ANNUAL REPORT
2024
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 1, 2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-12107
Abercrombie & Fitch Co.
(Exact name of registrant as specified in its charter)
Delaware
31-1469076
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
6301 Fitch Path
New Albany
Ohio
43054
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (614) 283-6500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.01 Par Value
ANF
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes ¨ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
x
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting
firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes x No
Aggregate market value of the registrant’s Class A Common Stock (the only outstanding common equity of the registrant) held by non-affiliates of
the registrant (for this purpose, executive officers and directors of the registrant are considered affiliates) as of August 3, 2024: $6,635,249,010.
Number of shares outstanding of the registrant’s common stock as of March 28, 2025: 48,869,057 shares of Class A Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant’s definitive proxy statement for the 2025 Annual Meeting of Stockholders, are incorporated by reference into Part III of
this Annual Report on Form 10-K. The registrant expects to file such definitive proxy statement with the Securities and Exchange Commission
within 120 days of its fiscal year ended February 1, 2025.
Table of Contents
Table of Contents
PART I
Item 1.
Business
4
Item 1A.
Risk Factors
12
Item 1B.
Unresolved Staff Comments
25
Item 1C.
Cybersecurity
25
Item 2.
Properties
26
Item 3.
Legal Proceedings
26
Item 4.
Mine Safety Disclosures
26
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
27
Item 6.
[Reserved]
28
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
29
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
44
Item 8.
Financial Statements and Supplementary Data
45
Consolidated Statements of Operations and Comprehensive Income (Loss)
45
Consolidated Balance Sheets
46
Consolidated Statements of Stockholders’ Equity
47
Consolidated Statements of Cash Flows
48
Index for Notes to Consolidated Financial Statements
49
Notes to Consolidated Financial Statements
50
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
82
Item 9A.
Controls and Procedures
82
Item 9B.
Other Information
83
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
83
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
84
Item 11.
Executive Compensation
85
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
85
Item 13.
Certain Relationships and Related Transactions, and Director Independence
85
Item 14.
Principal Accountant Fees and Services
85
PART IV
Item 15.
Exhibits and Financial Statement Schedules
86
Item 16.
Form 10-K Summary
86
Index to Exhibits
87
Signatures
90
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2024 Form 10-K
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report on Form 10-K may constitute forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change based on various
important factors, many of which may be beyond our 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 Annual Report on Form 10-K will prove to be accurate. Factors that could cause results to
differ from those expressed in the forward-looking statements include, but are not limited to, the risks described or referenced in
“ITEM 1A. RISK FACTORS,” of this Annual Report on Form 10-K and otherwise in our reports and filings with the SEC, as well
as the following:
•
risks related to changes in global economic and financial conditions, including inflation, and the resulting impact on
consumer spending generally and on our operating results, financial condition, and expense management, and our
ability to adequately mitigate the impact;
•
risks related to global operations, including changes in the economic or political conditions where we sell or source our
products or changes in import tariffs or trade restrictions;
•
risks related to the geopolitical landscape and ongoing armed conflicts, and the impact of such conflicts on international
trade, supplier delivery or increased freight costs, acts of terrorism, mass casualty events, social unrest, civil
disturbance or disobedience;
•
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 ability to successfully invest in and execute on our customer, digital and omnichannel initiatives;
•
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 international operations;
•
risks related to our ability to execute on, and maintain the success of, our strategic and growth initiatives;
•
risks and uncertainty related to adverse public health developments;
•
risks related to cybersecurity threats and privacy or data security breaches;
•
risks related to the potential loss or disruption of our information systems;
•
risks related to the continued validity of our trademarks and our ability to protect our intellectual property;
•
risks associated with climate change and other corporate responsibility issues;
•
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.
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.
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2024 Form 10-K
STRATEGY AND KEY BUSINESS PRIORITIES
The Company remains committed to, and confident in, its vision of being a global, digitally-led, omnichannel apparel retailer and
continues to evaluate corporate growth opportunities and initiatives that support this vision.
