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 thirty-nine weeks ended November 1, 2025 and November 2, 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 third quarter of Fiscal 2025, net sales increased 7%, as compared to the third quarter of Fiscal 2024. The increase was primarily attributable to mid-single-digit unit volume growth, with an increase in comparable company owned and operated stores, digital channels, net new owned and operated stores and low-single-digit AUR growth. The year-over-year increase in net sales reflects positive comparable sales of 3%, as compared to the third quarter of Fiscal 2024. On a geographic basis for the third quarter of Fiscal 2025:

•Net sales growth in the Americas region of 7% and 4% on a comparable basis. The increase was attributable to mid-single-digit unit volume growth, with increases in comparable company owned and operated stores, digital channels and net new owned and operated stores.

•Net sales growth in the EMEA region of 7% and 2% on a comparable basis. The increase was attributable to low-double-digit AUR growth and favorable foreign currency, partially offset by mid-single-digit unit volume decline, with decreases in comparable company owned and operated stores and digital channels.

•Net sales decline in the APAC region of (6)% and (12)% on a comparable basis. The decline was led by low-double-digit unit volume decline, with decreases in comparable owned and operated store and digital channels, partially offset by mid-single-digit AUR growth.

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 unit volume growth, with increases in comparable company owned and operated stores, digital channels and net new owned and operated stores. 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. The increase was led by high-single-digit unit volume growth, with increases in comparable company owned and operated stores, digital channels and net new owned and operated stores.

•Net sales growth in the EMEA region of 6% and flat on a comparable basis. The increase was attributable to mid-single digit AUR growth, favorable foreign currency and an increase in sales volume in net new stores, offset by relatively flat unit growth.

•Net sales growth in the APAC region of 3% and 2% on a comparable sales basis. The increase was attributable to mid-single digit AUR growth, a high-single digit increase in digital channels, partially offset by a decrease in comparable owned and operated stores. Sales growth was negatively impacted by low-single digit unit volume decline with declines in comparable owned and operated stores, partially offset by growth in digital channels.

The Company’s net sales by brand for the thirteen and thirty-nine weeks ended November 1, 2025 and November 2, 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 third quarter of Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased by approximately 260 basis points, as compared to the third quarter of Fiscal 2024. The percentage increase was primarily attributable to higher average unit cost (“AUC”) partially due to an approximate 210 basis point adverse tariff impact, with the remaining impact from product mix compared to the third 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 300 basis points, as compared to the year-to-date period of Fiscal 2024. The percentage increase was primarily attributable to cost of sales deleverage with AUR approximately flat driven by volume mix and targeted promotions, higher AUC primarily related to an approximate 90 basis point adverse tariff impact, and 40 basis points in higher freight costs compared to the year-to-date period of Fiscal 2024.

Selling expense

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

For the third quarter of Fiscal 2025, selling expense increased by $39 million, as compared to the third quarter of Fiscal 2024. Selling expense as a percentage of net sales increased 80 basis points, as compared to the third quarter of Fiscal 2024. The increase in rate was primarily driven by expense deleverage, with an approximate 100 basis point increase in marketing and an approximate 40 basis point increase in store occupancy and payrolls costs, partially offset by approximately 80 basis points in fulfillment expense.

For the year-to-date period of Fiscal 2025, selling expense increased by $71 million as compared to the year-to-date period of Fiscal 2024. Selling expense as a percentage of net sales decreased 30 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 120 basis point benefit resulting from the Litigation Settlement and approximately 70 basis points in fulfillment expense, partially offset by an approximate 70 basis point increase in store occupancy and payroll costs and an approximate 60 basis point increase in marketing. Excluding 120 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 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 third quarter of Fiscal 2025, general and administrative expense increased by $5 million, as compared to the third quarter of Fiscal 2024. General and administrative expense as a percentage of net sales decreased 60 basis points, as compared to the third quarter of Fiscal 2024. The decrease in expense rate was primarily driven by a 110 basis point decrease in employee compensation costs, partially offset by an approximate 40 basis point increase in outside services expense.

For the year-to-date period of Fiscal 2025, general and administration expense decreased by $12 million, as compared to the year-to-date period of Fiscal 2024. General and administrative expense as a percentage of net sales decreased 140 basis points as compared to the year-to-date period of Fiscal 2024. The decrease in expense rate was primarily driven by an approximate 160 basis point decrease in employee compensation costs and approximately 10 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 10 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 150 basis points, as compared to the year-to-date period of Fiscal 2024.

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 third quarter of Fiscal 2025, operating income decreased by $24 million, or 280 basis points, as a percentage of net sales, as compared to the third quarter of Fiscal 2024.

•Operating income for the Americas region decreased $16 million, or 360 basis points as a percentage of region net sales, as compared to the third quarter of Fiscal 2024. The decrease as a percent of sales was primarily attributed to higher cost of sales, inclusive of tariffs, and an increase in marketing investments.

•Operating income for the EMEA region decreased $0.2 million or 100 basis points as a percentage of region net sales, as compared to the third quarter of Fiscal 2024. The decrease as a percent of sales is primarily attributed to higher AUC and deleverage on general and administrative expenses, partially offset by leverage on store occupancy.

•Operating (loss) for the APAC region increased by $2 million or 610 basis points as a percentage of region net sales, as compared to the third quarter of Fiscal 2024. The decrease as a percent of sales is primarily attributed to deleverage on marketing investments and general and administrative expenses.

For the year-to-date period of Fiscal 2025, operating income decreased by $22 million compared to the year-to-date period of Fiscal 2024. As a percentage of net sales operating income decreased 150 basis points compared to the year-to-date period of Fiscal 2024.

•Operating income for the Americas increased $3 million and decreased 200 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 marketing investments, partially offset by leverage in fulfillment expenses and a benefit from the Litigation Settlement included in selling expense.

•Operating income for EMEA decreased $22 million, or 460 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, and deleverage on fulfillment expenses and marketing investments.

•Operating (loss) for APAC increased $9 million, or 760 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 higher cost of sales, and deleverage on store occupancy expenses, partially offset by leverage on general and administrative expenses.

Excluding the benefits related to the Litigation Settlement, adjusted non-GAAP operating income as a percentage of net sales decreased by approximately 260 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 third quarter of Fiscal 2025, interest income, net decreased $2.8 million, as compared to the third 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 third quarter of Fiscal 2024.

For the year-to-date period of Fiscal 2025, interest income, net decreased $3.8 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 third quarter and year-to-date period of Fiscal 2025, as compared with the third 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.