What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-06-05 compared with 2025-12-05 · 161 added, 372 removed, 270 unchanged (66% of the section changed)

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“Risk Factors,” in the Company’s Fiscal 2025 Form 10-K and otherwise in our subsequent reports and filings with the SEC, as well as the following:

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

• risks related to global operations, including changes in the economic or political conditions where we sell or source our products;

• risks related to the geopolitical landscape and ongoing armed conflicts, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience and the impact of such conflicts or events on international trade, supplier delivery or increased freight costs;

• risks and uncertainties related to global trade policy and international trade disputes, including the impact of the imposition or threat of imposition of new or increased tariffs or modification of existing tariffs by the United States or foreign governments, uncertainty regarding the timing and implementation of changes to existing tariff programs, the availability, timing, and amount of potential tariff refunds, or other changes to trade policies or arrangements;

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

• risks and uncertainties related to the effectiveness and optimization of recently implemented enterprise resource planning (“ERP”) systems, including the ability to realize expected benefits and manage post-implementation activities;

• risks related to our global operations and supply chain, including political or climate-related conditions in the countries where we sell or source our products, and the resulting impacts on transportation and freight costs;

• risks related to the geopolitical landscape and ongoing armed conflicts, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience, including regional conflicts in the Middle East, and the impact of such conflicts or events on international trade, consumer demand, supplier delivery, energy costs, or freight costs;

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

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• risks related to our ability to successfully invest in and execute on our customer, digital and omnichannel initiatives;

• risks related to our ability to successfully execute technology initiatives and partnerships, such as those relating to artificial intelligence technology;

• risks related to our ability to execute on, and maintain the success of, our strategic and growth initiatives;

• risks related to our ability to successfully execute technology initiatives and partnerships, including those relating to artificial intelligence (“AI”) technology;

• risks related to our ability to execute on, and maintain the success of, our current or any future strategic and growth initiatives, including risks related to the review of strategic alternatives for our APAC business;

• risks related to the effects of seasonal fluctuations on our sales and our performance during the back-to-school and holiday selling seasons;

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• risks related to cybersecurity threats and privacy or data security breaches, and the potential loss or disruption of our information technology systems;

• risks and uncertainty related to the implementation of new enterprise resource planning (“ERP”) systems;

• risks related to the continued validity of our trademarks and our ability to protect our intellectual property;

• risks associated with climate change and other corporate responsibility issues;

• risks associated with corporate responsibility, including those associated with climate change;

• risks related to reputational harm to the Company, its officers, and directors;

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• uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing laws and regulations.

In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company, or any other person, that the objectives of the Company will be achieved.

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

Abercrombie & Fitch Co.

2026 1Q Form 10-Q

forward-looking statements, including any financial targets and estimates, whether as a result of new information, future events, or otherwise.

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.

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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 and thirty-nine weeks ended November 1, 2025 and November 2, 2024.

• Results of Operations .

An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen and thirty-nine weeks ended November 1, 2025 and November 2, 2024.

An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen weeks ended May 2, 2026 and May 3, 2025.

• Liquidity and Capital Resources .

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of November 1, 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 thirty-nine weeks ended November 1, 2025, as compared to the thirty-nine weeks ended November 2, 2024;

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of May 2, 2026, which includes (i) an analysis of financial condition as compared to January 31, 2026;

(ii) an analysis of changes in cash flows for the thirteen weeks ended May 2, 2026, as compared to the thirteen weeks ended May 3, 2025;

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.

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Fiscal year Year ended/ending Number of weeks

Fiscal 2024 February 1, 2025 52

Fiscal 2025 January 31, 2026 52

Fiscal 2026 January 30, 2027 52

Fiscal 2027 January 29, 2028 52

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

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Focus areas for Fiscal 2026

The Company introduced the Always Forward Plan in June 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.

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.

The Company’s focus areas for Fiscal 2025 are to:

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 ERP system transformation, including through the implementation of our new merchandising and human capital management systems anticipated in the first half of Fiscal 2026, as well as our cloud migration journey;

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

Over the last several years, A&F has worked to successfully transform its brands, business and culture, while delivering on its financial commitments.

As the Company looks forward, it is 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.

Changes in trade policy and related uncertainty, including enacted and proposed tariffs affecting countries from which we source a significant portion of our merchandise, have resulted in a dynamic and unpredictable trade environment that has adversely impacted our business and operations.

These impacts include volatility in duties on merchandise sourced from impacted countries and added complexity to our supply chain and sourcing processes.

