What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-03-31 · 232 added, 210 removed, 338 unchanged (57% of the section changed)

1 unchanged sentence

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) generally discusses our results of operations for Fiscal 2025 and Fiscal 2024 and provides comparisons between such fiscal years.

For discussion and comparison of Fiscal 2023 and Fiscal 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2023, filed with the SEC on April 1, 2024.

For discussion and comparison of Fiscal 2024 and Fiscal 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2024, filed with the SEC on March 31, 2025.

This MD&A should be read together with the Company’s audited Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K in “ ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA , ” to which all references to Notes in MD&A are made.

In prior periods, the Company included stores and distribution expense and marketing, general and administrative expense as individual expense categories on the Consolidated Statements of Operations and Comprehensive Income (Loss).

Stores & distribution expense was recaptioned as selling expense, while marketing, general and administrative expense was recaptioned as general and administrative expense.

In conjunction with these changes, all marketing expenses, including amounts previously presented in marketing, general and administrative expense, were moved into selling expense, while certain management and IT costs were moved out of stores and distribution expense and into general and administrative expense.

The net changes associated with these reclassifications results in selling expense that is $38.3 million and $35.0 million lower than the stores and distribution expense that was previously presented for Fiscal 2023 and Fiscal 2022, respectively, and in general and administrative expense that is $38.3 million and $35.0 million higher than the marketing, general, and administrative expense that was previously presented for Fiscal 2023 and Fiscal 2022, respectively.

Prior period amounts have been reclassified to conform to the current fiscal year’s presentation.

MD&A is provided as a supplement to the accompanying 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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• Results of Operations .

An analysis of certain components of the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for Fiscal 2024 as compared to Fiscal 2023.

An analysis of certain components of the Company’s Consolidated Statements of Operations and Comprehensive Income for Fiscal 2025 as compared to Fiscal 2024.

• Liquidity and Capital Resources .

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of February 1, 2025, which includes (i) an analysis of changes in cash flows for Fiscal 2024 as compared to Fiscal 2023, (ii) an analysis of liquidity, including availability under the Company’s credit facility, and outstanding debt and covenant compliance and (iii) a summary of contractual and other obligations as of February 1, 2025.

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of January 31, 2026, which includes (i) an analysis of changes in cash flows for Fiscal 2025 as compared to Fiscal 2024, (ii) an analysis of liquidity, including availability under the Company’s credit facility, and outstanding debt and covenant compliance and (iii) a summary of contractual and other obligations as of January 31, 2026.

• Recent Accounting Pronouncements .

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Business summary

Abercrombie & Fitch Co.

(“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and its subsidiaries are referred to as the “Company”), is a global, digitally-led, omnichannel retailer.

The Company is a global, digitally-led, omnichannel retailer.

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 three reportable segments:

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

and Asia-Pacific (“APAC”).

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

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

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 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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Fiscal year Year ended/ ending Number of weeks

Fiscal 2022 January 28, 2023 52

Fiscal 2023 February 3, 2024 53

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Fiscal 2025 January 31, 2026 52

Fiscal 2026 January 30, 2027 52

Historically, the Company’s operations have been seasonal in nature and consist of two principal selling seasons:

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• General and administrative expense as a percentage of net sales;

• Operating income, including by region, and operating income as a percentage of net sales (“operating margin”);

• Operating income, including by segment, and operating income as a percentage of net sales (“operating margin”);

• Earnings before interest, taxes, depreciation and amortization (“EBITDA”)

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• Return on invested capital and return on equity;

• Store metrics, such as net sales per gross square foot, and store four-wall operating margins;

• Digital and omnichannel metrics;

• Transactional metrics, such as traffic and conversion, performance across key product categories, average unit retail (“AUR’), average unit cost (“AUC”), average units per transaction and average transaction values, return rates, shrink;

• Transactional metrics, such as traffic and conversion, performance across key product categories, AUR, average unit cost (“AUC”), average units per transaction and average transaction values, return rates, shrink;

• Customer-centric metrics such as customer retention and acquisition, and certain metrics related to the loyalty programs.

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Focus areas for Fiscal 2026

The Company introduced the Always Forward Plan in June of Fiscal 2022.

The Always Forward Plan is anchored on our strategic growth principles, which are to:

• Execute focused growth plans;

• Accelerate an enterprise-wide digital revolution;

• 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.

Execute focused growth plans by:

• driving sales growth across regions and brand families primarily through marketing and store investments in our owned and operating channels, while pursuing new geographies and markets via franchise, wholesale and licensing partnerships;

• using our regionally relevant brand playbooks globally to align the brands’ products, voices, and experiences with customers, both digitally and in-store;

• using testing and chase strategies to deliver compelling assortments and product collections across genders.

Accelerate an enterprise-wide digital revolution to improve the customer and associate experience by:

• 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 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;

• 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

Over the last several years, A&F Co.

has worked to successfully transform its brands, business and culture, while delivering on its financial commitments.

As the Company looks forward, it’s focused on evaluating opportunities that continue to deliver sustainable, profitable growth.

The Company expects to:

• Deliver Consistent Global Growth Across Brands by investing in owned-and-operated channels with the expectation of continued net sales growth, including through net new store openings, digital fulfillment, and marketing.

• Expand Channels and Categories by increasing net sales growth in new and select markets through the use of franchise, wholesale, and licensing partnerships.

The Company also plans to expand into new, adjacent product categories that resonate with each brand’s target customer.

• Execute a Multifaceted Strategy that includes evaluating sourcing footprint, adjusting pricing or promotions, and expense reduction initiatives to stabilize product and operating costs in attempt to meaningfully mitigate external cost pressure, including near-term tariff impacts.

