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 1, 2026 and August 2, 2025 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 2026, net sales increased 5% on a reported basis and were flat on a comparable sales basis, as compared to the second quarter of Fiscal 2025. The reported increase was primarily attributable to mid-single-digit AUR growth, driven by selected changes to tickets and promotions, and an increase in new owned and operated stores, which was partially offset by a low-single-digit decline in unit volume. The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance. On a geographic basis for the second quarter of Fiscal 2026:

•Net sales growth in the Americas region of 5% and 1% on a reported and comparable sales basis, respectively. The increase on a reported basis was primarily attributable to mid-single-digit AUR growth, with selected changes to tickets and promotions, partially offset by a low-single-digit decline in unit volume. The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance.

•Net sales growth in the EMEA region of 2% on a reported basis and net sales decline of 4% on a comparable sales basis. The increase on a reported basis was primarily attributable to low-single-digit AUR growth, with selected lower promotional activity, partially offset by a low-single-digit decline in unit volume. The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance.

•Net sales growth in the APAC region of 19% and 13% on a reported and comparable sales basis, respectively. The increase on a reported basis was led by low-double-digit AUR growth, lower promotional activity, higher third-party volume, and mid-single-digit growth in unit volume. The spread between net sales and comparable net sales is primarily attributable to third-party channel performance and favorable foreign currency.

For the year-to-date period of Fiscal 2026, net sales increased 3% on a reported basis and were flat on a comparable sales basis, as compared to the year-to-date period of Fiscal 2025. The increase on a reported basis was primarily attributable to mid-single-digit AUR growth, driven by selected changes to tickets and promotions, as well as the addition of new owned and operated stores and favorable foreign currency impacts, partially offset by a low-single-digit decline in unit volume. The spread between net sales and comparable net sales is primarily attributable to net new store openings and third-party channel performance. On a geographic basis for the year-to-date period of Fiscal 2026:

•Net sales growth in the Americas region of 4% and 1% on a reported and comparable basis, respectively. The increase on a reported basis was led by mid-single-digit AUR growth, with selected changes to tickets and promotions, with around flat unit volume. The spread between net sales and comparable net sales is primarily attributable to net new store openings.

•Net sales decline in the EMEA region of 3% and 8% on a reported and comparable basis, respectively. The decline on a reported basis was attributable to lower third-party volume, and a mid-single-digit decline in unit volume, partially offset by low-single-digit AUR growth and favorable foreign currency. The spread between net sales and comparable net sales is primarily attributable to net new store openings, third-party channel performance and favorable foreign currency.

•Net sales growth in the APAC region of 22% and 14% on a reported and comparable sales basis, respectively. The increase on a reported basis was attributable to high-single digit AUR growth and high-single-digit unit volume growth, coupled with higher third-party volume and favorable foreign currency. The spread between net sales and comparable net sales is primarily attributable to third-party channel performance, and favorable foreign currency.

The Company’s net sales by brand for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 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 2026, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 850 basis points, as compared to the second quarter of Fiscal 2025. The percentage decrease was primarily attributable to cost of sales leverage from 690 basis points net tariff benefit which includes the impact of IEEPA tariff refunds and ongoing tariff expense, AUR growth driven by selected changes to tickets and promotions, partially offset by an approximate 20 basis point increase in freight costs.

For the year-to-date period of Fiscal 2026, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 490 basis points, as compared to the year-to-date period of Fiscal 2025. The percentage decrease was primarily attributable to cost of sales leverage from 290 basis points net tariff benefit which includes the impact of IEEPA tariff refunds and ongoing tariff expense, AUR growth driven by selected changes to tickets and promotions, and an approximate 70 basis point decline in freight costs.

Selling expense

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

For the second quarter of Fiscal 2026, selling expense increased by $69 million, as compared to the second quarter of Fiscal 2025. Selling expense as a percentage of net sales increased 400 basis points, as compared to the second quarter of Fiscal 2025. The increase in rate was primarily driven by expense deleverage, including an approximate 350 basis point prior year benefit resulting from the favorable settlement of claims to resolve payment card interchange fee litigation (the “Litigation Settlement”), and an approximate 80 basis point increase in total fulfillment expense.

