ABERCROMBIE & FITCH CO /DE/ (ANF)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with the Company’s Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q in “Item 1. Financial Statements (Unaudited),” to which all references to Notes in MD&A are made.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by the Company or its management and authorized spokespeople involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company’s and management’s control. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “should,” “are confident,” “will,” “could,” “outlook,” or the negative versions of those words or other comparable words, and similar expressions may identify forward-looking statements. Future economic and industry trends that could potentially impact revenue and profitability are difficult to predict. Therefore, there can be no assurance that the forward-looking statements included in this Quarterly Report on Form 10-Q will prove to be accurate. Factors that could cause results to differ from those expressed in the Company’s forward-looking statements include, but are not limited to, the risks described or referenced in Part I, Item 1A. “Risk Factors,” in the Company’s Fiscal 2025 Form 10-K and otherwise in our subsequent reports and filings with the SEC, as well as the following:

•risks and uncertainties related to global trade policy and international trade disputes, including the impact of the imposition or threat of imposition of new or increased tariffs or modification of existing tariffs by the United States or foreign governments, uncertainty regarding the timing and implementation of changes to existing tariff programs, the availability, timing, and amount of potential tariff refunds, or other changes to trade policies or arrangements;

•risks related to changes in global economic and financial conditions, including inflation, and resulting impacts on consumer confidence and spending, and on our operating results, financial condition, and expense management;

•risks and uncertainties related to the effectiveness and optimization of recently implemented enterprise resource planning (“ERP”) systems, including the ability to realize expected benefits and manage post-implementation activities;

•risks related to our global operations and supply chain, including political or climate-related conditions in the countries where we sell or source our products, and the resulting impacts on transportation and freight costs;

•risks related to the geopolitical landscape and ongoing armed conflicts, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience, including regional conflicts in the Middle East, and the impact of such conflicts or events on international trade, consumer demand, supplier delivery, energy costs, or freight costs;

•risks related to natural disasters and other unforeseen catastrophic events;

•risks related to our failure to engage our customers, anticipate customer demand, expectations, and changing fashion trends, and manage our inventory and product delivery;

•risks related to our failure to operate effectively in a highly competitive and constantly evolving industry;

•risks related to our ability to successfully invest in and execute on our customer, digital and omnichannel initiatives;

•risks related to our ability to successfully execute technology initiatives and partnerships, including those relating to artificial intelligence (“AI”) technology;

•risks related to our ability to execute on, and maintain the success of, our current or any future strategic and growth initiatives, including risks related to the review of strategic alternatives for our APAC business;

•risks related to the effects of seasonal fluctuations on our sales and our performance during the back-to-school and holiday selling seasons;

•risks related to fluctuations in foreign currency exchange rates;

•risks related to fluctuations in our tax obligations and effective tax rate, including as a result of earnings and losses generated from our global operations, may result in volatility in our results of operations;

•risks and uncertainty related to adverse public health developments;

•risks related to cybersecurity threats and privacy or data security breaches, and the potential loss or disruption of our information technology systems;

•risks related to the continued validity of our trademarks and our ability to protect our intellectual property;

•risks associated with corporate responsibility, including those associated with climate change;

•risks related to reputational harm to the Company, its officers, and directors;

•risks related to actual or threatened litigation; and

•uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing laws and regulations.

Table of Contents

In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company, or any other person, that the objectives of the Company will be achieved. The forward-looking statements included herein are based on information presently available to the management of the Company. Except as may be required by applicable law, the Company assumes no obligation to publicly update or revise its forward-looking statements, including any financial targets and estimates, whether as a result of new information, future events, or otherwise. As used herein, “Abercrombie & Fitch Co.,” “A&F,” “the Company,” “we,” “us,” “our,” and similar terms include Abercrombie & Fitch Co. and its subsidiaries, unless the context indicates otherwise.

INTRODUCTION

MD&A is provided as a supplement to the accompanying Condensed Consolidated Financial Statements and notes thereto to help provide an understanding of the Company’s results of operations, financial condition, and liquidity. MD&A is organized as follows:

•Overview. A general description of the Company’s business and certain segment information.