Foundation for Growth
The Company introduced the Always Forward Plan in June of Fiscal 2022. The Always Forward Plan is anchored on our
strategic growth principles, which are to:
•
Execute focused growth plans;
•
Accelerate an enterprise-wide digital revolution; and
•
Operate with financial discipline
While the Company has significantly outperformed certain financial targets set forth in the Always Forward Plan, the growth
principles continue to serve as a framework for the Company achieving sustainable and profitable growth and profitability.
The Company’s strategic priorities continue to evolve based on changing consumer demands and new strategic opportunities,
and management reviews and prioritizes investments and strategic focus areas to address such demands and opportunities.
Execute focused growth plans by:
•
driving sales growth across regions and brand families primarily through marketing and store investments in our owned
and operating channels, while pursuing new geographies and markets via franchise, wholesale and licensing
partnerships;
•
using our regionally relevant brand playbooks globally to align the brands’ products, voices, and experiences with
customers, both digitally and in-store; and
•
using testing and chase strategies to deliver compelling assortments and product collections across genders.
Accelerate an enterprise-wide digital revolution to improve the customer and associate experience by:
•
continuing to progress on our multi-year enterprise resource planning (“ERP”) transformation and cloud migration
journey; and
•
investing in digital and technology to improve experiences across key parts of the customer journey while delivering a
consistent omnichannel experience.
Operate with financial discipline by:
•
using our agile inventory model and pricing strategies to position the Company to support customer demand throughout
the year; and
•
maintaining our durable balance sheet and consistent free cash flow profile, underpinned by our disciplined investment
philosophy while balancing against macro environment impacts and efficiency efforts.
OVERVIEW OF OPERATIONS
Omnichannel Initiatives
As customer shopping preferences continue to evolve and customers increasingly shop across multiple channels, the Company
aims to create best-in-class customer experiences and grow total company profitability by delivering improvements through a
continuous test-and-learn approach. Over the past several years, the Company experienced an acceleration in sales fulfilled
through digital channels, and continues to see a majority of sales through digital channels for the Abercrombie & Fitch brand.
Despite, this acceleration in the shift towards digital channels, stores continue to comprise a majority of sales for the Hollister
brand’s customer. Additionally, stores continue to be an important part of our customers’ omnichannel experience. The Company
believes that the customers’ shopping experience is improved by its offering of omnichannel capabilities, which include purchase-
online-pickup-in-store, ship-from-store, and cross-channel returns. These features allow our customers ease of access to shop
the brands’ in-store and online offerings and create a seamless transition between omnichannel capabilities.
Digital Operations
In order to continuously improve the customer experience, including providing a more seamless and consistent shopping
experience across channels, the Company continues to invest in its digital infrastructure. Such investments include upgrading
our merchandising enterprise resource planning (“ERP”) system. The Company has the capability to ship merchandise to
customers in more than 108 countries and process transactions in 21 currencies and through 20 forms of payment globally. The
Company operates desktop and mobile websites for its brands globally, which are available in various local languages. The
Company also operates two mobile applications that provide an enhanced mobile shopping experience to the customer and
provide us with customer insights. The Company continues to develop and invest its mobile capabilities as mobile engagement
continues to grow, with over 87% of the Company’s digital traffic generated from mobile devices in Fiscal 2024. In addition, in its
efforts to expand its global brand reach, the Company also partners with certain third-party e-commerce platforms.
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2024 Form 10-K
Store Operations
The Company has a goal of finding the right size, right location and right economics for omni-enabled stores that cater to local
customers. During Fiscal 2024, the Company opened 65 new store locations, remodeled 48 store locations, right-sized an
additional 12 store locations and closed 41 stores. The Company’s stores continue to play an essential role in creating brand
awareness and serving as physical gateways to the brands. Stores also serve as local hubs for online engagement as the
Company continues to evolve its omnichannel capabilities to create seamless shopping experiences.
As of February 1, 2025, all of the retail stores operated by the Company are located in leased facilities, primarily in shopping
centers. These leases generally have initial terms of between one and ten years. Certain leases also include early termination
options, which can be exercised under specific conditions. The leases expire at various dates between Fiscal 2025 and Fiscal
2035.
