ABERCROMBIE & FITCH CO /DE/ 10-Q

Item 1. Financial Statements (Unaudited) Abercrombie & Fitch Co. Condensed Consolidated Statements of Operations and Comprehensive Income (Thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended May 2, 2026 May 3, 2025 Net sales $ 1,113,821 $ 1,097,311 Cost of sales, exclusive of depreciation and amortization 413,838 417,133 Selling expense 431,195 399,937 General and administrative expense 182,754 174,925 Other operating (income) loss, net ( 2,763 ) 3,783 Operating income 88,797 101,533 Interest expense 450 661 Interest income ( 5,737 ) ( 7,444 ) Interest income, net ( 5,287 ) ( 6,783 ) Income before income taxes 94,084 108,316 Income tax expense 25,965 26,577 Net income 68,119 81,739 Less: Net income attributable to noncontrolling interests 985 1,326 Net income attributable to A&F $ 67,134 $ 80,413 Net income per share attributable to A&F Basic $ 1.49 $ 1.63 Diluted $ 1.47 $ 1.59 Weighted-average shares outstanding Basic 44,969 49,214 Diluted 45,677 50,634 Other comprehensive income (loss) Foreign currency translation adjustments, net of tax $ ( 1,081 ) $ 10,662 Derivative financial instruments, net of tax 2,054 ( 12,540 ) Other comprehensive income (loss) 973 ( 1,878 ) Comprehensive income 69,092 79,861 Less: Comprehensive income attributable to noncontrolling interests 985 1,326 Comprehensive income attributable to A&F $ 68,107 $ 78,535 The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements. Abercrombie & Fitch Co. 3 2026 1Q Form 10-Q Table of Contents Abercrombie & Fitch Co. Condensed Consolidated Balance Sheets (Thousands, except par value amounts) (Unaudited) May 2, 2026 January 31, 2026 Assets Current assets: Cash and equivalents $ 594,080 $ 759,540 Marketable securities 25,144 25,036 Receivables 146,042 146,757 Inventories 532,691 601,218 Other current assets 117,202 117,913 Total current assets 1,415,159 1,650,464 Property and equipment, net 686,576 674,079 Operating lease right-of-use assets 1,115,832 997,399 Other assets 235,397 219,932 Total assets $ 3,452,964 $ 3,541,874 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 257,945 $ 377,465 Accrued expenses 425,149 465,549 Short-term portion of operating lease liabilities 262,316 241,265 Income taxes payable 31,708 21,721 Total current liabilities 977,118 1,106,000 Long-term liabilities: Long-term portion of operating lease liabilities 1,030,161 926,830 Other liabilities 91,789 88,633 Total long-term liabilities 1,121,950 1,015,463 Stockholders’ equity Class A Common Stock: $ 0.01 par value: 150,000 shares authorized and 103,300 shares issued for all periods presented 1,033 1,033 Paid-in capital 395,493 421,662 Retained earnings 3,757,114 3,697,814 Accumulated other comprehensive loss, net of tax (“AOCL”) ( 125,195 ) ( 126,168 ) Treasury stock, at average cost: 58,869 and 58,295 shares as of May 2, 2026 and January 31, 2026, respectively ( 2,688,355 ) ( 2,590,446 ) Total Abercrombie & Fitch Co. stockholders’ equity 1,340,090 1,403,895 Noncontrolling interests 13,806 16,516 Total stockholders’ equity 1,353,896 1,420,411 Total liabilities and stockholders’ equity $ 3,452,964 $ 3,541,874 The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements. Abercrombie & Fitch Co. 4 2026 1Q Form 10-Q Table of Contents Abercrombie & Fitch Co. Condensed Consolidated Statements of Stockholders’ Equity (Thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended May 2, 2026 Common Stock Paid-in capital Non-controlling interests Retained earnings AOCL Treasury stock Total stockholders’ equity Shares outstanding Par value Shares At average cost Balance, January 31, 2026 45,005 $ 1,033 $ 421,662 $ 16,516 $ 3,697,814 $ ( 126,168 ) 58,295 $ ( 2,590,446 ) $ 1,420,411 Net income 985 67,134 68,119 Purchase of Common Stock (1) ( 1,156 ) 1,156 ( 105,554 ) ( 105,554 ) Share-based compensation issuances and exercises 582 ( 38,244 ) ( 7,834 ) ( 582 ) 7,645 ( 38,433 ) Share-based compensation expense 12,075 12,075 Derivative financial instruments, net of tax 2,054 2,054 Foreign currency translation adjustments, net of tax ( 1,081 ) ( 1,081 ) Distribution to noncontrolling interests, net ( 3,695 ) ( 3,695 ) Ending balance at May 2, 2026 44,431 $ 1,033 $ 395,493 $ 13,806 $ 3,757,114 $ ( 125,195 ) 58,869 $ ( 2,688,355 ) $ 1,353,896 Thirteen Weeks Ended May 3, 2025 Common Stock Paid-in capital Non-controlling interests Retained earnings AOCL Treasury stock Total stockholders’ equity Shares outstanding Par value Shares At average cost Balance, February 1, 2025 49,735 $ 1,033 $ 422,912 $ 15,695 $ 3,196,724 $ ( 139,151 ) 53,565 $ ( 2,145,890 ) $ 1,351,323 Net income 1,326 80,413 81,739 Purchase of Common Stock (1) ( 2,649 ) 2,649 ( 201,566 ) ( 201,566 ) Share-based compensation issuances and exercises 557 ( 36,753 ) ( 4,480 ) ( 557 ) 7,171 ( 34,062 ) Share-based compensation expense 10,591 10,591 Derivative financial instruments, net of tax ( 12,540 ) ( 12,540 ) Foreign currency translation adjustments, net of tax 10,662 10,662 Distribution to noncontrolling interests, net ( 3,553 ) ( 3,553 ) Ending balance at May 3, 2025 47,643 $ 1,033 $ 396,750 $ 13,468 $ 3,272,657 $ ( 141,029 ) 55,657 $ ( 2,340,285 ) $ 1,202,594 (1) Includes commissions and excise tax on share repurchases Abercrombie & Fitch Co. 5 2026 1Q Form 10-Q Table of Contents Abercrombie & Fitch Co. Condensed Consolidated Statements of Cash Flows (Thousands) (Unaudited) Thirteen Weeks Ended May 2, 2026 May 3, 2025 Operating