•Current Trends and Outlook. A discussion related to certain of the Company’s focus areas for the current fiscal year and a discussion of certain risks and challenges, as well as a summary of the Company’s performance for the thirteen weeks ended May 2, 2026 and May 3, 2025.

•Results of Operations. An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen weeks ended May 2, 2026 and May 3, 2025.

•Liquidity and Capital Resources. A discussion of the Company’s financial condition, changes in financial condition and liquidity as of May 2, 2026, which includes (i) an analysis of financial condition as compared to January 31, 2026; (ii) an analysis of changes in cash flows for the thirteen weeks ended May 2, 2026, as compared to the thirteen weeks ended May 3, 2025; and (iii) an analysis of liquidity, including availability under the Company’s ABL Facility (as defined below), the Company’s share repurchase program, and covenant compliance.

•Recent Accounting Pronouncements. A discussion, as applicable, of the recent accounting pronouncements that the Company has adopted or is currently evaluating, including the dates of adoption and/or expected dates of adoption, and their anticipated effects on the Company’s Condensed Consolidated Financial Statements.

•Critical Accounting Estimates. A discussion of the accounting estimates considered to be important to the Company’s results of operations and financial condition, which typically require significant judgment and estimation on the part of management in their application.

•Non-GAAP Financial Measures. MD&A provides a discussion of certain financial measures that have been determined to not be presented in accordance with GAAP. This section includes certain reconciliations between GAAP and non-GAAP financial measures and additional details on non-GAAP financial measures, including information as to why the Company believes that the non-GAAP financial measures provided within MD&A are useful to investors.

Table of Contents

OVERVIEW

Business summary

The Company is a global, digitally-led omnichannel retailer. The Company offers a broad assortment of apparel, personal care products and accessories for men, women and kids, which are sold primarily through its Company-owned stores and digital channels, as well as through various third-party arrangements.

The Company manages its business on a geographic basis, consisting of three reportable segments: Americas; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). Corporate functions and other income and expenses are evaluated on a consolidated basis and are not allocated to the Company’s segments, and therefore are included as a reconciling item between segment and total operating income.

The Company’s brand families include Abercrombie brands and Hollister brands. These brands share a commitment to offering unique products of enduring quality and exceptional comfort that allow customers around the world to express their own individuality and style.

The Company’s fiscal year ends on the Saturday closest to January 31. All references herein to the Company’s fiscal years are as follows:

Seasonality

Historically, the Company’s operations have been seasonal in nature and consist of two principal selling seasons: the spring season, which includes the first and second fiscal quarters (“Spring”), and the fall season, which includes the third and fourth fiscal quarters (“Fall”). Due to the seasonal nature of the retail apparel industry, the results of operations for any current period are not necessarily indicative of the results expected for the full fiscal year, and the Company could have significant fluctuations in certain asset and liability accounts. The Company historically experiences its greatest sales activity during the Fall season due to back-to-school and holiday sales periods, respectively.

CURRENT TRENDS AND OUTLOOK

Focus areas for Fiscal 2026

Over the last several years, A&F has worked to successfully transform its brands, business and culture, while delivering on its financial commitments. As the Company looks forward, it is focused on evaluating opportunities that continue to deliver sustainable, profitable growth. The Company expects to:

•Deliver Consistent Global Growth Across Brands by investing in owned-and-operated channels with the expectation of continued net sales growth, including through net new store openings, digital fulfillment, and marketing

•Expand Channels and Categories by increasing net sales growth in new and select markets through the use of franchise, wholesale, and licensing partnerships. The Company also plans to expand into new, adjacent product categories that resonate with each brand’s target customer.

•Execute a Multifaceted Strategy that includes evaluating sourcing footprint, adjusting pricing or promotions, and expense reduction

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) generally discusses our results of operations for Fiscal 2025 and Fiscal 2024 and provides comparisons between such fiscal years. For discussion and comparison of Fiscal 2024 and Fiscal 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2024, filed with the SEC on March 31, 2025. This MD&A should be read together with the Company’s audited Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA,” to which all references to Notes in MD&A are made.

