ANF Abercrombie & Fitch Co /De/ - 10-K

Item 1A. Risk Factors

Investing in our securities involves risk. The following risk factors should be read carefully in connection with evaluating our business and the forward-looking statements contained in this Annual Report on Form 10-K. Any of these risk factors could lead to material adverse effects on our business, operating results and financial condition. Additional risks and uncertainties not currently known to us or that we currently do not view as material may also become materially adverse to our business in future periods or if circumstances change.

MACROECONOMIC AND INDUSTRY RISKS.

Failure to engage our customers, anticipate customer demand and changing fashion trends, and manage our inventory commensurately could have a material adverse impact on our business.

Our success largely depends on our ability to anticipate and gauge the fashion preferences of our customers and provide merchandise that satisfies constantly shifting demands in a timely manner. Because we may enter into agreements for the manufacture and purchase of merchandise well in advance of the applicable selling season, we are vulnerable to changes in consumer preferences and demand, pricing shifts, and the sub-optimal selection and timing of merchandise purchases. We expect continuously changing fashion-related trends and consumer tastes to influence future demand for our products. Changes in consumer tastes, fashion trends and brand reputation can have an impact on our financial performance.

Moreover, there can be no assurance that we will continue to anticipate consumer demands and macroeconomic events or to be successful in accurately planning inventory in the future. Changing consumer preferences, spending patterns, and fashion trends, and our ability to anticipate, identify and swiftly respond to them, could adversely impact our sales. Inventory levels for certain merchandise styles no longer considered to be “on trend” may increase, leading to higher markdowns to sell through excess inventory and, therefore, lower than planned margins. Conversely, if we underestimate consumer demand for our merchandise, or if our manufacturers fail to supply quality products in a timely manner, we may experience inventory shortages that we cannot adequately mitigate through expedited inventory production and delivery, which may negatively impact customer relationships, diminish brand loyalty and result in lost sales.

We could also be at a competitive disadvantage if we are unable to effectively leverage data analytics to retrieve timely, customer insights to appropriately respond to customer demands and improve customer engagement through efforts such as marketing activities. Any of these events could significantly harm our operating results and financial condition.

We are also vulnerable to factors affecting inventory flow and availability of inventory. Impacts may be caused by natural disasters, unanticipated climate patterns and events, systems disruptions or outages, or inventory shrinkage due to theft (including by our employees, customers, or through organized retail crime). Such events may significantly impact anticipated customer demand or may impact availability of our inventory. If we are not able to adjust appropriately to such factors, our inventory management may be negatively affected, which could adversely impact our performance and our reputation.

Our failure to operate effectively in a highly competitive and constantly evolving industry could have a material adverse impact on our business.

The sale of apparel, personal care products and accessories for men, women and kids is a highly competitive business with numerous participants, including individual and chain specialty apparel retailers, local, regional, national and global department stores, discount stores, fast-fashion retailers, digitally-native brands, and online-exclusive businesses. Fast fashion, value fashion and off-price retailers have shifted customer expectations of pricing for well-known brands and the proliferation of the digital channel and the rise in popularity of social commerce has encouraged the entry of many new competitors and an increase in competition from established companies. These increases in competition could reduce our ability to retain and grow sales, resulting in an adverse impact to our operating results and business.

We face a variety of challenges in the highly competitive and constantly evolving retail industry, including:

• Anticipating and responding to changing consumer shopping preferences more quickly than our competitors;

• Maintaining favorable brand recognition;

• Effectively marketing our products to consumers across varying demographic markets, including through social media platforms, search engines, and emerging AI-enabled discovery;

• Effectively identifying, evaluating, and competing on new and emerging digital selling platforms and commerce models, including social commerce platforms and AI‑enabled or agentic shopping experiences;

• Effectively establishing and maintaining relationships with organizations, key brand representatives, influencers, athletes, and other celebrities as part of our marketing strategy to promote our brands and products;

• Retaining customers, including our loyalty club members, and the marketing costs to do so and to acquire new customers;

• Developing innovative, high-quality merchandise in styles that appeal to consumers and in ways that favorably distinguish us from our competitors;

• Operating in a highly promotional retail environment;

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

• Engaging in promotional activity and appropriately pricing our products without diminishing the aspirational nature of our brands and brand equity; and

• Identifying and assessing disruptive innovation, by existing or new competitors, that could alter the competitive landscape by: improving the customer experience and heightening customer expectations; transforming supply chain and corporate operations through changes to digital technologies and innovations, including the use of AI and machine learning; and enhancing management decision-making through use of data analytics to develop new consumer insights.

In light of the competitive challenges we face, we may not be able to compete successfully in the future. Additionally, increases in the number or strength of our competitors could reduce our sales, which in turn could have a material adverse effect on our results of operations and financial condition.

Changes in global economic and financial conditions, including the impact on consumer confidence and spending, could have a material adverse impact on our business.

Because we primarily serve individual consumers, our business is sensitive to changes in consumer confidence and discretionary spending levels. In addition, as a global business that sources a significant portion of our merchandise from outside the United States and generates revenue across domestic and international markets, we are exposed to macroeconomic conditions, trade policies, and currency fluctuations that may affect costs and demand across regions.

Uncertainty as to, and the state of, the global economy and global financial condition could have an adverse effect on our operating results and business. Our business is subject to factors that are impacted by worldwide economic conditions, including heightened inflation levels (which has occurred), unemployment levels, consumer credit availability, consumer debt levels, reductions in consumer net worth based on declines in the financial, residential real estate and mortgage markets, bank failures, sales and personal income tax rates, fuel and energy prices, global food supplies, rising or uncertain interest rates, new or increased tariffs, trade disputes, consumer confidence in future economic and political conditions, consumer perceptions of personal well-being and security, the value of the U.S. dollar versus foreign currencies, geopolitical conflicts, and other macroeconomic factors. For example, during Fiscal 2025, the U.S. announced a universal baseline tariff on all U.S. imports, plus additional country-specific tariffs for select countries, including the countries from which we source a predominant portion of our merchandise. As a result, we incurred approximately $90 million of net tariff expense, or 170 basis points as a percent of net sales for Fiscal 2025, which negatively impacted our operating profit in Fiscal 2025. See “ Changes in tariff policy regarding merchandise produced in, and raw materials sourced from, certain countries have and could continue to adversely affect our business ” Other changes in global economic and financial conditions could impact our ability to fund growth and our ability to access external financing in the credit and capital markets.

In addition, our business depends on consumer demand for our merchandise. Consumer confidence and discretionary spending habits, including purchases of our merchandise, can be adversely impacted by recessionary periods, inflation and other macroeconomic conditions adversely impacting levels of disposable income. We may not be able to accurately anticipate or predict consumer demand and behavior, such as taste and purchasing trends, in response to adverse economic conditions, which could result in lower sales, excess inventories and increased mark-downs, all of which could negatively impact our ability to achieve or maintain profitability. In the event that the U.S. and global economy worsens, or if there is a decline in consumer spending levels or other unfavorable conditions, we could experience lower than expected revenues, which could force us to delay or slow the implementation of our growth strategies and adversely impact our results of operations.

The economic conditions and factors described above could adversely impact our results of operations, liquidity and capital resources, and may exacerbate other risks within this section of “ITEM 1A. RISK FACTORS”.

Fluctuations in foreign currency exchange rates and our ability to mitigate the effects of such volatility could have a material adverse impact on our business.

Due to our global operations, we are exposed to foreign currency exchange rate risk with respect to our sales, profits, assets and liabilities denominated in currencies other than the U.S. dollar. In addition, certain of our subsidiaries transact in currencies other than their functional currency, including intercompany transactions, which results in foreign currency transaction gains or losses. Furthermore, we purchase substantially all of our inventory in U.S. dollars. As a result, our sales, gross profit and gross profit rate from global operations will be negatively impacted during periods of a strengthened U.S. dollar relative to the functional currencies of our foreign subsidiaries. Additionally, changes in the effectiveness of our hedging instruments may negatively impact our ability to mitigate the risks associated with fluctuations in foreign currency exchange rates. For example, changes in inventory purchase assumptions have resulted in changes in the effectiveness to certain of our hedging instruments, and we could see similar impacts in future periods.

Fluctuations in foreign currency exchange rates could adversely impact consumer spending, delay or prevent successful penetration into new markets or adversely affect the profitability of our global operations. Certain events could cause uncertainty with respect to trade policies, tariffs and government regulations and actions affecting trade between the U.S. and other countries, have increased global economic and political uncertainty in recent years and could result in volatility of foreign currency exchange rates as these events develop.

Abercrombie & Fitch Co.

2025 Form 10-K

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Our ability to attract customers to our stores depends, in part, on the success of the shopping malls or area attractions that our stores are located in or around.

Our stores are primarily located in shopping malls and other shopping centers. Our sales at these stores are partially dependent upon the volume of traffic in those shopping centers and the surrounding area which, for some centers, has been in decline. Our stores may benefit from the ability of a shopping center’s other tenants and area attractions to generate consumer traffic in the vicinity of our stores and the continuing popularity of the shopping center. We cannot control the loss of an “anchor” tenant or other significant tenant in a shopping mall or area attraction, the development of new shopping malls in the U.S. or internationally, the availability or cost of appropriate locations, the success of individual shopping malls, or the increasing impact of digital channels on shopping mall traffic. Additionally, we face competition with other retailers for prominent locations.

All of these factors may impact our ability to meet our productivity or our growth objectives for our stores and could have a material adverse impact on our financial condition or results of operations. Part of our future growth is dependent on our ability to operate stores in desirable locations, with capital investment and lease costs providing the opportunity to earn a reasonable return. We cannot be sure when or whether such desirable locations will become available at reasonable costs.

The impact of natural disasters, negative climate patterns, public health crises, geopolitical tension, armed conflict, acts of terrorism, social unrest, civil disturbance or disobedience, political crises, and other unexpected and catastrophic events could result in interruptions to our operations, as well as to the operations of our third-party partners, and have a material adverse impact on our business.

Our retail stores, corporate offices, distribution centers, and digital operations, as well as the operations of our vendors and manufacturers, are vulnerable to disruption from natural disasters and other adverse weather events; negative climate patterns; public health crises; geopolitical uncertainty or unrest, such as acts of terrorism, war, civil disturbance or disobedience, and other political instability; power interruptions or infrastructure disruptions; and other catastrophic events. In the past, events of this nature, including public health crises and geopolitical conflict, have disrupted commerce, and future occurrences of such events, whether domestic or international, could similarly disrupt commerce and adversely affect our operations.