As of February 1, 2025, the Company operated 789 retail stores as detailed in the table below:
Abercrombie
Hollister
Total (1)
Americas
215
385
600
EMEA
33
100
133
APAC
30
26
56
Total
278
511
789
(1)
Store count excludes temporary and franchise stores.
For store count and gross square footage by geographic region and brand as of February 1, 2025, and February 3, 2024, refer to
“ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of
this Annual Report on Form 10-K.
Franchise, License, and Wholesale Operations
The Company seeks to expand its global brand reach, create brand awareness and develop local presence through various
franchise, licensing, and wholesale arrangements. The Company has franchise agreements under which it provides third-party
partners the right to sell its product and operate stores in various geographic regions, including the Middle East, Central America,
South America, and Asia. As of February 1, 2025, the Company’s franchisees operated 49 franchise stores across the
Company’s brands. The Company also has license agreements under which it acts as a licensee, with various third parties
providing the Company with the rights to sell apparel and accessories with licensed trademarks, such as collegiate and
professional sports teams. The Company also acts as licensor under licensing agreements under which the Company provides
licenses to third-party partners to manufacture and sell designated products, such as certain apparel, eyewear, and fragrances.
As of February 1, 2025, the Company had 9 wholesale partnerships, primarily in EMEA.
SOURCING OF MERCHANDISE INVENTORY
The Company uses an agile inventory model to help manage inventory costs and production volumes to reflect customer
demand trends. Specifically the Company’s inventory model is intended to help enable optimization of inventory levels, increase
speed and response time to react to customer demand and preferences, and promote operational agility. The Company works
with its network of third-party vendors to supply compelling, high-quality product assortments to its customers. These vendors
are expected to operate in compliance with the laws of their respective countries and all other applicable laws, rules, and
regulations and have committed to follow the standards set forth in the Company’s Vendor Code of Conduct, regarding human
rights, labor rights, environmental responsibility, and workplace safety.
The Company sourced merchandise through approximately 150 vendors located in 16 countries, including the U.S., during Fiscal
2024. The Company’s largest vendor accounted for approximately 6% of merchandise sourced in Fiscal 2024, based on the cost
of sourced merchandise. The Company believes its product sourcing is appropriately distributed among vendors.
Refer to Note 6, “INVENTORIES,” of the Notes to Consolidated Financial Statements included in “ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K for a summary of inventory sourced based
on vendor location and dollar cost of merchandise receipts during Fiscal 2024.
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2024 Form 10-K
DISTRIBUTION OF MERCHANDISE INVENTORY
The Company’s distribution network is built to deliver inventory to Company-operated and global franchise stores and fulfill digital
and wholesale orders with speed and efficiency. Generally, merchandise is shipped directly from vendors to the Company’s
distribution centers, where it is received and inspected before being shipped to the Company’s stores or its digital or wholesale
customers.
The Company relies on both Company-owned and third-party distribution centers to manage the receipt, storage, sorting,
packing and distribution of its merchandise. Additional information pertaining to certain of the Company’s distribution centers as
of February 1, 2025 follows:
Location
Company-owned or third-party
New Albany, Ohio (primarily serves store and digital operations)
Company-owned
New Albany, Ohio (serves only digital operations)
Company-owned
Bergen op Zoom, Netherlands (primarily serves store and digital operations)
Third-party
Shanghai, China (primarily serves store and digital operations)
Third-party
Goodyear, Arizona (serves only digital operations)
Third-party
The Company primarily used six contract carriers to ship merchandise and related materials to its North American customers,
and several contract carriers for its global customers outside of North America during Fiscal 2024.
CUSTOMER ENGAGEMENT
The Company engages with its customers through in-store and digital interactions, loyalty programs, social media platforms,
mobile applications, online surveys and customer reviews, and continues to evolve in response to the feedback it receives
through these channels. The Company’s customer relationship management strategies support the Company’s development of
direct relationships with its customers and allow the Company to harness insights. Our brands have strong global followings on
key social media platforms, and the Company also partners with brand representatives, influencers, celebrities, and athletes to
market its products and communicate its brands’ identities. The Company aims to be at the forefront of customer engagement
and continues to explore new methods to connect with its customers.
