What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-09-04 compared with 2026-06-05 · 344 added, 105 removed, 326 unchanged (58% of the section changed)

9 unchanged sentences

“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 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 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 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;

29 unchanged sentences

• Current Trends and Outlook .

A discussion related to certain of the Company’s focus areas for the current fiscal year and a discussion of certain risks and challenges, as well as a summary of the Company’s performance for the thirteen weeks ended May 2, 2026 and May 3, 2025.

• Results of Operations .

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

An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025.

• Liquidity and Capital Resources .

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;

A discussion of the Company’s financial condition, changes in financial condition and liquidity as of August 1, 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 twenty-six weeks ended August 1, 2026, as compared to the twenty-six weeks ended August 2, 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.

15 unchanged sentences

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.

The Company operates a family of brands, including Abercrombie brands and Hollister, with a shared commitment to offering products of enduring quality and exceptional comfort that support global customers on their journey to being and becoming who they are.

The Company’s fiscal year ends on the Saturday closest to January 31.

21 unchanged sentences

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

While certain tariffs have been struck down, modified, or replaced, other tariffs remain in effect or have subsequently been imposed under various trade authorities, including tariffs imposed pursuant to Section 301 of the Trade Act of 1974, and additional tariffs may be imposed in the future.

Such tariffs may increase the cost of merchandise or materials sourced from impacted countries, adversely affect our supply chain, and negatively impact our results of operations.

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

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.

During the thirteen weeks ended August 1, 2026, the Company recognized approximately $100 million in refunds plus accrued interest of $3 million of IEEPA tariffs previously paid.

The refunds received were reflected as a reduction of cost of sales, with the accrued interest reflected in interest income in the Condensed Consolidated Statements of Operations and Comprehensive Income.

Subsequent to August 1, 2026, the Company received approximately $18 million in refunds related to IEEPA tariffs, of which approximately $4 million had been recognized as a receivable as of the end of the second quarter of 2026.

The remaining $14 million received will be reflected as a reduction of cost of sales in the third quarter of 2026, with accrued interest reflected in interest income, in the Condensed Consolidated Statements of Operations and Comprehensive Income.

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”).

2 unchanged sentences

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.

During periods of 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.

2 unchanged sentences

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.

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.

As of August 1, 2026, the Company operated 846 retail stores and the Company’s franchisees operated 61 franchise stores across the Company’s regions and brands as detailed in the table below.

Americas EMEA

15 unchanged sentences

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

During the twenty-six weeks ended August 1, 2026, the Company opened 24 new stores, remodeled 40 stores and right-sized five stores, while closing seven stores.

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.

5 unchanged sentences

Summary of results

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

The following provides a summary of results for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025:

GAAP Non-GAAP (1)

Thirteen Weeks Ended May 2, 2026

Thirteen Weeks Ended August 1, 2026

August 2, 2025

August 1, 2026

August 2, 2025

Net sales (in thousands)

5 unchanged sentences

Operating income margin

19.9 % 17.1 % 13.9 %

Net income attributable to A&F (in thousands)

1 unchanged sentence

Net income per diluted share attributable to A&F

4.17 2.91 2.32

Twenty-Six Weeks Ended

Net sales (in thousands)

$ 2,380,510 $ 2,305,871

Change in net sales 3 % 7 %

Comparable sales (2)

Operating income (in thousands)

$ 341,497 $ 308,191 $ 269,617

Operating income margin

14.3 % 13.4 % 11.7 %

Net income attributable to A&F (in thousands)

$ 250,854 $ 221,796 $ 193,171

Net income per diluted share attributable to A&F

5.59 4.47 3.90

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

1 unchanged sentence

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

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

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

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

(in thousands) August 1, 2026 January 31, 2026

Cash and equivalents $ 627,716 $ 759,540

1 unchanged sentence

Inventories 591,662 601,218

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)

