, which includes the third and fourth fiscal quarters (“Fall”).

The Company generally experiences its greatest sales activity during the Fall season, due to the back-to-school and holiday sales periods.

Spring and Fall, The Company generally experiences its greatest sales activity during the Fall season, due to the back-to-school and holiday sales periods.

The Company relies on excess operating cash flows, which are largely generated in Fall, to fund operations throughout the year and to reinvest in the business to support future growth.

The Company also has the ABL Facility available as a source of additional funding, which is described further below under “ Credit facility and Senior Secured Notes ”.

Over the next twelve months, the Company expects its primary cash requirements to be directed towards prioritizing investments in the business and continuing to fund operating activities, including the acquisition of inventory, and obligations related to compensation, marketing, data and technology leases and any lease buyouts or modifications it may exercise, taxes and other operating activities.

In addition, the Company continuously evaluates potential opportunities to strategically deploy excess cash and/or deleverage the balance sheet, depending on various factors, such as market and business conditions, including the Company’s ability to accelerate investments in the business.

Such opportunities may include, but are not limited to, purchasing outstanding Senior Secured Notes or share repurchases.

The Company evaluates opportunities for investments in the business that are in line with initiatives that position the business for sustainable long-term growth that align with its strategic pillars as described within Part I, “Item 1.

The Company also has the ABL Facility available as a source of additional funding, which is described further below under “ Credit facility ”.

Over the next twelve months, the Company expects its primary cash requirements to be directed towards prioritizing investments in the business and continuing to fund operating activities, including the acquisition of inventory, obligations related to compensation, marketing, data and technology, leases and any lease buyouts or modifications it may exercise, taxes and other operating activities.

In addition, management continuously evaluates potential opportunities to strategically deploy excess cash and/or deleverage the balance sheet, in consideration of on various factors, such as market and business conditions, and the Company’s ability to accelerate investments in the business.

Such opportunities may include, but are not limited to, share repurchases.

When evaluating opportunities for investments in the business, management considers alignment with initiatives that position the business for sustainable long-term growth and with the Company’s strategic pillars as described within Part I, “Item 1.

Business - STRATEGY AND KEY BUSINESS PRIORITIES” included on the Fiscal 2023 Form 10-K, including being opportunistic regarding growth opportunities.

Examples of potential investment opportunities include, but are not limited to, new store experiences, and investments in the Company’s digital and omnichannel initiatives.

Historically, the Company has utilized free cash flow generated from operations to fund any discretionary capital expenditures, which have been prioritized towards new store experiences, as well as digital and omnichannel investments, information technology, and other projects.

For the year-to-date period ended May 4, 2024, the Company used $38.9 million towards capital expenditures.

For the year-to-date period ended August 3, 2024, the Company invested $81.6 million towards capital expenditures.

Total capital expenditures for Fiscal 2024 are expected to be approximately $170 million.

The Company measures liquidity using total cash and cash equivalents and incremental borrowing available under the ABL Facility.

As of May 4, 2024, the Company had cash and cash equivalents of $864.2 million and total liquidity of approximately $1.2 billion, compared with cash and cash equivalents of $900.9 million and total liquidity of approximately $1.2 billion at the beginning of Fiscal 2024.

As of August 3, 2024, the Company had cash and cash equivalents of $738.4 million and total liquidity of approximately $1.2 billion, compared with cash and cash equivalents of $900.9 million and total liquidity of approximately $1.2 billion at the beginning of Fiscal 2024.

Share repurchases and dividends

In November 2021, A&F’s Board of Directors approved a $500 million share repurchase authorization, replacing the prior 2021 share repurchase authorization of 10.0 million shares, which had approximately 3.9 million shares remaining available.

During the year-to-date period ended May 4, 2024, the Company repurchased approximately 0.1 million shares of its common stock pursuant to this share repurchase authorization for approximately $15.0 million.

The Company has $217 million in share repurchase authorization remaining under the authorization approved in November 2021.