The Company also offers its loyalty programs, Abercrombie’s myAbercrombie® and Hollister’s Hollister House Rewards®. The
Company believes that these programs are important enablers of its customer engagement strategy as the Company aims to
seamlessly interact and connect with customers across all touchpoints through members-only offers, items, and experiences.
Under these loyalty programs, customers accumulate points primarily based on purchase activity and earn rewards as points are
converted at certain thresholds. These rewards can be redeemed for merchandise discounts either in-store or online. In addition
to earning and redeeming awards, loyalty members may receive other benefits at specified spending threshold tiers, such as free
shipping and extended return windows. The loyalty programs continue to provide timely customer insights and personalization
opportunities, and the Company believes these programs generate repeat business and contribute to higher average transaction
value.
COMPETITION
The Company operates in a rapidly evolving and highly competitive retail business environment. Competitors include individual
and chain specialty apparel retailers; local, regional, national and global department stores; discount stores; and digitally-native
brands and online-exclusive businesses. Additionally, the Company competes for consumers’ discretionary spending with
businesses in other product and experiential categories such as technology, restaurants, travel and media content.
The Company competes primarily on the basis of differentiating its brands from those of its competition through product,
providing high quality and newness; brand voice, amplifying and consolidating brand messaging; and experience, investing in
immersive, participatory omnichannel shopping environments.
Operating in a highly competitive industry environment can cause the Company to engage in greater than expected promotional
activity, which would result in pressure on average unit retail and profitability. Refer to “ITEM 1A. RISK FACTORS - Our failure to
operate effectively in a highly competitive and constantly evolving industry could have a material adverse impact on our
business” of this Annual Report on Form 10-K for further discussion of the potential impacts competition may have on the
Company.
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2024 Form 10-K
SEASONAL BUSINESS
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. Refer to “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS” of this Annual Report on Form 10-K for further discussion.
TRADEMARKS
The trademarks Abercrombie & Fitch®, abercrombie®, Hollister®, Gilly Hicks®, and the “Moose” and “Seagull” logos are registered
with the U.S. Patent and Trademark Office and registered, or the Company has applications for registration pending, with the
registries of countries in key markets within the Company’s sales and distribution channels. In addition, these trademarks are
either registered, or the Company has applications for registration pending, with the registries of many of the foreign countries in
which the manufacturers of the Company’s products are located. The Company has also registered, or has applied to register,
certain other trademarks in the U.S. and around the world. The Company believes its products are identified by its trademarks
and, therefore, its trademarks are of significant value. Each registered trademark has a duration of 10 to 20 years, depending on
the date it was registered, and the country in which it is registered, and is subject to an indefinite number of renewals for a like
period upon continued use and appropriate application. The Company intends to continue using its core trademarks and to timely
renew each of its registered trademarks that remain in use.
INFORMATION TECHNOLOGY SYSTEMS
The Company’s owned and third-party-operated management information technology systems consist of a full range of retail,
merchandising, human resource and financial systems. These systems include applications related to point-of-sale, digital
operations, inventory management, supply chain, planning, sourcing, merchandising, payroll, scheduling and financial reporting.
The Company continues to invest in technology to upgrade its core systems, including its merchandising ERP system and
modernizing its key data platforms, to enhance reporting and analytics, create efficiencies and to support its digital operations,
omnichannel capabilities, customer relationship management tools and loyalty programs.
WORKING CAPITAL
Refer to “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS” of this Annual Report on Form 10-K for a discussion of the Company’s cash requirements and sources of cash
available for working capital needs and investment opportunities.
HUMAN CAPITAL MANAGEMENT
The Company strives to create a culture that drives strategic and key business priorities forward, while being welcoming and
inclusive, encouraging associates to impact their global communities positively. The Company believes that the strength of its
unique culture is a competitive advantage, and intends to continue building upon that culture to improve performance across its
business.