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the twenty-six-week periods ended August 1, 2026 and August 2, 2025 were as follows:

(in thousands) August 1, 2026 August 2, 2025

Net cash provided by operating activities $ 313,401 $ 112,893

Net cash used for investing activities (114,357) (31,943)

5 unchanged sentences

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

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

The Company’s net sales by reportable segment for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 were as follows:

Thirteen Weeks Ended

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

(in thousands, except ratios) August 1, 2026 August 2, 2025 $ Change % Change Comparable

Americas $ 1,020,537 $ 974,200 $ 46,337 5 % 1 %

2 unchanged sentences

Total $ 1,266,689 $ 1,208,560 $ 58,129 5 —

Twenty-Six Weeks Ended

(in thousands, except ratios) August 1, 2026 August 2, 2025 $ Change % Change Comparable

Americas $ 1,920,481 $ 1,849,004 $ 71,477 4 % 1 %

EMEA 369,363 382,246 (12,883) (3) (8)

APAC 90,666 74,621 16,045 22 14

Total $ 2,380,510 $ 2,305,871 $ 74,639 3 —

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

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

For the first quarter of Fiscal 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:

For the second quarter of Fiscal 2026, net sales increased 5% on a reported basis and were flat on a comparable sales basis, as compared to the second quarter of Fiscal 2025.

The reported increase was primarily attributable to mid-single-digit AUR growth, driven by selected changes to tickets and promotions, and an increase in new owned and operated stores, which was partially offset by a low-single-digit decline in unit volume.

The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance.

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

• Net sales growth in the Americas region of 5% 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.

The increase on a reported basis was primarily attributable to mid-single-digit AUR growth, with selected changes to tickets and promotions, partially offset by a low-single-digit decline in unit volume.

The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance.

• Net sales growth in the EMEA region of 2% on a reported basis and net sales decline of 4% on a comparable sales basis.

The increase on a reported basis was primarily attributable to low-single-digit AUR growth, with selected lower promotional activity, partially offset by a low-single-digit decline in unit volume.

The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance.

• Net sales growth in the APAC region of 19% and 13% 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:

The increase on a reported basis was led by low-double-digit AUR growth, lower promotional activity, higher third-party volume, and mid-single-digit growth in unit volume.

The spread between net sales and comparable net sales is primarily attributable to third-party channel performance and favorable foreign currency.

For the year-to-date period of Fiscal 2026 , net sales increased 3% on a reported basis and were flat on a comparable sales basis, as compared to the year-to-date period of Fiscal 2025.

The increase on a reported basis was primarily attributable to mid-single-digit AUR growth, driven by selected changes to tickets and promotions, as well as the addition of new owned and operated stores and favorable foreign currency impacts, partially offset by a low-single-digit decline in unit volume.

The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance.

On a geographic basis for the year-to-date period of Fiscal 2026:

• Net sales growth in the Americas region of 4% and 1% on a reported and comparable basis, respectively.

The increase on a reported basis was led by mid-single-digit AUR growth, with selected changes to tickets and promotions, with around flat unit volume.

The spread between net sales and comparable net sales is primarily attributable to net new store openings.

• Net sales decline in the EMEA region of 3% and 8% on a reported and comparable basis, respectively.

The decline on a reported basis was attributable to lower third-party volume, and a mid-single-digit decline in unit volume, partially offset by low-single-digit AUR growth and favorable foreign currency.

The spread between net sales and comparable net sales is primarily attributable to net new store openings, third-party channel performance and favorable foreign currency.

• Net sales growth in the APAC region of 22% and 14% on a reported and comparable sales basis, respectively.

The increase on a reported basis was attributable to high-single digit AUR growth and high-single-digit unit volume growth, coupled with higher third-party volume and favorable foreign currency.

The spread between net sales and comparable net sales is primarily attributable to third-party channel performance, and favorable foreign currency.