Historically, the Company has repurchased shares of its Common Stock from time to time, dependent on excess liquidity, market conditions, and business conditions, with the objectives of returning excess cash to shareholders and offsetting dilution from issuances of Common Stock associated with the exercise of employee stock appreciation rights and the vesting of restricted stock units.

During the year-to-date period ended August 3, 2024, the Company repurchased approximately 0.2 million shares of its Common Stock pursuant to this share repurchase authorization for approximately $30.0 million.

As of August 3, 2024 t he Company had $202 million in share repurchases remaining under the authorization approved in November 2021.

Historically, the Company has repurchased shares of its Common Stock from time to time, which repurchases are dependent on excess liquidity, market conditions, and business conditions, with the objectives of returning excess cash to shareholders and offsetting dilution from issuances of Common Stock associated with the exercise of employee stock appreciation rights and the vesting of restricted stock units.

Shares may be repurchased in the open market, including pursuant to trading plans established in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), through privately negotiated transactions or other transactions or by a combination of such methods.

Refer to “ Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds ” of Part II of this Quarterly Report on Form 10-Q for the amount remaining available for purchase under the Company’s publicly announced share repurchase authorization.

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

The Company’s dividend program is currently suspended in order to preserve liquidity and maintain financial flexibility.

In May 2020, the Company suspended its dividend program.

The Company may in the future review its dividend program to determine, in light of facts and circumstances at that time, whether and when to reinstate.

Any dividends are declared at the discretion of A&F’s Board of Directors.

A&F’s Board of Directors reviews and establishes a dividend amount, if at all, based on A&F’s financial condition, results of operations, capital requirements, current and projected cash flows, business prospects and other factors, including any restrictions under the Company’s agreements related to the Senior Secured Notes and the ABL Facility.

There can be no assurance that the Company will declare and pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.

Credit facility and Senior Secured Notes

As of May 4, 2024, the Company had $213.9 million of gross borrowings outstanding under the 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.

In addition, the Amended and Restated Credit Agreement, as amended by the First Amendment (as defined below), provides for the ABL Facility, which is a senior secured asset-based revolving credit facility of up to $400 million.

As of May 4, 2024, the Company did not have any borrowings outstanding under the ABL Facility.

The ABL Facility matures on April 29, 2026.

Details regarding the remaining borrowing capacity under the ABL Facility as of May 4, 2024 are as follows:

(in thousands) May 4, 2024

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Senior Secured Notes

On July 15, 2024 (the “Redemption Date”), Abercrombie & Fitch Management Co (“A&F Management”) redeemed all of its outstanding 8.75% Senior Secured Notes due 2025, which had an aggregate principal amount of $214 million, pursuant to the terms of the indenture governing the Senior Secured Notes, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest to, but excluding, the Redemption Date.

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

Credit facility

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.

As of August 3, 2024, the Company did not have any borrowings outstanding under the ABL Facility.

Details regarding the remaining borrowing capacity under the ABL Facility as of August 3, 2024 are as follows:

(in thousands) August 3, 2024

Loan cap $ 478,787

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Borrowing capacity available $ 430,482

(1) The Company must maintain excess availability equal to the greater of 10% of the loan cap or $30 million under the ABL Facility.

(1) Under the ABL Facility, the Company must maintain excess availability equal to the greater of 10% of the loan cap or $36 million.

Refer to Note 10, “ BORROWINGS .”

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The Company accrues for both state income taxes and foreign withholding taxes with respect to earnings and profits earned after February 2, 2019, in such a manner that these funds could be repatriated without incurring additional tax expense.

As of May 4, 2024, $249.9 million of the Company’s $864.2 million of cash and equivalents were held by foreign affiliates.

As of August 3, 2024, $286.2 million of the Company’s $738.4 million of cash and equivalents were held by foreign affiliates.

Refer to Note 9, “ INCOME TAXES .”