These events could disrupt the operations of our corporate offices, global stores, and supply chain and those of our third-party partners, including our vendors and manufacturers. In addition to impacts on global operations, events of this nature could result in a reduction in the availability and quality, and as a result pricing volatility of, raw materials used to manufacture our merchandise, delays in merchandise fulfillment and deliveries, supply chain delays due to closed or reduced-capacity for trade routes and factories, reduced workforces, or scarcity of raw materials, as well as increased fuel and energy costs, which could further increase transportation and freight expenses. With a substantial portion of our merchandise being imported from foreign countries, any failure to obtain merchandise from our foreign manufacturers, or to do so at similar costs and in a timely manner, or to identify suitable substitute manufacturers, could adversely affect our operating results and financial condition.

Events of this nature may also undermine consumer confidence and consumer spending, and adversely affect our operating results by causing, among other things, loss of customers and revenues due to store closures or an inability to respond to customer demand, increased costs to meet consumer demand (which we may not be able to pass on to customers), reduced consumer demand or confidence, and changes in consumers’ discretionary spending habits. In addition, historically, our operations have been seasonal, and natural disasters, adverse weather conditions, or unseasonable weather patterns occurring , may diminish demand for our seasonal merchandise and influence consumer preferences, fashion trends, consumer traffic, and shopping habits.

Other factors that would negatively impact our ability to successfully operate due to the impact of these types of events include, but are not limited to:

• Physical losses to our stores, distribution centers, or offices that may incur costs that exceed our applicable insurance coverage for any necessary repairs to damages or business disruptions;

• Temporary or prolonged store closures, including in situations of severe weather or climate conditions, stay-at-home orders, travel restrictions, impacts of armed conflict, or other concerns related to physical safety.

• Reduced consumer demand or customer traffic to our stores in certain regions due to actual or perceived risks arising from geopolitical instability, armed conflict, or other catastrophic events;

• Delays in, or our ability to complete, planned store openings on the expected terms or timing, or at all based on shortages in labor and materials and delays in the production and delivery of materials;

• Constraints on our liquidity and our ability to access debt or equity capital on attractive terms, or at all, during periods of uncertainty and instability in the global financial markets, which may affect our ability to fund business operations or address maturing liabilities.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

STRATEGIC RISKS.

Changes to our long-term business strategy or a failure to successfully execute on our long-term strategic plans could adversely impact our financial condition and reputation.

While we have successfully executed long-term initiatives, our continued ability to effectively execute on and maintain the results of our long-term business strategy is subject to various risks and uncertainties as described herein. In addition, we may modify or adjust future long-term strategies to meet changes in our business environment.

While we believe that our successful execution and ability to attain certain established goals and targets have contributed to long-term revenue growth and profitability, there is no assurance regarding the extent to which we will realize the anticipated objectives or sustain the financial objectives, if at all, or regarding the timing of such anticipated benefits. Our failure to realize the anticipated objectives or sustain financial objectives established in our long-term strategic plans, which may be due to our inability to execute established long-term target or goals, changes in consumer demand, competition, macroeconomic conditions (including inflation or tariffs), retention of key talent, and other risks described herein, could have a material adverse effect on our business.

If the continued execution and maintenance of our long-term business strategy is not successful, or we do not realize the full objectives to the extent or in the timeline that we anticipate, our financial condition and reputation could be adversely affected.

Our failure to attract, retain, and effectively manage strategic partnerships with third parties could have a material adverse impact on our business.

In order to compete in this highly competitive and constantly evolving industry, at times, we have entered into and plan to continue to enter into new strategic partnerships with third parties to expand our global brand reach, and we may launch new concepts or brands to expand our portfolio. Such strategic partnerships may include sponsorship, wholesale, franchise, or licensing arrangements in which we license our brands and intellectual property for use on products produced, marketed and/or sold by third parties, and licensing arrangements in which we license intellectual property from third parties. Such arrangements are subject to additional risks, including our ability to comply with obligations under the agreements that we have with third parties, the abrupt termination of such arrangements, or actions taken by third-party wholesale, franchise, licensees, or other partners that may materially diminish the value of our intellectual property or our brands’ reputations.

These initiatives, and others that we may engage in to respond to the highly competitive and evolving industry in which we operate, could result in significant financial and operational investments that do not provide the anticipated benefits or desired rates of return and there can be no guarantee that pursuing these investments or strategic partnerships will result in improved operating results.

Our failure to evaluate and manage our global store network could have a material adverse impact on our business.

With the evolution of digital and omnichannel capabilities, customer expectations have shifted and there has been greater pressure for a seamless omnichannel experience across all channels. Through our multi-year global store network optimization initiative, we have taken actions to optimize our store productivity by remodeling, right-sizing or relocating stores to smaller square footage locations, and closing legacy stores. Modernizing and growing our store fleet is an important part of our business strategy and failure to evaluate and manage our global store network could have an adverse impact on our results of operations.

The ability to modify existing leases, to remodel or repurpose existing locations, and to open new stores experiences requires partnership with our landlords. If our partnerships with our landlords were to deteriorate, this could adversely affect the pace of opening new store experiences and/or lead to an increase in store closures. In addition, if there is an increase in events such as landlord bankruptcies, or mall foreclosures, competition between retailers could increase for remaining suitable store locations. Pursuing the wrong opportunities and any delays, cost increases, disruptions or other uncertainties related to those opportunities could adversely affect our results of operations. If our investments in new stores or remodeling and right-sizing existing stores do not achieve appropriate returns, our financial condition and results of operations could be adversely affected.

Although we attempt to open new stores in prominent locations, it is possible that locations which were prominent when we opened our stores may lose favor over time.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Our inability to effectively conduct business in international markets, including as a result of operational, legal, tax, regulatory, political, and economic risks could have a material adverse impact on our business.

We operate on a global basis and are subject to risks associated with operating in international markets that could have a material adverse impact on our business. Such risks include, but are not limited to, the following:

• addressing the different operational requirements present in each country in which we operate, including those related to employment and labor, transportation, logistics, real estate, lease provisions, and local reporting or legal requirements;

• supporting global growth by successfully executing our commercial strategy through local customer- and product-facing teams and certain corporate support functions at our regional headquarters located in Shanghai, China and London, United Kingdom;

• hiring, training, and retaining qualified personnel and maintaining effective labor relations, including in regions where associates are represented by workers’ councils and unions;

• retaining acceptance from local customers;

• managing inventory effectively to meet the needs of existing stores on a timely basis;

• political, civil and social unrest, and instability;

• government regulations affecting trade between the U.S. and other countries, including tariffs and customs laws;

• tax rate volatility and our ability to realize tax benefits resulting from non-U.S. operations;

• managing foreign currency exchange rate risks effectively; and

• the substantial investments of time and resources we make to operate in international markets may not achieve acceptable returns, and sustained declines in revenue or profitability in one or more international regions or operating segments could result in store closures, divestitures, restructuring costs, or impairment losses, all of which could adversely impact our business, profitability, and results of operations; for example, in March 2026, we announced that we are conducting a review of strategic alternatives for our APAC region.

We are subject to U.S. laws related to global operations, including the Foreign Corrupt Practices Act, as well as the laws of the foreign countries in which we operate. Violation of such laws by our overseas operations, associates, or agents, could result in sanctions, penalties, or reputational harm, which could adversely affect our business and operating results.

Our failure to realize the anticipated benefits of our transition to a regional-based organizational model could have a negative impact on our business.

During Fiscal 2023, to drive ongoing brand growth and leverage the knowledge and experience of its regional teams, the Company reorganized its structure and now primarily manages its business on a geographic basis, consisting of three reportable segments: Americas; EMEA, and APAC. As a result of our regional-based organizational model, we have decentralized execution of our commercial strategy in each international region from our global home office to our regional headquarters located in Shanghai, China and London, United Kingdom. Failure to realize the anticipated benefits of our recent transition to a regional-based organizational model could have a negative impact on our business. In addition, realization of the anticipated benefits of this new regional-based organizational model is dependent on the effectiveness of this new operating structure.

OPERATIONAL RISKS.

Failure to protect our reputation could have a material adverse impact on our business.

Our ability to maintain our reputation is critical and public perception about our products or operations, whether justified or not, could impair our reputation, involve us in litigation, damage our brands and have a material adverse impact on our business.

Events that could jeopardize our reputation, include, but are not limited to, the following:

• We fail to maintain high standards for merchandise quality and integrity;

• We fall victim to a cyber-attack, resulting in customer data being compromised;

• We fail to comply with ethical, social, product, labor, health and safety, legal, accounting or environmental standards, or related political considerations;

• Third parties with which we have a business relationship, including our brand representatives and influencer network, and our wholesale, franchise licensing, or marketplace partners, fail to represent our brands in a manner consistent with our brand image or act in a way that harms their reputation;

• Misconduct or illegal activities by our current and former associates, directors, advisors, third-party business partners, or others affiliated, or perceived to be affiliated, with the Company;

• Third-party vendors fail to comply with our Vendor Code of Conduct or any third parties with which we have a business relationship fail to represent our brands in a manner consistent with our brand image;

• Unfavorable media publicity, influencer reviews on social media, or negative consumer perception of our products, operations, brand or experience; and

• Our position or perceived lack of position on corporate social responsibility topics, public policy or other similar issues and any perceived lack of transparency about those matters.

Abercrombie & Fitch Co.

2025 Form 10-K

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In addition, in recent years there has been an increase in media platforms, particularly, social media and our use of social media platforms is an important element of our omnichannel marketing efforts. As social media continues to be an important channel for customer engagement, our brands’ interactions may be subject to heightened public scrutiny. Given the unpredictable nature of consumer reactions to social media messaging, our efforts may not resonate as intended and could result in negative public attention or reputational harm. For example, we maintain various social media accounts for our brands, including Instagram, TikTok, Facebook, X (f/k/a Twitter), SnapChat, and Pinterest accounts. Negative publicity or actions taken by individuals that we partner with, such as brand representatives, influencers or our associates, that fail to represent our brands in a manner consistent with our brand image or act in a way that harms their reputation, whether through our social media accounts or their own, could harm our brand reputation and materially impact our business. Social media also allows for anyone to provide public feedback, which could influence perceptions of our brands and reduce demand for our merchandise.

Our reputation also depends on the success of our corporate social responsibility and sustainability initiatives, which require Company-wide coordination and alignment on managing related risks and costs and may ultimately not be successful. Increased focus by governmental and nongovernmental organizations, regulators, investors, employees, and consumers on matters such as climate change, human capital, labor, and risk oversight heightens the risk of negative public reaction, public backlash, or pressure regarding our disclosures, initiatives, products, or practices related to sustainability or social issues, which could adversely affect our reputation, business operations, and financial results. These risks also include increased regulatory and stakeholder pressure to expand disclosures, make commitments, set targets, or establish additional goals and take actions to meet them, which could expose us to business, legal, market, reputational, operational, and execution risks and costs. If we announce such initiatives or goals, we may fail, or be perceived to fail, to appropriately set, timely meet, or report our progress, or act responsibly with respect to such initiatives or goals. In addition, divergent stakeholder perspectives regarding environmental, social, and governance, and other corporate responsibility matters, may result in criticism of the nature, scope, or revision of our initiatives or goals, and we may not be able to satisfy all expectations, potentially leading to negative publicity, consumer backlash (including boycotts), and adverse impacts on our reputation, results of operations, financial condition, and cash flows.