Therefore, the Company believes that the attraction, retention, and management of qualified talent are integral to its success. The
Company has policies and practices in place that are focused on creating a culture and work environment free from abuse,
harassment or discrimination of any kind. Highlights of our key human capital management programs and efforts include the
following:
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2024 Form 10-K
•
Living a corporate purpose of “Being here for you on the journey to being and becoming who you are.” The
Company’s corporate purpose was developed after conducting listening sessions with its associates and its customers,
and by weaving in key themes from each of the brand purposes.
•
Offering competitive compensation and benefits to help the Company attract, motivate, and retain the key talent
necessary to achieve outstanding business and financial results. The Company’s compensation offerings include cash-
based and equity-based incentive awards in order to align the interests of associates and stockholders. In addition, the
Company continues to provide hybrid and remote work arrangements for corporate home office associates where
feasible, including “work from anywhere” days and weeks. We also support our associates and their families beyond our
competitive compensation with comprehensive benefits offerings, providing eligible associates with paid parental leave
in the United States and internationally based on local law, as well as adoption and fertility support benefits to all eligible
associates globally.
•
Improving associate engagement through open communication channels with a focus on associate experience. The
Company regularly holds all-company meetings to communicate with its associates. The Company also collects
feedback through various engagement surveys throughout the year to better understand the associate experience and
drive improvements, with the most recent organization-wide survey conducted in October 2024.
•
Fostering associate development by providing a wide variety of growth and development opportunities throughout
associates’ careers. This includes structured development programs, access to online skill development platforms,
stretch assignments, internal career pathing, self-awareness exercises, and active coaching. The Company also uses
leadership standards to help associates identify the core behaviors essential for their career growth, as well as personal
growth, on their journey at the Company. Resources in support of these efforts include the Company’s internal job
board, which empowers associates to apply for open roles and/or to seek advancement opportunities within the
Company, as well as formalized talent reviews to discuss associate development opportunities.
•
Creating a culture of belonging and working to ensure that all our associates feel respected and represented. We
believe that when we do this, we are stronger across every aspect of our business. The Company follows core
principles to embed a sense of community into our organization, including having a workforce that reflects the
communities we serve, building a leadership team that is representative of our workforce, offering voluntary training and
inviting all associates to participate in any of our various associate resource groups to promote inclusion and belonging,
and driving fairness through our compensation and benefits offerings.
•
Encouraging community involvement of its associates by promoting various charitable, philanthropic, and social
awareness programs, which the Company believes fosters a collaborative and rewarding work environment. The
Company provides support to global organizations in the form of cash donations, volunteerism and in-kind support. In
partnership with its vendor partners, customers and associates, the Company is proud to support community partners
serving youth, teens, and young adults with a focus on mental health and wellness, empowerment, and inclusion. The
Company offers its associates a paid volunteer day each year for eligible volunteer work.
•
Focusing on the health and safety of its associates by investing in various wellness programs that are designed to
enhance the physical, financial, and mental well-being of its associates globally. The Company provides benefits-eligible
associates and their families with access to free and confidential counseling through our Employee Assistance Program,
as well as free access to a mediation and mindfulness app. The Company also provides regular programming on
financial planning and mental health.
Associates
The Company employed approximately 39,200 associates globally as of February 1, 2025, of whom approximately 32,600 were
part-time associates. As of February 1, 2025, the Company employed approximately 31,400 associates in the U.S., and
employed approximately 7,800 associates outside of the U.S. The Company employs temporary, seasonal associates at times,
particularly during Fall, when it experiences its greatest sales activity due to back-to-school and holiday sales periods.
The proportion of associates represented by works councils and unions is not significant and is generally limited to associates in
the Company’s European stores.