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Analysis of cash flows

The table below provides certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirteen weeks ended May 4, 2024 and April 29, 2023:

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

The table below provides certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended August 3, 2024 and July 29, 2023:

Twenty-Six Weeks Ended

August 3, 2024 July 29, 2023

(in thousands)

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

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

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

Net cash used for investing activities (96,649) (89,780)

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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, end of period $ 746,295 $ 627,103

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

Operating activities - During the year-to-date period ended May 4, 2024, net cash provided by operating activities included increased cash receipts as a result of the 22% year-over-year increase in net sales.

During the year-to-date period ended April 29, 2023, net cash used for operating activities included increased cash receipts as a result of the 3% year-over-year increase in net sales as well as increased payments to vendors in the fourth quarter of Fiscal 2022 which resulted in lower cash payments in the first quarter of Fiscal 2023.

Investing activities - During the year-to-date period ended May 4, 2024, net cash used for investing activities was primarily used for capital expenditures of $38.9 million.

Net cash used for investing activities for the year-to-date period ended April 29, 2023 was primarily used for capital expenditures of $46.4 million.

Financing activities - During the year-to-date period ended May 4, 2024, net cash used for financing activities included $65 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards, the purchase of approximately 0.1 million shares of Common Stock with a market value of approximately $15.0 million and the purchase of $9.3 million of outstanding Senior Secured Notes at a premium of $0.1 million.

During the year-to-date period ended April 29, 2023, net cash used for financing activities included amounts related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Operating activities - During the year-to-date period ended August 3, 2024, net cash provided by operating activities included increased cash receipts as a result of the 22% year-over-year increase in net sales.

During the year-to-date period ended July 29, 2023, net cash used for operating activities included increased cash receipts as a result of the 9% year-over-year increase in net sales, as well as increased payments to vendors in the fourth quarter of Fiscal 2022, which resulted in lower cash payments in the first quarter of Fiscal 2023.

Investing activities - During the year-to-date period ended August 3, 2024, net cash used for investing activities was primarily used for capital expenditures of $81.6 million, as well as the purchase of $15 million of marketable securities.

Net cash used for investing activities for the year-to-date period ended July 29, 2023 was primarily used for capital expenditures of $89.8 million.

Financing activities - During the year-to-date period ended August 3, 2024, net cash used for financing activities included the repurchase of $9.3 million in the open market and redemption of $214.0 million of outstanding Senior Secured Notes, $67 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards, and the purchase of approximately 0.2 million shares of Common Stock with a market value of approximately $30.0 million.

During the year-to-date period ended July 29, 2023, net cash used for financing activities included amounts related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Contractual obligations

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There have been no significant changes in critical accounting policies and estimates since the end of Fiscal 2023.

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

NON-GAAP FINANCIAL MEASURES

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Comparable sales excludes revenue other than store and digital sales.

Management uses comparable sales to understand the drivers of year-over-year changes in net sales and believes comparable sales can be a useful metric as it can

Abercrombie & Fitch Co.

2024 1Q Form 10-Q

assist investors in distinguishing the portion of the Company’s revenue attributable to existing locations from the portion attributable to the opening or closing of stores.

Management uses comparable sales to understand the drivers of year-over-year changes in net sales and believes that comparable sales can be a useful metric as it can assist investors in distinguishing the portion of the Company’s revenue attributable to existing locations from the portion attributable to the opening or closing of stores.

The most directly comparable GAAP financial measure is change in net sales.

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(2) The tax effect of excluded items is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.

Abercrombie & Fitch Co.

2024 2Q Form 10-Q

Financial information on a constant currency basis

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The per diluted share effect from foreign currency exchange rates is calculated using a 26% effective tax rate.

