ABERCROMBIE & FITCH CO /DE/

For the period ended Jan 31, 2026. Filed Mar 26, 2026.

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FY2026 · Filed Mar 26, 2026

ANF$154.00+0.8%Stored close · as of Nov 10, 2026

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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.

Inventory Valuation
Policy	Effect if Actual Results Differ from Assumptions
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.

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