INTRODUCTION

MD&A is provided as a supplement to the accompanying Consolidated Financial Statements and notes thereto to help provide an understanding of the Company’s results of operations, financial condition, and liquidity. MD&A is organized as follows:

•Overview. A general description of the Company’s business and certain segment information, and an overview of key performance indicators reviewed by management in assessing the Company’s results.

•Current Trends and Outlook. A discussion of the Company’s long-term plans for growth and a summary of the Company’s performance over recent years, primarily Fiscal 2025 and Fiscal 2024.

•Results of Operations. An analysis of certain components of the Company’s Consolidated Statements of Operations and Comprehensive Income for Fiscal 2025 as compared to Fiscal 2024.

•Liquidity and Capital Resources. A discussion of the Company’s financial condition, changes in financial condition and liquidity as of January 31, 2026, which includes (i) an analysis of changes in cash flows for Fiscal 2025 as compared to Fiscal 2024, (ii) an analysis of liquidity, including availability under the Company’s credit facility, and outstanding debt and covenant compliance and (iii) a summary of contractual and other obligations as of January 31, 2026.

•Recent Accounting Pronouncements. The recent accounting pronouncements the Company has adopted or is currently evaluating, including the dates of adoption or expected dates of adoption, as applicable, and anticipated effects on the Company’s audited Consolidated Financial Statements, are included in Note 2 “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.”

•Critical Accounting Estimates. A discussion of the accounting estimates considered to be important to the Company’s results of operations and financial condition, which typically require significant judgment and estimation on the part of the Company’s management in their application.

•Non-GAAP Financial Measures. MD&A provides a discussion of certain financial measures that have been determined to not be presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). This section includes certain reconciliations between GAAP and non-GAAP financial measures and additional details on non-GAAP financial measures, including information as to why the Company believes the non-GAAP financial measures provided within MD&A are useful to investors.

Table of Contents

OVERVIEW

Business summary

The Company is a global, digitally-led, omnichannel retailer. The Company offers a broad assortment of apparel, personal care products and accessories for men, women and kids, which are sold primarily through its Company-owned stores and digital channels, as well as through various third-party arrangements.

The Company manages its business on a geographic basis, consisting of three reportable segments: Americas; EMEA; and APAC. Corporate functions and other income and expenses are evaluated on a consolidated basis and are not allocated to the Company’s segments and therefore are included as a reconciling item between segment and total operating income.

The Company’s brand families include Abercrombie brands and Hollister brands. These brands share a commitment to offering unique products of enduring quality and exceptional comfort that allow customers around the world to express their own individuality and style.

The Company’s fiscal year ends on the Saturday closest to January 31. This typically results in a fifty-two-week year, but occasionally gives rise to an additional week, resulting in a fifty-three-week year, as was the case in Fiscal 2023. All references herein to the Company’s fiscal years are as follows:

Seasonality

Historically, the Company’s operations have been seasonal in nature and consist of two principal selling seasons: the spring season, which includes the first and second fiscal quarters (“Spring”) and the fall season, which includes the third and fourth fiscal quarters (“Fall”). Due to the seasonal nature of the retail apparel industry, the results of operations for any current period are not necessarily indicative of the results expected for the full fiscal year, and the Company could have significant fluctuations in certain asset and liability accounts. The Company historically experiences its greatest sales activity during the Fall season due to back-to-school and holiday sales periods, respectively.

Key Performance Indicators

The following measurements are among the key performance indicators reviewed by the Company’s management in assessing the Company’s results:

•Net sales and comparable sales by region and brand;

•Cost of sales, exclusive of depreciation and amortization, as a percentage of net sales;

•Gross profit and gross profit rate;

•Selling expense as a percentage of net sales;

•General and administrative expense as a percentage of net sales;

•Operating income, including by segment, and operating income as a percentage of net sales (“operating margin”);

•Earnings before interest, taxes, depreciation and amortization (“EBITDA”)

•Net income and net income attributable to A&F;

•Net income per diluted share attributable to A&F;

•Cash flow and liquidity measures, such as the Company’s working capital, operating cash flow, and free cash flow;

•Inventory metrics, such as inventory turnover;

•Return on invested capital and return on equity;

•Transactional metrics, such as traffic and conversion, performance across key product categories, AUR, average unit cost (“AUC”), average units per transaction and average transaction values, return rates, shrink; and

•Customer-centric metrics such as customer retention and acquisition, and certain metrics related to the loyalty programs.