• Enhance and Modernize our Key Systems and Leverage Technology to support operational productivity and to improve the customer journey.

• Execute Financial Discipline to maintain double-digit operating margins and expand net income per diluted share.

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 legislation and regulations, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy.

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 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.

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.

In addition, changes in trade policy and related uncertainty, including enacted and proposed tariffs affecting countries from which we source a significant portion of our merchandise and raw materials, have created a dynamic and unpredictable trade environment that adversely impacted our business and operations during Fiscal 2025 and continues into Fiscal 2026.

During Fiscal 2025, changes in U.S.

trade policy, including the imposition, modification, and rescission of certain tariffs, increased volatility in duties and raw material costs associated with merchandise sourced from certain countries and added complexity to our supply chain and sourcing processes.

On February 20, 2026, the U.S.

Supreme Court held that IEEPA did not authorize the imposition of tariffs, striking down the 10% universal baseline tariff, as well as the country-specific tariffs.

The Company is involved in litigation seeking refunds of IEEPA tariffs.

The outcome and timing of resolution remain uncertain.

While certain tariffs have been struck down, modified, or replaced, other tariffs remain in effect, and additional tariffs have been imposed or proposed during Fiscal 2026.

Additional, increased, or modified tariffs may be imposed without warning through various statutes and trade authorities.

These changing tariff rates and shifting trade policies have created significant uncertainty for suppliers, consumers, and us.

These continued uncertainties regarding the future impact of tariffs and global trade relations could lead to weakened business conditions for our industry and could adversely impact our ability to procure merchandise or result in increases to the cost of merchandise sourced from impacted countries.

The Company continues to evaluate the impact of tariffs and other trade policies on its business and is continuing to execute against our playbook of mitigation strategies.

Mitigation strategies have included evaluating supply chain footprint changes, negotiating with our supply chain vendors, pursuing operating expense reductions, and determining ways to increase AUR.

After factoring in certain mitigation strategies, tariffs on goods imported into the U.S.

under trade policies in effect through January 31, 2026 negatively impacted operating income by $90 million or 170 basis points as a percent of net sales, during Fiscal 2025.

Assuming the estimated impact from the tariffs on goods imported into the U.S., including the impact of a 15% tariff on all U.S.

imports (which, for purposes of our outlook, is expected to apply beginning February 24, 2026, and to remain in effect for the entirety of Fiscal 2026), and factoring in certain planned mitigation strategies, we expect to incur approximately $40 million of incremental impact compared to Fiscal 2025, or approximately 70 basis points as a percentage of net sales, which would negatively impact our operating income during Fiscal 2026.

Recently, the global markets have experienced fluctuations in fuel and other energy related costs, which could lead to greater uncertainty regarding the overall economic environment and consumer spending.

During 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 adversely impact demand for our products.

Continued inflationary pressures could further impact expenses and have a longer-term impact on our ability to maintain satisfactory margins.

Abercrombie & Fitch Co.

2025 Form 10-K

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.

The global supply chain also continues to be negatively impacted by various factors, including disruptions in major maritime routes, port congestion, higher operational costs, and increased competition for supply chain availability due to uncertainty regarding tariffs and trade policy.

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 port congestion or transportation delays, and could result in higher freight costs in the near-term and beyond.

As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, we are exposed to global events and geopolitical developments, including armed conflicts in certain regions, that may adversely impact our operations.

In addition to the impacts of tariffs discussed above, global supply chain conditions continue to be affected by other factors, including disruptions in major maritime routes, higher transportation and logistics costs, and increased competition for supply chain capacity due to uncertainty in the global trade environment and ongoing armed conflicts.

For example, armed conflicts in the Middle East have contributed to elevated freight rates and longer transit times compared to historical levels, and prolonged or escalating conflicts could result in additional supply chain disruption, including higher energy and transportation costs (such as fuel related charges), shipping delays, or increased costs from using air freight instead of ocean freight to mitigate inventory delays.

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.

Abercrombie & Fitch Co.

2024 Form 10-K

Global store network modernization and growth

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 the Company delivered new store experiences across brands during Fiscal 2024 and Fiscal 2023.

Details related to these new store experiences follow:

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 and Fiscal 2024.

Details related to these new Company owned and operated store experiences follow:

Type of new store experience Fiscal 2025 Fiscal 2024

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Right-sizes 11 12

During Fiscal 2024, the Company opened 65 new stores, while closing 41 stores.

This compares with 35 new stores and 32 closures during Fiscal 2023 .

Total 120 125

During Fiscal 2025, the Company opened 62 new stores, remodeled 47 stores, and right-sized 11 stores, while closing 22 stores.

This compares with 65 new stores, 48 remodeled stores, 12 right-sized stores, and 41 closures during Fiscal 2024.

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

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

Additional details related to store count and gross square footage follow:

Fifty-Two Weeks Ended February 1, 2025

Additional details related to Company owned and operated store count and gross square footage follow:

Fifty-Two Weeks Ended January 31, 2026

Total Company

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Permanently closed (3) (4) (1) (5) (4) (5) (8) (14) (22)

February 1, 2025 215 385 33 100 30 26 278 511 789

January 31, 2026 239 396 36 101 31 26 306 523 829

Gross square footage (in thousands) :

February 1, 2025 1,305 2,478 214 769 174 154 1,693 3,401 5,094

January 31, 2026 1,454 2,539 227 748 180 152 1,861 3,439 5,300

(1) The Americas segment includes North America and South America.

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(3) The APAC segment includes the Asia-Pacific region, including Asia and Oceania.

(4) This store count excludes temporary and international franchise stores.