Damage to our reputation and loss of consumer confidence for these or any other reasons could lead to adverse consumer actions, including boycotts, have negative impacts on investor perception and could impact our ability to attract and retain the talent necessary to compete in the marketplace or to attract or retain business partners for third-party relationships such as licensing or franchise arrangements, all of which could have a material adverse impact on our business, as well as require additional resources to rebuild our reputation.

Failure to continue to successfully manage the complexities of our omnichannel operations and of our customers’ omnichannel shopping experience, or failure to continue to successfully invest in customer, digital and omnichannel initiatives could have a material adverse impact on our business.

As omnichannel retailing continues to evolve, our customers increasingly interact with our brands through a variety of digital and physical spaces, and expect seamless integration across all touchpoints. As our success depends on our ability to effectively manage the complexities of our omnichannel operations and of our customers’ omnichannel shopping experience, including our ability to respond to shifting consumer traffic patterns, receive and fulfill orders, and engage our customers, we have made significant investments and operational changes to develop our digital and omnichannel capabilities globally. Such investments and operational changes include the development of localized fulfillment, shipping and customer service operations, investments in digital media to attract new customers, and the rollout of omnichannel capabilities listed in “ ITEM 1. BUSINESS ” of this Annual Report on Form 10-K.

While we must keep up to date with technology trends in the retail environment in order to manage our successful omnichannel shopping experience, it is possible these initiatives may not provide the anticipated benefits or desired rates of return. For example, we could be at a competitive disadvantage if we are unable to effectively collect data and leverage data analytics to retrieve timely, customer insights to appropriately respond to customer demands and improve customer engagement across channels or if innovative digital products and features we develop are not utilized or received by customers as anticipated.

In addition, digital operations are subject to numerous risks, including reliance on third-party computer hardware/software and service providers, data breaches, the variability of the rate of merchandise returns, violations of evolving government interpretations of laws and regulations, including those relating to online privacy, credit card fraud, telecommunication failures, electronic break-ins and similar compromises, and disruption of services. Changes in foreign governmental regulations and interpretations may also negatively impact our omnichannel operations, including our ability to accept orders and deliver product to our customers. Failure to successfully respond to these risks may adversely affect sales as well as damage the reputation of our brands.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

If our information technology systems are disrupted or fail to operate effectively, or if we are unable to successfully implement new technology, including significant system upgrades, our business and results of operations could be adversely affected.

We rely heavily on our own information technology systems and on third-party systems in both our customer-facing and corporate operations to operate our websites and mobile apps; process transactions; respond to customer inquiries; manage inventory; purchase, sell, and ship merchandise; maintain our loyalty programs; manage our workforce; and support other customer-facing and business objectives. Given the significant number of transactions completed annually, the effective and secure operation of our computer hardware, telecommunications, and software systems is critical. Despite efforts to prevent such occurrences, our systems may be vulnerable from time to time to damage or interruption resulting from computer viruses, power interruptions or outages, system failures, third-party intrusions, inadvertent or intentional breaches by our associates, third-party service providers or business partners, or threat actors, and other technical malfunctions. The increasing sophistication, availability, and use of AI by threat actors further elevates these risks. If our systems are damaged, fail to function properly, or become outdated relative to those of our competitors, we may be required to make significant investments to repair or replace such systems and could experience operational delays or disruptions.

We have made and expect to continue to make significant investments of capital, time, and management attention to modernize our core systems, and the effectiveness of these investments may be less predictable than others and may fail to deliver the anticipated benefits or returns. As part of these efforts, we began a multi‑year process to upgrade our merchandising ERP system and to implement a new human capital management system. In March 2026, we went live with a new merchandising ERP system. The transition to the new system temporarily impacted operations, including limiting inventory receipts and movement across the business, which is expected to unfavorably affect net sales during the first quarter of Fiscal 2026. We also expect to incur additional implementation‑related costs, which are expected to unfavorably impact our operating margin during the first quarter of Fiscal 2026.

Additional system upgrades and transformation activities are expected to continue in phases over the next few years. System upgrades and implementations involve inherent risks, including system disruptions, inaccurate system information, changes to internal control processes, increased operating and administrative costs, demands on management time, and challenges with user adoption. Any failure, disruption, or delay in implementing or operating new or upgraded systems, particularly during peak selling periods, could adversely impact our ability to manage our inventory, fulfill customer orders, or it may cause information to be lost or delayed, including data related to customer orders. Such investments may not provide the anticipated benefits or desired rates of returns.

Additionally, we rely on third-party vendors and platforms for certain information technology processes, including point-of-sale, digital operations, inventory management, supply chain, planning, sourcing, merchandising, payroll, scheduling, financial reporting, and managing third-party relationships, including our brand representatives and influencer network, and our wholesale, franchise licensing, or marketplace partners. This reliance increases our exposure to failures by such third parties to perform adequately or maintain effective internal controls, which could disrupt our operations or adversely affect our business.

We may be exposed to risks and costs associated with cyber-attacks, data protection, credit card fraud, and identity theft that could have a material adverse impact on our business.

In the standard course of business, we receive and maintain confidential information about customers, associates and other third parties. In addition, third parties also receive and maintain certain confidential information. Protection of this information is critical to our business and may subject us to laws, rules and regulations domestically and in foreign jurisdictions. The retail industry in particular has been the target of many cyber-attacks and it is possible that an individual or group could defeat our security measures, or those of a third-party service provider or business partner, and access confidential information about our business, customers and associates. Further, like other companies in the retail industry, during the ordinary course of business, we and our vendors have in the past experienced, and we expect to continue to experience, cyber-attacks of varying degrees and types, including phishing, and other attempts to breach, or gain unauthorized access to, our and our vendors’ systems. To date, cyber-attacks have not had a material impact on our operations, but we cannot provide assurance that cyber-attacks will not have a material impact in the future.

We have experienced, and expect to continue to experience, increased costs associated with protecting confidential information through the implementation of security technologies, processes and procedures, including training programs for associates to raise awareness about phishing, malware and other cyber risks, especially as we implement new technologies, such as new payment capabilities or updates to our mobile apps and websites. Additionally, the techniques and sophistication used to conduct cyber-attacks and breaches of information technology systems change frequently and increase in complexity and are often not recognized until such attacks are launched or have been in place for a period of time. For example, as AI continues to evolve, cyber-attackers could also use AI to develop or hone their attacks. We (or the third parties on which we rely) may not have the resources or technical sophistication to sufficiently anticipate, prevent, or immediately identify and remediate cyber-attacks.

Furthermore, the global regulatory environment is increasingly complex and demanding with frequent new and changing requirements surrounding information security and privacy, including new regulations potentially applicable to public companies in the United States, China’s Cybersecurity Law, the California Consumer Privacy Act, and the European Union’s General Data Protection Regulation. We may incur significant costs related to compliance with these laws and failure to comply with these regulatory standards, and others, could have a material adverse impact on our business.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

We have also implemented a flexible work policy allowing most of our corporate associates to work remotely, from time to time, as have certain of our third-party vendors. Offsite working by associates, which requires increased use of public internet connection, and use of office equipment off premises may make our business more vulnerable to cybersecurity breach attempts, phishing and other scams, fraud, money laundering, theft and other criminal activity.

If we, or a third-party who has access to our info, were to fall victim to a successful cyber-attack or suffer intentional or unintentional data and security breaches by associates or third parties, it could have a material adverse impact on our business, especially an event that compromises customer data or results in the unauthorized release of confidential business or customer information. In addition, if we are unable to avert a denial of service attack that renders our website inoperable, it could result in negative consequences, such as lost sales and customer dissatisfaction. Additional negative consequences that could result from these and similar events may include, but are not limited to:

• remediation costs, such as liability for stolen assets or information, potential legal settlements to affected parties, repairs of system damage, and incentives to customers or business partners in an effort to maintain relationships after an attack;

• increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training associates, and engaging third party experts and consultants;

• lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack;

• litigation and legal risks, including costs of litigation and regulatory, fines, penalties or actions by domestic or international governmental authorities;

• increased insurance premiums, or the ability to obtain insurance on commercially reasonable terms;

• reputational damage that adversely affects customer or investor confidence; and

• damage to the Company’s competitiveness, stock price, and long-term stockholder value.

Although we maintain cybersecurity insurance, there can be no assurance that it will be sufficient for a specific cyber incident, or that insurance proceeds will be paid to us in a timely fashion.

Use of artificial intelligence technologies by us and our service providers could subject us to operational, technological, and business risks that could adversely affect our business.

The use of rapidly evolving technologies, such as AI technologies, by us and our third-party service providers presents risks and challenges to our business. Using AI and other machine learning technologies may expose us to unintended outcomes, liability, reputational harm, particularly if such technology produces errors or hallucinations, results in content that is biased, infringes on intellectual property, or otherwise does not function as intended. Moreover, with the use of certain AI and other machine learning technologies, including those licensed from third parties, there may be a lack of transparency regarding how such technologies generate outputs, and we may not be able to fully validate their accuracy or reliability. To the extent that we rely on AI‑enabled tools to support operational processes or decision‑making, limitations in model performance, data quality, or human oversight could adversely affect our operations, customer experience, or financial performance.

The use of AI and other machine learning technologies, by us or our service providers, in connection with the creation or development of intellectual property may present challenges in asserting ownership over the resulting output. Further, the use of such technologies may increase the risk that confidential information becomes accessible by third parties or results in legal or regulatory exposure. We also rely on third-party service providers that may use AI in their business activities, and failures by one or more of such service providers to meet our expectations may have an adverse effect on our operations or financial condition.

Changes in the cost, availability and quality of raw materials, transportation and labor, including changes due to trade relations could have a material adverse impact on our business.

Changes in the cost, availability and quality of the fabrics or other raw materials used to manufacture our merchandise could have a material adverse effect on our cost of sales, or our ability to meet customer demand. The prices for such fabrics depend largely on the market prices for the raw materials used to produce them, particularly cotton. The price and availability of such raw materials may fluctuate significantly, depending on many factors, including crop yields, weather patterns and other unforeseen events. For example, significant inflationary pressures have and may continue to impact the cost of labor, cotton and other raw materials. Increased global uncertainty has also impacted and may in the future impact the cost, availability and quality of the fabrics or other raw materials used to manufacture our merchandise, and compliance with sanctions, customs trade orders and sourcing laws could impact the price of cotton in the marketplace and the global supply chain.