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

The Company’s net sales by brand for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 were as follows:

Thirteen Weeks Ended

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

(in thousands, except ratios) August 1, 2026 August 2, 2025 $ Change % Change Comparable

$ 596,808 $ 551,868 $ 44,940 8 % 4 %

1 unchanged sentence

Total $ 1,266,689 $ 1,208,560 $ 58,129 5 —

Twenty-Six Weeks Ended

(in thousands, except ratios) August 1, 2026 August 2, 2025 $ Change % Change Comparable

$ 1,161,527 $ 1,099,815 $ 61,712 6 % 2 %

1,218,983 1,206,056 12,927 1 (2)

Total $ 2,380,510 $ 2,305,871 $ 74,639 3 —

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

2 unchanged sentences

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

Cost of sales, exclusive of depreciation and amortization $ 366,109 28.9 % $ 451,590 37.4 % (850)

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.

2026 1Q Form 10-Q

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Cost of sales, exclusive of depreciation and amortization $ 779,947 32.8 % $ 868,723 37.7 % (490)

For the second quarter of Fiscal 2026, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 850 basis points, as compared to the second quarter of Fiscal 2025.

The percentage decrease was primarily attributable to cost of sales leverage from 690 basis points net tariff benefit which includes the impact of IEEPA tariff refunds and ongoing tariff expense, AUR growth driven by selected changes to tickets and promotions, partially offset by an approximate 20 basis point increase in freight costs.

For the year-to-date period of Fiscal 2026, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 490 basis points, as compared to the year-to-date period of Fiscal 2025.

The percentage decrease was primarily attributable to cost of sales leverage from 290 basis points net tariff benefit which includes the impact of IEEPA tariff refunds and ongoing tariff expense, AUR growth driven by selected changes to tickets and promotions, and an approximate 70 basis point decline in freight costs.

Selling expense

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

Selling expense $ 444,042 35.1 % $ 375,356 31.1 % 400

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.

Excluded item:

Litigation Settlement (1)

— — 42,874 3.5 (350)

Adjusted non-GAAP selling expense

$ 444,042 35.1 $ 418,230 34.6 50

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Selling expense $ 875,237 36.8 % $ 775,293 33.6 % 320

Excluded item:

Litigation Settlement (1)

— — 42,874 1.9 (190)

Adjusted non-GAAP selling expense

$ 875,237 36.8 $ 818,167 35.5 130

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

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

For the second quarter of Fiscal 2026, selling expense increased by $69 million, as compared to the second quarter of Fiscal 2025 .

Selling expense as a percentage of net sales increased 400 basis points, as compared to the second quarter of Fiscal 2025.

The increase in rate was primarily driven by expense deleverage, including an approximate 350 basis point prior year benefit resulting from the favorable settlement of claims to resolve payment card interchange fee litigation (the “Litigation Settlement”), and an approximate 80 basis point increase in total fulfillment expense.

For the year-to-date period of Fiscal 2026, selling expense increased by $100 million, as compared to the year-to-date period of Fiscal 2025 .

Selling expense as a percentage of net sales increased 320 basis points, as compared to the year-to-date period of Fiscal 2025.

The increase in rate was primarily driven by expense deleverage, including an approximate 190 basis point prior year benefit resulting from the Litigation Settlement, an approximate 110 basis point increase in store occupancy, payroll and other controllable costs, and an approximate 70 basis point increase in marketing.

General and administrative expense

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

1 unchanged sentence

$ 204,784 16.2 % $ 175,325 14.5 % 170

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.

Excluded item:

Litigation Settlement (1)

— — (4,300) (0.4) 40

Adjusted non-GAAP general and administrative expense

$ 204,784 16.2 $ 171,025 14.2 200

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

General and administrative expense

$ 387,538 16.3 % $ 350,250 15.2 % 110

Excluded item:

Litigation Settlement (1)

— — (4,300) (0.2) 20

Adjusted non-GAAP general and administrative expense

$ 387,538 16.3 $ 345,950 15.0 130

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

For the second quarter of Fiscal 2026, general and administrative expense increased by $29 million, as compared to the second quarter of Fiscal 2025 .