activities Net income $ 68,119 $ 81,739 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 42,304 38,576 Amortization of capitalized cloud computing arrangement implementation costs 3,118 4,724 Asset impairment 2,185 679 Loss on disposal 677 629 Provision for deferred income taxes 5,116 9,549 Share-based compensation 12,075 10,591 Changes in assets and liabilities: Inventories 68,300 35,511 Accounts payable and accrued expenses ( 159,339 ) ( 168,939 ) Operating lease right-of-use assets and liabilities 5,360 5,048 Income taxes 9,987 7,049 Other assets ( 8,723 ) ( 27,872 ) Other liabilities ( 4,923 ) ( 1,284 ) Net cash provided by (used for) operating activities 44,256 ( 4,000 ) Investing activities Purchases of marketable securities ( 9,800 ) — Proceeds from maturities of marketable securities 9,800 20,000 Purchases of property and equipment ( 61,341 ) ( 50,764 ) Net cash used for investing activities ( 61,341 ) ( 30,764 ) Financing activities Purchases of Common Stock ( 105,018 ) ( 200,000 ) Acquisition of Common Stock for tax withholding obligations ( 38,433 ) ( 34,062 ) Other financing activities ( 4,177 ) ( 451 ) Net cash used for financing activities ( 147,628 ) ( 234,513 ) Effect of foreign currency exchange rates on cash ( 787 ) 7,407 Net decrease in cash and equivalents, and restricted cash and equivalents ( 165,500 ) ( 261,870 ) Cash and equivalents, and restricted cash and equivalents, beginning of period 766,916 780,395 Cash and equivalents, and restricted cash and equivalents, end of period $ 601,416 $ 518,525 Supplemental information related to non-cash activities Purchases of property and equipment accrued in accounts payable $ 58,350 $ 63,113 Excise tax liability accrued on share repurchases 536 1,566 Operating lease right-of-use assets additions, net of terminations, impairments and other reductions 192,539 113,827 Supplemental information related to cash activities Cash paid for income taxes 11,487 9,632 Cash received from income tax refunds 49 319 Cash paid for amounts included in measurement of operating lease liabilities 87,339 73,290 The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements. Abercrombie & Fitch Co. 6 2026 1Q Form 10-Q Table of Contents Abercrombie & Fitch Co. Index for Notes to Condensed Consolidated Financial Statements (Unaudited) Page No. Note 1. NATURE OF BUSINESS 8 Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 8 Note 3. REVENUE RECOGNITION 10 Note 4. NET INCOME (LOSS) PER SHARE 11 Note 5. FAIR VALUE 11 Note 6. PROPERTY AND EQUIPMENT, NET 12 Note 7. LEASES 12 Note 8. ASSET IMPAIRMENT 13 Note 9. INCOME TAXES 13 Note 10. BORROWINGS 14 Note 11. SHARE-BASED COMPENSATION 14 Note 12. DERIVATIVE INSTRUMENTS 16 Note 13. ACCUMULATED OTHER COMPREHENSIVE LOSS 17 Note 14. SEGMENT REPORTING 17 Note 15. CONTINGENCIES 19 Abercrombie & Fitch Co. 7 2026 1Q Form 10-Q Table of Contents Abercrombie & Fitch Co. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. NATURE OF BUSINESS 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 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: Americas; 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. 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying Condensed Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its financial position, results of operations and cash flows. The Company has interests in Emirati and Kuwaiti business ventures with Majid al Futtaim Lifestyle L.L.C. (“MAF”), each of which meets the definition of a variable interest entity (“VIE”). The purpose of the business ventures with MAF is to operate stores in the United Arab Emirates and Kuwait. The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with the noncontrolling interests’ (“NCI”) portions of net income presented as net income attributable to NCI on the Condensed Consolidated Statements of Operations and Comprehensive Income and the NCI portion of stockholders’ equity presented as NCI on the Condensed Consolidated Balance Sheets. Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. This typically results in a fifty-two week year, but occasionally gives rise to an additional week, resulting in a fifty-three week year. Fiscal years are designated in the Condensed Consolidated Financial Statements and notes, as well as the remainder of this Quarterly Report on Form 10-Q, by the calendar year in which the fiscal year commences. All references herein to the Company’s fiscal years are as follows: Fiscal year Year ended/ending Number of weeks Fiscal 2025 January 31, 2026 52 Fiscal 2026 January 30, 2027 52 Fiscal 2027 January 29, 2028 52 Interim financial statements The Condensed Consolidated Financial Statements as of May 2, 2026, and for the thirteen week periods ended May 2, 2026 and May 3, 2025, are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim consolidated financial statements. Accordingly, the Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in A&F’s Annual Report on Form 10-K for Fiscal 2025 filed with the SEC on March 26, 2026 (the “Fiscal 2025 Form 10-K”). The January 31, 2026 consolidated balance sheet data, included herein, were derived from audited consolidated financial statements, but do not include all disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly, in all material respects, the financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for Fiscal 2026. Abercrombie & Fitch Co. 8 2026 1Q Form 10-Q Table of Contents Use of estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. Additionally, these estimates and assumptions may change as a result of the impact of global economic conditions such as the uncertainty regarding a slowing economy, volatility in interest rates, continued inflation, fluctuation in foreign exchange rates, the imposition of, and changes to, tariffs by the U.S. government and certain trading partners, and geopolitical concerns, all of which could result in material impacts to the Company’s consolidated financial statements in future reporting periods. Recent accounting pronouncements The Company reviews recent accounting pronouncements on a quarterly basis and has excluded discussion of those not applicable to the Company and those that did not have, or are not expected to have, a material impact on the Company’s consolidated financial statements. The following table provides a brief description of certain accounting pronouncements the Company has not yet adopted and that could affect the Company’s financial statements. Accounting Standards Update (ASU) Description Effect on the financial statements or other significant matters ASU 2024-03 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ASU 2025-01 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date The updates require a disaggregated disclosure of income statement expenses. The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The updates are effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Other than the new disclosure requirements, the adoption of this guidance will not have a significant impact on the Company’s consolidated financial statements. ASU 2025-06 - Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software The update removes all references to project stages and clarifies that costs may begin to be capitalized once management has authorized the project and it is probable that the project will be completed and the software will be used to perform the function intended. The update specifies disclosure of capitalized internal-use software balance and accumulated amortization at the balance sheet date, the amortization for the period and a general description of the method used in computing amortization. The update is effective for annual periods beginning after December 15, 2027 and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and accompanying notes Condensed Consolidated Statements of Cash Flows reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Condensed Consolidated Statements of Cash Flows: (in thousands) Location May 2, 2026 January 31, 2026 May 3, 2025 February 1, 2025 Cash and equivalents Cash and equivalents $ 594,080 $ 759,540 $ 510,563 $ 772,727 Restricted cash and equivalents (1) Other assets 7,336 7,376 7,962 7,668 Cash and equivalents and restricted cash and equivalents $ 601,416 $ 766,916 $ 518,525 $ 780,395 (1) Restricted cash and equivalents primarily consist of amounts on deposit with banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements. Abercrombie & Fitch Co. 9 2026 1Q Form 10-Q Table of Contents Supply Chain Finance Program Under the supply chain finance (“SCF”) program, which is administered by a third party, the Company’s vendors, at their sole discretion, are given the opportunity to sell receivables from the Company to a participating financial institution at a discount that leverages the Company’s credit profile. The commercial terms negotiated by the Company with its vendors are consistent, irrespective of whether a vendor participates in the SCF program. A participating vendor has the option to be paid by the financial institution earlier than the original invoice due date. The Company’s responsibility is limited to making payment on the terms originally negotiated by the Company with each vendor, regardless of whether the vendor sells its receivable to a financial institution. If a vendor chooses to participate in the SCF program, the Company pays the financial institution the stated amount of confirmed merchandise invoices on the stated maturity date, which is typically 60 days from the invoice date. The agreement with the financial institution does not require the Company to provide assets pledged as security or other forms of guarantees for the SCF program. As of May 2, 2026 and January 31, 2026, $ 49.9 million and $ 75.3 million of SCF program liabilities were recorded in accounts payable in the Condensed Consolidated Balance Sheets, respectively. Amounts are reflected as cash used for operating activities in the Condensed Consolidated Statements of Cash Flows when settled. 3. REVENUE RECOGNITION Disaggregation of revenue All revenues are recognized in net sales in the Condensed Consolidated Statements of Operations and Comprehensive Income. For information regarding the disaggregation of revenue, refer to Note 14, “ SEGMENT REPORTING . ” Contract liabilities The following table details certain contract liabilities representing unearned revenue as of May 2, 2026, January 31, 2026, May 3, 2025, and February 1, 2025: (in thousands) May 2, 2026 January 31, 2026 May 3, 2025 February 1, 2025 Gift card liability (1) $ 40,218 $ 48,057 $ 39,391 $ 45,364 Loyalty programs liability 34,311 36,878 33,065 32,199 (1) Includes $ 13.4 million and $ 9.6 million of revenue recognized during the thirteen weeks ended May 2, 2026 and May 3, 2025, respectively, that was included in the gift card liability at the beginning of January 31, 2026 and February 1, 