What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-09-05 compared with 2025-06-06 · 366 added, 119 removed, 312 unchanged (61% of the section changed)

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by the Company or its management and spokespeople involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company’s control.

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by the Company or its management and authorized spokespeople involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company’s and management’s control.

Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “should,” “are confident,” “will,” “could,” “outlook,” or the negative versions of those words or other comparable words, and similar expressions may identify forward-looking statements.

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“Risk Factors,” in the Company’s Fiscal 2024 Form 10-K and otherwise in our subsequent reports and filings with the SEC, as well as the following:

• risks related to global trade policy, including the impact of the imposition or threat of imposition of new or increased tariffs by the United States or foreign governments, other changes to trade policies or arrangements and continued uncertainties relating to such policies and arrangements, or a global trade war;

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

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The forward-looking statements included herein are based on information presently available to the management of the Company.

Except as may be required by applicable law, the Company assumes no obligation to publicly update or revise its forward-looking statements, including any financial targets and estimates, whether as a result of new information, future events, or otherwise.

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

and its subsidiaries, unless the context indicates otherwise.

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

or otherwise.

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

and its subsidiaries, unless the context indicates otherwise.

MD&A is provided as a supplement to the accompanying Condensed Consolidated Financial Statements and notes thereto to help provide an understanding of the Company’s results of operations, financial condition, and liquidity.

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• Current Trends and Outlook .

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 weeks ended May 3, 2025 and May 4, 2024.

• 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 3, 2025 and May 4, 2024.

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 2, 2025 and August 3, 2024.

• Liquidity and Capital Resources .

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of May 3, 2025, which includes (i) an analysis of financial condition as compared to February 1, 2025;

(ii) an analysis of changes in cash flows for the thirteen weeks ended May 3, 2025, as compared to the thirteen weeks ended May 4, 2024;

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of August 2, 2025, which includes (i) an analysis of financial condition as compared to February 1, 2025;

(ii) an analysis of changes in cash flows for the twenty-six weeks ended August 2, 2025, as compared to the twenty-six weeks ended August 3, 2024;

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

• Recent Accounting Pronouncements .

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.

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 their anticipated effects on the Company’s Condensed Consolidated Financial Statements.

• Critical Accounting Estimates .

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The Company offers a broad assortment of apparel, personal care products and accessories for men, women and kids, which are sold primarily through its Company-owned stores and digital channels, as well as through various third-party arrangements.

The Company manages its business on a geographic basis, consisting of 3 reportable segments:

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

Europe, the Middle East and Africa (“EMEA”);

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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.

The Company’s brands include Abercrombie brands and Hollister brands.

The Company’s brand families include Abercrombie brands and Hollister brands.

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

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• Operate with financial discipline.

While the Company has significantly outperformed certain financial targets set forth in the Always Forward Plan, the growth principles continue to serve as a framework for the Company achieving sustainable and profitable growth and profitability.

The Company’s strategic priorities continue to evolve based on changing consumer demands and new strategic opportunities, and management reviews and prioritizes investments and strategic focus areas to address such demands and opportunities.

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• continuing to progress on our multi-year enterprise resource planning (“ERP”) transformation and cloud migration journey;

• investing in digital and technology to improve experiences across key parts of the customer journey while delivering a

Abercrombie & Fitch Co.

2025 1Q Form 10-Q

consistent omnichannel experience.

• investing in digital and technology to improve experiences across key parts of the customer journey while delivering a consistent omnichannel experience.

Operate with financial discipline by:

• using our agile inventory model and pricing strategies to position the Company to support customer demand throughout the year;

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

• maintaining our durable balance sheet and consistent free cash flow profile, underpinned by our disciplined investment philosophy while balancing against macro environment impacts and efficiency efforts.

Current macroeconomic conditions

Current macroeconomic conditions and tariffs

Macroeconomic conditions, such as a volatile interest rate environment, ongoing inflation, the geopolitical landscape, and foreign exchange rate fluctuations continue to impact the global economy.

In addition, recent changes in legislative and regulatory developments, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy.

For example, during the first quarter of Fiscal 2025, the U.S.

announced a new universal baseline tariff of 10%, plus an additional country-specific tariff for select countries, including the countries from which we source a predominant portion of our merchandise, on all U.S.

In addition, recent changes in legislative and regulatory developments, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy and impacted our business and operations.

For example, during Fiscal 2025, the U.S.

announced a new universal baseline tariff on all U.S.

imports, plus additional country-specific tariffs for select countries, including the countries from which we source a predominant portion of our merchandise, including Vietnam, Cambodia, and India.

As a result, certain countries have imposed retaliatory tariffs on U.S.

While the U.S.

announced a 90-day pause on many of these country-specific tariffs and a recent court ruling brings additional uncertainty regarding the enforceability of the announced tariffs, it is possible that further tariffs may be introduced or increased, resulting in further uncertainty regarding the future of global trade relations.

These actions have the potential to disrupt our ability to procure, and/or increase the cost of merchandise sourced from these countries.

Uncertainties regarding tariffs, together with geopolitical tensions, may further affect our business and operations or could lead to further weakened business conditions for our industry.

With continued uncertainty surrounding the geopolitical and trade environment, we continue to evaluate the impact of tariffs and other trade policies on our business and are building a playbook of mitigation strategies.

Current mitigation strategies include supply chain changes, negotiations with our supply chain vendors, and pursuing operating expense reductions.