General and administrative expense as a percentage of net sales increased 170 basis points, as compared to the second quarter of Fiscal 2025.

The increase in expense rate was primarily driven by a 120 basis point increase in total employee compensation costs, and a 70 basis point increase in other outside services, partially offset by an approximate adverse 40 basis point impact in prior year legal fees relating to the Litigation Settlement.

For the year-to-date period of Fiscal 2026, general and administrative expense increased by $37 million, as compared to the year-to-date period of Fiscal 2025.

General and administrative expense as a percentage of net sales increased 110 basis points as compared to the year-to-date period of Fiscal 2025.

The increase in expense rate was primarily driven by an approximate 80 basis point increase in total employee compensation costs an approximate 40 basis point increase in other outside services, offset by an approximate adverse 20 basis point impact in legal fees relating to the Litigation Settlement.

Other operating (income) loss, net

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

Other operating income, net $ (946) (0.1) % $ (369) — % (10)

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Other operating (income) loss, net $ (3,709) (0.2) % $ 3,414 0.1 % (30)

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

Operating income

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

5 unchanged sentences

Operating income $ 252,700 19.9 $ 206,658 17.1 280

Excluded item:

Litigation Settlement (2)

— 0.0 38,574 3.2 (320)

Adjusted non-GAAP operating income

$ 252,700 19.9 $ 168,084 13.9 600

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

% of Net Sales (1)

Americas $ 613,528 31.9 % $ 546,789 29.6 % 230

EMEA 30,648 8.3 40,564 10.6 (230)

APAC (4,281) (4.7) (10,377) (13.9) 920

Operating loss not attributed to segments (298,398) (268,785)

Operating income $ 341,497 14.3 $ 308,191 13.4 90

Excluded item:

Litigation Settlement (2)

— 0.0 38,574 1.7 (170)

Adjusted non-GAAP operating income

$ 341,497 14.3 $ 269,617 11.7 260

(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.

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.

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

For the second quarter of Fiscal 2026, operating income increased by $46 million, or 280 basis points as a percentage of net sales, as compared to the second quarter of Fiscal 2025.

• Operating income for the Americas region increased $63 million, or 470 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2025.

The increase as a percent of sales was primarily attributed to an increase in AUR, cost of sales leverage, inclusive of IEEPA tariff refunds, partially offset by a prior year benefit from the Litigation Settlement included in selling expense, as well as deleverage in fulfillment expenses.

• Operating income for the EMEA region increased $2.7 million, or 110 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2025.

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

• Operating (loss) for the APAC region decreased $2.6 million or 840 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2025.

The decrease as a percent of sales was primarily attributed to leverage in cost of sales on higher AUR, as well as leverage of store-related, marketing and administrative expenses.

• Operating (loss) not attributed to segments increased primarily related to an increase in employee compensation and technology costs.

For the year-to-date period of Fiscal 2026, operating income increased by $33 million compared to the year-to-date period of Fiscal 2025.

As a percentage of net sales, operating income increased 90 basis points compared to the year-to-date period of Fiscal 2025.

• Operating income for the Americas increased $67 million, or 230 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2025.

The increase as a percent of sales was primarily attributed to cost of sales leverage, inclusive of IEEPA tariff refunds, partially offset by a prior year benefit from the Litigation Settlement included in selling expense and deleverage on store-related, and fulfillment expenses.

• Operating income for EMEA decreased $10 million, or 230 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2025.

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

• Operating (loss) for APAC decreased $6 million, or 920 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2025.

The decrease as a percent of sales was primarily attributed to leverage in cost of sales and store-related expenses.

• Operating (loss) not attributed to segments increased primarily related to an increase in employee compensation and technology costs.