2025, respectively. The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Revenue associated with gift card redemptions and gift card breakage $ 31,477 $ 30,900 Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs 15,751 15,312 Abercrombie & Fitch Co. 10 2026 1Q Form 10-Q Table of Contents 4. NET INCOME PER SHARE Net income per basic and diluted share attributable to A&F is computed based on the weighted-average number of outstanding shares of A&F’s Class A Common Stock, $0.01 par value (“Common Stock”). The following table provides additional information pertaining to net income per share attributable to A&F for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Shares of Common Stock issued 103,300 103,300 Weighted-average treasury shares ( 58,331 ) ( 54,086 ) Weighted-average — basic shares 44,969 49,214 Dilutive effect of share-based compensation awards 708 1,420 Weighted-average — diluted shares 45,677 50,634 Anti-dilutive shares (1) 851 894 (1) Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net income per diluted share because the impact would have been anti-dilutive. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved from zero up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion. 5. FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs to measure fair value are as follows: • Level 1—inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets that the Company can access at the measurement date. • Level 2—inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities, directly or indirectly. • Level 3—inputs to the valuation methodology are unobservable. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The following table provides the three levels of the hierarchy and the distribution of the Company’s assets measured at fair value on a recurring basis, as of May 2, 2026 and January 31, 2026: Assets and Liabilities at Fair Value as of May 2, 2026 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 189,156 $ 11,187 $ — $ 200,343 Derivative instruments (2) — 367 — 367 Rabbi Trust assets (3) 1,164 55,844 — 57,008 Restricted cash equivalents (1) 3,087 629 — 3,716 Total assets $ 193,407 $ 68,027 $ — $ 261,434 Liabilities: Derivative instruments (2) $ — $ 988 $ — $ 988 Total liabilities $ — $ 988 $ — $ 988 Assets and Liabilities at Fair Value as of January 31, 2026 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 341,768 $ 19,109 $ — $ 360,877 Derivative instruments (2) — 350 — 350 Rabbi Trust assets (3) 1,164 55,443 — 56,607 Restricted cash equivalents (1) 3,089 629 — 3,718 Total assets $ 346,021 $ 75,531 $ — $ 421,552 Liabilities: Derivative instruments (2) $ — $ 2,336 $ — $ 2,336 Total liabilities $ — $ 2,336 $ — $ 2,336 (1) Level 1 assets consisted of investments in money market funds and U.S. treasury bills. Level 2 assets consisted of time deposits with original maturities of less than three months . (2) Level 2 assets and liabilities consisted primarily of foreign currency exchange forward contracts. Abercrombie & Fitch Co. 11 2026 1Q Form 10-Q Table of Contents (3) Level 1 assets consisted of investments in money market funds. Level 2 assets consisted of trust-owned life insurance policies. The Company’s Level 2 assets and liabilities consisted of: • Trust-owned life insurance policies, which were valued using the cash surrender value of the life insurance policies; • Time deposits with original maturities of three months or less, which were recorded at cost, approximating fair value, due to the short-term nature of these investments; and • Derivative instruments, primarily foreign currency exchange forward contracts, which were valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk. The Company also holds certain investments that are not measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets, including held-to-maturity securities. Held-to-maturity securities consist primarily of time deposits with maturities less than one year, which are valued at amortized cost, approximating fair value. 6. PROPERTY AND EQUIPMENT, NET The following table provides property and equipment, net as of May 2, 2026 and January 31, 2026: (in thousands) May 2, 2026 January 31, 2026 Property and equipment, at cost $ 2,865,306 $ 2,815,744 Less: Accumulated depreciation and amortization ( 2,178,730 ) ( 2,141,665 ) Property and equipment, net $ 686,576 $ 674,079 Refer to Note 8, “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during the thirteen weeks ended May 2, 2026 and May 3, 2025. 7. LEASES The Company is a party to leases related to its Company-operated retail stores, as well as for certain of its distribution centers, office space, information technology and equipment. The following table provides a summary of the Company’s operating lease costs for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Single lease cost (1) $ 82,422 $ 69,847 Variable lease cost (2) 47,349 48,575 Operating lease right-of-use asset impairment (3) 668 449 Sublease income ( 1,067 ) ( 988 ) Total operating lease cost $ 129,372 $ 117,883 (1) Includes amortization and interest expense associated with operating lease right-of-use assets and the impact from remeasurement of operating lease liabilities. (2) Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs. (3) Refer to Note 8, “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. The Company had minimum commitments related to operating lease contracts that have not yet commenced, primarily for certain Company-operated retail stores, of approximately $ 53.1 million as of May 2, 2026. Abercrombie & Fitch Co. 12 2026 1Q Form 10-Q Table of Contents 8. ASSET IMPAIRMENT The following table provides asset impairment charges for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Operating lease right-of-use asset impairment $ 668 $ 449 Property and equipment asset impairment 1,517 230 Total asset impairment $ 2,185 $ 679 Asset impairment charges for the thirteen weeks ended May 2, 2026 and May 3, 2025 related to certain of the Company’s store assets, primarily in the EMEA and APAC segments. The store impairment charges for the thirteen weeks ended May 2, 2026 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $ 83.1 million, including $ 63.7 million related to operating lease right-of-use assets. 