While certain tariffs have been struck down, modified, or replaced, other tariffs have subsequently been imposed or proposed, including the imposition of a temporary 10% global tariff pursuant to Section 122 of the Trade Act of 1974 through July 24, 2026.

Additional, increased, or modified tariffs may be imposed without warning through various statutes and trade authorities, which could lead to weakened business conditions for our industry and could result in increases to the cost of merchandise sourced

Abercrombie & Fitch Co.

2026 1Q Form 10-Q

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 and tariffs

from impacted countries.

Following the February 2026 U.S.

Supreme Court decision invalidating certain tariffs imposed under IEEPA, the Company applied for refunds of IEEPA tariffs previously paid;

however the timing, approval, and amount of such refunds ultimately received remains uncertain.

As of May 2, 2026, the Company had not recognized any refunds of IEEPA tariffs.

Based on current assumptions regarding tariffs on goods imported into the U.S., including the impact of a 10% tariff rate for the fiscal second quarter and a 15% tariff rate thereafter for the remainder of Fiscal 2026, factoring in certain planned mitigation strategies and excluding any refunds of IEEPA tariffs, we expect to incur approximately $10 million of incremental impact, or approximately 20 basis points as a percentage of net sales, compared to Fiscal 2025, which would negatively impact our operating income during Fiscal 2026.

The Company continues to evaluate the impact of tariffs and other trade policies on its business and is executing against our playbook of mitigation strategies, which includes evaluating supply chain footprint changes, supply chain vendor negotiations, pursuing operating expense reductions, and determining ways to increase average unit retail (“AUR”).

Current macroeconomic conditions and global events

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, changes in legislative and regulatory developments during the year, including enacted and proposed tariffs and other trade policies, have introduced further uncertainty in the global economy and have 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.

In response to U.S.-imposed tariffs, certain countries have imposed retaliatory tariffs on U.S.

has reached trade agreements with certain countries.

However, U.S.

tariff rates on imports from other countries and other reciprocal tariffs have remained in effect and are subject to ongoing trade negotiations as of the date of this filing.

It is also possible that further tariffs may be introduced, increased, or that existing tariffs may further change, including as a result of pending court rulings.

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, and/or result in increases to the cost of merchandise sourced from impacted countries.

We continue to evaluate the impact of tariffs and other trade policies on our business and we are continuing to build and execute against 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”) including through lower promotions, lower clearance selling and targeted ticket increases starting post-holiday.

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

based on trade policies in effect as of November 21, 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 our ability to maintain satisfactory margins.

Global events and supply chain disruptions

As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, management is mindful of macroeconomic risks, global challenges and the changing global geopolitical environment.

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

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 also 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.

In addition, 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 and consumer demand in affected markets.

For example, armed conflicts in the Middle East have disrupted, and may continue to affect, consumer demand patterns in affected markets.

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.

Supply chain disruptions

Global supply chain conditions continue to be affected by 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.

As of May 2, 2026, the Company operated 834 retail stores and the Company’s franchisees operated 62 franchise stores across the Company’s regions and brands as detailed in the table below.

Americas EMEA

Company-owned

240 38 31 309

399 101 25 525

Company-owned total

639 139 56 834

Abercrombie 21 9 8 38

Hollister 10 10 4 24

Franchise total

670 158 68 896

For Company-owned gross square footage by geographic region and brand as of January 31, 2026, and February 1, 2025, refer to “ ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ” included in the Fiscal 2025 Form 10-K.

Abercrombie & Fitch Co.

2026 1Q Form 10-Q

Global store network modernization and growth

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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 2026 .

Through the end of the third fiscal quarter, the Company opened 48 new stores, remodeled 24 stores and right-sized eight stores, while closing 10 stores.

Through the end of the first fiscal quarter, the Company opened six new stores, remodeled 24 stores and right-sized two stores, while closing one store.

As part of this focus, the Company’s store investment plan includes delivering approximately 30 net store openings during Fiscal 2026 consisting of opening approximately 50 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 Company’s consolidated financial statements and disclosures.

Abercrombie & Fitch Co.

2025 3Q Form 10-Q

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 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.

