ABERCROMBIE & FITCH CO /DE/

Focus Areas for Fiscal 2025

The Company introduced the Always Forward Plan in June of Fiscal 2022. The Always Forward Plan is anchored on our strategic growth principles, which are to:

•Execute focused growth plans;

•Accelerate an enterprise-wide digital revolution; and

•Operate with financial discipline

While the Company has significantly outperformed certain financial targets set forth in the Always Forward Plan, the growth principles continue to serve as a framework for the Company achieving sustainable and profitable growth and profitability.

The Company’s strategic priorities continue to evolve based on changing consumer demands and new strategic opportunities, and management reviews and prioritizes investments and strategic focus areas to address such demands and opportunities.

Execute focused growth plans by:

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

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

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

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

•continuing to progress on our multi-year enterprise resource planning (“ERP”) transformation and cloud migration journey; and

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

Operate with financial discipline by:

•using our agile inventory model and pricing strategies to position the Company to support customer demand throughout the year; and

•maintaining our durable balance sheet and consistent free cash flow profile, underpinned by our disciplined investment philosophy while balancing against macro environment impacts and efficiency efforts.

Current Macroeconomic Conditions

Macroeconomic conditions, such as a volatile interest rate environment, ongoing inflation, the geopolitical landscape, and foreign exchange rate fluctuations, continue to impact the global economy. In addition, recent changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy. In periods of perceived or actual unfavorable economic conditions, consumers may reallocate available discretionary spending or determine that they have fewer funds available for discretionary spending, which may adversely impact demand for our products. In addition, freight costs have remained heightened since the start of the second quarter of Fiscal 2024, which we expect to continue through the first half of Fiscal 2025. Continued inflationary pressures could further impact expenses and have a long-term impact on the Company, as increasing costs may impact its ability to maintain satisfactory margins.

Global Events and Supply Chain Disruptions

As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, management is mindful of macroeconomic risks, global challenges and the changing global geopolitical environment. The global supply chain also continues to be negatively impacted by various factors, including disruptions in major maritime routes, port congestion, higher operational costs, and increased competition for supply chain availability due to uncertainty regarding tariffs and trade policy. The Company has taken certain mitigating actions in response to these disruptions, including increasing air freight usage where appropriate and prioritizing critical orders earlier to allow for longer lead times. Further mitigating actions may be needed, particularly if there is prolonged port congestion or transportation delays, and could result in higher freight costs in the near-term and beyond.

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 the Company delivered new store experiences across brands during Fiscal 2024 and Fiscal 2023. Details related to these new store experiences follow:

During Fiscal 2024, the Company opened 65 new stores, while closing 41 stores. This compares with 35 new stores and 32 closures during Fiscal 2023. Future closures could be completed through natural lease expirations, while certain other leases include early termination options that can be exercised under specific conditions. The Company may also elect to exit or modify other leases, and could incur charges related to these actions.

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

(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 international franchise stores.

Pillar Two Model Rules

In 2021, the Organization for Economic Cooperation and Development (“OECD”) released Pillar Two Global Anti-Base Erosion model rules (“Pillar Two Rules”), designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. Although the U.S. withdrew the U.S. from the OECD’s global tax agreement in January 2025, other countries where the Company does business, including the U.K. and Germany, have enacted legislation implementing Pillar Two Rules, which are effective from January 1, 2024. The implementation of Pillar Two Rules in each jurisdiction in which the Company operates did not have a material impact on the Company’s effective tax rate for Fiscal 2024, and the Company does not project a material impact on the effective tax rate for Fiscal 2025. The Company will continue to evaluate the impact as additional jurisdictions enact legislation and provide further guidance.

Summary of Results

A summary of results for Fiscal 2024 and Fiscal 2023 follows:

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