9. INCOME TAXES The quarterly provision for income taxes is based on the current estimate of the annual effective income tax rate and the tax effect of discrete items occurring during the quarter. The Company’s quarterly provision and the estimate of the annual effective tax rate are subject to significant variation due to several factors. These factors include variability in the pre-tax jurisdictional mix of earnings, changes in how the Company does business including entering into new businesses or geographies, changes in foreign currency exchange rates, changes in laws, regulations, interpretations and administrative practices, relative changes in expenses or losses for which tax benefits are not recognized and the impact of discrete items. In addition, jurisdictions where the Company anticipates an ordinary loss for the fiscal year for which the Company does not anticipate future tax benefits are excluded from the overall computation of estimated annual effective tax rate and no tax benefits are recognized in the period related to losses in such jurisdictions. The impact of these items on the effective tax rate will be greater at lower levels of pre-tax earnings. Impact of valuation allowances During the thirteen weeks ended May 2, 2026, the Company did not recognize income tax benefits on $ 24.9 million of pretax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 3.9 million. As of May 2, 2026, the Company had foreign net deferred tax assets of approximately $ 39.1 million, including $ 13.6 million and $ 13.5 million in the United Kingdom and China, respectively. While the Company believes that these net deferred tax assets are more-likely-than-not to be realized, it is not a certainty, as the Company continues to evaluate and respond to situations as they emerge. Should circumstances change, the net deferred tax assets may become subject to additional valuation allowances in the future. Additional valuation allowances would result in additional tax expense. During the thirteen weeks ended May 3, 2025, the Company did not recognize income tax benefits on $ 10.0 million of pre-tax losses, primarily in Switzerland, resulting in adverse tax impacts of $ 1.5 million. As of January 31, 2026, the Company had foreign net deferred tax assets of approximately $ 35.1 million, including $ 13.2 million, and $ 11.7 million in the United Kingdom and China, respectively. Share-based compensation Refer to Note 11, “ SHARE-BASED COMPENSATION ,” for details on income tax benefits and charges related to share-based compensation awards during the thirteen weeks ended May 2, 2026 and May 3, 2025. Abercrombie & Fitch Co. 13 2026 1Q Form 10-Q Table of Contents 10. BORROWINGS ABL Facility The Amended and Restated Credit Agreement, as amended, of Abercrombie & Fitch Management Co. (“A&F Management”), a wholly-owned indirect subsidiary of A&F, 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 terms of the Company’s ABL Facility have remained unchanged from those disclosed in Note 13, “ BORROWINGS ,” of the Notes to Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data” of the Fiscal 2025 Form 10-K. The Company did not have any borrowings outstanding under the ABL Facility as of May 2, 2026 or as of January 31, 2026. As of May 2, 2026, availability under the ABL Facility was $ 499.5 million, net of $ 0.5 million in outstanding stand-by letters of credit. As the Company must maintain excess availability equal to the greater of 10% of the loan cap or $36 million under the ABL Facility, borrowing capacity available to the Company under the ABL Facility was $ 449.5 million as of May 2, 2026. Representations, warranties and covenants The agreements related to the ABL Facility contain various representations, warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of A&F and its subsidiaries to: grant or incur liens; incur, assume or guarantee additional indebtedness; sell or otherwise dispose of assets, including capital stock of subsidiaries; make investments in certain subsidiaries; pay dividends, make distributions or redeem or repurchase capital stock; change the nature of their business; and consolidate or merge with or into, or sell substantially all of the assets of the Company or A&F Management to another entity. Certain of the agreements related to the ABL Facility also contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance and providing additional guarantees and collateral in certain circumstances. The Company was in compliance with all debt covenants under these agreements as of May 2, 2026. 