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

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Summary of results

The following provides a summary of results for the thirteen and thirty-nine weeks ended November 1, 2025 and November 2, 2024:

The following provides a summary of results for the thirteen weeks ended May 2, 2026 and May 3, 2025:

GAAP Non-GAAP (1)

Thirteen Weeks Ended November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

Net sales (in thousands)

$ 1,290,619 $ 1,208,966

Change in net sales 7 % 14 %

Comparable sales (2)

Operating income (in thousands)

$ 155,021 $ 179,282

Operating income margin

12.0 % 14.8 %

Net income attributable to A&F (in thousands)

$ 112,995 $ 131,979

Net income per share attributable to A&F 2.36 2.50

Thirty-Nine Weeks Ended

Thirteen Weeks Ended May 2, 2026

Net sales (in thousands)

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Operating income margin

12.9 % 14.4 % 11.8 %

Net income attributable to A&F (in thousands)

$ 67,134 $ 80,413

Net income per share attributable to A&F 6.83 7.13 6.24

Net income per diluted share attributable to A&F

(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 November 1, 2025 and February 1, 2025 were as follows:

(in thousands) November 1, 2025 February 1, 2025

Certain components of the Company’s Condensed Consolidated Balance Sheets as of May 2, 2026 and January 31, 2026 were as follows:

(in thousands) May 2, 2026 January 31, 2026

Cash and equivalents $ 594,080 $ 759,540

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Inventories 532,691 601,218

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirty-nine-week periods ended November 1, 2025 and November 2, 2024 were as follows:

(in thousands) November 1, 2025 November 2, 2024

Net cash provided by operating activities $ 313,000 $ 402,756

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirteen-week periods ended May 2, 2026 and May 3, 2025 were as follows:

(in thousands) May 2, 2026 May 3, 2025

Net cash provided by (used for) operating activities $ 44,256 $ (4,000)

Net cash used for investing activities (61,341) (30,764)

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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 and thirty-nine weeks ended November 1, 2025 and November 2, 2024 were as follows:

The Company’s net sales by reportable segment for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) November 1, 2025 November 2, 2024 $ Change % Change Comparable

Americas $ 1,057,448 $ 986,449 $ 70,999 7 % 4 %

EMEA 194,510 181,592 12,918 7 2

APAC 38,661 40,925 (2,264) (6) (12)

Total $ 1,290,619 $ 1,208,966 $ 81,653 7 3

Thirty-Nine Weeks Ended

(in thousands, except ratios) November 1, 2025 November 2, 2024 $ Change % Change Comparable

(in thousands, except ratios) May 2, 2026 May 3, 2025 $ Change % Change Comparable

Americas $ 899,944 $ 874,804 $ 25,140 3 % 1 %

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

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

The increase was primarily attributable to mid-single-digit unit volume growth, with an increase in comparable company owned and operated stores, digital channels, net new owned and operated stores and low-single-digit AUR growth.

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

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

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

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

• Net sales growth in the EMEA region of 7% and 2% on a comparable basis.

The increase was attributable to low-double-digit AUR growth and favorable foreign currency, partially offset by mid-single-digit unit volume decline, with decreases in comparable company owned and operated stores and digital channels.

• Net sales decline in the APAC region of (6)% and (12)% on a comparable basis.

The decline was led by low-double-digit unit volume decline, with decreases in comparable owned and operated store and digital channels, partially offset by mid-single-digit AUR growth.

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 unit volume growth, with increases in comparable company owned and operated stores, digital channels and net new owned and operated stores.

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.

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

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

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

• Net sales growth in the APAC region of 3% and 2% on a comparable sales basis.

The increase was attributable to mid-single digit AUR growth, a high-single digit increase in digital channels, partially offset by a decrease in comparable owned and operated stores.

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

Abercrombie & Fitch Co.

2025 3Q Form 10-Q

The Company’s net sales by brand for the thirteen and thirty-nine weeks ended November 1, 2025 and November 2, 2024 were as follows:

For the first quarter of Fiscal 2026, net sales increased 2%, as compared to the first quarter of Fiscal 2025.

The increase was primarily attributable to low-single-digit AUR growth, driven by selected changes to tickets and promotions, coupled with an increase in new owned and operated stores and favorable foreign currency.

The year-over-year increase in net sales reflects negative comparable sales of (1)%, as compared to the first quarter of Fiscal 2025.

On a geographic basis for the first quarter of Fiscal 2026:

• Net sales growth in the Americas region of 3% and 1% on a reported and comparable sales basis, respectively.

The reported increase was primarily attributable to low-single-digit AUR growth, and low-single-digit direct channel unit volume growth with an increases 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 decline in the EMEA region of (10)% and (11)% on a reported and comparable sales basis, respectively.

The reported decline was attributable lower third-party volume, particularly in the Middle East and other European markets as regional conflict conditions escalated during the quarter, partially offset by a low-single-digit AUR growth and favorable foreign currency.