Pillar Two Model Rules

In 2021, the Organization for Economic Cooperation and Development (“OECD”) released Pillar Two Global Anti-Base Erosion model rules (“Pillar Two Rules”), designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation.

Although the U.S.

withdrew the U.S.

from the OECD’s global tax agreement in January 2025, other countries where the Company does business, including the U.K.

and Germany, have enacted legislation implementing Pillar Two Rules, which are effective from January 1, 2024.

The implementation of Pillar Two Rules in each jurisdiction in which the Company operates did not have a material impact on the Company’s effective tax rate for Fiscal 2024, and the Company does not project a material impact on the effective tax rate for Fiscal 2025.

The Company will continue to evaluate the impact as additional jurisdictions enact legislation and provide further guidance.

(4) This store count excludes temporary and franchise stores.

Recent tax law changes

On July 4, 2025, House Resolution 1, also known as the 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 of 2017, 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 Company’s consolidated financial statements and disclosures.

Abercrombie & Fitch Co.

2025 Form 10-K

For a discussion of material risks that have the potential to cause our actual results to differ materially from our expectations, refer to “ ITEM 1A.

RISK FACTORS , ”.

Summary of results

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GAAP Non-GAAP (1)

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

Fiscal 2025 Fiscal 2024 Fiscal 2025 Fiscal 2024

Net sales $ 4,948,587 $ 4,280,677

Net sales (in thousands)

$ 5,266,292 $ 4,948,587

Change in net sales from the prior fiscal year 6 % 16 %

Comparable sales (2)

Operating income $ 740,820 $ 484,671 $ 489,107

Operating income (in thousands)

$ 699,143 $ 740,820 $ 660,569

Operating income margin

Net income attributable to A&F

13.3 % 15.0 % 12.5 %

Net income attributable to A&F (in thousands)

$ 506,921 $ 566,223 $ 478,039

Net income per diluted share attributable to A&F

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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 Consolidated Balance Sheets as of February 1, 2025 and February 3, 2024 and Consolidated Statements of Cash Flows for Fiscal 2024 and Fiscal 2023 were as follows:

(in thousands)

Balance Sheets data February 1, 2025 February 3, 2024

Certain components of the Company’s Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025 were as follows:

(in thousands) January 31, 2026 February 1, 2025

Cash and equivalents $ 759,540 $ 772,727

Marketable securities

Gross borrowings outstanding, carrying amount — 223,214

25,036 116,221

Inventories 601,218 575,005

Statements of Cash Flows data Fiscal 2024 Fiscal 2023

Certain components of the Company’s Consolidated Statements of Cash Flows for Fiscal 2025 and Fiscal 2024 were as follows:

(in thousands) Fiscal 2025 Fiscal 2024

Net cash provided by operating activities $ 619,142 $ 710,376

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RESULTS OF OPERATIONS

The estimated basis point (“BPS”) changes disclosed throughout this Results of Operations have been rounded based on the change in the percentage of net sales.

The estimated basis point (“BPS”) change disclosed throughout this Results of Operations has been rounded based on the change in the percentage of net sales.

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 Fiscal 2025 and Fiscal 2024 were as follows:

(in thousands) Fiscal 2024 Fiscal 2023 $ Change % Change Comparable Sales (1)

(in thousands, except ratios)

Fiscal 2025 Fiscal 2024 $ Change % Change Comparable Sales (1)

$ 4,290,395 $ 4,027,514 $ 262,881 7 % 4 %

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APAC 157,757 150,554 7,203 5 (3)

Total Company $ 4,948,587 $ 4,280,677 $ 667,910 16 17

$ 5,266,292 $ 4,948,587 $ 317,705 6 3

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

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For Fiscal 2025, net sales increased 6%, as compared to Fiscal 2024.

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

High-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 headwind of approximately $50 million due to the timing of sales volume based on the impact of the calendar shift in Fiscal 2024 as a result of the 53rd selling week in Fiscal 2023.

The increase was primarily attributable to low-single-digit AUR growth and mid-single-digit 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 3%, as compared to Fiscal 2024.

• Net sales growth in the Americas region of 17% on both a reported and comparable sales basis.

The increase was attributable to a higher AUR from lower promotional activity and category mix into higher ticket items and direct channel unit volume growth from increased traffic and transactions in company owned and operated stores and digital channels.

• Net sales growth in the EMEA region of 12% and 16% on a reported and comparable sales basis, respectively.

The increase was attributable to a higher AUR from lower promotional activity and category mix into higher ticket items and unit volume growth from increased traffic and transactions in company owned and operated stores and digital channels.

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

• Net sales growth in the APAC region of 9% and 19% on a reported and comparable sales basis, respectively.

On a geographic basis, net sales for Fiscal 2025 were as follows:

• Net sales growth in the Americas region of 7% and 4% on a reported and comparable sales basis, respectively.

The increase was led by mid-single-digit unit volume growth, with increases in Company owned and operated stores, and digital channels.

• Net sales growth in the EMEA region of 6% and flat on a reported and comparable sales basis, respectively.

The increase on a reported basis was attributable to mid-single-digit AUR growth, favorable foreign currency and an increase in sales volume in net new stores, and third-party channels, offset by relatively flat unit growth.

• Net sales growth in the APAC region of 5% on a reported basis and a decline of (3)% on a comparable sales basis.

The increase on a reported basis was attributable to mid-single-digit AUR growth, and low-double-digit increase in digital channels, partially offset by a low-single-digit decline in Company owned and operated stores.

Sales growth was negatively impacted by low-single-digit unit volume decline with declines in Company owned and operated stores, partially offset by unit volume growth in digital channels.