Abercrombie & Fitch Co.

2 unchanged sentences

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

2 unchanged sentences

Interest income, net $ (7,591) (0.6) $ (2,474) (0.2) (40)

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.

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Interest expense $ 1,011 — % $ 1,281 0.1 % (10)

Interest income (13,889) (0.5) (10,538) (0.5) —

Interest income, net $ (12,878) (0.5) $ (9,257) (0.4) (10)

For the second quarter of Fiscal 2026, interest income, net increased $5.1 million, as compared to the second quarter of Fiscal 2025.

The net increase was a result of interest income recognized on IEEPA tariff refunds, and an increase in balance and yield on time deposits and money market accounts compared to the second quarter of Fiscal 2025.

For the year-to-date period of Fiscal 2026, interest income, net increased $3.6 million, as compared to the year-to-date period of Fiscal 2025.

The net increase was primarily a result of interest income recognized on IEEPA tariff refunds compared to the year-to-date period of Fiscal 2025.

Income tax expense

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

Income tax expense $ 74,752 28.7 % $ 65,744 31.4 %

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

Excluded item:

Tax effect of pre-tax excluded items (1)

Adjusted non-GAAP income tax expense $ 74,752 28.7 $ 55,795 32.7

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Income tax expense $ 100,717 28.4 % $ 92,321 29.1 %

Excluded item:

Tax effect of pre-tax excluded items (1)

Adjusted non-GAAP income tax expense $ 100,717 28.4 $ 82,372 29.5

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

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

The change in the effective tax rate for the second quarter and year-to-date period of Fiscal 2026, as compared with the second quarter and year-to-date period of Fiscal 2025, is due to higher pre-tax income compared with the prior-year period.

Refer to Note 10, “ INCOME TAXES .”

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

Net income attributable to A&F

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

Net income attributable to A&F $ 183,720 14.5 % $ 141,383 11.7 % 280

Excluded item, net of tax (1)

— — (28,625) (2.4) 240

Adjusted non-GAAP net income attributable to A&F

$ 183,720 14.5 $ 112,758 9.3 520

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Net income attributable to A&F $ 250,854 10.5 % $ 221,796 9.6 % 90

Excluded item, net of tax (1)

— — (28,625) (1.2) 120

Adjusted non-GAAP net income attributable to A&F

$ 250,854 10.5 $ 193,171 8.4 210

(1) Excluded items presented above under “Operating income,” and “Income tax expense.” Refer to “ NON-GAAP FINANCIAL MEASURES ” for further details.

Net income per share attributable to A&F

Thirteen Weeks Ended

May 2, 2026 May 3, 2025 $ Change

August 1, 2026 August 2, 2025 $ Change

Net income per diluted share attributable to A&F

$ 4.17 $ 2.91 $ 1.26

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

— (0.59) 0.59

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

4.17 2.32 1.85

Impact from changes in foreign currency exchange rates — 0.01 (0.01)

Net income per diluted share attributable to A&F on a constant currency basis (1)

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

$ 4.17 $ 2.33 $ 1.84

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025 $ Change

Net income per diluted share attributable to A&F

$ 5.59 $ 4.47 $ 1.12

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

— (0.58) 0.58

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

$ 5.59 $ 3.90 $ 1.69

Impact from changes in foreign currency exchange rates — 0.12 (0.12)

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

$ 5.59 $ 4.02 $ 1.57

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

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

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

EBITDA AND ADJUSTED EBITDA

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

August 1, 2026 August 2, 2025

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

5 unchanged sentences

$ 295,979 23.4 $ 244,082 20.2 320

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

Excluded item:

Litigation Settlement (2)

— — (38,574) (3.2) 320

Adjusted EBITDA (1)

$ 295,979 23.4 $ 205,508 17.0 640

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

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

Net income $ 253,658 10.7 % $ 225,127 9.8 % 90

Income tax expense 100,717 4.2 92,321 4.0 20

Interest income, net

(12,878) (0.5) (9,257) (0.4) (10)

Depreciation and amortization 85,583 3.5 76,000 3.3 20

$ 427,080 17.9 $ 384,191 16.7 120

Excluded item:

Litigation Settlement (2)

— — (38,574) (1.7) 170

Adjusted EBITDA (1)

$ 427,080 17.9 $ 345,617 15.0 290

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

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

Adjusted EBITDA is EBITDA adjusted for excluded items.