Assuming a 30% tariff on U.S.

imports from China and a 10% baseline tariff on other global imports to the U.S., and factoring in our planned mitigation strategies, we expect to incur approximately $50 million of tariff expense, or 100 basis points as a percent of net sales, which will correspondingly negatively impact our operating profit in Fiscal 2025.

In periods of perceived or actual unfavorable economic conditions, consumers may reallocate available discretionary spending or determine that they have fewer funds available for discretionary spending, which may also adversely impact demand for our products.

In addition, freight costs have remained heightened since the start of the second quarter of Fiscal 2024, which we expect to continue through the first half of Fiscal 2025.

has reached trade agreements with certain countries, however U.S.

tariff rates on imports from certain other countries remained subject to ongoing trade negotiations as of the date of this filing.

It is also possible that further tariffs may be introduced or increased, or that existing tariffs may further change, resulting in continued uncertainty regarding the future of global trade relations.

Additionally, recent court rulings bring additional uncertainty regarding the enforceability of the aforementioned tariffs.

These continued uncertainties could disrupt our ability to procure, and/or result in increases to the cost of merchandise sourced from impacted countries.

Uncertainties regarding tariffs, together with geopolitical tensions, may affect our business and operations or could lead to weakened business conditions for our industry.

With continued uncertainty surrounding the geopolitical and trade environment, we continue to evaluate the impact of tariffs and other trade policies on our business and are continuing to build our playbook of mitigation strategies.

Current mitigation strategies include evaluating supply chain footprint changes, negotiating with our supply chain vendors, pursuing operating expense reductions and determining ways to increase average unit retail (“AUR”) primarily through lower promotions and lower clearance selling.

Assuming the estimated impact from the tariffs on goods imported into the U.S.

based on with trade policies as of August 25, 2025, and factoring in certain planned mitigation strategies, we expect to incur approximately $90 million of net tariff expense, or 170 basis points as a percent of net sales, which will correspondingly negatively impact our operating profit in Fiscal 2025.

Further, in periods of perceived or actual unfavorable economic conditions, consumers may reallocate available discretionary spending or determine that they have fewer funds available for discretionary spending, which may also adversely impact demand for our products.

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

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In the past, 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.

During times of supply chain disruption, the Company may elect to pull forward product calendars which limits the effectiveness of our inventory chase model.

Further mitigating actions may be needed and could result in higher freight costs in the near-term and beyond.

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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 2025 .

Through the end of the first fiscal quarter, the Company opened seven new stores, remodeled nine stores and right-sized one store, while closing three stores.

Through the end of the second fiscal quarter, the Company opened 26 new stores, remodeled 16 stores and right-sized five store, while closing eight stores.

As part of this focus, the Company’s store investment plan includes delivering approximately 40 net store openings during Fiscal 2025 consisting of opening approximately 60 new stores, while closing approximately 20 stores, pending negotiations with our landlord partners.

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The Company may also elect to exit or modify other leases, and could incur charges related to these actions.

Recent Tax Law Changes

On July 4, 2025, House Resolution 1, also known as the One Big Beautiful Bill Act (“OBBBA”), was signed into law.

The OBBBA includes, among other provisions, changes to U.S.

corporate income tax law impacting the taxation of domestic and international business operations, including permanently extending certain expiring provisions of the Tax Cuts and Jobs Act, restoration of accelerated depreciation on capital expenditures, deductible research and experimental expenditures, and modifications to the international tax framework.

The enactment of the OBBBA did not have a material impact on the consolidated financial statements and disclosures.

Abercrombie & Fitch Co.

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Summary of results

The following provides a summary of results for the thirteen weeks ended May 3, 2025 and May 4, 2024:

The following provides a summary of results for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024:

GAAP Non-GAAP (1)

Thirteen Weeks Ended May 3, 2025

Thirteen Weeks Ended August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Net sales (in thousands)

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Operating income margin

17.1 % 15.5 % 13.9 %

Net income attributable to A&F (in thousands)

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Net income per share attributable to A&F 2.91 2.50 2.32

Twenty-Six Weeks Ended

Net sales $ 2,305,871 $ 2,154,704

Change in net sales 7 % 22 %

Comparable sales (2)

Operating income $ 308,191 $ 305,474 $ 269,617

Operating income margin

13.4 % 14.2 % 11.7 %

Net income attributable to A&F $ 221,796 $ 247,018 $ 193,171

Net income per share attributable to A&F 4.47 4.64 3.90

(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 .”

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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 3, 2025 and February 1, 2025 were as follows:

(in thousands) May 3, 2025 February 1, 2025

Certain components of the Company’s Condensed Consolidated Balance Sheets as of August 2, 2025 and February 1, 2025 were as follows:

(in thousands) August 2, 2025 February 1, 2025

Cash and equivalents $ 572,730 $ 772,727

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Inventories 592,966 575,005

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirteen-week periods ended May 3, 2025 and May 4, 2024 were as follows:

(in thousands) May 3, 2025 May 4, 2024

Net cash (used for) provided by operating activities $ (4,000) $ 95,010

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the twenty-six-week periods ended August 2, 2025 and August 3, 2024 were as follows:

(in thousands) August 2, 2025 August 3, 2024

Net cash provided by operating activities $ 112,893 $ 260,119

Net cash used for investing activities (31,943) (96,649)

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Net sales by segment are presented by attributing revenues to a physical store location or geographical region that fulfills the order.