The Company’s net sales by brand for Fiscal 2025 and Fiscal 2024 were as follows:

(in thousands) Fiscal 2024 Fiscal 2023 $ Change % Change Comparable Sales (1)

(in thousands, except ratios)

Fiscal 2025 Fiscal 2024 $ Change % Change Comparable Sales (1)

$ 2,523,662 $ 2,556,434 $ (32,772) (1) % (7) %

2,742,630 2,392,153 350,477 15 13

Total Company $ 4,948,587 $ 4,280,677 $ 667,910 16 17

$ 5,266,292 $ 4,948,587 $ 317,705 6 3

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

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Fiscal 2025 Fiscal 2024

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

(in thousands, except ratios)

% of Net Sales % of Net Sales BPS Change

Cost of sales, exclusive of depreciation and amortization $ 2,028,884 38.5 % $ 1,773,926 35.8 % 270

For Fiscal 2024, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased approximately 130 basis points as compared to Fiscal 2023.

The percentage decrease 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 Fiscal 2023.

For Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales, increased approximately 270 basis points as compared to Fiscal 2024.

The percentage increase was primarily attributable to cost of sales deleverage with higher AUC primarily related to $90 million or 170 basis point adverse net tariff impact and unfavorable product and channel mix, partially offset by a low-single-digit increase in AUR, driven by volume mix and targeted promotions compared to Fiscal 2024.

Abercrombie & Fitch Co.

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Fiscal 2025 Fiscal 2024

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

(in thousands, except ratios)

% of Net Sales % of Net Sales BPS Change

Selling expense

$ 1,809,633 34.4 % $ 1,689,988 34.2 % 20

Excluded item:

Litigation Settlement (1)

42,874 0.8 — — 80

Adjusted non-GAAP selling expense

$ 1,852,507 35.2 $ 1,689,988 34.2 100

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

For Fiscal 2025, selling expense increased by $120 million compared to Fiscal 2024.

Selling expense as a percentage of net sales, decreased 160 basis points as compared to Fiscal 2023.

The decrease as a percent of net sales was primarily driven by expense leverage from higher net sales, including 190 basis points in stores expense, primarily relating to store occupancy and store employee compensation costs, and 10 basis points in distribution center and order fulfillment costs.

The decrease as a percent of net sales was partially offset by an increase of 40 basis points in marketing expense, primarily due to media campaigns and content, as compared to Fiscal 2023.

Selling expense, as a percentage of net sales increased 20 basis points as compared to Fiscal 2024.

The increase in rate was primarily driven by an approximate 80 basis point increase in store occupancy and payroll costs and an approximate 40 basis point increase in marketing, partially offset by an approximate 80 basis point benefit resulting from the Litigation Settlement and approximately a 20 basis point benefit in fulfillment expense.

Excluding 80 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 Fiscal 2025, as compared to Fiscal 2024.

General and administrative expense

Fiscal 2025 Fiscal 2024

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

(in thousands, except ratios)

% of Net Sales % of Net Sales BPS Change

General and administrative expense

$ 725,471 13.8 % $ 750,485 15.2 % (140)

For Fiscal 2024, general and administrative expense increased by $69 million compared to Fiscal 2023.

Excluded item:

Litigation Settlement (1)

(4,300) (0.1) — — (10)

Adjusted non-GAAP general and administrative expense

$ 721,171 13.7 $ 750,485 15.2 (150)

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

For Fiscal 2025, general and administrative expense decreased by $25 million compared to Fiscal 2024.

General and administrative expense, as a percentage of net sales, decreased 140 basis points as compared to Fiscal 2024.

The decrease in expense rate was primarily driven by expense leverage from higher net sales, including 100 basis points in employee compensation costs, partially offset by 40 basis points in information technology expense.

Other Operating Income, Net

The decrease in expense rate was primarily driven by an approximate 150 basis point decrease in employee compensation costs, partially offset by approximately 10 basis points in legal fees relating to the Litigation Settlement and other administrative expenses.

Excluding 10 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales during Fiscal 2025, decreased by approximately 150 basis points, as compared to Fiscal 2024.

Other operating loss (income), net

Fiscal 2025 Fiscal 2024

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

Other operating income, net $ 6,632 0.1% $ 5,873 0.1% —

For Fiscal 2024, other operating income, net, increased as compared to Fiscal 2023, primarily due to $0.7 million foreign currency gains recognized in Fiscal 2024.

(in thousands, except ratios)

% of Net Sales % of Net Sales BPS Change

Other operating loss (income), net $ 3,161 0.1 % $ (6,632) (0.1) % 20

For Fiscal 2025, other operating loss (income), net, as a percentage of net sales, increased by 20 basis points as compared to Fiscal 2024, primarily due to $7.3 million foreign currency losses recognized in Fiscal 2025 compared to $2.7 million in foreign currency gains in Fiscal 2024 .

Abercrombie & Fitch Co.

2025 Form 10-K

Operating income

Fiscal 2025 Fiscal 2024

(in thousands) % of Net Sales (1)

(in thousands, except ratios)

% of Net Sales (1)

Americas $ 1,187,253 27.7 % $ 1,210,493 30.1 % (240)

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Operating income $ 699,143 13.3 $ 740,820 15.0 (170)

Excluded items:

Asset impairment charges (2)

Excluded item:

Litigation Settlement (2)

38,574 0.7 — — 70

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

Abercrombie & Fitch Co.

2024 Form 10-K

For Fiscal 2024, operating income increased by $256 million or 370 basis points, as a percentage of net sales, as compared to Fiscal 2023.

• Operating income for the Americas increased $270 million or 250 basis points as a percentage of region net sales as compared to 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 employee compensation costs and store occupancy expenses.

• Operating income for EMEA increased $29 million or 30 basis points as a percentage of region net sales as compared to Fiscal 2023.

The increase as a percent of sales primarily relates to positive comparable sales of 16%, relating to higher unit volume, increased AUR on reduced promotions, and expense leverage relating to employee compensation costs and store occupancy expenses.

• Operating (loss) for APAC increased $(1) million or 0 basis points as a percentage of region net sales as compared to Fiscal 2023.

The loss was impacted by marketing, occupancy, and general and administrative investments, which more than offset the expense leverage from comparable sales growth of 19%.

For Fiscal 2025, operating income decreased by $42 million or 170 basis points, as a percentage of net sales, as compared to Fiscal 2024.

• Operating income for the Americas decreased $23 million and decreased 240 basis points as a percentage of segment net sales as compared to Fiscal 2024.

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

• Operating income for EMEA decreased $18 million or 310 basis points as a percentage of segment net sales as compared to Fiscal 2024.

The decrease as a percent of sales primarily related to deleverage on fulfillment expenses and marketing investments.

• Operating (loss) for APAC increased $16 million or 950 basis points as a percentage of segment net sales as compared to Fiscal 2024.

The increase as a percent of sales is primarily attributed to higher cost of sales, and deleverage on store occupancy expenses, partially offset by leverage on general and administrative expenses.

• Operating (loss) not attributed to segments decreased primarily related to a decrease in employee compensation costs, partially offset by increases in other administrative expenses and foreign currency losses.

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 Fiscal 2025, as compared to Fiscal 2024.

Interest (income) expense, net

Fiscal 2025 Fiscal 2024

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

(in thousands, except ratios)

% of Net Sales % of Net Sales BPS Change

Interest expense $ 2,375 — % $ 12,077 0.2 % (20)

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Interest (income) expense, net $ (21,629) (0.4) $ (27,857) (0.6) 20

For Fiscal 2024, interest (income) expense, net, increased 60 basis points as compared to Fiscal 2023.

The net increase was a result of lower interest expense in Fiscal 2024 compared to Fiscal 2023 as result of the repurchases of Senior Secured Notes in late Fiscal 2023 and Fiscal 2024 and redemption of the remaining outstanding balance on July 15, 2024.

Additionally, interest income increased due to the increase in balance and rates received on time deposits and money market accounts as compared to Fiscal 2023.

For Fiscal 2025, interest (income) expense, net, decreased $6.2 million, as compared to Fiscal 2024.

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

Income tax expense

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Adjusted non-GAAP income tax expense $ 196,085 28.7 $ 194,661 25.3

(1) Refer to “ Operating Income ” for details of pre-tax excluded items.

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

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

The increase in income tax expense compared to Fiscal 2023 can be attributed to higher domestic income resulting from higher sales volume and higher AURs.

The decrease in effective tax rate compared to Fiscal 2023 can be attributed to higher domestic income, a higher tax benefit recognized on vesting of share based compensation awards, and continued business improvement in the EMEA and APAC segments.

During Fiscal 2024, the Company did not recognize income tax benefits on $53.8 million of pre-tax losses, primarily in Switzerland, resulting in adverse tax impacts of $8.2 million.

The primary driver relates to expense deleverage within the APAC and EMEA regions.

During Fiscal 2023, the Company did not recognize income tax benefits on $103.0 million of pre-tax losses, primarily in Switzerland, resulting in adverse tax impacts of $15.6 million.

The primary driver relates to expense deleverage within the APAC and EMEA regions, although to a lesser extent than in Fiscal 2022.

Refer to Note 11, “ INCOME TAXES ,” for further discussion on factors that impacted the effective tax rate in Fiscal 2024 and Fiscal 2023.

(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.

Abercrombie & Fitch Co.

2025 Form 10-K

The change in the effective tax rate for Fiscal 2025, as compared to Fiscal 2024, is due to jurisdictional mix, a lower tax benefit on share-based compensation compared with the prior year.

During Fiscal 2025 and Fiscal 2024, the Company did not recognize income tax benefits on $74.9 million and $53.8 million, respectively, of pre-tax losses, primarily in Switzerland, resulting in adverse tax impacts of $11.9 million and $8.2 million, respectively.

The primary driver relates to expense deleverage within the APAC and EMEA regions.

Refer to Note 12, “ INCOME TAXES ,” for further discussion on factors that impacted the effective tax rate in Fiscal 2025 and Fiscal 2024.

Net income attributable to A&F

Fiscal 2025 Fiscal 2024

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

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

Net income attributable to A&F $ 506,921 9.6 % $ 566,223 11.4 % (180)

Excluded items, net of tax (1)

Excluded item, net of tax (1)

(28,882) (0.5) — — (50)

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Net income per diluted share attributable to A&F

Excluded items, net of tax (1)

$ 10.46 $ 10.69 $ (0.23)

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

(0.60) — (0.60)

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

$ 9.86 $ 10.69 $ (0.83)

Impact from changes in foreign currency exchange rates — (0.09) 0.09

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Fiscal 2025 Fiscal 2024

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

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

Net income $ 514,995 9.8 % $ 574,016 11.6 % (180)

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Interest (income) expense, net

(21,629) (0.4) (27,857) (0.6) 20

Depreciation and amortization 155,021 2.9 153,773 3.2 (30)

$ 854,164 16.2 $ 894,593 18.1 (190)

Adjustments to EBITDA

Asset impairment (1)

Excluded item:

Litigation Settlement (2)

(38,574) (0.7) — — (70)

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

Adjusted EBITDA is EBITDA adjusted for asset impairment.

Adjusted EBITDA is EBITDA adjusted for excluded items.

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

Abercrombie & Fitch Co.

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LIQUIDITY AND CAPITAL RESOURCES

The Company’s capital allocation strategy and priorities are reviewed by A&F’s Board of Directors quarterly considering both liquidity and valuation factors.

The Company’s capital allocation strategy and priorities are reviewed by the Board of Directors quarterly, considering both liquidity and valuation factors.

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 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, please see below under “ Share repurchases .”

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The Company relies on excess operating cash flows, which are largely generated in Fall, to fund operations throughout the fiscal 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.”

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.

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

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 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 that align with its strategic pillars as described within “ ITEM 1.

BUSINESS - STRATEGY AND KEY BUSINESS PRIORITIES .” 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 marketing, digital and omnichannel investments, information technology, and other projects.

For Fiscal 2024, the Company used $182.9 million towards capital expenditures, up from $157.8 million of capital expenditures in Fiscal 2023.

Total capital expenditures for Fiscal 2025 are expected to be approximately $200 million.

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 “ ITEM 1.

BUSINESS - STRATEGY AND KEY BUSINESS PRIORITIES , ” including being opportunistic regarding areas for growth.

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

For Fiscal 2025, the Company invested $240.8 million towards capital expenditures, up from $182.9 million of capital expenditures in Fiscal 2024.

Total capital expenditures for Fiscal 2026 are expected to be in the range of $200 to $225 million.

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

As of January 31, 2026, the Company had cash and cash equivalents of $759.5 million and total liquidity of approximately $1.2 billion, compared with cash and cash equivalents of $772.7 million and total liquidity of approximately $1.2 billion at February 1, 2025.

Share repurchases

In November 2021, A&F’s Board of Directors approved a $500 million share repurchase authorization (the “2021 Authorization”).

During Fiscal 2024, the Company repurchased $230 million, or 1.6 million shares, of its Common Stock pursuant to the 2021 Authorization.

On March 5, 2025, the Company announced that A&F’s Board of Directors approved a new $1.3 billion share repurchase authorization program (the “2025 Authorization”).

The 2025 Authorization has no expiration date.

In addition, the 2025 Authorization replaced the 2021 Authorization, and shares may no longer be repurchased pursuant to the 2021 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.

Shares may be repurchased in the open market or in private transactions in such manner as be deemed advisable from time to time (including, without limitation, pursuant to accelerated share repurchase programs, one or more trading plans established in accordance with Rule 10b5-1 of the Exchange Act, or any other method deemed advisable) and may be discontinued at any time.

In March 2025, the Company announced that the Board of Directors approved a $1.3 billion share repurchase program (the “2025 Authorization”), which replaced the prior share repurchase program of $500 million authorized by the Board of Directors in 2021.

The 2025 Authorization does not have an expiration date and may be discontinued at any time.

During Fiscal 2025 , the Company repurchased approximately 5.4 million shares of its Common Stock for approximately $450 million.

As of January 31, 2026, the Company had $850 million 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 stockholders and offsetting dilution from issuances of Common Stock associated with the vesting of restricted stock units.

Shares may be repurchased from time to time in the open market or in private transactions in such manner as may be deemed advisable from time to time (including, without limitation, pursuant to accelerated share repurchase programs, one or more 10b5-1 trading plans, or any other method deemed advisable) and may be discontinued at any time.

The timing and amount of any such repurchases will be determined based on an evaluation of market conditions, the Company’s share price, legal requirements, and other factors.

The Company is not obligated to repurchase any specific amount of shares of its Common Stock.

Refer to “ ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ” of this Annual Report on Form 10-K for additional information regarding the Company’s publicly announced share repurchase authorization programs.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ” for additional information regarding the Company’s publicly announced share repurchase authorization programs.

Abercrombie & Fitch Co.

2025 Form 10-K

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 in 2025 (the “Senior Secured Notes”), 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 the 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 amended the Amended and Restated Credit Agreement, dated as of April 29, 2021 (the “ABL Credit Agreement”), to, among other things (as described in greater detail below), provide for a $500 million senior secured asset-based revolving credit facility (the “ABL 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 from $400 million to $500 million;

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

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

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

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

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

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

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

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

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

The Company did not have any borrowings outstanding under the ABL Facility as of February 1, 2025 or as of February 3, 2024.

Details regarding the remaining borrowing capacity under the ABL Facility as of February 1, 2025 follow:

(in thousands) February 1, 2025

On August 2, 2024, A&F, as parent and a guarantor, Abercrombie & Fitch Management Co., 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 the Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”).

The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $500 million (the “ABL Facility”), which matures on August 2, 2029.

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

The Company did not have any borrowings outstanding under the ABL Facility as of January 31, 2026 or as of February 1, 2025.

Details regarding the remaining borrowing capacity under the ABL Facility as of January 31, 2026 are as follows:

(in thousands) January 31, 2026

Loan cap $ 500,000

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Refer to Note 13, “ BORROWINGS ,” for additional information.

The Company’s earnings and profits from its foreign subsidiaries could be repatriated to the U.S., without incurring additional federal income tax.

The Company’s earnings and profits from its foreign subsidiaries could be repatriated to the U.S.

without incurring additional federal income tax.

The Company determined that the balance of the Company’s undistributed earnings and profits from its foreign subsidiaries as of February 2, 2019, are considered indefinitely reinvested outside of the U.S., and if these funds were to be repatriated to the U.S., the Company would expect to incur an insignificant amount of state income taxes and foreign withholding taxes.

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 may be repatriated without incurring additional tax expense.

As of February 1, 2025, $257.5 million of the Company’s $772.7 million of cash and equivalents were held by foreign affiliates.

As of January 31, 2026, $245.2 million of the Company’s $759.5 million of cash and equivalents were held by foreign affiliates.

Refer to Note 12, “ INCOME TAXES ,” for additional details regarding the impact certain events related to the Company’s income taxes had on the Company’s Consolidated Financial Statements.

Abercrombie & Fitch Co.

2024 Form 10-K

Analysis of cash flows

The table below provides certain components of the Company’s Consolidated Statements of Cash Flows for Fiscal 2025 and Fiscal 2024:

(in thousands) Fiscal 2024 Fiscal 2023

Fiscal 2025 Fiscal 2024

(in thousands)

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

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Effects of foreign currency exchange rate changes on cash 13,540 (7,086)

Net (decrease) increase in cash and equivalents, and restricted cash and equivalents $ (129,290) $ 382,116

Net decrease in cash and equivalents, and restricted cash and equivalents $ (13,479) $ (129,290)

Cash and equivalents, and restricted cash and equivalents, end of period $ 766,916 $ 780,395

Operating activities - For Fiscal 2024, net cash provided by operating activities included increased cash receipts as a result of the 16% year-over-year increase in net sales as compared to net cash provided by operating activities in Fiscal 2023.

Investing activities - For Fiscal 2024, net cash used for investing activities was primarily attributable to capital expenditures of $182.9 million, as well as the purchase of $140 million in marketable securities and maturity of $25 million in marketable securities as compared to net cash used for investing activities of $157.8 million in Fiscal 2023, primarily attributable to capital expenditures.

Financing activities - For Fiscal 2024, net cash used for financing activities primarily consisted of the repurchase of approximately 1.6 million shares of Common Stock in the open market with a market value of approximately $229.8 million, the repurchase of $9.3 million in the open market and the complete redemption of $214 million of outstanding Senior Secured Notes, and $70.2 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

For Fiscal 2023, net cash used for financing activities primarily consisted of the purchase of $76.5 million of outstanding Senior Secured Notes for $78.0 million, as well as $29.5 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Operating activities - For Fiscal 2025, net cash provided by operating activities decreased by $91.2 million, primarily related to $174.4 million from the impact from changes in accounts payable and accrued expenses related to timing of merchandise and advertising payables and decreased incentive compensation payments.

The decrease was partially offset by $84.8 million in lower inventory receipts compared to Fiscal 2024 and increased cash receipts as a result of the 6% year-over-year increase in net sales.

During Fiscal 2024, net cash provided by operating activities included increased cash receipts as a result of the 16% increase in net sales.

Abercrombie & Fitch Co.

2025 Form 10-K

Investing activities - For Fiscal 2025, net cash used for investing activities decreased by $146.9 million, primarily attributable to capital expenditures of $240.8 million, as well as purchases of $25 million of marketable securities, partially offset by maturities of $115 million of marketable securities.

For Fiscal 2024, net cash used for investing activities was primarily attributable to capital expenditures of $182.9 million, as well as purchases of $139.6 million of marketable securities, partially offset by maturities of $24.8 million in marketable securities.

Financing activities - For Fiscal 2025, net cash used for financing activities decreased by $39.5 million, primarily related to the repurchase of approximately 5.4 million shares of Common Stock with a market value of approximately $450 million, and $36.7 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

For Fiscal 2024, net cash used for financing activities included the repurchase of approximately 1.6 million shares of Common Stock with a market value of approximately $229.8 million, the repurchase of $9.3 million in the open market and redemption of $214 million of outstanding 8.75% Senior Secured Notes, and $70.2 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Contractual Obligations

As of February 1, 2025, the Company’s contractual obligations were as follows:

As of January 31, 2026, the Company’s contractual obligations were as follows:

Payments due by period

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Refer to Note 9, “ LEASES ,” and Note 17, “ SAVINGS AND RETIREMENT PLANS ,” for further discussion.

Due to uncertainty as to the amounts and timing of future payments, tax related to uncertain tax positions, including accrued interest and penalties, of $4.9 million as of February 1, 2025, is excluded from the contractual obligations table.

Due to uncertainty as to the amounts and timing of future payments, tax related to uncertain tax positions, including accrued interest and penalties, of $5.2 million as of January 31, 2026, is excluded from the contractual obligations table.

Deferred taxes are also excluded in the contractual obligations table.

For further discussion, refer to Note 12, “ INCOME TAXES .”

As of February 1, 2025, the Company had recorded $4.4 million and $42.0 million of obligations related to its deferred compensation and supplemental retirement plans in accrued expenses and other liabilities on the Consolidated Balance Sheet, respectively.

As of January 31, 2026, the Company had recorded $4.4 million and $47.0 million of obligations related to its deferred compensation and supplemental retirement plans in accrued expenses and other liabilities on the Consolidated Balance Sheet, respectively.

Amounts payable with known payment dates of $18.0 million have been classified in the contractual obligations table based on those scheduled payment dates.

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therefore, those amounts have been excluded in the contractual obligations table.

Abercrombie & Fitch Co.

2024 Form 10-K

RECENT ACCOUNTING PRONOUNCEMENTS

The Company describes its significant accounting policies in Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent accounting pronouncements .” The Company reviews recent accounting pronouncements on a quarterly basis and has excluded discussion of those not applicable to the Company and those that did not have, or are not expected to have, a material impact on the Company’s consolidated financial statements.

Abercrombie & Fitch Co.

2025 Form 10-K

CRITICAL ACCOUNTING ESTIMATES

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The LCNRV adjustment reduces inventory to its net realizable value based on the Company’s consideration of multiple factors and assumptions, expected sell-off activity, composition and aging of inventory, historical recoverability experience and risk of obsolescence from changes in economic conditions or customer preferences.

