ABERCROMBIE FITCH CO DE

RESULTS OF OPERATIONS

The estimated basis point (“BPS”) change disclosed throughout this Results of Operations section 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 the thirteen weeks ended May 3, 2025 and May 4, 2024 were as follows:

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

For the first quarter of Fiscal 2025, net sales increased 8% as compared to the first quarter of Fiscal 2024. The increase was primarily attributable to high-single digit growth in unit volume from traffic growth in comparable company owned and operated stores and digital channels and net new stores. The year-over-year increase in net sales reflects positive comparable sales of 4%, as compared to the first quarter of Fiscal 2024.

•Net sales growth in the Americas region of 7%. The increase was attributable to unit volume growth from increased traffic and transactions in company owned and operated stores and digital channels. The comparable sales growth percentage is lower than net sales growth percentage, as comparable sales excludes the net impact of new store openings during the period which had a benefit on net sales growth.

•Net sales growth in the EMEA region of 12%. The increase was attributable to both higher average unit retail (“AUR”) from lower promotional activity and unit volume growth from increased traffic and transactions in company owned and operated stores and digital channels. The comparable sales growth percentage is lower than net sales growth percentage, as comparable sales exclude the net impact of new store openings during the period and the effects of foreign currency, both of which had a benefit on net sales growth.

•In the APAC region, net sales grew 5% and 2% on a comparable sales basis. The increase was attributable to net sales growth led by high unit sales across company owned and operated stores and digital channels. The comparable sales growth percentage is lower than net sales growth percentage, as comparable sales excludes the net impact of new store openings during the period which had a benefit on net sales growth.

The Company’s net sales by brand for the thirteen weeks ended May 3, 2025 and May 4, 2024 were as follows:

(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

For the first quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 440 basis points, as compared to the first quarter of Fiscal 2024. The percentage increase was primarily attributable to cost of sales deleverage from approximately 230 basis points in higher freight costs compared to the first quarter of Fiscal 2024.

Selling expense

For the first quarter of Fiscal 2025, selling expense increased by $40 million compared to the first quarter of 2024. Selling expense as a percentage of net sales increased 110 basis points, as compared to the first quarter of Fiscal 2024. The increase in rate was primarily driven by expense deleverage, including approximately 50 basis points in marketing costs, approximately 40 basis points in stores expense, primarily relating to store occupancy and store employee compensation costs, and approximately 30 basis points in distribution center and order fulfillment costs as compared to the first quarter of Fiscal 2024.

General and administrative expense

For the first quarter of Fiscal 2025, general and administrative expense decreased by $15 million compared to the first quarter of Fiscal 2024. General and administrative expense as a percentage of net sales decreased 270 basis points, as compared to the first quarter of Fiscal 2024. The decrease in expense rate was primarily driven by a 210 basis point decrease in employee compensation costs and approximately 60 basis points in outside services and other administrative expenses.

Other operating loss (income), net

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.

For the first quarter of Fiscal 2025, operating income decreased by $28 million, or 340 basis points, as a percentage of net sales, as compared to the first quarter of Fiscal 2024.

•Operating income for the Americas region decreased $25 million or 490 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2024. The decrease as a percent of net sales was primarily attributed to higher freight costs and deleverage on store occupancy and distribution center related fulfillment expenses.

•Operating income for the EMEA region decreased $8 million or 620 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2024. The decrease as a percent of net sales was primarily attributed to higher freight costs, marketing costs and deleverage on distribution center related fulfillment expenses.

•Operating (loss) for the APAC region increased by $4 million or 1,090 basis points as a percentage of region net sales, as compared to the first quarter of Fiscal 2024. The decrease as a percent of net sales was primarily attributed to deleverage on higher selling expenses.

Interest income, net

For the first quarter of Fiscal 2025, interest income, net increased $1.8 million, as compared to the first quarter of Fiscal 2024. The net increase in interest income was a result of 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. This was partially offset by a reduction in interest income due to the decrease in balance on time deposits and money market accounts compared to the first quarter of Fiscal 2024.

Income tax expense

Compared with the year-to-date period of Fiscal 2024, the change in the effective tax rate during Fiscal 2025 is due to jurisdictional mix and lower levels of pre-tax income offset by a lower tax benefit on share-based compensation compared with the prior year.

Refer to Note 9, “INCOME TAXES.”

Net income attributable to A&F

Net income per share attributable to A&F

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

EBITDA

(1)EBITDA is a supplemental financial measure that is not defined or prepared in accordance with GAAP. EBITDA is defined as net income before interest, income taxes and depreciation and amortization. Refer to “NON-GAAP FINANCIAL MEASURES” for further details.