While not all of these metrics are disclosed publicly by the Company due to the proprietary nature of the information, the Company discusses many of these metrics within this MD&A.

Table of Contents

CURRENT TRENDS AND OUTLOOK

Focus areas for Fiscal 2026

Over the last several years, A&F Co. has worked to successfully transform its brands, business and culture, while delivering on its financial commitments. As the Company looks forward, it’s focused on evaluating opportunities that continue to deliver sustainable, profitable growth. The Company expects to:

•Deliver Consistent Global Growth Across Brands by investing in owned-and-operated channels with the expectation of continued net sales growth, including through net new store openings, digital fulfillment, and marketing.

•Expand Channels and Categories by increasing net sales growth in new and select markets through the use of franchise, wholesale, and licensing partnerships. The Company also plans to expand into new, adjacent product categories that resonate with each brand’s target customer.

•Execute a Multifaceted Strategy that includes evaluating sourcing footprint, adjusting pricing or promotions, and expense reduction initiatives to stabilize product and operating costs in attempt to meaningfully mitigate external cost pressure, including near-term tariff impacts.

•Enhance and Modernize our Key Systems and Leverage Technology to support operational productivity and to improve the customer journey.

•Execute Financial Discipline to maintain double-digit operating margins and expand net income per diluted share.

Current macroeconomic conditions and tariffs

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, changes in trade policy and related uncertainty, including enacted and proposed tariffs affecting countries from which we source a significant portion of our merchandise and raw materials, have created a dynamic and unpredictable trade environment that adversely impacted our business and operations during Fiscal 2025 and continues into Fiscal 2026.

During Fiscal 2025, changes in U.S. trade policy, including the imposition, modification, and rescission of certain tariffs, increased volatility in duties and raw material costs associated with merchandise sourced from certain countries and added complexity to our supply chain and sourcing processes.

On February 20, 2026, the U.S. Supreme Court held that IEEPA did not authorize the imposition of tariffs, striking down the 10% universal baseline tariff, as well as the country-specific tariffs. The Company is involved in litigation seeking refunds of IEEPA tariffs. The outcome and timing of resolution remain uncertain.

While certain tariffs have been struck down, modified, or replaced, other tariffs remain in effect, and additional tariffs have been imposed or proposed during Fiscal 2026. Additional, increased, or modified tariffs may be imposed without warning through various statutes and trade authorities. These changing tariff rates and shifting trade policies have created significant uncertainty for suppliers, consumers, and us. These continued uncertainties regarding the future impact of tariffs and global trade relations could lead to weakened business conditions for our industry and could adversely impact our ability to procure merchandise or result in increases to the cost of merchandise sourced from impacted countries.

The Company continues to evaluate the impact of tariffs and other trade policies on its business and is continuing to execute against our playbook of mitigation strategies. Mitigation strategies have included evaluating supply chain footprint changes, negotiating with our supply chain vendors, pursuing operating expense reductions, and determining ways to increase AUR.

After factoring in certain mitigation strategies, tariffs on goods imported into the U.S. under trade policies in effect through January 31, 2026 negatively impacted operating income by $90 million or 170 basis points as a percent of net sales, during Fiscal 2025. Assuming the estimated impact from the tariffs on goods imported into the U.S., including the impact of a 15% tariff on all U.S. imports (which, for purposes of our outlook, is expected to apply beginning February 24, 2026, and to remain in effect for the entirety of Fiscal 2026), and factoring in certain planned mitigation strategies, we expect to incur approximately $40 million of incremental impact compared to Fiscal 2025, or approximately 70 basis points as a percentage of net sales, which would negatively impact our operating income during Fiscal 2026.

Recently, the global markets have experienced fluctuations in fuel and other energy related costs, which could lead to greater uncer

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]