The Company’s net sales by reportable segment for the thirteen weeks ended May 3, 2025 and May 4, 2024 were as follows:

The Company’s net sales by reportable segment for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) May 3, 2025 May 4, 2024 $ Change % Change Comparable

(in thousands, except ratios) August 2, 2025 August 3, 2024 $ Change % Change Comparable

Americas $ 974,200 $ 901,224 $ 72,976 8 % 5 %

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Total $ 1,208,560 $ 1,133,974 $ 74,586 7 3

Twenty-Six Weeks Ended

(in thousands, except ratios) August 2, 2025 August 3, 2024 $ Change % Change Comparable

Americas $ 1,849,004 $ 1,721,345 $ 127,659 7 % 5 %

EMEA 382,246 364,460 17,786 5 0

APAC 74,621 68,899 5,722 8 2

Total $ 2,305,871 $ 2,154,704 $ 151,167 7 4

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

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

For the first quarter of Fiscal 2025, net sales increased 8% as compared to the first quarter of Fiscal 2024.

The increase was primarily attributable to high-single digit growth in unit volume from traffic growth in comparable company owned and operated stores and digital channels and net new stores.

The year-over-year increase in net sales reflects positive comparable sales of 4%, as compared to the first quarter of Fiscal 2024.

• Net sales growth in the Americas region of 7%.

The increase was attributable to unit volume growth from increased traffic and transactions in company owned and operated stores and digital channels.

The comparable sales growth percentage is lower than net sales growth percentage, as comparable sales excludes the net impact of new store openings during the period which had a benefit on net sales growth.

• Net sales growth in the EMEA region of 12%.

The increase was attributable to both higher average unit retail (“AUR”) from lower promotional activity and unit volume growth from increased traffic and transactions in company owned and operated stores and digital channels.

The comparable sales growth percentage is lower than net sales growth percentage, as comparable sales exclude the net impact of new store openings during the period and the effects of foreign currency, both of which had a benefit on net sales growth.

• In the APAC region, net sales grew 5% and 2% on a comparable sales basis.

The increase was attributable to net sales growth led by high unit sales across company owned and operated stores and digital channels.

The Company’s net sales by brand for the thirteen weeks ended May 3, 2025 and May 4, 2024 were as follows:

For the second quarter of Fiscal 2025, net sales increased 7%, as compared to the second quarter of Fiscal 2024.

The increase was primarily attributable to high-single digit unit volume growth, with increases in company owned and operated stores digital channels and net new stores, partially offset by reduced AUR.

The year-over-year increase in net sales reflects positive comparable sales of 3%, as compared to the second quarter of Fiscal 2024.

On a geographic basis for the second quarter of Fiscal 2025:

• Net sales growth in the Americas region of 8% and 5% on a comparable basis.

The increase was attributable to low-double digit unit volume growth, with increases in company owned and operated stores and digital channels and net new owned and operated stores.

• Net sales decline in the EMEA region of (1)% and (5)% on a comparable basis.

The decrease was attributable to lower comparable AUR from increased promotional activity, partially offset by low single-digit unit volume growth, with increases in company owned and operated stores and digital channels, new stores and favorable foreign currency.

• Net sales growth in the APAC region of 12% and 1% on a comparable basis.

Sales growth was led by low single-digit unit volume growth, with increases in owned and operated store and digital channels and new owned and operated stores.

For the year-to-date period of Fiscal 2025 , net sales increased 7%, as compared to the year-to-date period of Fiscal 2024.

The increase was primarily attributable to high-single digit growth unit volume growth, with increases in company owned and operated stores and digital channels.

The year-over-year increase in net sales reflects positive comparable sales of 4%, as compared to the year-to-date period of Fiscal 2024.

On a geographic basis for the year-to-date-period of Fiscal 2025:

• Net sales growth in the Americas region of 7% and 5% on a comparable basis.

Sales growth was led by high single-digit unit volume growth, with increases in company owned and operated stores and digital channels and net new owned and operated stores.

• Net sales growth in the EMEA region of 5% and flat on a comparable basis.

The increase was attributable to new store sales, low single-digit unit volume growth with an increase in in digital channels, and foreign currency partially offset by lower AUR.

• Net sales growth in the APAC region of 8% and 2% on a comparable sales basis.

The increase was attributable to new store sales and low-single digit unit volume growth, with an increase in digital, partially offset by a decrease in owned and operated stores.

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

The Company’s net sales by brand for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) May 3, 2025 May 4, 2024 $ Change % Change Comparable

(in thousands, except ratios) August 2, 2025 August 3, 2024 $ Change % Change Comparable

$ 551,868 $ 582,416 $ (30,548) (5) % (11) %

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Total $ 1,208,560 $ 1,133,974 $ 74,586 7 3

Twenty-Six Weeks Ended

(in thousands, except ratios) August 2, 2025 August 3, 2024 $ Change % Change Comparable

$ 1,099,815 $ 1,153,929 $ (54,114) (5) % (10) %

1,206,056 1,000,775 205,281 21 20

Total $ 2,305,871 $ 2,154,704 $ 151,167 7 4

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

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Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

Cost of sales, exclusive of depreciation and amortization $ 451,590 37.4 % $ 397,712 35.1 % 230

For the first quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 440 basis points, as compared to the first quarter of Fiscal 2024.