11. SHARE-BASED COMPENSATION Financial statement impact The following table provides share-based compensation expense and the related income tax impacts for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Share-based compensation expense $ 12,075 $ 10,591 Income tax benefits associated with share-based compensation expense recognized 1,661 1,398 The following table provides discrete income tax benefits and charges related to share-based compensation awards during the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Income tax discrete benefits realized for tax deductions related to the issuance of shares $ 3,559 $ 4,591 The following table provides the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Employee tax withheld upon issuance of shares (1) $ 38,433 $ 34,062 (1) Classified within financing activities on the Condensed Consolidated Statements of Cash Flows. Abercrombie & Fitch Co. 14 2026 1Q Form 10-Q Table of Contents Restricted stock units The following table provides the summarized activity for restricted stock units for the thirteen weeks ended May 2, 2026: Service-based Restricted Stock Units Performance-based Restricted Stock Units Market-based Restricted Stock Units Number of Underlying Shares Weighted- Average Grant Date Fair Value Number of Underlying Shares Weighted- Average Grant Date Fair Value Number of Underlying Shares Weighted- Average Grant Date Fair Value Unvested at January 31, 2026 975,804 $ 66.81 342,566 $ 56.31 171,304 $ 74.95 Granted 357,454 86.47 100,324 86.42 50,168 109.30 Adjustments for performance achievement — — 196,438 28.36 98,224 41.20 Vested ( 426,946 ) 54.00 ( 392,876 ) 28.36 ( 196,448 ) 41.20 Forfeited ( 13,109 ) 71.80 — — — — Unvested at May 2, 2026 (1) 893,203 $ 80.72 246,452 $ 90.85 123,248 $ 115.83 (1) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved from zero up to 200% of their target vesting amount. The following table provides the unrecognized compensation cost and the remaining weighted-average period over which these costs are expected to be recognized for restricted stock units as of May 2, 2026: Service-based Restricted Stock Units Performance-based Restricted Stock Units Market-based Restricted Stock Units Unrecognized compensation cost (in thousands) $ 66,451 $ 15,569 $ 9,337 Remaining weighted-average period cost is expected to be recognized (years) 1.4 1.2 1.2 The following table provides additional information pertaining to restricted stock units for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Service-based restricted stock units: Total grant date fair value of awards granted $ 30,909 $ 31,388 Total grant date fair value of awards vested 23,055 20,341 Performance-based restricted stock units: Total grant date fair value of awards granted 8,670 7,500 Total grant date fair value of awards vested 11,142 9,845 Market-based restricted stock units: Total grant date fair value of awards granted 5,483 4,093 Total grant date fair value of awards vested 8,094 7,214 The following table provides the weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended May 2, 2026 May 3, 2025 Grant date market price $ 86.42 $ 78.69 Fair value 109.30 85.88 Price volatility 60 % 61 % Expected term (years) 2.9 2.9 Risk-free interest rate 3.6 % 3.8 % Average volatility of peer companies 48.2 45.6 Average correlation coefficient of peer companies 0.4229 0.4430 Abercrombie & Fitch Co. 15 2026 1Q Form 10-Q Table of Contents 12. DERIVATIVE INSTRUMENTS The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes. The Company uses derivative instruments, primarily forward contracts designated as cash flow hedges, to hedge the foreign currency exchange rate exposure associated with forecasted foreign-currency-denominated intercompany inventory transactions with foreign subsidiaries before inventory is sold to third parties. Fluctuations in exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These foreign currency exchange forward contracts typically have a maximum term of twelve months. The conversion of the inventory to cost of sales, exclusive of depreciation and amortization, will result in the reclassification of related derivative gains and losses that are reported in AOCL on the Condensed Consolidated Balance Sheets into earnings. The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net monetary assets and liabilities, such as cash balances, receivables and payables. Fluctuations in foreign currency exchange rates result in transaction gains or losses being recorded in earnings, as monetary assets and liabilities are remeasured at the spot exchange rate at quarter-end and upon settlement. The Company has chosen not to apply hedge accounting to these instruments because there are no differences in the timing of gain or loss recognition on the hedging instruments and the hedged items. As of May 2, 2026, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany transactions: (in thousands) Notional Amount (1) Euro $ 59,216 British pound 69,163 Canadian dollar 35,170 (1) Amounts reported are the U.S. dollar notional amounts outstanding as of May 2, 2026. As of May 2, 2026, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge foreign-currency-denominated net monetary assets and liabilities: (in thousands) Notional Amount (1) Euro 17,623 (1) Amounts reported are the U.S. dollar notional amounts outstanding as of May 2, 2026. The fair value of derivative instruments is determined using quoted market prices of the same or similar instruments, adjusted for counterparty risk. The following table provides the location and amounts of derivative fair values of foreign currency exchange forward contracts on the Condensed Consolidated Balance Sheets as of May 2, 2026 and January 31, 2026: (in thousands) Location May 2, 2026 January 31, 2026 Location May 2, 2026 January 31, 2026 Derivatives designated as cash flow hedging instruments Other current assets $ 354 $ 24 Accrued expenses $ 946 $ 2,336 Derivatives not designated as hedging instruments Other current assets 13 326 Accrued expenses 42 — Total $ 367 $ 350 $ 988 $ 2,336 The following table provides information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Net gain (loss) recognized in AOCL (1) $ 1,390 $ ( 11,336 ) Net (loss) gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization (2) ( 695 ) 1,600 (1) Amount represents the change in fair value of derivative instruments. (2) Amount represents gains and losses reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income when the hedged item affects earnings, which is when merchandise is converted to cost of sales, exclusive of depreciation and amortization. Substantially all of the unrealized gain will be recognized in costs of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income over the next twelve months . Abercrombie & Fitch Co. 16 2026 1Q Form 10-Q Table of Contents The following table provides additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Net (loss) gain, net recognized in other operating (income) loss, net $ ( 111 ) $ 366 13. ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables provide activity in AOCL for the thirteen weeks ended May 2, 2026: Thirteen Weeks Ended May 2, 2026 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at January 31, 2026 $ ( 123,535 ) $ ( 2,633 ) $ ( 126,168 ) Other comprehensive (loss) income before reclassifications ( 1,081 ) 1,390 309 Reclassified net loss from AOCL (1) — 695 695 Tax effect — ( 31 ) ( 31 ) Other comprehensive (loss) income after reclassifications ( 1,081 ) 2,054 973 Ending balance at May 2, 2026 $ ( 124,616 ) $ ( 579 ) $ ( 125,195 ) (1) Amount represents gains and losses reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income. The following tables provide activity in AOCL for the thirteen weeks ended May 3, 2025: Thirteen Weeks Ended May 3, 2025 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 1, 2025 $ ( 143,883 ) $ 4,732 $ ( 139,151 ) Other comprehensive income (loss) before reclassifications 10,662 ( 11,336 ) ( 674 ) Reclassified net gain from AOCL (1) — ( 1,600 ) ( 1,600 ) Tax effect — 396 396 Other comprehensive income (loss) after reclassifications 10,662 ( 12,540 ) ( 1,878 ) Ending balance at May 3, 2025 $ ( 133,221 ) $ ( 7,808 ) $ ( 141,029 ) (1) Amount represents gains and losses reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Condensed Consolidated Statements of Operations and Comprehensive Income. 14. SEGMENT REPORTING The Company’s reportable segments are based on the financial information the chief operating decision maker (“CODM”) uses to allocate resources and assess performance of its business. The Company manages its business on a geographic basis, consisting of three reportable segments: Americas; EMEA; and 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. The Americas reportable segment includes the results of operations in North America and South America. The EMEA reportable segment includes the results of operations in Europe, the Middle East and Africa. The APAC reportable segment includes the results of operations in the Asia-Pacific region, including Asia and Oceania. Intersegment sales and transfers are recorded at cost and are treated as a transfer of inventory. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. The group comprised of the Company’s (i) Chief Executive Officer, (ii) Chief Operating Officer, and (iii) Chief Financial Officer functions as the Company’s CODM. The Company’s CODM manages business operations and evaluates the performance of each segment based on the net sales and operating income (loss) of the segment. The CODM considers actual performance relative to expectations and growth potential to determine the appropriate allocation of resources to each segment. Net sales by segment are presented by attributing revenues to a physical store location or geographical region that fulfills the order. Operating income (loss) for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributed to the segment. Corporate/other expenses include expenses incurred that are not directly attributed to a reportable segment and primarily relate to corporate or global functions such as design, sourcing, brand management, corporate Abercrombie & Fitch Co. 17 2026 1Q Form 10-Q Table of Contents strategy, information technology, finance, treasury, legal, human resources, and other corporate support services, as well as certain globally managed components of the planning, merchandising, and marketing functions. The Company reports inventories by segment as that information is used by the CODM in determining allocation of resources to the segments. The Company does not report its other assets by segment as that information is not used by the CODM in assessing segment performance or allocating resources. The following tables provide the Company’s segment information for the thirteen weeks ended May 2, 2026 and May 3, 2025 and as of May 2, 2026, January 31, 2026 and May 3, 2025: Thirteen Weeks Ended May 2, 2026 (in thousands) Americas (1) EMEA APAC Total Net sales $ 899,944 $ 167,373 $ 46,504 $ 1,113,821 Cost of sales, exclusive of depreciation and amortization 334,396 62,841 16,601 413,838 Store occupancy (2) 93,152 34,615 12,431 140,198 Fulfillment (2) 81,550 21,366 5,585 108,501 Other expense (3) 159,917 45,147 12,772 217,836 Segment income (loss) $ 230,929 $ 3,404 $ ( 885 ) $ 233,448 Operating loss not attributed to segments: Corporate and other unallocated expenses (4) ( 144,651 ) Operating income $ 88,797 Interest income, net ( 5,287 ) Income before income taxes $ 94,084 Depreciation and amortization $ 23,615 $ 6,743 $ 2,652 $ 33,010 Depreciation and amortization not attributed to segments 9,294 Total depreciation and amortization $ 42,304 Capital expenditures $ 45,121 $ 12,270 $ 1,081 $ 58,472 Capital expenditures not attributed to segments 2,869 Total capital expenditures $ 61,341 Thirteen Weeks Ended May 3, 2025 (in thousands) Americas (1) EMEA APAC Total Net sales $ 874,804 $ 185,036 $ 37,471 $ 1,097,311 Cost of sales, exclusive of depreciation and amortization 329,923 73,597 13,613 417,133 Store occupancy (2) 84,920 28,974 10,525 124,419 Fulfillment (2) 85,046 23,486 4,933 113,465 Other expense (3) 147,955 42,945 12,810 203,710 Segment income (loss) $ 226,960 $ 16,034 $ ( 4,410 ) $ 238,584 Operating loss not attributed to segments: Corporate and other unallocated expenses (4) ( 137,051 ) Operating income $ 101,533 Interest income, net ( 6,783 ) Income before income taxes $ 108,316 Depreciation and amortization $ 22,955 $ 5,595 $ 2,038 $ 30,588 Depreciation and amortization not attributed to segments 7,988 Total depreciation and amortization $ 38,576 Capital expenditures $ 30,038 $ 8,029 $ 4,022 $ 42,089 Capital expenditures not attributed to segments 8,675 Total capital expenditures $ 50,764 (1) Includes the U.S., Canada, and Latin America. Net sales in the U.S. were $ 0.9 billion and $ 0.8 billion for the thirteen weeks ended May 2, 2026 and May 3, 2025, respectively. (2) Included in selling expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. (3) Other expense includes store payroll, other direct store controllable and marketing expenses included in selling expense, as well as allocated and support related expenses included in general and administrative expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. (4) Corporate and other unallocated expenses represent corporate overhead expenses that have not been allocated to any segment. Abercrombie & Fitch Co. 18 2026 1Q Form 10-Q Table of Contents (in thousands) May 2, 2026 January 31, 2026 May 3, 2025 Assets Inventories Americas $ 425,739 $ 480,078 $ 432,576 EMEA 90,215 94,292 86,582 APAC 16,737 26,848 22,901 Total inventories $ 532,691 $ 601,218 $ 542,059 Assets not attributed to segments 2,920,273 2,940,656 2,554,117 Total assets $ 3,452,964 $ 3,541,874 $ 3,096,176 The Company’s long-lived assets and intellectual property, which primarily relates to trademark assets associated with the Company’s global operations, by geographic area as of May 2, 2026, January 31, 2026 and May 3, 2025 were as follows: (in thousands) May 2, 2026 January 31, 2026 May 3, 2025 Americas (1) (2) $ 1,301,144 $ 1,165,532 $ 1,044,664 EMEA (3) 402,561 398,189 324,531 APAC 116,162 125,433 124,238 Total $ 1,819,867 $ 1,689,154 $ 1,493,433 (1) Includes the U.S., Canada, and Latin America. Long-lived assets and intellectual property located in the U.S. were $ 1.2 billion, $ 1.1 billion, and $ 1.0 billion as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively. (2) Includes intellectual property of $ 2.9 million, $ 2.9 million, and $ 2.9 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively. (3) Includes intellectual property of $ 14.6 million, $ 14.8 million, and $ 16.4 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively. Brand Information The following table provides additional disaggregated revenue information, which is categorized by brand, for the thirteen weeks ended May 2, 2026 and May 3, 2025: Thirteen Weeks Ended (in thousands) May 2, 2026 May 3, 2025 Abercrombie $ 564,719 $ 547,947 Hollister 549,102 549,364 Total $ 1,113,821 $ 1,097,311 15. CONTINGENCIES On February 20, 2026, the U.S. Supreme Court ruling invalidated tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), striking down the 10% universal baseline tariff, as well as the country-specific tariffs. On March 4, 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection to refund IEEPA tariffs that were previously collected. The Company will apply a gain contingency model in accordance with Accounting Standards Codification Topic 450, C ontingencies , to account for potential refunds of previously paid IEEPA tariffs. Under this model, a gain contingency is not recognized in the condensed consolidated financial statements until the gain is realized or realizable. Any refunds, when recognized, would be reflected as a reduction of Inventories on the Condensed Consolidated Balance Sheet to the extent the related goods remain on hand, or as a reduction of Cost of sales in the Condensed Consolidated Statements of Operations and Comprehensive Income for amounts related to goods already sold. 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. As of May 2, 2026, the Company had not recognized any amounts related to any potential refunds.The approval, timing, and amount of any refunds are uncertain. Abercrombie & Fitch Co. 19 2026 1Q Form 10-Q Table of Contents