Direct unit channel volume decreased by high-single digits, with decreases in Company-owned and operated stores and digital channels.

• Net sales growth in the APAC region of 24% and 15% on a reported and comparable sales basis, respectively.

The reported increase was led by high-single-digit AUR growth, higher third-party volume and favorable foreign currency.

Direct unit channel volume increased low-double digits with increases in Company-owned and operated stores and digital channels.

The Company’s net sales by brand for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) November 1, 2025 November 2, 2024 $ Change % Change Comparable

$ 617,345 $ 629,835 $ (12,490) (2) % (7) %

673,274 579,131 94,143 16 15

Total $ 1,290,619 $ 1,208,966 $ 81,653 7 3

Thirty-Nine Weeks Ended

(in thousands, except ratios) November 1, 2025 November 2, 2024 $ Change % Change Comparable

(in thousands, except ratios) May 2, 2026 May 3, 2025 $ Change % Change Comparable

$ 564,719 $ 547,947 $ 16,772 3 % — %

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Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Cost of sales, exclusive of depreciation and amortization $ 483,670 37.5 % $ 422,034 34.9 % 260

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

Cost of sales, exclusive of depreciation and amortization $ 413,838 37.2 % $ 417,133 38.0 % (80)

For the third quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 260 basis points, as compared to the third quarter of Fiscal 2024.

The percentage increase was primarily attributable to higher average unit cost (“AUC”) partially due to an approximate 210 basis point adverse tariff impact, with the remaining impact from product mix compared to the third 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 300 basis points, as compared to the year-to-date period of Fiscal 2024.

The percentage increase was primarily attributable to cost of sales deleverage with AUR approximately flat driven by volume mix and targeted promotions, higher AUC primarily related to an approximate 90 basis point adverse tariff impact, and 40 basis points in higher freight costs compared to the year-to-date period of Fiscal 2024 .

For the first quarter of Fiscal 2026, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 80 basis points, as compared to the first quarter of Fiscal 2025.

The percentage decrease was primarily attributable to cost of sales leverage from a 180 basis point decline in freight costs, a decline in foreign currency and AUR growth driven by selected changes to tickets and promotions, partially offset by 180 basis points of adverse tariff impacts, compared to the first quarter of Fiscal 2025 .

Abercrombie & Fitch Co.

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Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Selling expense $ 459,548 35.6 % $ 420,990 34.8 % 80

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

Selling expense $ 431,195 38.7 % $ 399,937 36.4 % 230

Excluded item:

Litigation Settlement (1)

42,874 1.2 — — 120

Adjusted non-GAAP selling expense

$ 1,277,715 35.5 $ 1,163,565 34.6 90

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

For the third quarter of Fiscal 2025, selling expense increased by $39 million, as compared to the third quarter of Fiscal 2024 .

Selling expense as a percentage of net sales increased 80 basis points, as compared to the third quarter of Fiscal 2024.

The increase in rate was primarily driven by expense deleverage, with an approximate 100 basis point increase in marketing and an approximate 40 basis point increase in store occupancy and payrolls costs, partially offset by approximately 80 basis points in fulfillment expense.

For the year-to-date period of Fiscal 2025, selling expense increased by $71 million as compared to the year-to-date period of Fiscal 2024 .

Selling expense as a percentage of net sales decreased 30 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 120 basis point benefit resulting from the Litigation Settlement and approximately 70 basis points in fulfillment expense, partially offset by an approximate 70 basis point increase in store occupancy and payroll costs and an approximate 60 basis point increase in marketing.

Excluding 120 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 year-to-date period of Fiscal 2025, as compared to the year-to-date period of Fiscal 2024.

Abercrombie & Fitch Co.

2025 3Q Form 10-Q

For the first quarter of Fiscal 2026, selling expense increased by $31 million, as compared to the first quarter of Fiscal 2025 .

Selling expense as a percentage of net sales increased 230 basis points, as compared to the first quarter of Fiscal 2025.

The increase in rate was primarily driven by expense deleverage, with an approximate 190 basis point increase in store occupancy, payroll and other controllable costs, an approximate 90 basis point increase in marketing, partially offset by an approximate 60 basis point decline in fulfillment expense.

General and administrative expense

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

General and administrative expense

$ 193,402 15.0 % $ 188,246 15.6 % (60)

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

1 unchanged sentence

$ 182,754 16.4 % $ 174,925 15.9 % 50

Excluded item:

Litigation Settlement (1)

(4,300) (0.1) — — (10)

Adjusted non-GAAP general and administrative expense

$ 539,352 15.0 $ 555,941 16.5 (150)

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

For the third quarter of Fiscal 2025, general and administrative expense increased by $5 million, as compared to the third quarter of Fiscal 2024 .