Board Oversight
A&F’s Board of Directors (the “Board of Directors”) and its committees oversee human capital matters. The Compensation and
Human Capital Committee of the Board of Directors oversees the Company’s overall compensation structure, policies and
programs, as well as administration of the Company’s cash-based and equity-based performance award programs. Members of
the Board of Directors also review succession plans for the Company’s executive officers and discuss with senior leadership the
Company’s human capital management strategies, programs, policies and practices, including those relating to organizational
structure and key reporting relationships, along with development of strategies and practices relating to recruitment, retention
and development of the Company’s associates as needed. Additionally, the Environmental, Social and Governance Committee of
the Board of Directors is responsible for the oversight of risks associated with our environmental and social strategies.
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2024 Form 10-K
Item 1A. Risk Factors
Investing in our securities involves risk. The following risk factors should be read carefully in connection with evaluating our
business and the forward-looking statements contained in this Annual Report on Form 10-K. Any of these risk factors could lead
to material adverse effects on our business, operating results and financial condition. Additional risks and uncertainties not
currently known to us or that we currently do not view as material may also become materially adverse to our business in future
periods or if circumstances change.
MACROECONOMIC AND INDUSTRY RISKS.
Failure to engage our customers, anticipate customer demand and changing fashion trends, and manage our inventory
commensurately could have a material adverse impact on our business.
Our success largely depends on our ability to anticipate and gauge the fashion preferences of our customers and provide
merchandise that satisfies constantly shifting demands in a timely manner. Because we may enter into agreements for the
manufacture and purchase of merchandise well in advance of the applicable selling season, we are vulnerable to changes in
consumer preferences and demand, pricing shifts, and the sub-optimal selection and timing of merchandise purchases. We
expect continuously changing fashion-related trends and consumer tastes to influence future demand for our products. Changes
in consumer tastes, fashion trends and brand reputation can have an impact on our financial performance.
Moreover, there can be no assurance that we will continue to anticipate consumer demands and macroeconomic events or to be
successful in accurately planning inventory in the future. Changing consumer preferences, spending patterns, and fashion
trends, and our ability to anticipate, identify and swiftly respond to them, could adversely impact our sales. Inventory levels for
certain merchandise styles no longer considered to be “on trend” may increase, leading to higher markdowns to sell through
excess inventory and, therefore, lower than planned margins. Conversely, if we underestimate consumer demand for our
merchandise, or if our manufacturers fail to supply quality products in a timely manner, we may experience inventory shortages
that we cannot adequately mitigate through expedited inventory production and delivery, which may negatively impact customer
relationships, diminish brand loyalty and result in lost sales.
We could also be at a competitive disadvantage if we are unable to effectively leverage data analytics to retrieve timely, customer
insights to appropriately respond to customer demands and improve customer engagement through efforts such as marketing
activities. Any of these events could significantly harm our operating results and financial condition.
We are also vulnerable to factors affecting inventory flow and availability of inventory. Impacts may be caused by natural
disasters, unanticipated climate patterns and events, or inventory shrinkage due to theft (including by our employees, customers,
or through organized retail crime). Such events may significantly impact anticipated customer demand or may impact availability
of our inventory. If we are not able to adjust appropriately to such factors, our inventory management may be negatively affected,
which could adversely impact our performance and our reputation.
Our failure to operate effectively in a highly competitive and constantly evolving industry could have a material adverse impact on
our business.
The sale of apparel, personal care products and accessories for men, women and kids is a highly competitive business with
numerous participants, including individual and chain specialty apparel retailers, local, regional, national and global department
stores, discount stores, digitally-native brands, and online-exclusive businesses. Proliferation of the digital channel has
encouraged the entry of many new competitors and an increase in competition from established companies. These increases in
competition could reduce our ability to retain and grow sales, resulting in an adverse impact to our operating results and
business.