The percentage increase was primarily attributable to cost of sales deleverage from approximately 230 basis points in higher freight costs compared to the first quarter of Fiscal 2024.

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Cost of sales, exclusive of depreciation and amortization $ 868,723 37.7 % $ 740,985 34.4 % 330

For the second quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 230 basis points, as compared to the second quarter of Fiscal 2024.

The percentage increase was primarily attributable to cost of sales deleverage from single-digit AUR decreases driven by volume mix and targeted promotions, and higher average unit cost (“AUC”) partially due to an approximate 40 basis point adverse tariff impact compared to the second quarter of Fiscal 2024 .

For the year-to-date period of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 330 basis points, as compared to the year-to-date period of Fiscal 2024.

The percentage increase was primarily attributable to cost of sales deleverage from single-digit AUR decreases driven by volume mix and targeted promotions, and higher AUC primarily related to 120 basis points in higher freight costs and an approximate 20 basis point adverse tariff impact compared to the year-to-date period of Fiscal 2024 .

Abercrombie & Fitch Co.

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Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

Selling expense $ 375,356 31.1 % $ 382,557 33.7 % (260)

For the first quarter of Fiscal 2025, selling expense increased by $40 million compared to the first quarter of 2024.

Selling expense as a percentage of net sales increased 110 basis points, as compared to the first quarter of Fiscal 2024.

The increase in rate was primarily driven by expense deleverage, including approximately 50 basis points in marketing costs, approximately 40 basis points in stores expense, primarily relating to store occupancy and store employee compensation costs, and approximately 30 basis points in distribution center and order fulfillment costs as compared to the first quarter of Fiscal 2024.

Excluded item:

Litigation Settlement (1)

42,874 3.5 — — 350

Adjusted non-GAAP selling expense

$ 418,230 34.6 $ 382,557 33.7 90

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Selling expense $ 775,293 33.6 % $ 742,575 34.5 % (90)

Excluded item:

Litigation Settlement (1)

42,874 1.9 — — 190

Adjusted non-GAAP selling expense

$ 818,167 35.5 $ 742,575 34.5 100

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

For the second quarter of Fiscal 2025, selling expense decreased by $7 million, as compared to the second quarter of Fiscal 2024 .

Selling expense as a percentage of net sales decreased 260 basis points, as compared to the second quarter of Fiscal 2024.

The decrease in rate was primarily driven by expense leverage, including an approximate 350 basis point benefit resulting from the favorable settlement of claims to resolve payment card interchange fee litigation (the “Litigation Settlement”), partially offset by an approximate 90 basis point increase in store occupancy and payrolls costs.

Excluding 350 basis points of benefits related to the Litigation Settlement, adjusted non-GAAP selling expense as a percentage of net sales increased by approximately 90 basis points during the second quarter of Fiscal 2025, as compared to the second quarter of Fiscal 2024 .

For the year-to-date period of Fiscal 2025, selling expense increased by $33 million as compared to the year-to-date period of Fiscal 2024 .

Selling expense as a percentage of net sales decreased 90 basis points as compared to the year-to-date period of Fiscal 2024.

The decrease in rate was primarily driven by expense leverage, including an approximate 190 basis point benefit resulting from the Litigation Settlement, partially offset by an approximate 60 basis point increase in store occupancy and payroll costs and an approximate 40 basis point increase in marketing.

Excluding 190 basis points of benefits related to the Litigation Settlement, adjusted non-GAAP selling expense as a percentage of net sales increased by approximately 100 basis points during the year-to-date period of Fiscal 2025, as compared to the year-to-date period of Fiscal 2024.

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

General and administrative expense

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

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$ 175,325 14.5 % $ 178,147 15.7 % (120)

For the first quarter of Fiscal 2025, general and administrative expense decreased by $15 million compared to the first quarter of Fiscal 2024.

General and administrative expense as a percentage of net sales decreased 270 basis points, as compared to the first quarter of Fiscal 2024.

The decrease in expense rate was primarily driven by a 210 basis point decrease in employee compensation costs and approximately 60 basis points in outside services and other administrative expenses.

Other operating loss (income), net

Excluded item:

Litigation Settlement (1)

(4,300) (0.4) — — (40)

Adjusted non-GAAP general and administrative expense

$ 171,025 14.2 $ 178,147 15.7 (150)

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

General and administrative expense

$ 350,250 15.2 % $ 367,695 17.1 % (190)

Excluded item:

Litigation Settlement (1)

(4,300) (0.2) — — (20)

Adjusted non-GAAP general and administrative expense

$ 345,950 15.0 $ 367,695 17.1 (210)

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

For the second quarter of Fiscal 2025, general and administrative expense decreased by $3 million, as compared to the second quarter of Fiscal 2024 .

General and administrative expense as a percentage of net sales decreased 120 basis points, as compared to the second quarter of Fiscal 2024.

The decrease in expense rate was primarily driven by a 190 basis point decrease in employee compensation costs, partially offset by approximately 40 basis points in legal fees relating to the Litigation Settlement, and 30 basis points in other administrative expenses.

Excluding 40 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales decreased by approximately 150 basis points during the second quarter of Fiscal 2025, as compared to the second quarter of Fiscal 2024 .

For the year-to-date period of Fiscal 2025, general and administration expense decreased by $17 million, as compared to the year-to-date period of Fiscal 2024.