General and administrative expense as a percentage of net sales decreased 60 basis points, as compared to the third quarter of Fiscal 2024.

The decrease in expense rate was primarily driven by a 110 basis point decrease in employee compensation costs, partially offset by an approximate 40 basis point increase in outside services expense.

For the year-to-date period of Fiscal 2025, general and administration expense decreased by $12 million, as compared to the year-to-date period of Fiscal 2024.

General and administrative expense as a percentage of net sales decreased 140 basis points as compared to the year-to-date period of Fiscal 2024.

The decrease in expense rate was primarily driven by an approximate 160 basis point decrease in employee compensation costs and approximately 10 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 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 the year-to-date period of Fiscal 2025, decreased by approximately 150 basis points, as compared to the year-to-date period of Fiscal 2024.

For the first quarter of Fiscal 2026, general and administrative expense increased by $8 million, as compared to the first quarter of Fiscal 2025 .

General and administrative expense as a percentage of net sales increased 50 basis points, as compared to the first quarter of Fiscal 2025.

The increase in expense rate was primarily driven by a 60 basis point increase in employee compensation costs, occupancy and other administrative expenses.

Other operating (income) loss, net

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Other operating income, net $ (1,022) (0.1) % $ (1,586) (0.1) % —

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

Other operating loss (income), net $ 2,392 0.1 % $ (3,611) (0.1) % 20

Abercrombie & Fitch Co.

2025 3Q Form 10-Q

Other operating (income) loss, net $ (2,763) (0.2) % $ 3,783 0.3 % (50)

Operating income

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

% of Net sales (1)

Americas $ 288,586 27.3 % $ 304,542 30.9 % (360)

EMEA 21,484 11.0 21,708 12.0 (100)

APAC (6,306) (16.3) (4,181) (10.2) (610)

Operating loss not attributed to segments (148,743) (142,787)

Operating income $ 155,021 12.0 $ 179,282 14.8 (280)

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

5 unchanged sentences

Operating income $ 88,797 8.0 $ 101,533 9.3 (130)

Excluded item:

Litigation Settlement (2)

38,574 1.1 — — 110

Adjusted non-GAAP operating income

$ 424,638 11.8 $ 484,756 14.4 (260)

(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.

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

For the third quarter of Fiscal 2025, operating income decreased by $24 million, or 280 basis points, as a percentage of net sales, as compared to the third quarter of Fiscal 2024.

• Operating income for the Americas region decreased $16 million, or 360 basis points as a percentage of region net sales, as compared to the third quarter of Fiscal 2024.

The decrease as a percent of sales was primarily attributed to higher cost of sales, inclusive of tariffs, and an increase in marketing investments.

• Operating income for the EMEA region decreased $0.2 million or 100 basis points as a percentage of region net sales, as compared to the third quarter of Fiscal 2024.

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

• Operating (loss) for the APAC region increased by $2 million or 610 basis points as a percentage of region net sales, as compared to the third quarter of Fiscal 2024.

The decrease as a percent of sales is primarily attributed to deleverage on marketing investments and general and administrative expenses.

For the year-to-date period of Fiscal 2025, operating income decreased by $22 million compared to the year-to-date period of Fiscal 2024.

As a percentage of net sales operating income decreased 150 basis points compared to the year-to-date period of Fiscal 2024.

• Operating income for the Americas increased $3 million and decreased 200 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 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 $22 million, or 460 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, and deleverage on fulfillment expenses and marketing investments.

• Operating (loss) for APAC increased $9 million, or 760 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 higher cost of sales, and deleverage on store occupancy expenses, partially offset by leverage on general and administrative expenses.

Excluding the benefits related to the Litigation Settlement, adjusted non-GAAP operating income as a percentage of net sales decreased by approximately 260 basis points during the year-to-date period of Fiscal 2025, as compared to the year-to-date period of Fiscal 2024.

For the first quarter of Fiscal 2026, operating income decreased by $13 million, or 130 basis points, as a percentage of net sales, as compared to the first quarter of Fiscal 2025.

• Operating income for the Americas region increased $4 million, and decreased 20 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2025.

The decrease as a percent of sales was primarily attributed to deleverage in marketing investments and store-related expenses, partially offset by cost of sales leverage.

• Operating income for the EMEA region decreased $12.6 million or 670 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2025.