We face a variety of challenges in the highly competitive and constantly evolving retail industry, including:
•
Anticipating and responding to changing consumer shopping preferences more quickly than our competitors;
•
Maintaining favorable brand recognition;
•
Effectively marketing our products to consumers across varying demographic markets, including through social media
platforms which have become increasingly important in order to stay connected to our customers, as our digital sales
penetration has increased. Individual country laws and regulations governing the use and availability of these social
media platforms continue to evolve, and if we are unable to effectively use social media platforms as marketing tools our
ability to retain or acquire customers and our financial condition may suffer;
•
Effectively establishing and maintaining relationships with key brand representatives, influencers, athletes, and other
celebrities as part of our marketing strategy to promote our brands and products;
•
Retaining customers, including our loyalty club members, and the resulting increased marketing costs to acquire new
customers;
•
Developing innovative, high-quality merchandise in styles that appeal to consumers and in ways that favorably distinguish
us from our competitors;
•
Operating in a highly promotional retail environment;
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•
Engaging in promotional activity and appropriately pricing our products without diminishing the aspirational nature of our
brands and brand equity; and
•
Identifying and assessing disruptive innovation, by existing or new competitors, that could alter the competitive landscape
by: improving the customer experience and heightening customer expectations; transforming supply chain and corporate
operations through changes to digital technologies and innovations, including the use of artificial intelligence (“AI”) and
machine learning; and enhancing management decision-making through use of data analytics to develop new, consumer
insights.
In light of the competitive challenges we face, we may not be able to compete successfully in the future.
Changes in global economic and financial conditions, including the impact on consumer confidence and spending, could have a
material adverse impact on our business.
Uncertainty as to, and the state of, the global economy and global financial condition could have an adverse effect on our
operating results and business. Our business is subject to factors that are impacted by worldwide economic conditions, including
heightened inflation levels (which has occurred), unemployment levels, consumer credit availability, consumer debt levels,
reductions in consumer net worth based on declines in the financial, residential real estate and mortgage markets, bank failures,
sales and personal income tax rates, fuel and energy prices, global food supplies, rising or uncertain interest rates, new
increased tariffs, trade disputes, consumer confidence in future economic and political conditions, consumer perceptions of
personal well-being and security, the value of the U.S. dollar versus foreign currencies, geopolitical conflicts, and other
macroeconomic factors. Changes in global economic and financial conditions could impact our ability to fund growth and our
ability to access external financing in the credit and capital markets.
In addition, our business depends on consumer demand for our merchandise. Consumer confidence and discretionary spending
habits, including purchases of our merchandise, can be adversely impacted by recessionary periods, inflation and other
macroeconomic conditions adversely impacting levels of disposable income. We may not be able to accurately anticipate or
predict consumer demand and behavior, such as taste and purchasing trends, in response to adverse economic conditions,
which could result in lower sales, excess inventories and increased mark-downs, all of which could negatively impact our ability
to achieve or maintain profitability. In the event that the U.S. and global economy worsens, or if there is a decline in consumer
spending levels or other unfavorable conditions, we could experience lower than expected revenues, which could force us to
delay or slow the implementation of our growth strategies and adversely impact our results of operations.
The economic conditions and factors described above could adversely impact our results of operations, liquidity and capital
resources, and may exacerbate other risks within this section of “ITEM 1A. RISK FACTORS”.
The impact of war, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience could have a material
adverse impact on our business.
In the past, the impact of war, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience and the
associated heightened security measures taken in response to these events have disrupted commerce. Further events of this
nature, domestic or abroad, including international and domestic unrest, may disrupt commerce and undermine consumer
confidence and consumer spending by causing a decline in traffic, store closures and a decrease in digital demand adversely
affecting our operating results.
Furthermore, the existence or threat of any other unforeseen interruption of commerce, including as a result of geopolitical or
armed conflict and the possible interference with international trade, supplier deliveries, freight costs, or tariffs, could negatively
impact our business by interfering with the availability of raw materials or our ability to obtain merchandise from foreign
manufacturers. With a substantial portion of our merchandise being imported from foreign countries, failure to obtain
merchandise from our foreign manufacturers or substitute other manufacturers, at similar costs and in a timely manner, could
adversely affect our operating results and financial condition.
Fluctuations in foreign currency exchange rates and our ability to mitigate the effects of such volatility could have a material
adverse impact on our business.
Due to our global operations, we are exposed to foreign currency exchange rate risk with respect to our sales, profits, assets and
liabilities denominated in currencies other than the U.S. dollar. In addition, certain of our subsidiaries transact in currencies other
than their functional currency, including intercompany transactions, which results in foreign currency transaction gains or losses.