Reconciliations of non-GAAP financial metrics on a constant currency basis to financial measures calculated and presented in accordance with GAAP for the thirteen weeks ended May 4, 2024 and April 29, 2023 were as follows:

(in thousands, except change in net sales, gross profit rate, operating margin and per share data) Thirteen Weeks Ended

Net sales May 4, 2024 April 29, 2023 % Change

Reconciliations of non-GAAP financial metrics on a constant currency basis to financial measures calculated and presented in accordance with GAAP for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 were as follows:

(in thousands, except change in net sales, gross profit rate, operating margin and per share data) Thirteen Weeks Ended Twenty-Six Weeks Ended

Net sales August 3, 2024 July 29, 2023 % Change August 3, 2024 July 29, 2023 % Change

GAAP $ 1,133,974 $ 935,345 21 % $ 2,154,704 $ 1,771,339 22 %

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Non-GAAP on a constant currency basis $ 1,133,974 $ 932,975 22 % $ 2,154,704 $ 1,768,427 22 %

Gross profit, exclusive of depreciation and amortization expense May 4, 2024 April 29, 2023 BPS Change (1)

Gross profit, exclusive of depreciation and amortization expense August 3, 2024 July 29, 2023 BPS Change (1)

August 3, 2024 July 29, 2023 BPS Change (1)

GAAP $ 736,262 $ 584,380 240 $ 1,413,719 $ 1,094,174 380

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Non-GAAP on a constant currency basis $ 736,262 $ 584,260 230 $ 1,413,719 $ 1,094,984 370

Operating income May 4, 2024 April 29, 2023 BPS Change (1)

Operating income August 3, 2024 July 29, 2023 BPS Change (1)

August 3, 2024 July 29, 2023 BPS Change (1)

GAAP $ 175,625 $ 89,842 590 $ 305,474 $ 123,850 720

Excluded items (2)

— — — — (4,436) 20

Adjusted non-GAAP $ 175,625 $ 89,842 590 $ 305,474 $ 128,286 700

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Adjusted non-GAAP on a constant currency basis $ 175,625 $ 88,375 600 $ 305,474 $ 127,283 700

Net income per share attributable to A&F May 4, 2024 April 29, 2023 $ Change

Net income per share attributable to A&F August 3, 2024 July 29, 2023 $ Change August 3, 2024 July 29, 2023 $ Change

GAAP $ 2.50 $ 1.10 $ 1.40 $ 4.64 $ 1.43 $ 3.21

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(1) The estimated basis point change has been rounded based on the change in the percentage of net sales.

(2) Excluded items for the thirteen weeks ended April 29, 2023 consisted of pre-tax store asset impairment charges and the tax effect of pre-tax excluded items.

(2) Excluded items for the twenty-six weeks ended July 29, 2023 consisted of pre-tax store asset impairment charges and the tax effect of pre-tax excluded items.

Abercrombie & Fitch Co.

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We also believe these supplemental performance measures are meaningful information for investors and other interested parties to use in computing the Company's core financial performance over multiple periods and with other companies by excluding the impact of differences in tax jurisdictions, debt service levels and capital investment.

Reconciliations of non-GAAP EBITDA and adjusted EBITDA to financial measures calculated and presented in accordance with GAAP for the thirteen weeks ended May 4, 2024 and April 29, 2023 were as follows:

Reconciliations of non-GAAP EBITDA and adjusted EBITDA to financial measures calculated and presented in accordance with GAAP for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 were as follows:

Thirteen Weeks Ended

May 4, 2024 % of

Net Sales April 29, 2023 % of

August 3, 2024 % of

Net Sales July 29, 2023 % of

Net income $ 135,379 11.9 % $ 58,731 6.3 %

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$ 214,980 19.0 % $ 126,225 13.5 %

Twenty-Six Weeks Ended

August 3, 2024 % of

Net Sales July 29, 2023 % of

Net income $ 250,457 11.6 % $ 76,578 4.3 %

Income tax expense 65,243 3.0 42,732 2.4

Interest (income) expense, net (10,226) (0.5) 4,540 0.3

Depreciation and amortization 77,044 3.7 72,411 4.1

$ 382,518 17.8 % $ 196,261 11.1 %

Adjustments to EBITDA

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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 2. Management’s Discussion and Analysis