The decrease as a percent of sales is primarily attributed to deleverage in store-related expenses, partially offset by cost of sales leverage.

• Operating (loss) for the APAC region decreased by $3.5 million or 990 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2025.

The decrease as a percent of sales is primarily attributed to leverage in cost of sales, store-related, fulfillment and administrative expenses.

Abercrombie & Fitch Co.

2 unchanged sentences

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Interest expense $ 550 — % $ 569 — % —

Interest income (6,491) (0.5) (9,302) (0.7) 20

Interest income, net $ (5,941) (0.5) $ (8,733) (0.7) 20

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

2 unchanged sentences

Interest income, net $ (5,287) (0.5) $ (6,783) (0.6) 10

For the third quarter of Fiscal 2025, interest income, net decreased $2.8 million, as compared to the third 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 third quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, interest income, net decreased $3.8 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.

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 first quarter of Fiscal 2026, interest income, net decreased $1.5 million, as compared to the first quarter of Fiscal 2025.

The net decrease was a result of a reduction in interest income due to the decrease in balance and yield on time deposits and money market accounts compared to the first quarter of Fiscal 2025.

Income tax expense

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Income tax expense $ 45,862 28.5 % $ 54,151 28.8 %

Income before taxes - GAAP $ 160,962 $ 188,015

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

Income tax expense $ 25,965 27.6 % $ 26,577 24.5 %

Excluded item:

Tax effect of pre-tax excluded items (1)

Adjusted non-GAAP income tax expense $ 128,354 29.2 $ 119,394 23.7

(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 third quarter and year-to-date period of Fiscal 2025, as compared with the third 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.

The change in the effective tax rate for the first quarter of Fiscal 2026, as compared with the first quarter of Fiscal 2025, is due to jurisdictional mix and a lower tax benefit on share-based compensation compared with the prior-year period

Refer to Note 9, “ INCOME TAXES .”

Abercrombie & Fitch Co.

2025 3Q Form 10-Q

Net income attributable to A&F

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Net income attributable to A&F $ 112,995 8.8 % $ 131,979 10.9 % (210)

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

Net income attributable to A&F $ 67,134 6.0 % $ 80,413 7.3 % (130)

Excluded item, net of tax (1)

(28,745) (0.8) — 0.0 (80)

Adjusted non-GAAP net income attributable to A&F

$ 306,046 8.5 $ 378,997 11.3 (280)

(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

November 1, 2025 November 2, 2024 $ Change

May 2, 2026 May 3, 2025 $ Change

Net income per diluted share attributable to A&F

3 unchanged sentences

$ 1.47 $ 1.70 $ (0.23)

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024 $ Change

Net income per diluted share attributable to A&F

$ 6.83 $ 7.13 $ (0.30)

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

(0.59) — (0.59)

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

$ 6.24 $ 7.13 $ (0.89)

Impact from changes in foreign currency exchange rates — (0.06) 0.06

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

$ 6.24 $ 7.07 $ (0.83)

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

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

Abercrombie & Fitch Co.

2025 3Q Form 10-Q

EBITDA AND ADJUSTED EBITDA

Thirteen Weeks Ended

November 1, 2025 November 2, 2024

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

Net income $ 115,100 8.9 % $ 133,864 11.1 % (220)

Income tax expense 45,862 3.6 54,151 4.5 (90)

Interest income, net

(5,941) (0.5) (8,733) (0.7) 20

Depreciation and amortization 38,566 3.0 39,566 3.2 (20)

$ 193,587 15.0 $ 218,848 18.1 (310)

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

May 2, 2026 May 3, 2025

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

5 unchanged sentences

$ 131,101 11.8 $ 140,109 12.8 (100)

Excluded item:

Litigation Settlement (2)

(38,574) (1.1) — 0.0 (110)

Adjusted EBITDA (1)

$ 539,204 15.0 $ 601,366 17.9 (290)

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

(1) EBITDA is a supplemental financial measure that is 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

LIQUIDITY AND CAPITAL RESOURCES

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

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

5 unchanged sentences

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

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

The Company 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.

2 unchanged sentences

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

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

Business - STRATEGY AND KEY BUSINESS PRIORITIES” included in the Fiscal 2024 Form 10-K, including being opportunistic regarding growth opportunities.

Business - STRATEGY AND KEY BUSINESS PRIORITIES” included in the Fiscal 2025 Form 10-K, 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.

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 November 1, 2025, the Company invested $185.2 million towards capital expenditures.

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

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, and information technology.

For the year-to-date period ended May 2, 2026, the Company invested $61.3 million towards capital expenditures.