The Company does not expect material changes to the underlying assumptions used to measure the LCNRV estimate as of February 1, 2025.

The Company does not expect material changes to the underlying assumptions used to measure the LCNRV estimate as of January 31, 2026.

However, actual results could vary from estimates and could significantly impact the ending inventory valuation at cost, as well as gross profit.

An increase or decrease in the LCNRV adjustment of 10% would have affected pre-tax income by approximately $3.5 million for Fiscal 2025.

The provision for income taxes is determined using the asset and liability approach.

Tax laws often require items to be included in tax filings at different times than the items are being reflected in the financial statements.

A current liability is recognized for the estimated taxes payable for the current year.

Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.

Deferred taxes are adjusted for enacted changes in tax rates and tax laws.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company does not expect material changes in the judgments, assumptions or interpretations used to calculate the tax provision for Fiscal 2025.

However, changes in these judgments, assumptions or interpretations may occur, and should those changes be significant, they could have a material impact on the Company’s income tax provision.

Income Tax Valuation Allowances

The Company records deferred tax assets for deductible temporary differences and tax loss carryforwards.

Management evaluates whether it is more likely than not that these deferred tax assets will be realized based on projected future taxable income, tax planning strategies, and reversal of temporary differences.

All available evidence, both positive and negative, is considered to determine whether, based upon the weight of the evidence, it is more likely than not that some portion or all the deferred tax assets will not be realized.

Greater weight is given to evidence that can be objectively verified such as current and cumulative financial reporting results.

A valuation allowance is not required to the extent that, in the Company’s judgment, sufficient positive evidence exists to conclude that it is more likely than not that recorded deferred tax assets will be realized.

This evaluation requires significant judgment, particularly regarding long term financial projections and the timing of reversals.

Any such reversal of a valuation allowance is recorded as a tax benefit in the financial statements.

These estimates are considered critical accounting estimates because they involve complex judgments about future events and could materially affect our results of operations.

Changes in the Company’s expectations about future taxable income — including those driven by global trade policy and international trade disputes, global economic and financial conditions, changes in consumer demand, supply chain disruptions, or tax law or other regulatory developments — may cause material adjustments to valuation allowances in future periods.

Should the Company’s actual future taxable income by jurisdiction vary from estimates, it could result in increases or reversals of valuation allowances and impacts on our effective tax rate.

As of the end of Fiscal 2025 , the Company had recorded valuation allowances of $184.8 million, of which $178.2 million relates to Switzerland.

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Fair value of the Company’s store-related assets is determined at the individual store level based on the highest and best use of the asset group.

The key assumptions used in the Company’s fair value analysis is comparable market rents.

Store assets that were tested for impairment as of February 1, 2025 and not impaired, had long-lived assets with a net book value of $8.8 million, which included $8.1 million of operating lease right-of-use assets as of February 1, 2025.

Store assets that were previously impaired as of February 1, 2025, had a remaining net book value of $77.6 million, which included $68.8 million of operating lease right-of-use assets, as of February 1, 2025.

The key assumption used in the Company’s fair value analysis is comparable market rents.

A 10% change in cash flows estimated for impairment purposes would not result in a material amount of additional impairment charges.

If actual results are not consistent with the estimates and assumptions used in assessing impairment or measuring impairment losses, there may be a material impact on the Company’s financial condition or results of operation.

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The Company believes that each of the non-GAAP financial measures presented in this “ ITEM 7.

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 do not reflect its future operating outlook, such as certain asset impairment charges, therefore 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.

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Comparable sales

At times, the Company provides comparable sales, defined as the year-over-year percentage change in the aggregate of (1) sales for stores that have been open as the same brand at least one year and whose square footage has not been expanded or reduced by more than 20% within the past year, with the prior fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations, and (2) digital sales with the prior fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations.

The Company provides comparable sales, defined as the year-over-year percentage change in the aggregate of (1) net sales for stores that have been open as the same brand at least one year and square footage has not been expanded or reduced by more than 20% within the past year, with the prior fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations, and (2) digital net sales with the prior fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations.

Comparable sales exclude revenue other than store and digital sales.

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Excluded items

Asset impairment Certain asset impairment charges

Operating income Certain asset impairment charges

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 items

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 items

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.

7 unchanged sentences

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

A reconciliation of financial metrics on a constant currency basis to GAAP for Fiscal 2024 and Fiscal 2023 is as follows:

Reconciliations of non-GAAP financial metrics on a constant currency basis to financial measures calculated and presented in accordance with GAAP for Fiscal 2025 and Fiscal 2024 were as follows:

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

6 unchanged sentences

Excluded items (2)

(38,574) — (80)

Adjusted non-GAAP $ 660,569 $ 740,820 (250)

4 unchanged sentences

Excluded items, net of tax (2)

(0.60) — (0.60)

Adjusted non-GAAP $ 9.86 $ 10.69 $ (0.83)

7 unchanged sentences

We also believe that 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 Fiscal 2024 and Fiscal 2023 were as follows:

Reconciliations 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 Fiscal 2025 and Fiscal 2024 were as follows:

Fiscal 2025 Fiscal 2024

6 unchanged sentences

Adjustments to EBITDA

Asset impairment (1)

Litigation settlement (1)

(38,574) (0.7) — —

3 unchanged sentences

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

Adjusted EBITDA is EBITDA adjusted for asset impairment.

Adjusted EBITDA is EBITDA adjusted for excluded items.

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-K

Item 7. Management’s Discussion and Analysis