For the year-to-date period of Fiscal 2026, selling expense increased by $100 million, as compared to the year-to-date period of Fiscal 2025. Selling expense as a percentage of net sales increased 320 basis points, as compared to the year-to-date period of Fiscal 2025. The increase in rate was primarily driven by expense deleverage, including an approximate 190 basis point prior year benefit resulting from the Litigation Settlement, an approximate 110 basis point increase in store occupancy, payroll and other controllable costs, and an approximate 70 basis point increase in marketing.

General and administrative expense

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

For the second quarter of Fiscal 2026, general and administrative expense increased by $29 million, as compared to the second quarter of Fiscal 2025. General and administrative expense as a percentage of net sales increased 170 basis points, as compared to the second quarter of Fiscal 2025. The increase in expense rate was primarily driven by a 120 basis point increase in total employee compensation costs, and a 70 basis point increase in other outside services, partially offset by an approximate adverse 40 basis point impact in prior year legal fees relating to the Litigation Settlement.

For the year-to-date period of Fiscal 2026, general and administrative expense increased by $37 million, as compared to the year-to-date period of Fiscal 2025. General and administrative expense as a percentage of net sales increased 110 basis points as compared to the year-to-date period of Fiscal 2025. The increase in expense rate was primarily driven by an approximate 80 basis point increase in total employee compensation costs an approximate 40 basis point increase in other outside services, offset by an approximate adverse 20 basis point impact in legal fees relating to the Litigation Settlement.

Other operating (income) loss, 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 2026, operating income increased by $46 million, or 280 basis points as a percentage of net sales, as compared to the second quarter of Fiscal 2025.

•Operating income for the Americas region increased $63 million, or 470 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2025. The increase as a percent of sales was primarily attributed to an increase in AUR, cost of sales leverage, inclusive of IEEPA tariff refunds, partially offset by a prior year benefit from the Litigation Settlement included in selling expense, as well as deleverage in fulfillment expenses.

•Operating income for the EMEA region increased $2.7 million, or 110 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2025. The increase as a percent of sales was primarily attributed to cost of sales leverage, partially offset by deleverage in store-related and marketing investment.

•Operating (loss) for the APAC region decreased $2.6 million or 840 basis points as a percentage of region net sales, as compared to the second quarter of Fiscal 2025. The decrease as a percent of sales was primarily attributed to leverage in cost of sales on higher AUR, as well as leverage of store-related, marketing and administrative expenses.

•Operating (loss) not attributed to segments increased primarily related to an increase in employee compensation and technology costs.

For the year-to-date period of Fiscal 2026, operating income increased by $33 million compared to the year-to-date period of Fiscal 2025. As a percentage of net sales, operating income increased 90 basis points compared to the year-to-date period of Fiscal 2025.

•Operating income for the Americas increased $67 million, or 230 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2025. The increase as a percent of sales was primarily attributed to cost of sales leverage, inclusive of IEEPA tariff refunds, partially offset by a prior year benefit from the Litigation Settlement included in selling expense and deleverage on store-related, and fulfillment expenses.

•Operating income for EMEA decreased $10 million, or 230 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2025. The decrease as a percent of sales primarily related to deleverage in store-related and marketing investments, partially offset by cost of sales leverage.

•Operating (loss) for APAC decreased $6 million, or 920 basis points as a percentage of region net sales, as compared to the year-to-date period of Fiscal 2025. The decrease as a percent of sales was primarily attributed to leverage in cost of sales and store-related expenses.

•Operating (loss) not attributed to segments increased primarily related to an increase in employee compensation and technology costs.

Interest income, net

For the second quarter of Fiscal 2026, interest income, net increased $5.1 million, as compared to the second quarter of Fiscal 2025. The net increase was a result of interest income recognized on IEEPA tariff refunds, and an increase in balance and yield on time deposits and money market accounts compared to the second quarter of Fiscal 2025.

For the year-to-date period of Fiscal 2026, interest income, net increased $3.6 million, as compared to the year-to-date period of Fiscal 2025. The net increase was primarily a result of interest income recognized on IEEPA tariff refunds compared to the year-to-date period of Fiscal 2025.

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 2026, as compared with the second quarter and year-to-date period of Fiscal 2025, is due to higher pre-tax income compared with the prior-year period.

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.