Total capital expenditures for Fiscal 2026 are expected to be around $225 million.

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

As of November 1, 2025, the Company had cash and cash equivalents of $605.8 million and total liquidity of approximately $1.1 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 May 2, 2026, the Company had cash and cash equivalents of $594.1 million and total liquidity of approximately $1.0 billion, compared with cash and cash equivalents of $759.5 million and total liquidity of approximately $1.2 billion at the beginning of Fiscal 2026 .

Share repurchases

1 unchanged sentence

The 2025 Authorization does not have an expiration date.

During the year-to-date period ended November 1, 2025, the Company repurchased approximately 4.5 million shares of its Common Stock pursuant to the 2025 Authorization for approximately $350 million.

As of November 1, 2025, t he Company had $950 million in share repurchases remaining under the 2025 Authorization.

During the fiscal year-to-date period ended May 2, 2026, the Company repurchased approximately 1.2 million shares of its Common Stock pursuant to the 2025 Authorization for approximately $105 million.

As of May 2, 2026, t he Company had $745 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 shareholders 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 open market or 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.

Shares may be repurchased from time to time in the open market or 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.

4 unchanged sentences

On August 2, 2024, A&F, as parent and a guarantor, A&F 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 the ABL Facility, which is a senior secured asset-based revolving credit facility of up to $500 million.

As of November 1, 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 November 1, 2025 are as follows:

(in thousands) November 1, 2025

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.

As of May 2, 2026, 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 2, 2026 are as follows:

(in thousands) May 2, 2026

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 November 1, 2025, $205.8 million of the Company’s $605.8 million of cash and equivalents were held by foreign affiliates.

As of May 2, 2026, $225.7 million of the Company’s $594.1 million of cash and equivalents were held by foreign affiliates.

Refer to Note 9, “ INCOME TAXES .”

Analysis of cash flows

The table below provides certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended November 1, 2025 and November 2, 2024:

Thirty-Nine Weeks Ended

November 1, 2025 November 2, 2024

The table below provides certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirteen weeks ended May 2, 2026 and May 3, 2025:

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

(in thousands)

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

Net cash provided by operating activities 313,000 402,756

Net cash provided by (used for) operating activities 44,256 (4,000)

Net cash used for investing activities (61,341) (30,764)

3 unchanged sentences

Cash and equivalents, and restricted cash and equivalents, end of period $ 601,416 $ 518,525

Operating activities - During the fiscal year-to-date period ended November 1, 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 November 2, 2024, net cash provided by operating activities included increased cash receipts as a result of the 19% year-over-year increase in net sales.

Investing activities - During the fiscal year-to-date period ended November 1, 2025, net cash used for investing activities was primarily used for capital expenditures of $185 million, as well as the purchase of $15.0 million of marketable securities, partially offset by the maturity of $105 million of marketable securities.

Net cash used for investing activities for the fiscal year-to-date period ended November 2, 2024 was primarily used for capital expenditures of $132.0 million, as well as the purchase of $55.0 million of marketable securities.

Abercrombie & Fitch Co.

2026 1Q Form 10-Q

Financing activities - During the fiscal year-to-date period ended November 1, 2025, net cash used for financing activities included the purchase of approximately 4.5 million shares of Common Stock with a market value of approximately $351 million and $36 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 November 2, 2024, net cash used for financing activities included the repurchase of $9.3 million in the open market and redemption of $214.0 million of outstanding Senior Secured Notes, $69.6 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 0.9 million shares of Common Stock with a market value of approximately $129.8 million.

Operating activities - For the fiscal year-to-date period ended May 2, 2026, net cash provided by operating activities increased by $48.3 million, primarily related to $32.8 million in lower inventory receipts and increased cash receipts as a result of the 2% year-over-year increase in net sales, as well as $9.6 million from the impact from changes in accounts payable and accrued expenses related to the timing of merchandise payables and decreased incentive compensation payments.

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.

Investing activities - For the fiscal year-to-date period ended May 2, 2026, net cash used for investing activities increased by $30.6 million primarily related to capital expenditures of $61.3 million Net cash used for investing activities for the fiscal year-to-date period ended May 3, 2025 was primarily used for capital expenditures of $50.8 million, partially offset by the maturity of $20.0 million of marketable securities.

Financing activities - For the fiscal year-to-date period ended May 2, 2026, net cash used for financing activities included the purchase of approximately 1.2 million shares of Common Stock with a market value of approximately $105.0 million and $38.4 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 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 $200.0 million and $34.1 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Contractual obligations

1 unchanged sentence

These contractual obligations impact the Company’s short-term and long-term liquidity and capital resource needs.