General and administrative expense as a percentage of net sales decreased 190 basis points as compared to the year-to-date period of Fiscal 2024.

The decrease in expense rate was primarily driven by an approximate 200 basis point decrease in employee compensation costs, approximately 20 basis points in legal fees relating to the Litigation Settlement, partially offset by approximately 30 basis points in outside services and other administrative expenses.

Excluding 20 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales during the year-to-date period of Fiscal 2025, decreased by approximately 210 basis points, as compared to the year-to-date period of Fiscal 2024.

Other operating income, net

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

Other operating income, net $ (369) — % $ (67) — % —

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Other operating (loss) income, net $ 3,414 0.1 % $ (2,025) (0.1) % 20

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

Operating income

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

(in thousands, except ratios) % of Net sales (1)

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Operating income $ 206,658 17.1 $ 175,625 15.5 160

Excluded item:

Litigation Settlement (2)

38,574 3.2 — — 320

Adjusted non-GAAP operating income

$ 168,084 13.9 $ 175,625 15.5 (160)

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

(in thousands, except ratios) % of Net Sales (1)

% of Net Sales (1)

Americas $ 546,789 29.6 % $ 527,467 30.6 % (100)

EMEA 40,564 10.6 62,541 17.2 (660)

APAC (10,377) (13.9) (3,567) (5.2) (870)

Operating loss not attributed to segments (268,785) (280,967)

Operating income $ 308,191 13.4 $ 305,474 14.2 (80)

Excluded item:

Litigation Settlement (2)

38,574 1.7 — — 170

Adjusted non-GAAP operating income

$ 269,617 11.7 $ 305,474 14.2 (250)

(1) Segment operating income as a percentage of net sales is calculated by attributing the segment’s operating income with the respective net sales in the segment.

For the first quarter of Fiscal 2025, operating income decreased by $28 million, or 340 basis points, as a percentage of net sales, as compared to the first quarter of Fiscal 2024.

• Operating income for the Americas region decreased $25 million or 490 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2024.

The decrease as a percent of net sales was primarily attributed to higher freight costs and deleverage on store occupancy and distribution center related fulfillment expenses.

• Operating income for the EMEA region decreased $8 million or 620 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2024.

The decrease as a percent of net sales was primarily attributed to higher freight costs, marketing costs and deleverage on distribution center related fulfillment expenses.

• Operating (loss) for the APAC region increased by $4 million or 1,090 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2024.

The decrease as a percent of net sales was primarily attributed to deleverage on higher selling expenses.

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

For the second quarter of Fiscal 2025, operating income increased by $31 million, or 160 basis points, as a percentage of net sales, as compared to the second quarter of Fiscal 2024.

• Operating income for the Americas region increased $45 million, or 230 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2024.

The increase as a percent of sales was primarily attributed to a benefit from the Litigation Settlement included in selling expense, partially offset by higher cost of sales, inclusive of tariffs, and deleverage on store occupancy expenses.

• Operating income for the EMEA region decreased $14 million or 670 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2024.

The decrease as a percent of sales is primarily attributed to lower comparable AUR and deleverage on stores and distribution center related fulfillment expenses.

• Operating (loss) for the APAC region increased by $3 million or 630 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2024.

The decrease as a percent of sales is primarily attributed to deleverage on higher stores and distribution expenses.

Excluding the benefits related to the Litigation Settlement, adjusted non-GAAP operating income as a percentage of net sales decreased by approximately 160 basis points during the second quarter of Fiscal 2025, as compared to the second quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, operating income increased by $3 million compared to the year-to-date period of Fiscal 2024.

As a percentage of net sales operating income decreased 80 basis points compared to the year-to-date period of Fiscal 2024.

• Operating income for the Americas increased $19 million and decreased 100 basis points as a percentage of region net sales as compared to the year-to-date period of Fiscal 2024.

The decrease as a percent of sales was primarily attributed to higher cost of sales, inclusive of tariffs, and deleverage on store occupancy expenses, partially offset by a benefit from the Litigation Settlement included in selling expense.

• Operating (loss) for EMEA increased $22 million, or 660 basis points as a percentage of region net sales as compared to the year-to-date period of Fiscal 2024.

The decrease as a percent of sales primarily relates to higher freight costs, marketing and deleverage on distribution center related fulfillment expenses.

• Operating (loss) for APAC increased $7 million, or 870 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2024.

The decrease as a percent of sales is primarily attributed to deleverage on higher stores and distribution expenses.

Excluding the benefits related to the Litigation Settlement, adjusted non-GAAP operating income as a percentage of net sales decreased by approximately 250 basis points during the year-to-date period of Fiscal 2025, as compared to the year-to-date period of Fiscal 2024.

Abercrombie & Fitch Co.

2 unchanged sentences

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

2 unchanged sentences

Interest income, net $ (2,474) (0.2) $ (5,203) (0.5) 30

For the first quarter of Fiscal 2025, interest income, net increased $1.8 million, as compared to the first quarter of Fiscal 2024.

The net increase in interest income was a result of lower interest expense in Fiscal 2025 compared to Fiscal 2024 as a result of the redemption of the remaining outstanding balance of the 8.75% Senior Secured Notes on July 15, 2024.

This was partially offset by a reduction in interest income due to the decrease in balance on time deposits and money market accounts compared to the first quarter of Fiscal 2024.