Fluctuations in the cost of transportation could also have a material adverse effect on our cost of sales and ability to meet customer demand. We primarily use 7 contract carriers to ship merchandise and related materials to our North American customers, and several contract carriers for our global customers. If the shipping operations of these third parties were disrupted, and we are unable to respond in a quick and efficient manner, our ability to replace inventory in our stores and process digital and third-party orders could be interrupted, potentially resulting in adverse impacts to sales or increased costs. Furthermore, we are susceptible to increases in fuel costs which may increase the cost of distribution. If we are not able to pass this cost on to our customers, our financial condition and results of operations could be adversely affected.

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In addition, we have experienced increasing wage pressures in recent years related to the cost of labor at our third-party manufacturers, at our distribution centers and at our stores. For example, recent government initiatives in the U.S. or changes to existing laws, such as the adoption and implementation of national, state, or local government proposals relating to increases in minimum wage rates, may increase our costs of doing business and adversely affect our results of operations. We may not be able to pass all or a portion of higher labor costs on to our customers, which could adversely affect our gross margin and results of operations.

We depend upon independent third parties for the manufacture and delivery of our merchandise, and a disruption of the manufacture or delivery of our merchandise could have a material adverse impact on our business.

We depend on third parties for the manufacture and delivery of our merchandise. As a result, the continued success of our operations is tied to our timely receipt of quality merchandise from third-party manufacturers. We source the majority of our merchandise outside of the U.S. through arrangements with approximately 124 vendors, primarily located in southeast Asia. Political, social or economic instability in the regions in which our manufacturers are located could cause disruptions in trade, including exports to the U.S. and EMEA. In addition, the inability of vendors to access liquidity, or the insolvency of vendors, could lead to their failure to deliver merchandise to us. A manufacturer’s inability to ship orders in a timely manner or meet our quality standards could cause delays in responding to consumer demand and negatively affect consumer confidence or negatively impact our competitive position, any of which could have a material adverse effect on our financial condition and results of operations.

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 transportation costs (such as a result of increased fuel costs), shipping delays, or increased costs from using air freight instead of ocean freight to mitigate inventory delays. It is possible that the adverse impact of these and future attacks, including additional costs associated with mitigation efforts, could materially adversely affect our business and results of operation.

All factories that we partner with are contractually required to adhere to the Company’s Vendor Code of Conduct, go through social audits which include on-site walk-throughs to appraise the physical working conditions and health and safety practices, and review payroll and age documentation. If these factories are unwilling or not able to meet the standards set forth within the Company’s Vendor Code of Conduct, it could limit the options available to us and could result in an increase of costs of manufacturing, which we may not be able to pass on to our customers.

Other events that could disrupt the timely delivery of our merchandise include new trade law provisions or regulations, reliance on a limited number of shipping carriers and associated alliances, weather events, significant labor disputes, port congestion and other unexpected events.

Changes in tariff policy regarding merchandise produced in, and raw materials sourced from, certain countries have and could continue to adversely affect our business.

A predominant portion of the merchandise we sell is manufactured in countries other than the United States. Refer to Note 7, “ INVENTORIES ,” of the Notes to Consolidated Financial Statements included in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K for a summary of inventory sourced based on vendor location during Fiscal 2025. In addition, many of the raw materials used to manufacture our apparel are sourced internationally.

Recent trade policies and related uncertainty, including tariffs imposed on countries from which we source a significant portion of our merchandise and raw materials, have created a dynamic and unpredictable trade landscape that has adversely affected, and could continue to adversely affect, our business. For example, in 2025, the U.S. imposed, modified, and rescinded certain tariffs, including those pursuant to the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court held that IEEPA did not authorize the imposition of such tariffs, and subsequently the U.S. administration continued to impose, modify, and propose new tariffs pursuant to various statutes and trade authorities, including the imposition of a 10% global tariff pursuant to Section 122 of the Trade Act of 1974. While certain tariffs have been struck down, modified, or replaced, other tariffs remain in effect, and additional tariff programs may be imposed in the future through various statutes and trade authorities. In addition, there can be no assurance that any duties paid under tariffs that are subsequently struck down, including those imposed pursuant to the IEEPA, will be refunded in whole or in part, or that any such refunds would be received on a timely basis, if at all.

In addition, certain countries have imposed retaliatory tariffs on U.S. exports, and other U.S. trading partners may take additional retaliatory measures or modify their trade or business policies in response to changes in U.S. trade policy, which could further disrupt global trade flows and adversely affect our business.

It is likely that tariffs and international trade arrangements will continue to change, potentially without warning and to an extent or duration that is difficult to predict. Changing tariff rates and shifting trade policies have created, and may continue to create, significant uncertainty for suppliers, consumers, and us, and these risks may be heightened if trade tensions between the U.S. and other countries worsen. If tariffs on goods from countries from which we source products are increased or maintained at elevated levels, our merchandise costs would remain higher relative to typical costs, which could negatively impact our margins and consumer demand for our products. In response to increased costs, we may choose to adjust pricing or promotions or take other actions, which could adversely affect customer demand or our competitive position. Moreover, tariff-related cost pressures and supply chain disruptions may lead to reputational harm if we are unable to deliver our products or services on expected

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timelines.

Although such changes have implications across the entire industry, we may fail to effectively adapt to and manage the adjustments in strategy that would be necessary in response to these developments. We continue to evaluate and implement measures to mitigate the impact of current and potential tariffs, including managing product costs, considering operating expense reductions, and pursuing average unit retail (“AUR”) growth. However, these mitigation efforts may take time to implement and take effect, may involve additional costs, may not be accepted by consumers, and may not be sufficient to offset the full impact of tariffs.

In addition to the general uncertainty and overall risk from potential changes in trade laws and policies, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities, or fail to effectively adapt our business strategies, which could adversely affect our revenues, profitability, and overall business.

Our reliance on our distribution centers makes us susceptible to disruptions or adverse conditions affecting our supply chain.

Our distribution center operations are susceptible to local and regional factors, such as system failures, accidents, labor disputes, economic and weather conditions, natural disasters, significant power interruptions or outages, demographic and population changes, and other unforeseen events and circumstances. We rely on both Company-operated and third-party distribution centers to manage the receipt, storage, sorting, packing and distribution of our merchandise. If our distribution centers are not adequate to support our operations, including as a result of capacity constraints in response to an increase in digital sales or performance issues related to third-party management, the increased rate of merchandise returns, we could experience adverse impacts such as shipping delays and or customer dissatisfaction. In addition, if our distribution operations were disrupted due to, for example, labor shortages, natural disasters or power interruptions or outages, and we were unable to relocate operations or find other property adequate for conducting business, our ability to replace inventory in our stores and process digital and third-party orders could be interrupted, potentially resulting in adverse impacts to sales or increased costs. Refer to “ ITEM 1. BUSINESS ” of this Annual Report on Form 10-K, for a listing of certain distribution centers on which we rely.

We rely on the experience and skills of our executive officers and associates, and the failure to attract or retain this talent, effectively manage succession, and establish a workforce that can best serve the communities in which we operate could have a material adverse impact on our business.

Our ability to succeed may be adversely impacted if we are not able to attract, retain and develop talent and future leaders, including our executive officers. We believe that the attraction, retention and management of qualified talent is integral to our success in advancing our strategies and key business priorities and avoiding disruptions in our business. We rely on our associates across the organization, including those at our corporate offices, stores, and distribution centers, as well as their experience and expertise in the retail business.

Our executive officers closely supervise all aspects of our operations, have substantial experience and expertise in the retail business and have an integral role in the growth and success of our brands. If we were to lose the benefit of the involvement of our executive officers or other personnel, without adequate succession plans, our business could be adversely affected.

In addition, if we are unable to attract and retain talent at the associate level, our business could be adversely impacted. Competition for such qualified talent is intense, and we cannot be sure that we will be able to attract, retain and develop a sufficient number of qualified individuals in future periods. In addition, we cannot guarantee that we will be able to find adequate temporary or seasonal personnel to staff our operations when needed. As automation, AI, and other technology-enabled tools become increasingly integrated into our operations, our success will depend, in part, on our ability to attract and retain associates with relevant technical skills, effectively train our workforce, and achieve user acceptance and adoption of these tools. Failure to ensure effective training, adoption, and use of new technologies by our associates could limit anticipated benefits and adversely affect our business.

If we are not successful in these efforts or fail to successfully execute against the key human capital management initiatives discussed in “ ITEM 1. BUSINESS ” of this Annual Report on Form 10-K, our business could be adversely impacted.

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LEGAL, TAX, REGULATORY AND COMPLIANCE RISKS.

Misconduct or illegal activities by our current and former associates, directors, advisers, third-party service providers or business partners, or others affiliated, or perceived to be affiliated, with the Company could subject to us to reputational harm, regulatory scrutiny or inquiries, or legal liability .

There is a risk that current or former associates, executives, directors, advisers, third party-service providers or business partners of the Company, or others who are actually or perceived to be affiliated with us, could engage, deliberately or recklessly, in misconduct or fraud that creates legal exposure for us and adversely affects our business. If such individuals were to engage, or be accused of engaging in, illegal or suspicious activities, sexual misconduct or harassment, racial or gender discrimination, improper use or disclosure of confidential information, fraud, payment or solicitation of bribes, or any other type of similar misconduct or violation of other laws and regulations, during their employment or service with us, we could suffer serious harm to our brand, reputation, be subject to penalties or sanctions, suffer serious harm to our financial position and current and future business relationships, and face potentially significant litigation or investigations.

In particular, Michael Jeffries, who served as chief executive officer of the Company from 1992 to 2014, has been accused of sexual abuse and exploitation, which accusations include claims relating to behavior that is alleged to have occurred during his prior tenure with us. Criminal charges have been filed against Mr. Jeffries, and there are multiple pending civil actions against Mr. Jeffries and the Company that relate to this alleged behavior. Although we believe the claims against us are without merit, the allegations against this former executive, as well as the claims brought against us, have resulted in negative media attention and may result in additional litigation or may result in other adverse consequences to our reputation, brand, and business. In addition, in March 2024 and March 2025, the Delaware Court of Chancery ruled that Mr. Jeffries was entitled to advancement by the Company of his defense costs for the civil litigation and for his defense costs for the criminal prosecution against him, respectively.

Fluctuations in our tax obligations and effective tax rate may result in volatility in our results of operations could have a material adverse impact on our business.

We are subject to income taxes in many U.S. and foreign jurisdictions. In addition, our products are subject to import and excise duties and/or sales, consumption or value-added taxes (“VAT”) in many jurisdictions. We record tax expense based on our estimates of future payments, which include reserves for estimates of probable settlements of foreign and domestic tax audits. At any time, many tax years are subject to audit by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. As a result, we expect that throughout the year, there could be ongoing variability in our quarterly tax rates as taxable events occur and exposures are evaluated. In addition, our effective tax rate in any given financial reporting period may be materially impacted by changes in the mix and level of earnings or losses by taxing jurisdictions or by changes to existing accounting rules or regulations. Fluctuations in duties could also have a material impact on our financial condition, results of operations or cash flows.

In some global markets, we are required to withhold and remit VAT to the appropriate local tax authorities. Failure to correctly calculate or remit the appropriate amounts could subject us to substantial fines and penalties that could have an adverse effect on our financial condition, results of operations or cash flows.

In the past, tax law has been enacted, domestically and abroad, impacting our current or future tax structure and effective tax rate, such as the Inflation Reduction Act of 2022 and the One Big Beautiful Bill Act of 2025 (“OBBBA”) in the U.S. Tax law may be enacted in the future, domestically or abroad, that impacts our current or future tax structure and effective tax rate.

Litigation and any future stockholder activism could have a material adverse impact on our business.

We, along with third parties we do business with, are involved, from time to time, in litigation arising in the ordinary course of business. Litigation matters may include, but are not limited to, contract disputes, employment-related actions, alleged misconduct by current or former associates, labor relations, commercial litigation, intellectual property rights, privacy litigation, product safety, ESG, anti-ESG, environmental matters, and stockholder actions.

Litigation, in general, may be expensive and disruptive. We cannot predict with certainty the outcomes of these legal proceedings and other contingencies, and the costs incurred in litigation can be substantial, regardless of the outcome. Substantial unanticipated verdicts, fines and rulings do sometimes occur. As a result, we could, from time to time, incur judgments, enter into settlements, or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations in the period in which the amounts are accrued and/or our cash flows in the period in which the amounts are paid. The outcome of some of these legal proceedings and other contingencies could require us to take, or refrain from taking, actions which could negatively affect our operations and, depending on the nature of the allegations, could negatively impact our reputation. Additionally, defending against these legal proceedings may involve significant expense and diversion of management’s attention and resources.

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Stockholder activism, which could take many forms or arise in a variety of situations, remains popular with many public investors. Due to the volatility of our stock price and for a variety of other reasons, we may become the target of securities litigation or stockholder activism. Responding to stockholder activists’ campaigns may involve significant expense and diversion of management’s attention and resources without yielding any improvement in our results of operations or financial condition.

Failure to adequately protect and enforce our intellectual property, or failure to adequately ensure that we are not infringing the intellectual property rights of others, could have a negative impact on our brand image and limit our ability to penetrate new markets which could have a material adverse impact on our business.

We believe our core trademarks, Abercrombie & Fitch ® , abercrombie ® , Hollister ® , Gilly Hicks ® , and the “Moose” and “Seagull” logos, are essential to the effective implementation of our strategy. We have obtained or applied for federal registration of these trademarks with the U.S. Patent and Trademark Office and the registries of countries in key markets within the Company’s owned and operated sales and distribution channels, and those in which the Company’s franchise, wholesale, and licensing partners have sales and distribution rights. In addition, these trademarks are either registered, or the Company has applications for registration pending, with the registries of many of the foreign countries in which the manufacturers of the Company’s products are located. There can be no assurance that we will obtain registrations that have been applied for or that the registrations we obtain will prevent the imitation of our products or infringement of our intellectual property rights by others. Although brand security initiatives are in place, we cannot guarantee that our efforts against the infringement or counterfeiting of our brands will be successful. If a third party copies our products in a manner that projects lesser quality or carries a negative connotation, our brand image could be materially adversely affected. Moreover, the increased prevalence of AI raises potential issues related to unauthorized use of our intellectual property by third parties, as well as potential questions over the ownership of any intellectual property generated through the use of AI tools. The impact of AI on intellectual property rights may result in increased costs with respect to policing and ownership disputes.

Because we have not yet registered all of our trademarks in all categories, or in all foreign countries in which we source or offer our merchandise now, or may in the future, our global expansion and our merchandising of products using these marks could be limited. The pending applications for international registration of various trademarks could be challenged or rejected in those countries because third parties of whom we are not currently aware have already registered similar marks in those countries. Accordingly, it may be possible, in those foreign countries where the status of various applications is pending or unclear, for a third-party owner of the national trademark registration for a similar mark to prohibit the manufacture, sale or exportation of branded goods in or from that country. Failure to register our trademarks or purchase or license the right to use our trademarks or logos in these jurisdictions could limit our ability to obtain supplies from, or manufacture in, less costly markets or penetrate new markets should our business plan include selling our merchandise or granting rights to our franchise, wholesale, and licensing partners in those non-U.S. jurisdictions.

In addition, if third parties successfully claim we infringe their intellectual property rights, we may be subject to liability, be prevented from using our trademarks or other intellectual property rights, or be obligated to remove this merchandise from our inventory, which could have an adverse effect on our financial conditions and operations. Defending infringement claims could be expensive and time consuming and might result in our incurring additional costs, entering into costly license agreements, actions to recover unpaid royalty fees, or other settlement agreements. These risks may be magnified if we increase our use of licensing arrangements or partnerships with third parties.

Changes in the regulatory or compliance landscape could have a material adverse impact on our business.

We are subject to numerous domestic and foreign laws and regulations, including those related to customs, truth-in-advertising, securities, environmental and social disclosures, consumer protection, general privacy, health information privacy, identity theft, online privacy, general employment, employee health and safety, minimum wages, unsolicited commercial communication and zoning and occupancy laws, as well as ordinances that regulate retailers generally and/or govern the importation, intellectual property, promotion and sale of merchandise and the operation of retail stores, digital operations and distribution centers. If these laws and regulations were to change, or were violated by our management, associates, suppliers, vendors or other parties with whom we do business, the costs of certain merchandise could increase, or we could experience delays in shipments of our merchandise, be subject to fines or penalties, temporary or permanent store closures, or increased regulatory scrutiny or suffer reputational harm, which could reduce demand for our merchandise and adversely affect our business and results of operations. Any changes in regulations, the imposition of additional regulations, or the enactment of any new or more stringent legislation including the areas referenced above, could adversely affect our business and results of operations.

Laws and regulations at the local, state, federal and various global levels frequently change, and the ultimate cost of compliance cannot be precisely estimated. Changes in the legal or regulatory environment affecting responsible sourcing, supply chain transparency, or environmental protection, among others, may result in increased compliance costs for us and our business partners. Additionally, we may face regulatory challenges in complying with applicable global sanctions and trade regulations and reputational challenges with our consumers and other stakeholders if we are unable to sufficiently verify the origins of material sourced for the manufacture of our products.

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In addition, we are subject to a variety of regulatory and reporting requirements, including, but not limited to, those related to corporate governance and public disclosure. Stockholder activism, the current political environment, financial reform legislation, government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations. New requirements or changes in current regulatory reporting requirements may introduce additional complexities, lead to additional compliance costs, divert management’s time and attention from strategic business activities, and could have a significant effect on our reported results for the affected periods. Failure to comply with such regulations could result in fines, penalties, or lawsuits and could have a material adverse impact on our business.

The agreements related to A&F Management’s senior secured asset-based revolving credit facility includes restrictive covenants that limit our flexibility in operating our business and our inability to obtain additional credit on reasonable terms in the future could have an adverse impact on our business.

The Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”) 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 agreements related to the ABL Facility contain restrictive covenants that, subject to specified exemptions, restrict, among other things, the ability of the Company and its subsidiaries to: incur, assume or guarantee additional indebtedness; grant or incur liens; sell or otherwise dispose of assets, including capital stock of subsidiaries; make investments in certain subsidiaries; pay dividends or make distributions on our capital stock; redeem or repurchase capital stock; change the nature of our 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.

If an event of default under either related agreement occurs, any outstanding obligations under the ABL Facility could be declared immediately due and payable or the lenders or noteholders could foreclose on or exercise other remedies with respect to the assets securing the indebtedness under the ABL Facility. In addition, there is no assurance that we would have the cash resources available to repay such accelerated obligations. Moreover, the ABL Facility is secured by certain of our real property, inventory, intellectual property, general intangibles and receivables, among other things, and lenders may exercise remedies against the collateral in an event of default.

We may, from time to time, incur indebtedness. There can be no assurance that we would be able to obtain sufficient funds to enable us to repay or refinance any future obligations on commercially reasonable terms, or at all. Changes in market conditions could potentially impact the size and terms of a replacement facility or facilities in the future. The inability to obtain credit on commercially reasonable terms in the future could adversely impact our liquidity and results of operations as well as limit our ability to take advantage of business opportunities that may arise.

Our amended and restated bylaws provide that certain courts in the State of Delaware or the federal district courts of the United States will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder to us or our stockholders, any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our certificate of incorporation or our bylaws (as either may be amended or restated) or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware, or any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware. However, if the Court of Chancery within the State of Delaware lacks jurisdiction over such action, the action may be brought in the United States District Court for the District of Delaware. Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”). The exclusive forum provisions will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provisions will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. There is, however, uncertainty as to whether a court would enforce the exclusive forum provisions, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) generally discusses our results of operations for Fiscal 2025 and Fiscal 2024 and provides comparisons between such fiscal years. For discussion and comparison of Fiscal 2024 and Fiscal 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2024, filed with the SEC on March 31, 2025. This MD&A should be read together with the Company’s audited Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K in “ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA , ” to which all references to Notes in MD&A are made.

INTRODUCTION

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

• Overview . A general description of the Company’s business and certain segment information, and an overview of key performance indicators reviewed by management in assessing the Company’s results.

• Current Trends and Outlook . A discussion of the Company’s long-term plans for growth and a summary of the Company’s performance over recent years, primarily Fiscal 2025 and Fiscal 2024.

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

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

• Recent Accounting Pronouncements . The recent accounting pronouncements the Company has adopted or is currently evaluating, including the dates of adoption or expected dates of adoption, as applicable, and anticipated effects on the Company’s audited Consolidated Financial Statements, are included in Note 2 “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES .”

• Critical Accounting Estimates . A discussion of the accounting estimates considered to be important to the Company’s results of operations and financial condition, which typically require significant judgment and estimation on the part of the Company’s management in their application.

• Non-GAAP Financial Measures . MD&A provides a discussion of certain financial measures that have been determined to not be presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). This section includes certain reconciliations between GAAP and non-GAAP financial measures and additional details on non-GAAP financial measures, including information as to why the Company believes the non-GAAP financial measures provided within MD&A are useful to investors.

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OVERVIEW

Business summary

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; 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 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’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, as was the case in Fiscal 2023. All references herein to the Company’s fiscal years are as follows:

Fiscal year

Year ended/ ending

Number of weeks

Fiscal 2023

February 3, 2024

Fiscal 2024

February 1, 2025

Fiscal 2025

January 31, 2026

Fiscal 2026

January 30, 2027

Seasonality

Historically, the Company’s operations have been seasonal in nature and consist of two principal selling seasons: the spring season, which includes the first and second fiscal quarters (“Spring”) and the fall season, which includes the third and fourth fiscal quarters (“Fall”). Due to the seasonal nature of the retail apparel industry, the results of operations for any current period are not necessarily indicative of the results expected for the full fiscal year, and the Company could have significant fluctuations in certain asset and liability accounts. The Company historically experiences its greatest sales activity during the Fall season due to back-to-school and holiday sales periods, respectively.

Key Performance Indicators

The following measurements are among the key performance indicators reviewed by the Company’s management in assessing the Company’s results:

• Net sales and comparable sales by region and brand;

• Cost of sales, exclusive of depreciation and amortization, as a percentage of net sales;

• Gross profit and gross profit rate;

• Selling expense as a percentage of net sales;

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

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

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

• Net income and net income attributable to A&F;

• Net income per diluted share attributable to A&F;

• Cash flow and liquidity measures, such as the Company’s working capital, operating cash flow, and free cash flow;

• Inventory metrics, such as inventory turnover;

• Return on invested capital and return on equity;

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

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

While not all of these metrics are disclosed publicly by the Company due to the proprietary nature of the information, the Company discusses many of these metrics within this MD&A.

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CURRENT TRENDS AND OUTLOOK

Focus areas for Fiscal 2026

Over the last several years, A&F Co. has worked to successfully transform its brands, business and culture, while delivering on its financial commitments. As the Company looks forward, it’s focused on evaluating opportunities that continue to deliver sustainable, profitable growth. The Company expects to:

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

• Expand Channels and Categories by increasing net sales growth in new and select markets through the use of franchise, wholesale, and licensing partnerships. The Company also plans to expand into new, adjacent product categories that resonate with each brand’s target customer.

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

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

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

Current macroeconomic conditions and tariffs

Macroeconomic conditions, such as a volatile interest rate environment, ongoing inflation, the geopolitical landscape, and foreign exchange rate fluctuations, continue to impact the global economy. In addition, changes in trade policy and related uncertainty, including enacted and proposed tariffs affecting countries from which we source a significant portion of our merchandise and raw materials, have created a dynamic and unpredictable trade environment that adversely impacted our business and operations during Fiscal 2025 and continues into Fiscal 2026.

During Fiscal 2025, changes in U.S. trade policy, including the imposition, modification, and rescission of certain tariffs, increased volatility in duties and raw material costs associated with merchandise sourced from certain countries and added complexity to our supply chain and sourcing processes.

On February 20, 2026, the U.S. Supreme Court held that IEEPA did not authorize the imposition of tariffs, striking down the 10% universal baseline tariff, as well as the country-specific tariffs. The Company is involved in litigation seeking refunds of IEEPA tariffs. The outcome and timing of resolution remain uncertain.

While certain tariffs have been struck down, modified, or replaced, other tariffs remain in effect, and additional tariffs have been imposed or proposed during Fiscal 2026. Additional, increased, or modified tariffs may be imposed without warning through various statutes and trade authorities. These changing tariff rates and shifting trade policies have created significant uncertainty for suppliers, consumers, and us. These continued uncertainties regarding the future impact of tariffs and global trade relations could lead to weakened business conditions for our industry and could adversely impact our ability to procure merchandise or result in increases to the cost of merchandise sourced from impacted countries.

The Company continues to evaluate the impact of tariffs and other trade policies on its business and is continuing to execute against our playbook of mitigation strategies. Mitigation strategies have included evaluating supply chain footprint changes, negotiating with our supply chain vendors, pursuing operating expense reductions, and determining ways to increase AUR.

After factoring in certain mitigation strategies, tariffs on goods imported into the U.S. under trade policies in effect through January 31, 2026 negatively impacted operating income by $90 million or 170 basis points as a percent of net sales, during Fiscal 2025. Assuming the estimated impact from the tariffs on goods imported into the U.S., including the impact of a 15% tariff on all U.S. imports (which, for purposes of our outlook, is expected to apply beginning February 24, 2026, and to remain in effect for the entirety of Fiscal 2026), and factoring in certain planned mitigation strategies, we expect to incur approximately $40 million of incremental impact compared to Fiscal 2025, or approximately 70 basis points as a percentage of net sales, which would negatively impact our operating income during Fiscal 2026.

Recently, the global markets have experienced fluctuations in fuel and other energy related costs, which could lead to greater uncertainty regarding the overall economic environment and consumer spending. During periods of perceived or actual unfavorable economic conditions, consumers may reallocate available discretionary spending or determine that they have fewer funds available for discretionary spending, which may adversely impact demand for our products. Continued inflationary pressures could further impact expenses and have a longer-term impact on our ability to maintain satisfactory margins.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Global events and supply chain disruptions

As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, we are exposed to global events and geopolitical developments, including armed conflicts in certain regions, that may adversely impact our operations. In addition to the impacts of tariffs discussed above, global supply chain conditions continue to be affected by other factors, including disruptions in major maritime routes, higher transportation and logistics costs, and increased competition for supply chain capacity due to uncertainty in the global trade environment and ongoing armed conflicts. For example, armed conflicts in the Middle East have contributed to elevated freight rates and longer transit times compared to historical levels, and prolonged or escalating conflicts could result in additional supply chain disruption, including higher energy and transportation costs (such as fuel related charges), shipping delays, or increased costs from using air freight instead of ocean freight to mitigate inventory delays.

Management continues to monitor global events and assess the potential impacts that these and similar events may have on the business in future periods. Although management also develops and updates contingency plans to assist in mitigating potential impacts, it is possible that the Company’s preparations for such events are not adequate to mitigate their impact, and that these events could further adversely affect its business and results of operations.

Global store network modernization and growth

The Company has a goal of finding the right size, right location and right economics for omni-enabled stores that cater to local customers. The Company continues to use data to inform its focus on aligning store square footage with digital penetration, and has delivered new store experiences across brands during Fiscal 2025 and Fiscal 2024. Details related to these new Company owned and operated store experiences follow:

Type of new store experience

Fiscal 2025

Fiscal 2024

New stores

Remodels

Right-sizes

Total

During Fiscal 2025, the Company opened 62 new stores, remodeled 47 stores, and right-sized 11 stores, while closing 22 stores. This compares with 65 new stores, 48 remodeled stores, 12 right-sized stores, and 41 closures during Fiscal 2024. Future closures could be completed through natural lease expirations, while certain other leases include early termination options that can be exercised under specific conditions. The Company may also elect to exit or modify other leases, and could incur charges related to these actions.

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

Fifty-Two Weeks Ended January 31, 2026

AMERICAS (1)

EMEA (2)

APAC (3)

Total Company

Abercrombie

Hollister

Abercrombie

Hollister

Abercrombie

Hollister

Abercrombie

Hollister

Total (4)

February 1, 2025

New

Permanently closed

January 31, 2026

Gross square footage (in thousands) :

February 1, 2025

January 31, 2026

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

(2) The EMEA segment includes Europe, the Middle East and Africa.

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

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

Recent tax law changes

On July 4, 2025, House Resolution 1, also known as the OBBBA, was signed into law. The OBBBA includes, among other provisions, changes to U.S. corporate income tax law impacting the taxation of domestic and international business operations, including permanently extending certain expiring provisions of the Tax Cuts and Jobs Act of 2017, restoration of accelerated depreciation on capital expenditures, deductible research and experimental expenditures, and modifications to the international tax framework. The enactment of the OBBBA did not have a material impact on the Company’s consolidated financial statements and disclosures.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

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

Summary of results

A summary of results for Fiscal 2025 and Fiscal 2024 follows:

GAAP

Non-GAAP (1)

Fiscal 2025

Fiscal 2024

Fiscal 2025

Fiscal 2024

Net sales (in thousands)

Change in net sales from the prior fiscal year

Comparable sales (2)

Operating income (in thousands)

Operating income margin

Net income attributable to A&F (in thousands)

Net income per diluted share attributable to A&F

(1)      Refer to “ RESULTS OF OPERATIONS ” for details on excluded items. A reconciliation of each non-GAAP financial measure presented in this Annual Report on Form 10-K to the most directly comparable financial measure calculated in accordance with GAAP, as well as a discussion as to why the Company believes that these non-GAAP financial measures are useful to investors, is provided below under “ NON-GAAP FINANCIAL MEASURES .”

(2)      Comparable sales are calculated on a constant currency basis and exclude revenue other than store and digital sales. Refer to the discussion below in “ NON-GAAP FINANCIAL MEASURES ,” for further details on the comparable sales calculation.

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

(in thousands)

January 31, 2026

February 1, 2025

Cash and equivalents

Marketable securities

Inventories

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

(in thousands)

Fiscal 2025

Fiscal 2024

Net cash provided by operating activities

Net cash used for investing activities

Net cash used for financing activities

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

RESULTS OF OPERATIONS

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

Net sales

Net sales by segment are presented by attributing revenues to a physical store location or geographical region that fulfills the order. The Company’s net sales by reportable segment for Fiscal 2025 and Fiscal 2024 were as follows:

(in thousands, except ratios)

Fiscal 2025

Fiscal 2024

$ Change

% Change

Comparable Sales (1)

By segment:

Americas

EMEA

APAC

Total

(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 Fiscal 2025, net sales increased 6%, as compared to Fiscal 2024. The increase was primarily attributable to low-single-digit AUR growth and mid-single-digit unit volume growth, with increases in Company owned and operated stores, and digital channels. The year-over-year increase in net sales reflects positive comparable sales of 3%, as compared to Fiscal 2024. On a geographic basis, net sales for Fiscal 2025 were as follows:

• Net sales growth in the Americas region of 7% and 4% on a reported and comparable sales basis, respectively. The increase was led by mid-single-digit unit volume growth, with increases in Company owned and operated stores, and digital channels.

• Net sales growth in the EMEA region of 6% and flat on a reported and comparable sales basis, respectively. The increase on a reported basis was attributable to mid-single-digit AUR growth, favorable foreign currency and an increase in sales volume in net new stores, and third-party channels, offset by relatively flat unit growth.

• Net sales growth in the APAC region of 5% on a reported basis and a decline of (3)% on a comparable sales basis. The increase on a reported basis was attributable to mid-single-digit AUR growth, and low-double-digit increase in digital channels, partially offset by a low-single-digit decline in Company owned and operated stores. Sales growth was negatively impacted by low-single-digit unit volume decline with declines in Company owned and operated stores, partially offset by unit volume growth in digital channels.

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

(in thousands, except ratios)

Fiscal 2025

Fiscal 2024

$ Change

% Change

Comparable Sales (1)

Abercrombie

Hollister

Total

(1) Comparable sales are calculated on a constant currency basis. Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details on the comparable sales calculation.

Cost of sales, exclusive of depreciation and amortization

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

Cost of sales, exclusive of depreciation and amortization

For Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales, increased approximately 270 basis points as compared to Fiscal 2024. The percentage increase was primarily attributable to cost of sales deleverage with higher AUC primarily related to $90 million or 170 basis point adverse net tariff impact and unfavorable product and channel mix, partially offset by a low-single-digit increase in AUR, driven by volume mix and targeted promotions compared to Fiscal 2024.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Selling expense

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

Selling expense

Excluded item:

Litigation Settlement (1)

Adjusted non-GAAP selling expense

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

For Fiscal 2025, selling expense increased by $120 million compared to Fiscal 2024. Selling expense, as a percentage of net sales increased 20 basis points as compared to Fiscal 2024. The increase in rate was primarily driven by an approximate 80 basis point increase in store occupancy and payroll costs and an approximate 40 basis point increase in marketing, partially offset by an approximate 80 basis point benefit resulting from the Litigation Settlement and approximately a 20 basis point benefit in fulfillment expense. Excluding 80 basis points of benefits related to the Litigation Settlement, adjusted non-GAAP selling expense as a percentage of net sales increased by approximately 100 basis points during Fiscal 2025, as compared to Fiscal 2024.

General and administrative expense

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

General and administrative expense

Excluded item:

Litigation Settlement (1)

Adjusted non-GAAP general and administrative expense

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

For Fiscal 2025, general and administrative expense decreased by $25 million compared to Fiscal 2024. General and administrative expense, as a percentage of net sales, decreased 140 basis points as compared to Fiscal 2024. The decrease in expense rate was primarily driven by an approximate 150 basis point decrease in employee compensation costs, partially offset by approximately 10 basis points in legal fees relating to the Litigation Settlement and other administrative expenses. Excluding 10 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales during Fiscal 2025, decreased by approximately 150 basis points, as compared to Fiscal 2024.

Other operating loss (income), net

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

Other operating loss (income), net

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

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Operating income

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales (1)

% of Net Sales (1)

BPS Change

Americas

EMEA

APAC

Operating loss not attributed to segments

Operating income

Excluded item:

Litigation Settlement (2)

Adjusted non-GAAP operating income

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

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

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

• Operating income for the Americas decreased $23 million and decreased 240 basis points as a percentage of segment net sales as compared to Fiscal 2024. The decrease as a percent of sales was primarily attributed to higher cost of sales, inclusive of tariffs, and deleverage on marketing investments, partially offset by leverage in fulfillment expenses and a benefit from the Litigation Settlement included in selling expense.

• Operating income for EMEA decreased $18 million or 310 basis points as a percentage of segment net sales as compared to Fiscal 2024. The decrease as a percent of sales primarily related to deleverage on fulfillment expenses and marketing investments.

• Operating (loss) for APAC increased $16 million or 950 basis points as a percentage of segment net sales as compared to Fiscal 2024. The increase as a percent of sales is primarily attributed to higher cost of sales, and deleverage on store occupancy expenses, partially offset by leverage on general and administrative expenses.

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

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

Interest (income) expense, net

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

Interest expense

Interest income

Interest (income) expense, net

For Fiscal 2025, interest (income) expense, net, decreased $6.2 million, as compared to Fiscal 2024. The net decrease was a result of a reduction in interest income due to the decrease in balance of time deposits and money market accounts compared to Fiscal 2024. This was partially offset by lower interest expense in Fiscal 2025 compared to Fiscal 2024 as a result of the redemption of the remaining outstanding balance of the 8.75% Senior Secured Notes on July 15, 2024.

Income tax expense

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

Effective Tax Rate

Effective Tax Rate

Income tax expense

Excluded items:

Tax effect of pre-tax excluded items (1)

Adjusted non-GAAP income tax expense

(1)     The tax effect of pre-tax excluded items is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis. Refer to “ NON-GAAP FINANCIAL MEASURES ” for details of pre-tax excluded items.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

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

During Fiscal 2025 and Fiscal 2024, the Company did not recognize income tax benefits on $74.9 million and $53.8 million, respectively, of pre-tax losses, primarily in Switzerland, resulting in adverse tax impacts of $11.9 million and $8.2 million, respectively. The primary driver relates to expense deleverage within the APAC and EMEA regions.

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

Net income attributable to A&F

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

Net income attributable to A&F

Excluded item, net of tax (1)

Adjusted non-GAAP net income attributable to A&F

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

Net income per diluted share attributable to A&F

Fiscal 2025

Fiscal 2024

$ Change

Net income per diluted share attributable to A&F

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

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

Impact from changes in foreign currency exchange rates

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

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

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

EBITDA and adjusted EBITDA

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

BPS Change

Net income

Income tax expense

Interest (income) expense, net

Depreciation and amortization

EBITDA (1)

Excluded item:

Litigation Settlement (2)

Adjusted EBITDA (1)

(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.

2025 Form 10-K

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

Overview

The Company’s capital allocation strategy and priorities are reviewed by the Board of Directors quarterly, considering both liquidity and valuation factors. The Company believes that it will have adequate liquidity to fund operating activities for the next twelve months. The Company monitors market conditions and may in the future determine whether and when to repurchase shares of its Common Stock. For a discussion of the Company’s share repurchase activity, please see below under “ Share repurchases .”

Primary sources and uses of cash

The Company’s business has two principal selling seasons: Spring and Fall. The Company generally experiences its greatest sales activity during the Fall season, due to the back-to-school and holiday sales periods. The Company relies on excess operating cash flows, which are largely generated in Fall, to fund operations throughout the fiscal year and to reinvest in the business to support future growth. The Company also has the ABL Facility available as a source of additional funding, which is described further below under “ Credit f acility .”

Over the next twelve months, the Company expects its primary cash requirements to be directed towards prioritizing investments in the business and continuing to fund operating activities, including the acquisition of inventory, obligations related to compensation, marketing, data and technology, leases and any lease buyouts or modifications it may exercise, taxes, and other operating activities. In addition, management continuously evaluates potential opportunities to strategically deploy excess cash and/or deleverage the balance sheet, in consideration on various factors, such as market and business conditions, and the Company’s ability to accelerate investments in the business. Such opportunities may include, but are not limited to, share repurchases.

When evaluating opportunities for investments in the business, management considers alignment with initiatives that position the business for sustainable long-term growth and with the Company’s strategic pillars as described within “ ITEM 1. BUSINESS - STRATEGY AND KEY BUSINESS PRIORITIES , ” including being opportunistic regarding areas for growth. Examples of potential investment opportunities include, but are not limited to, new store experiences, and investments in the Company’s digital and omnichannel initiatives, and investments in supply chain and distribution capabilities. 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 Fiscal 2025, the Company invested $240.8 million towards capital expenditures, up from $182.9 million of capital expenditures in Fiscal 2024. Total capital expenditures for Fiscal 2026 are expected to be in the range of $200 to $225 million.

The Company measures liquidity using total cash and cash equivalents and incremental borrowing available under the ABL Facility. As of January 31, 2026, the Company had cash and cash equivalents of $759.5 million and total liquidity of approximately $1.2 billion, compared with cash and cash equivalents of $772.7 million and total liquidity of approximately $1.2 billion at February 1, 2025.

Share repurchases

In March 2025, the Company announced that the Board of Directors approved a $1.3 billion share repurchase program (the “2025 Authorization”), which replaced the prior share repurchase program of $500 million authorized by the Board of Directors in 2021. The 2025 Authorization does not have an expiration date and may be discontinued at any time. During Fiscal 2025 , the Company repurchased approximately 5.4 million shares of its Common Stock for approximately $450 million. As of January 31, 2026, the Company had $850 million in share repurchases remaining under the 2025 Authorization.

Historically, the Company has repurchased shares of its Common Stock from time to time, which repurchases are dependent on excess liquidity, market conditions, and business conditions, with the objectives of returning excess cash to stockholders and offsetting dilution from issuances of Common Stock associated with the vesting of restricted stock units. Shares may be repurchased from time to time in the open market or in private transactions in such manner as may be deemed advisable from time to time (including, without limitation, pursuant to accelerated share repurchase programs, one or more 10b5-1 trading plans, or any other method deemed advisable) and may be discontinued at any time. The timing and amount of any such repurchases will be determined based on an evaluation of market conditions, the Company’s share price, legal requirements, and other factors. The Company is not obligated to repurchase any specific amount of shares of its Common Stock. Refer to “ ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ” for additional information regarding the Company’s publicly announced share repurchase authorization programs.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Credit facility

On August 2, 2024, A&F, as parent and a guarantor, Abercrombie & Fitch Management Co., as lead borrower, and certain of A&F’s direct and indirect wholly-owned subsidiaries, as additional borrowers and guarantors, entered into the Second Amendment to the Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”). The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $500 million (the “ABL Facility”), which matures on August 2, 2029. The ABL Facility is subject to a borrowing base, consisting primarily of inventory located in the U.S., the United Kingdom, and the Netherlands, with a letter of credit sub-limit of $62.5 million, a swing line loan sub-limit of $30 million, and an accordion feature allowing A&F to increase the revolving commitment by up to $150 million subject to specified conditions.

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

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

(in thousands)

January 31, 2026

Loan cap

Less: Outstanding stand-by letters of credit

Borrowing capacity

Less: Minimum excess availability (1)

Borrowing capacity available

(1)     Under the ABL Facility, the Company must maintain excess availability equal to the greater of 10% of the loan cap or $36 million.

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

Income taxes

The Company’s earnings and profits from its foreign subsidiaries could be repatriated to the U.S. without incurring additional federal income tax. The Company determined that the balance of the Company’s undistributed earnings and profits from its foreign subsidiaries as of February 2, 2019, are considered indefinitely reinvested outside of the U.S., and if these funds were to be repatriated to the U.S., the Company would expect to incur an insignificant amount of state income taxes and foreign withholding taxes. The Company accrues for both state income taxes and foreign withholding taxes with respect to earnings and profits earned after February 2, 2019, in such a manner that these funds may be repatriated without incurring additional tax expense. As of January 31, 2026, $245.2 million of the Company’s $759.5 million of cash and equivalents were held by foreign affiliates.

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

Analysis of cash flows

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

Fiscal 2025

Fiscal 2024

(in thousands)

Cash and equivalents, and restricted cash and equivalents, beginning of period

Net cash provided by operating activities

Net cash used for investing activities

Net cash used for financing activities

Effects of foreign currency exchange rate changes on cash

Net decrease in cash and equivalents, and restricted cash and equivalents

Cash and equivalents, and restricted cash and equivalents, end of period

Operating activities - For Fiscal 2025, net cash provided by operating activities decreased by $91.2 million, primarily related to $174.4 million from the impact from changes in accounts payable and accrued expenses related to timing of merchandise and advertising payables and decreased incentive compensation payments. The decrease was partially offset by $84.8 million in lower inventory receipts compared to Fiscal 2024 and increased cash receipts as a result of the 6% year-over-year increase in net sales. During Fiscal 2024, net cash provided by operating activities included increased cash receipts as a result of the 16% increase in net sales.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Investing activities - For Fiscal 2025, net cash used for investing activities decreased by $146.9 million, primarily attributable to capital expenditures of $240.8 million, as well as purchases of $25 million of marketable securities, partially offset by maturities of $115 million of marketable securities. For Fiscal 2024, net cash used for investing activities was primarily attributable to capital expenditures of $182.9 million, as well as purchases of $139.6 million of marketable securities, partially offset by maturities of $24.8 million in marketable securities.

Financing activities - For Fiscal 2025, net cash used for financing activities decreased by $39.5 million, primarily related to the repurchase of approximately 5.4 million shares of Common Stock with a market value of approximately $450 million, and $36.7 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards. For Fiscal 2024, net cash used for financing activities included the repurchase of approximately 1.6 million shares of Common Stock with a market value of approximately $229.8 million, the repurchase of $9.3 million in the open market and redemption of $214 million of outstanding 8.75% Senior Secured Notes, and $70.2 million related to shares of Common Stock withheld (repurchased) to cover tax withholdings upon vesting of share-based compensation awards.

Contractual Obligations

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

Payments due by period

(in thousands)

Total

Less than 1 year

1-3 years

3-5 years

More than 5 years

Operating lease obligations (1)

Purchase obligations (2)

Other obligations (3)

Total

(1) Operating lease obligations consist of the Company’s future undiscounted operating lease payments. Operating lease obligations do not include 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. Total variable lease cost was $192.2 million in Fiscal 2025. Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases , ” and Note 9, “ LEASES ,” for further discussion.

(2) Purchase obligations primarily consist of non-cancelable purchase orders for merchandise to be delivered during Fiscal 2026 and commitments for fabric expected to be used during upcoming seasons. In addition, purchase obligations include agreements to purchase goods or services, including, but not limited to, information technology, digital and marketing contracts, as well as estimated obligations related to the Company’s 13-year, 100% renewable energy supply agreement for its global home office and Company-owned distribution centers.

(3) Other obligations consist of: estimated asset retirement obligations; known and scheduled payments related to the Company’s deferred compensation and supplemental retirement plans; and minimum contractual obligations related to leases signed but not yet commenced, primarily related to the Company’s stores. Refer to Note 9, “ LEASES ,” and Note 17, “ SAVINGS AND RETIREMENT PLANS ,” for further discussion.

Due to uncertainty as to the amounts and timing of future payments, tax related to uncertain tax positions, including accrued interest and penalties, of $5.2 million as of January 31, 2026, is excluded from the contractual obligations table. Deferred taxes are also excluded in the contractual obligations table. For further discussion, refer to Note 12, “ INCOME TAXES .”

As of January 31, 2026, the Company had recorded $4.4 million and $47.0 million of obligations related to its deferred compensation and supplemental retirement plans in accrued expenses and other liabilities on the Consolidated Balance Sheet, respectively. Amounts payable with known payment dates of $18.0 million have been classified in the contractual obligations table based on those scheduled payment dates. However, it is not reasonably practicable to estimate the timing and amounts for the remainder of these obligations; therefore, those amounts have been excluded in the contractual obligations table.

RECENT ACCOUNTING PRONOUNCEMENTS

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

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

CRITICAL ACCOUNTING ESTIMATES

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts. Since actual results may differ from those estimates, the Company revises its estimates and assumptions as new information becomes available. Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ,” describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. The estimates and assumptions discussed below include those that the Company believes are the most critical to the portrayal of the Company’s financial condition and results of operations.

Policy

Effect if Actual Results Differ from Assumptions

Inventory Valuation

The Company reviews inventories on a quarterly basis. The Company reduces the inventory valuation when the carrying cost of specific inventory items on hand exceeds the amount expected to be realized from the ultimate sale or disposal of the goods, through a lower of cost and net realizable value (“LCNRV”) adjustment.

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

The Company does not expect material changes to the underlying assumptions used to measure the LCNRV estimate as of January 31, 2026. However, actual results could vary from estimates and could significantly impact the ending inventory valuation at cost, as well as gross profit.

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

Income Tax Valuation Allowances

The Company records deferred tax assets for deductible temporary differences and tax loss carryforwards. Management evaluates whether it is more likely than not that these deferred tax assets will be realized based on projected future taxable income, tax planning strategies, and reversal of temporary differences. All available evidence, both positive and negative, is considered to determine whether, based upon the weight of the evidence, it is more likely than not that some portion or all the deferred tax assets will not be realized. Greater weight is given to evidence that can be objectively verified such as current and cumulative financial reporting results. A valuation allowance is not required to the extent that, in the Company’s judgment, sufficient positive evidence exists to conclude that it is more likely than not that recorded deferred tax assets will be realized. This evaluation requires significant judgment, particularly regarding long term financial projections and the timing of reversals. Any such reversal of a valuation allowance is recorded as a tax benefit in the financial statements. These estimates are considered critical accounting estimates because they involve complex judgments about future events and could materially affect our results of operations.

Changes in the Company’s expectations about future taxable income — including those driven by global trade policy and international trade disputes, global economic and financial conditions, changes in consumer demand, supply chain disruptions, or tax law or other regulatory developments — may cause material adjustments to valuation allowances in future periods. Should the Company’s actual future taxable income by jurisdiction vary from estimates, it could result in increases or reversals of valuation allowances and impacts on our effective tax rate. As of the end of Fiscal 2025 , the Company had recorded valuation allowances of $184.8 million, of which $178.2 million relates to Switzerland.

Long-lived Assets

Long-lived assets, primarily operating lease right-of-use assets, leasehold improvements, furniture, fixtures and equipment, are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset group might not be recoverable. These include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, adverse market conditions and store closure or relocation decisions. On at least a quarterly basis, the Company reviews for indicators of impairment at the individual store level, the lowest level for which cash flows are identifiable.

Stores that display an indicator of impairment are subjected to an impairment assessment. The Company’s impairment assessment requires management to make assumptions and judgments related, but not limited, to management’s expectations for future operations and projected cash flows. The key assumption used in the Company’s undiscounted future store cash flow models is estimated sales growth rate.

An impairment loss may be recognized when these undiscounted future cash flows are less than the carrying amount of the asset group. In the circumstance of impairment, any loss would be measured as the excess of the carrying amount of the asset group over its fair value. Fair value of the Company’s store-related assets is determined at the individual store level based on the highest and best use of the asset group. The key assumption used in the Company’s fair value analysis is comparable market rents.

A 10% change in cash flows estimated for impairment purposes would not result in a material amount of additional impairment charges. If actual results are not consistent with the estimates and assumptions used in assessing impairment or measuring impairment losses, there may be a material impact on the Company’s financial condition or results of operation.

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

NON-GAAP FINANCIAL MEASURES

This Annual Report on Form 10-K includes discussion of certain financial measures on both a GAAP and a non-GAAP basis. The Company believes that each of the non-GAAP financial measures presented in this “ ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ” is useful to investors as it provides a meaningful basis to evaluate the Company’s operating performance excluding the effect of certain items that the Company believes may not reflect its future operating outlook, thereby supplementing investors’ understanding of comparability of operations across periods. Management used these non-GAAP financial measures during the periods presented to assess the Company’s performance and to develop expectations for future operating performance. These non-GAAP financial measures should be used as a supplement to, and not as an alternative to, the Company’s GAAP financial results, and may not be calculated in the same manner as similar measures presented by other companies.

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 fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations, and (2) digital net sales with the prior fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign currency exchange rate fluctuations. Comparable sales exclude revenue other than store and digital sales. Management uses comparable sales to understand the drivers of year-over-year changes in net sales and believes comparable sales can be a useful metric as it can assist investors in distinguishing the portion of the Company’s revenue attributable to existing locations from the portion attributable to the opening or closing of stores. The most directly comparable GAAP financial measure is change in net sales.

Excluded items

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

Financial measures (1)

Excluded items

Selling expense

Settlement of claims to resolve payment card interchange fee litigation

General and administrative expense

Legal fees in connection with settlement of claims to resolve payment card interchange fee litigation

Operating income

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

Income tax expense (2)

Tax effect of pre-tax excluded item

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

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

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

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

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents

Financial information on a constant currency basis

The Company provides certain financial information on a constant currency basis to enhance investors’ understanding of underlying business trends and operating performance by removing the impact of foreign currency exchange rate fluctuations. Management also uses financial information on a constant currency basis to award employee performance-based compensation. The effect from foreign currency exchange rates, calculated on a constant currency basis, is determined by applying the current period’s foreign currency exchange rates to the prior fiscal year’s results and is net of the year-over-year impact from hedging. 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 Fiscal 2025 and Fiscal 2024 were as follows:

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

Net sales

Fiscal 2025

Fiscal 2024

% Change

GAAP

Impact from changes in foreign currency exchange rates

Net sales on a constant currency basis

Operating income

Fiscal 2025

Fiscal 2024

BPS Change (1)

GAAP

Excluded items (2)

Adjusted non-GAAP

Impact from changes in foreign currency exchange rates

Adjusted non-GAAP on a constant currency basis

Net income per diluted share attributable to A&F

Fiscal 2025

Fiscal 2024

$ Change

GAAP

Excluded items, net of tax (2)

Adjusted non-GAAP

Impact from changes in foreign currency exchange rates

Adjusted non-GAAP on a constant currency basis

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

(2)     Refer to “ RESULTS OF OPERATIONS ,” for details on excluded items. The tax effect of excluded items is calculated as the difference between the tax provision on a GAAP basis and an adjusted non-GAAP basis.

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

Reconciliations of non-GAAP EBITDA to net income, a financial measure calculated and presented in accordance with GAAP, and the adjustments made in calculating adjusted EBITDA for Fiscal 2025 and Fiscal 2024 were as follows:

Fiscal 2025

Fiscal 2024

(in thousands, except ratios)

% of Net Sales

% of Net Sales

Net income

Income tax expense

Interest (income) expense, net

Depreciation and amortization

EBITDA (1)

Adjustments to EBITDA

Litigation settlement (1)

Adjusted EBITDA (1)

(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.

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

Abercrombie & Fitch Co.

2025 Form 10-K

Table of Contents