There have been no material changes in the Company’s contractual obligations since February 1, 2025, with the exception of those obligations which occurred in the normal course of business (primarily changes in the Company’s merchandise inventory-related purchases and lease obligations, which fluctuate throughout the year as a result of the seasonal nature of the Company’s operations).

There have been no material changes in the Company’s contractual obligations since January 31, 2026, with the exception of those obligations which occurred in the normal course of business (primarily changes in the Company’s merchandise inventory-related purchases and lease obligations, which fluctuate throughout the year as a result of the seasonal nature of the Company’s operations).

RECENT ACCOUNTING PRONOUNCEMENTS

13 unchanged sentences

Comparable sales

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 year’s net sales converted at the current year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations, and (2) digital net sales with the prior year’s net sales converted at the current year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations.

Abercrombie & Fitch Co.

2026 1Q Form 10-Q

converted at the current year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations.

Comparable sales excludes revenue other than store and digital sales.

1 unchanged sentence

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

Abercrombie & Fitch Co.

2025 3Q 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 and thirty-nine weeks ended November 1, 2025 and November 2, 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 weeks ended May 2, 2026 and May 3, 2025 were as follows:

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

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Net sales November 1, 2025 November 2, 2024 % Change November 1, 2025 November 2, 2024 % Change

Thirteen Weeks Ended

Net sales May 2, 2026 May 3, 2025 % Change

GAAP $ 1,113,821 $ 1,097,311 2 %

1 unchanged sentence

Non-GAAP on a constant currency basis $ 1,113,821 $ 1,108,330 — %

Operating income November 1, 2025 November 2, 2024 BPS Change (1)

November 1, 2025 November 2, 2024 BPS Change (1)

Operating income May 2, 2026 May 3, 2025 BPS Change (1)

GAAP $ 88,797 $ 101,533 (130)

Excluded items (2)

— — — 38,574 — 110

Adjusted non-GAAP $ 155,021 $ 179,282 (280) $ 424,638 $ 484,756 (260)

Impact from changes in foreign currency exchange rates — 7,486 (50)

Adjusted non-GAAP on a constant currency basis $ 155,021 $ 177,430 (260) $ 424,638 $ 479,942 (240)

Net income per share attributable to A&F November 1, 2025 November 2, 2024 $ Change November 1, 2025 November 2, 2024 $ Change

Non-GAAP on a constant currency basis $ 88,797 $ 109,019 (180)

Net income per share attributable to A&F May 2, 2026 May 3, 2025 $ Change

GAAP $ 1.47 $ 1.59 $ (0.12)

Excluded items, net of tax (2)

— — — 0.59 — 0.59

Adjusted non-GAAP $ 2.36 $ 2.50 $ (0.14) $ 6.24 $ 7.13 $ (0.89)

Impact from changes in foreign currency exchange rates — 0.11 (0.11)

Adjusted non-GAAP on a constant currency basis $ 2.36 $ 2.47 $ (0.11) $ 6.24 $ 7.07 $ (0.83)

Non-GAAP on a constant currency basis $ 1.47 $ 1.70 $ (0.23)

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

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

Abercrombie & Fitch Co.

2025 3Q 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 thirty-nine weeks ended November 1, 2025 and November 2, 2024 were as follows:

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 2, 2026 and May 3, 2025 were as follows:

Thirteen Weeks Ended

(in thousands, except ratios) November 1, 2025 % of

Net Sales November 2, 2024 % of

Net income $ 115,100 8.9 % $ 133,864 11.1 %

Income tax expense 45,862 3.6 54,151 4.5

Interest income, net

(5,941) (0.5) (8,733) (0.7)

Depreciation and amortization 38,566 3.0 39,566 3.2

$ 193,587 15.0 $ 218,848 18.1

Thirty-Nine Weeks Ended

(in thousands, except ratios) November 1, 2025 % of

Net Sales November 2, 2024 % of

(in thousands, except ratios) May 2, 2026 % of

Net Sales May 3, 2025 % of

Net income $ 68,119 6.1 % $ 81,739 7.4 %

4 unchanged sentences

$ 131,101 11.8 $ 140,109 12.8

Adjustments to EBITDA

Litigation settlement (2)

(38,574) (1.1) — —

Adjusted EBITDA (1)

$ 539,204 15.0 $ 601,366 17.9

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

(1) EBITDA is a supplemental financial measure that is 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.

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

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis