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 and twenty-six weeks ended August 2, 2025 and August 3, 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 second quarter of Fiscal 2025, net sales increased 7%, as compared to the second quarter of Fiscal 2024. The increase was primarily attributable to high-single digit unit volume growth, with increases in company owned and operated stores digital channels and net new stores, partially offset by reduced AUR. The year-over-year increase in net sales reflects positive comparable sales of 3%, as compared to the second quarter of Fiscal 2024. On a geographic basis for the second quarter of Fiscal 2025:

•Net sales growth in the Americas region of 8% and 5% on a comparable basis. The increase was attributable to low-double digit unit volume growth, with increases in company owned and operated stores and digital channels and net new owned and operated stores.

•Net sales decline in the EMEA region of (1)% and (5)% on a comparable basis. The decrease was attributable to lower comparable AUR from increased promotional activity, partially offset by low single-digit unit volume growth, with increases in company owned and operated stores and digital channels, new stores and favorable foreign currency.

•Net sales growth in the APAC region of 12% and 1% on a comparable basis. Sales growth was led by low single-digit unit volume growth, with increases in owned and operated store and digital channels and new owned and operated stores.

For the year-to-date period of Fiscal 2025, net sales increased 7%, as compared to the year-to-date period of Fiscal 2024. The increase was primarily attributable to high-single digit growth 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 4%, as compared to the year-to-date period of Fiscal 2024. On a geographic basis for the year-to-date-period of Fiscal 2025:

•Net sales growth in the Americas region of 7% and 5% on a comparable basis. Sales growth was led by high single-digit unit volume growth, with increases in company owned and operated stores and digital channels and net new owned and operated stores.

•Net sales growth in the EMEA region of 5% and flat on a comparable basis. The increase was attributable to new store sales, low single-digit unit volume growth with an increase in in digital channels, and foreign currency partially offset by lower AUR.

•Net sales growth in the APAC region of 8% and 2% on a comparable sales basis. The increase was attributable to new store sales and low-single digit unit volume growth, with an increase in digital, partially offset by a decrease in owned and operated stores.

The Company’s net sales by brand for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 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 second quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 230 basis points, as compared to the second quarter of Fiscal 2024. The percentage increase was primarily attributable to cost of sales deleverage from single-digit AUR decreases driven by volume mix and targeted promotions, and higher average unit cost (“AUC”) partially due to an approximate 40 basis point adverse tariff impact compared to the second quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 330 basis points, as compared to the year-to-date period of Fiscal 2024. The percentage increase was primarily attributable to cost of sales deleverage from single-digit AUR decreases driven by volume mix and targeted promotions, and higher AUC primarily related to 120 basis points in higher freight costs and an approximate 20 basis point adverse tariff impact compared to the year-to-date period of Fiscal 2024.

Selling expense

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

For the second quarter of Fiscal 2025, selling expense decreased by $7 million, as compared to the second quarter of Fiscal 2024. Selling expense as a percentage of net sales decreased 260 basis points, as compared to the second quarter of Fiscal 2024. The decrease in rate was primarily driven by expense leverage, including an approximate 350 basis point benefit resulting from the favorable settlement of claims to resolve payment card interchange fee litigation (the “Litigation Settlement”), partially offset by an approximate 90 basis point increase in store occupancy and payrolls costs. Excluding 350 basis points of benefits related to the Litigation Settlement, adjusted non-GAAP selling expense as a percentage of net sales increased by approximately 90 basis points during the second quarter of Fiscal 2025, as compared to the second quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, selling expense increased by $33 million as compared to the year-to-date period of Fiscal 2024. Selling expense as a percentage of net sales decreased 90 basis points as compared to the year-to-date period of Fiscal 2024. The decrease in rate was primarily driven by expense leverage, including an approximate 190 basis point benefit resulting from the Litigation Settlement, partially offset by an approximate 60 basis point increase in store occupancy and payroll costs and an approximate 40 basis point increase in marketing. Excluding 190 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 the year-to-date period of Fiscal 2025, as compared to the year-to-date period of Fiscal 2024.

General and administrative expense

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

For the second quarter of Fiscal 2025, general and administrative expense decreased by $3 million, as compared to the second quarter of Fiscal 2024. General and administrative expense as a percentage of net sales decreased 120 basis points, as compared to the second quarter of Fiscal 2024. The decrease in expense rate was primarily driven by a 190 basis point decrease in employee compensation costs, partially offset by approximately 40 basis points in legal fees relating to the Litigation Settlement, and 30 basis points in other administrative expenses. Excluding 40 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales decreased by approximately 150 basis points during the second quarter of Fiscal 2025, as compared to the second quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, general and administration expense decreased by $17 million, as compared to the year-to-date period of Fiscal 2024. General and administrative expense as a percentage of net sales decreased 190 basis points as compared to the year-to-date period of Fiscal 2024. The decrease in expense rate was primarily driven by an approximate 200 basis point decrease in employee compensation costs, approximately 20 basis points in legal fees relating to the Litigation Settlement, partially offset by approximately 30 basis points in outside services and other administrative expenses. Excluding 20 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales during the year-to-date period of Fiscal 2025, decreased by approximately 210 basis points, as compared to the year-to-date period of Fiscal 2024.

Other operating 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.

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

For the second quarter of Fiscal 2025, operating income increased by $31 million, or 160 basis points, as a percentage of net sales, as compared to the second quarter of Fiscal 2024.

•Operating income for the Americas region increased $45 million, or 230 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2024. The increase as a percent of sales was primarily attributed to a benefit from the Litigation Settlement included in selling expense, partially offset by higher cost of sales, inclusive of tariffs, and deleverage on store occupancy expenses.

•Operating income for the EMEA region decreased $14 million or 670 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2024. The decrease as a percent of sales is primarily attributed to lower comparable AUR and deleverage on stores and distribution center related fulfillment expenses.

•Operating (loss) for the APAC region increased by $3 million or 630 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2024. The decrease as a percent of sales is primarily attributed to deleverage on higher stores and distribution expenses.

Excluding the benefits related to the Litigation Settlement, adjusted non-GAAP operating income as a percentage of net sales decreased by approximately 160 basis points during the second quarter of Fiscal 2025, as compared to the second quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, operating income increased by $3 million compared to the year-to-date period of Fiscal 2024. As a percentage of net sales operating income decreased 80 basis points compared to the year-to-date period of Fiscal 2024.

•Operating income for the Americas increased $19 million and decreased 100 basis points as a percentage of region net sales as compared to the year-to-date period of Fiscal 2024. The decrease as a percent of sales was primarily attributed to higher cost of sales, inclusive of tariffs, and deleverage on store occupancy expenses, partially offset by a benefit from the Litigation Settlement included in selling expense.

•Operating (loss) for EMEA increased $22 million, or 660 basis points as a percentage of region net sales as compared to the year-to-date period of Fiscal 2024. The decrease as a percent of sales primarily relates to higher freight costs, marketing and deleverage on distribution center related fulfillment expenses.

•Operating (loss) for APAC increased $7 million, or 870 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2024. The decrease as a percent of sales is primarily attributed to deleverage on higher stores and distribution expenses.

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 the year-to-date period of Fiscal 2025, as compared to the year-to-date period of Fiscal 2024.

Interest income, net

For the second quarter of Fiscal 2025, interest income, net decreased $2.7 million, as compared to the second quarter of Fiscal 2024. The net decrease was a result of a reduction in interest income due to the decrease in balance on time deposits and money market accounts compared to the second quarter of 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.

For the year-to-date period of Fiscal 2025, interest income, net decreased $1.0 million, as compared to the year-to-date period of Fiscal 2024. The net decrease was a result of a reduction in interest income due to the decrease in balance on time deposits and money market accounts compared to the year-to-date period of 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

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

The change in the effective tax rate for the second quarter and year-to-date period of Fiscal 2025, as compared with the second quarter and the year-to-date period of Fiscal 2024, is due to jurisdictional mix, a lower tax benefit on share-based compensation compared with the prior year, and the establishment of an additional valuation allowance in Japan.

Refer to Note 10, “INCOME TAXES.”

Net income attributable to A&F

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

Net income per share attributable to A&F

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

EBITDA AND ADJUSTED EBITDA

(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.