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

Abercrombie & Fitch Co.

18 unchanged sentences

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.

For the year-to-date period ended August 1, 2026, the Company invested $129.4 million towards capital expenditures.

Total capital expenditures for Fiscal 2026 are expected to be around $250 million.

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

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 .

As of August 1, 2026, the Company had cash and cash equivalents of $627.7 million and total liquidity of approximately $1.1 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 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.

During the fiscal year-to-date period ended August 1, 2026, the Company repurchased approximately 3.2 million shares of its Common Stock pursuant to the 2025 Authorization for approximately $282 million.

As of August 1, 2026, the Company had $568 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.

8 unchanged sentences

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

As of August 1, 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 August 1, 2026 are as follows:

(in thousands) August 1, 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 May 2, 2026, $225.7 million of the Company’s $594.1 million of cash and equivalents were held by foreign affiliates.

As of August 1, 2026, $208.5 million of the Company’s $627.7 million of cash and equivalents were held by foreign affiliates.

Refer to Note 10, “ INCOME TAXES .”

Analysis of cash flows

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

Thirteen Weeks Ended

May 2, 2026 May 3, 2025

The table below provides certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended August 1, 2026 and August 2, 2025:

Twenty-Six Weeks Ended

August 1, 2026 August 2, 2025

(in thousands)

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

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

Net cash provided by operating activities 313,401 112,893

Net cash used for investing activities (114,357) (31,943)

5 unchanged sentences

2026 2Q Form 10-Q

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.

Operating activities - For the fiscal year-to-date period ended August 1, 2026, net cash provided by operating activities increased by $200.5 million, primarily related to an increase in net income due to the 3% year-over-year increase in net sales and recognition of IEEPA tariff refunds, partially offset by expense deleverage, including the impact of the prior-year benefit resulting from the favorable settlement of claims to resolve payment card interchange fee litigation.

Additionally, operating cash flow benefited from $64.2 million related to changes in accounts payable and accrued expenses, primarily related to the timing of merchandise payables and decreased incentive compensation payments, $45.7 million related to the timing of tax liabilities and resulting payments, $40.3 million primarily related to the timing of collection of receivables, as well as $24.0 million in lower inventory receipts.

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

Investing activities - For the fiscal year-to-date period ended August 1, 2026, net cash used for investing activities increased by $82.4 million primarily related to capital expenditures of $129.4 million, partially offset by the maturity of $34.6 million of marketable securities.

Net cash used for investing activities for the fiscal year-to-date period ended August 2, 2025 was primarily used for capital expenditures of $116.9 million, partially offset by the maturity of $85.0 million of marketable securities.

Financing activities - For the fiscal year-to-date period ended August 1, 2026, net cash used for financing activities included the purchase of approximately 3.2 million shares of Common Stock with a market value of approximately $286.4 million and $38.6 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

During the fiscal year-to-date period ended August 2, 2025, net cash used for financing activities included the purchase of approximately 3.2 million shares of Common Stock with a market value of approximately $251.2 million and $34.8 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Contractual obligations

17 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

Abercrombie & Fitch Co.

2026 2Q 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.

Excluded items

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

Financial measures (1)

Excluded items

Selling expense Litigation Settlement

General and administrative expense Legal fees in connection with the Litigation Settlement

Operating income Litigation Settlement, net of legal fees

Income tax expense (2)

Tax effect of pre-tax excluded items

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

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

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

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

Financial information on a constant currency basis

3 unchanged sentences

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

Reconciliations of non-GAAP financial metrics on a constant currency basis to financial measures calculated and presented in accordance with GAAP for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows:

Reconciliations of non-GAAP financial metrics on a constant currency basis to financial measures calculated and presented in accordance with GAAP for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 were as follows:

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

Thirteen Weeks Ended

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

Thirteen Weeks Ended Twenty-Six Weeks Ended

Net sales August 1, 2026 August 2, 2025 % Change August 1, 2026 August 2, 2025 % Change

GAAP $ 1,266,689 $ 1,208,560 5 % $ 2,380,510 $ 2,305,871 3 %

1 unchanged sentence

Non-GAAP on a constant currency basis $ 1,266,689 $ 1,208,337 5 % $ 2,380,510 $ 2,316,666 3 %

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

Operating income August 1, 2026 August 2, 2025 BPS Change (1)

August 1, 2026 August 2, 2025 BPS Change (1)

GAAP $ 252,700 $ 206,658 280 $ 341,497 $ 308,191 90

Excluded items (2)

— 38,574 (320) — 38,574 (170)

Adjusted non-GAAP $ 252,700 $ 168,084 600 $ 341,497 $ 269,617 260

Impact from changes in foreign currency exchange rates — 787 (10) — 8,273 (30)

Non-GAAP on a constant currency basis $ 252,700 $ 168,871 590 $ 341,497 $ 277,890 230

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

Net income per share attributable to A&F August 1, 2026 August 2, 2025 $ Change August 1, 2026 August 2, 2025 $ Change

GAAP $ 4.17 $ 2.91 $ 1.26 $ 5.59 $ 4.47 $ 1.12

Excluded items, net of tax (2)

— 0.59 (0.59) — 0.58 (0.58)

Adjusted non-GAAP $ 4.17 $ 2.32 $ 1.85 $ 5.59 $ 3.90 $ 1.69

Impact from changes in foreign currency exchange rates — 0.01 (0.01) — 0.12 (0.12)

1 unchanged sentence

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

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

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

A reconciliation of non-GAAP EBITDA to net income, a financial measure calculated and presented in accordance with GAAP, for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows:

(2) Excluded item consists of the favorable Litigation Settlement, net of legal fees

Abercrombie & Fitch Co.

2026 2Q Form 10-Q

EBITDA AND ADJUSTED EBITDA

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

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

A reconciliation of non-GAAP EBITDA to net income, a financial measure calculated and presented in accordance with GAAP, and the adjustments made in calculating Adjusted EBITDA for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 were as follows:

Thirteen Weeks Ended

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

Net Sales May 3, 2025 % of

(in thousands, except ratios) August 1, 2026 % of

Net Sales August 2, 2025 % of

Net income $ 185,539 14.6 % $ 143,388 11.9 %

4 unchanged sentences

$ 295,979 23.4 $ 244,082 20.2

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

Adjustments to EBITDA

Litigation Settlement (2)

— — (38,574) (3.2)

Adjusted EBITDA (1)

$ 295,979 23.4 $ 205,508 17.0

Twenty-Six Weeks Ended

(in thousands, except ratios) August 1, 2026 % of

Net Sales August 2, 2025 % of

Net income $ 253,658 10.7 % $ 225,127 9.8 %

Income tax expense 100,717 4.2 92,321 4.0

Interest income, net

(12,878) (0.5) (9,257) (0.4)

Depreciation and amortization 85,583 3.5 76,000 3.3

$ 427,080 17.9 $ 384,191 16.7

Adjustments to EBITDA

Litigation Settlement (2)

— — (38,574) (1.7)

Adjusted EBITDA (1)

$ 427,080 17.9 $ 345,617 15.0

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

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

Adjusted EBITDA is EBITDA adjusted for excluded items.

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

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