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Interest expense $ 1,281 0.1 % $ 10,969 0.5 % (40)

Interest income (10,538) (0.5) (21,195) (1.0) 50

Interest income, net $ (9,257) (0.4) $ (10,226) (0.5) 10

For the second quarter of Fiscal 2025, interest income, net decreased $2.7 million, as compared to the second quarter of Fiscal 2024.

The net decrease was a result of a reduction in interest income due to the decrease in balance on time deposits and money market accounts compared to the second quarter of Fiscal 2024.

This was partially offset by lower interest expense in Fiscal 2025 compared to Fiscal 2024 as a result of the redemption of the remaining outstanding balance of the 8.75% Senior Secured Notes on July 15, 2024.

For the year-to-date period of Fiscal 2025, interest income, net decreased $1.0 million, as compared to the year-to-date period of Fiscal 2024 .

The net decrease was a result of a reduction in interest income due to the decrease in balance on time deposits and money market accounts compared to the year-to-date period of Fiscal 2024.

Income tax expense

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

Income tax expense $ 65,744 31.4 % $ 45,449 25.1 %

Compared with the year-to-date period of Fiscal 2024, the change in the effective tax rate during Fiscal 2025 is due to jurisdictional mix and lower levels of pre-tax income offset by a lower tax benefit on share-based compensation compared with the prior year.

Excluded item:

Tax effect of pre-tax excluded items (1)

Adjusted non-GAAP income tax expense $ 55,795 32.7 $ 45,449 25.1

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Income tax expense $ 92,321 29.1 % $ 65,243 20.7 %

Excluded item:

Tax effect of pre-tax excluded items (1)

Adjusted non-GAAP income tax expense $ 82,372 29.5 $ 65,243 20.7

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

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

The change in the effective tax rate for the second quarter and year-to-date period of Fiscal 2025, as compared with the second quarter and the year-to-date period of Fiscal 2024, is due to jurisdictional mix, a lower tax benefit on share-based compensation compared with the prior year, and the establishment of an additional valuation allowance in Japan.

Refer to Note 10, “ INCOME TAXES .”

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

Net income attributable to A&F

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

Net income attributable to A&F $ 141,383 11.7 % $ 133,168 11.7 % —

Excluded item, net of tax (1)

(28,625) (2.4) — — (240)

Adjusted non-GAAP net income attributable to A&F

$ 112,758 9.3 $ 133,168 11.7 (240)

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Net income attributable to A&F $ 221,796 9.6 % $ 247,018 11.5 % (190)

Excluded item, net of tax (1)

(28,625) (1.2) — 0.0 (120)

Adjusted non-GAAP net income attributable to A&F

$ 193,171 8.4 $ 247,018 11.5 (310)

(1) Excluded items presented above under “Operating income,” and “Income tax expense”.

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

Net income per share attributable to A&F

Thirteen Weeks Ended

May 3, 2025 May 4, 2024 $ Change

August 2, 2025 August 3, 2024 $ Change

Net income per diluted share attributable to A&F

$ 2.91 $ 2.50 $ 0.41

Excluded item, net of tax (1) (2)

(0.59) — (0.59)

Adjusted non-GAAP net income per diluted share attributable to A&F

2.32 2.50 (0.18)

Impact from changes in foreign currency exchange rates — 0.03 (0.03)

1 unchanged sentence

$ 2.32 $ 2.53 $ (0.21)

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024 $ Change

Net income per diluted share attributable to A&F

$ 4.47 $ 4.64 $ (0.17)

Excluded item, net of tax (1) (2)

(0.58) — (0.58)

Adjusted non-GAAP net income per diluted share attributable to A&F

$ 3.90 $ 4.64 $ (0.74)

Impact from changes in foreign currency exchange rates — (0.04) 0.04

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

$ 3.90 $ 4.60 $ (0.70)

(1) Excluded items presented above under “Operating income,” and “Income tax expense”.

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

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

EBITDA AND ADJUSTED EBITDA

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

August 2, 2025 August 3, 2024

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

4 unchanged sentences

$ 244,082 20.2 $ 214,980 19.0 120

(1) EBITDA is a supplemental financial measure that is not defined or prepared in accordance with GAAP.

Excluded item:

Litigation Settlement (2)

(38,574) (3.2) — — (320)

Adjusted EBITDA (1)

$ 205,508 17.0 $ 214,980 19.0 (200)

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

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

Net income $ 225,127 9.8 % $ 250,457 11.6 % (180)

Income tax expense 92,321 4.0 65,243 3.0 100

Interest (income) expense, net (9,257) (0.4) (10,226) (0.5) 10

Depreciation and amortization 76,000 3.3 77,044 3.7 (40)

$ 384,191 16.7 $ 382,518 17.8 (110)

Excluded item:

Litigation Settlement (2)

(38,574) (1.7) — 0.0 (170)

Adjusted EBITDA (1)

$ 345,617 15.0 $ 382,518 17.8 (280)

(1) EBITDA and adjusted EBITDA are supplemental financial measures that are not defined or prepared in accordance with GAAP.

EBITDA is defined as net income before interest, income taxes and depreciation and amortization.

Adjusted EBITDA is EBITDA adjusted for excluded items.

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

8 unchanged sentences

The Company’s business has two principal selling seasons:

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.

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.

4 unchanged sentences

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 2024 Form 10-K, including being opportunistic regarding growth opportunities.

Business - STRATEGY AND KEY BUSINESS PRIORITIES” included in the Fiscal 2024 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, and information technology.

For the year-to-date period ended May 3, 2025, the Company invested $50.8 million towards capital expenditures.

For the year-to-date period ended August 2, 2025, the Company invested $116.9 million towards capital expenditures.

Total capital expenditures for Fiscal 2025 are expected to be approximately $225 million.

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

As of May 3, 2025, the Company had cash and cash equivalents of $510.6 million and total liquidity of approximately $0.9 billion, compared with cash and cash equivalents of $772.7 million and total liquidity of approximately $1.2 billion at the beginning of Fiscal 2025.

As of August 2, 2025, the Company had cash and cash equivalents of $572.7 million and total liquidity of approximately $1.0 billion, compared with cash and cash equivalents of $772.7 million and total liquidity of approximately $1.2 billion at the beginning of Fiscal 2025 .

Share repurchases

1 unchanged sentence

The 2025 Authorization does not have an expiration date.

During the year-to-date period ended May 3, 2025, the Company repurchased approximately 2.6 million shares of its Common Stock pursuant to this share repurchase authorization for approximately $200 million.

As of May 3, 2025, t he Company had $1.1 billion in share repurchases remaining under the 2025 Authorization.

During the year-to-date period ended August 2, 2025, the Company repurchased approximately 3.2 million shares of its Common Stock pursuant to this share repurchase authorization for approximately $250 million.

As of August 2, 2025, t he Company had $1.1 billion in share repurchases remaining under the 2025 Authorization.

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 vesting of restricted stock units.

6 unchanged sentences

The ABL Credit Agreement provides for the ABL Facility, which is a senior secured asset-based revolving credit facility of up to $500 million.

As of May 3, 2025, the Company did not have any borrowings outstanding under the ABL Facility.

Details regarding the remaining borrowing capacity under the ABL Facility as of May 3, 2025 are as follows:

(in thousands) May 3, 2025

As of August 2, 2025, 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 2, 2025 are as follows:

(in thousands) August 2, 2025

Loan cap $ 500,000

9 unchanged sentences

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 3, 2025, $188.5 million of the Company’s $510.6 million of cash and equivalents were held by foreign affiliates.

As of August 2, 2025, $209.1 million of the Company’s $572.7 million of cash and equivalents were held by foreign affiliates.

Refer to Note 10, “ INCOME TAXES .”

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 3, 2025 and May 4, 2024:

Thirteen Weeks Ended

May 3, 2025 May 4, 2024

The table below provides certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended August 2, 2025 and August 3, 2024:

Twenty-Six Weeks Ended

August 2, 2025 August 3, 2024

(in thousands)

Cash and equivalents, and restricted cash and equivalents, beginning of period $ 780,395 $ 909,685

Net cash (used for) provided by operating activities (4,000) 95,010

Net cash provided by operating activities 112,893 260,119

Net cash used for investing activities (31,943) (96,649)

3 unchanged sentences

Cash and equivalents, and restricted cash and equivalents, end of period $ 580,332 $ 746,295

Operating activities - During the fiscal year-to-date period ended May 3, 2025, net cash used for operating activities included an increase in cash outflows related to the timing of merchandise and advertising payables, partially offset by increased cash receipts as a result of the 8% year-over-year increase in net sales.

During the fiscal 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.

Investing activities - During the fiscal year-to-date period ended May 3, 2025, net cash used for investing activities was primarily used for capital expenditures of $51 million, partially offset by the maturity of $20 million of marketable securities.

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

Financing activities - During the fiscal year-to-date period ended May 3, 2025, net cash used for financing activities included the purchase of approximately 2.6 million shares of Common Stock with a market value of approximately $200 million and $34 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

During the fiscal year-to-date period ended May 4, 2024, net cash used for financing activities included

Operating activities - During the fiscal year-to-date period ended August 2, 2025, net cash provided by operating activities included an increase in cash outflows related to the timing of merchandise and advertising payables and higher inventory product costs, partially offset by increased cash receipts as a result of the 7% year-over-year increase in net sales.

During the fiscal 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.

Investing activities - During the fiscal year-to-date period ended August 2, 2025, net cash used for investing activities was primarily used for capital expenditures of $117 million, partially offset by the maturity of $85 million of marketable securities.

Net cash used for investing activities for the fiscal year-to-date period ended August 3, 2024 was primarily used for capital expenditures of $81.6 million.

Financing activities - During the fiscal year-to-date period ended August 2, 2025, net cash used for financing activities included the purchase of approximately 3.2 million shares of Common Stock with a market value of approximately $251 million and $35 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

During the fiscal year-to-date period ended August 3, 2024, net cash used for financing activities included

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

$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 the outstanding 8.75% Senior Secured Notes at a premium of $0.1 million.

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 million.

Contractual obligations

13 unchanged sentences

The Company believes that each of the non-GAAP financial measures presented in this “ Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” is useful to investors as it provides a meaningful basis to evaluate the Company’s operating performance excluding the effect of certain items that the Company believes may not reflect its future operating outlook, such as certain asset impairment charges, thereby supplementing investors’ understanding of comparability of operations across periods.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” is useful to investors as it provides a meaningful basis to evaluate the Company’s operating performance excluding the effect of certain items that the Company believes may not reflect its future operating outlook, thereby supplementing investors’ understanding of comparability of operations across periods.

Management used these non-GAAP financial measures during the periods presented to assess the Company’s performance and to develop expectations for future operating performance.

7 unchanged sentences

2025 2Q Form 10-Q

Excluded item

The following financial measures are disclosed on a GAAP and on an adjusted non-GAAP basis excluding the following item, as applicable:

Financial measures (1)

Excluded items

Selling expense Settlement of claims to resolve payment card interchange fee litigation

General and administrative expense Legal fees in connection with settlement of claims to resolve payment card interchange fee litigation

Operating income Settlement, net of legal fees, of claims to resolve payment card interchange fee litigation

Income tax expense (2)

Tax effect of pre-tax excluded item

Net income and net income per share attributable to A&F (2)

Pre-tax excluded items and the tax effect of pre-tax excluded item

(1) Certain of these financial measures are also expressed as a percentage of net sales.

(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.

Financial information on a constant currency basis

3 unchanged sentences

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 3, 2025 and May 4, 2024 were as follows:

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 2, 2025 and August 3, 2024 were as follows:

(in thousands, except change in net sales, operating income margin and per share data)

Thirteen Weeks Ended

Net sales May 3, 2025 May 4, 2024 % Change

Thirteen Weeks Ended Twenty-Six Weeks Ended

Net sales August 2, 2025 August 3, 2024 % Change August 2, 2025 August 3, 2024 % Change

GAAP $ 1,208,560 $ 1,133,974 7 % $ 2,305,871 $ 2,154,704 7 %

1 unchanged sentence

Non-GAAP on a constant currency basis $ 1,208,560 $ 1,144,681 6 % $ 2,305,871 $ 2,165,203 6 %

Operating income May 3, 2025 May 4, 2024 BPS Change (1)

Operating income August 2, 2025 August 3, 2024 BPS Change (1)

August 2, 2025 August 3, 2024 BPS Change (1)

GAAP $ 206,658 $ 175,625 160 $ 308,191 $ 305,474 (80)

Excluded items (2)

38,574 — 320 38,574 — 170

Adjusted non-GAAP $ 168,084 $ 175,625 (160) $ 269,617 $ 305,474 (250)

Impact from changes in foreign currency exchange rates — 2,272 0 — (2,962) 20

Adjusted non-GAAP on a constant currency basis $ 168,084 $ 177,897 (160) $ 269,617 $ 302,512 (230)

Net income per share attributable to A&F May 3, 2025 May 4, 2024 $ Change

Net income per share attributable to A&F August 2, 2025 August 3, 2024 $ Change August 2, 2025 August 3, 2024 $ Change

GAAP $ 2.91 $ 2.50 $ 0.41 $ 4.47 $ 4.64 $ (0.17)

Excluded items, net of tax (2)

0.59 — 0.59 0.58 — 0.58

Adjusted non-GAAP $ 2.32 $ 2.50 $ (0.18) $ 3.90 $ 4.64 $ (0.74)

Impact from changes in foreign currency exchange rates — 0.03 (0.03) — (0.04) 0.04

1 unchanged sentence

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

The Company provides EBITDA as a supplemental measure used by the Company's executive management to assess the Company's performance.

We also believe this supplemental performance measure is 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.

A reconciliation of non-GAAP EBITDA to net income, a financial measure calculated and presented in accordance with GAAP, for the thirteen weeks ended May 3, 2025 and May 4, 2024 were as follows:

(2) Excluded item consists of a favorable settlement, net of legal fees, of payment card interchange fee litigation

Abercrombie & Fitch Co.

2025 2Q Form 10-Q

EBITDA AND ADJUSTED EBITDA

The Company provides EBITDA and adjusted EBITDA as supplemental measures used by the Company’s executive management to assess the Company’s performance.

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.

A reconciliation of non-GAAP EBITDA to net income, a financial measure calculated and presented in accordance with GAAP, and the adjustments made in calculating adjusted EBITDA for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) May 3, 2025 % of

Net Sales May 4, 2024 % of

(in thousands, except ratios) August 2, 2025 % of

Net Sales August 3, 2024 % of

Net income $ 143,388 11.9 % $ 135,379 11.9 %

4 unchanged sentences

$ 244,082 20.2 $ 214,980 19.0

(1) EBITDA is a supplemental financial measure that is not defined or prepared in accordance with GAAP.

Adjustments to EBITDA

Litigation Settlement (2)

(38,574) (3.2) — —

Adjusted EBITDA (1)

$ 205,508 17.0 $ 214,980 19.0

Twenty-Six Weeks Ended

(in thousands, except ratios) August 2, 2025 % of

Net Sales August 3, 2024 % of

Net income $ 225,127 9.8 % $ 250,457 11.6 %

Income tax expense 92,321 4.0 65,243 3.0

Interest (income) expense, net (9,257) (0.4) (10,226) (0.5)

Depreciation and amortization 76,000 3.3 77,044 3.7

$ 384,191 16.7 $ 382,518 17.8

Adjustments to EBITDA

Litigation settlement (2)

(38,574) (1.7) — —

Adjusted EBITDA (1)

$ 345,617 15.0 $ 382,518 17.8

(1) EBITDA and adjusted EBITDA are supplemental financial measures that are not defined or prepared in accordance with GAAP.

EBITDA is defined as net income before interest, income taxes and depreciation and amortization.

Adjusted EBITDA is EBITDA adjusted for excluded items.

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

Abercrombie & Fitch Co.

1 unchanged sentence

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