Furthermore, we purchase substantially all of our inventory in U.S. dollars. As a result, our sales, gross profit and gross profit rate
from global operations will be negatively impacted during periods of a strengthened U.S. dollar relative to the functional
currencies of our foreign subsidiaries. Additionally, changes in the effectiveness of our hedging instruments may negatively
impact our ability to mitigate the risks associated with fluctuations in foreign currency exchange rates. For example, changes in
inventory purchase assumptions have resulted in changes in the effectiveness to certain of our hedging instruments, and we
could see similar impacts in future periods.
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Fluctuations in foreign currency exchange rates could adversely impact consumer spending, delay or prevent successful
penetration into new markets or adversely affect the profitability of our global operations. Certain events could cause uncertainty
with respect to trade policies, tariffs and government regulations and actions affecting trade between the U.S. and other
countries, have increased global economic and political uncertainty in recent years and could result in volatility of foreign
currency exchange rates as these events develop.
Our ability to attract customers to our stores depends, in part, on the success of the shopping malls or area attractions that our
stores are located in or around.
Our stores are primarily located in shopping malls and other shopping centers. Our sales at these stores are partially dependent
upon the volume of traffic in those shopping centers and the surrounding area which, for some centers, has been in decline. Our
stores may benefit from the ability of a shopping center’s other tenants and area attractions to generate consumer traffic in the
vicinity of our stores and the continuing popularity of the shopping center. We cannot control the loss of a significant tenant in a
shopping mall or area attraction, the development of new shopping malls in the U.S. or around the world, the availability or cost
of appropriate locations, the success of individual shopping malls, or the increasing impact of digital channels on shopping mall
traffic and there is competition with other retailers for prominent locations.
All of these factors may impact our ability to meet our productivity or our growth objectives for our stores and could have a
material adverse impact on our financial condition or results of operations. Part of our future growth is dependent on our ability to
operate stores in desirable locations, with capital investment and lease costs providing the opportunity to earn a reasonable
return. We cannot be sure when or whether such desirable locations will become available at reasonable costs.
The impact of natural disasters, negative climate patterns, public health crises, political crises and other unexpected and
catastrophic events could result in interruptions to our operations, as well as to the operations of our third-party partners, and
have a material adverse impact on our business.
Our retail stores, corporate offices, distribution centers, infrastructure projects and digital operations, as well as the operations of
our vendors and manufacturers, are vulnerable to disruption from natural disasters, such as hurricanes, tornadoes, floods,
earthquakes, extreme cold events, unseasonably warm weather, and other adverse weather events; negative climate patterns,
such as those in domestic and global water-stressed regions; public health crises, such as pandemics and epidemics; political
crises, such as terrorists attacks, war, geopolitical uncertainty, labor, unrest, and other political instability (including, without
limitation, the ongoing conflict between Russia and Ukraine and the conflict in the Middle East); significant power interruptions or
outages; and other unexpected, catastrophic events. These events could disrupt the operations of our corporate offices, global
stores and supply chain and those of our third-party partners, including our vendors and manufacturers. In addition to immediate
impacts on global operations, these events could result in a reduction in the availability and quality, and as a result pricing
volatility of, raw materials used to manufacture our merchandise, delays in merchandise fulfillment and deliveries, loss of
customers and revenues due to store closures and inability to respond to customer demand, increased costs to meet consumer
demand (which we may not be able to pass on to customers), reduced consumer confidence or changes in consumers’
discretionary spending habits.
Other factors that would negatively impact our ability to successfully operate due to the impact of natural disasters, negative
climate patterns, public health crises, political crises, significant power interruptions or outages, and other unexpected,
catastrophic events and other unexpected and other catastrophic events include, but are not limited to:
•
Supply chain delays due to closed or reduced capacity for trade routes and factories, reduced workforces, or scarcity of
raw materials;
•
Physical losses to our stores, distribution centers or offices that may incur costs that exceed our applicable insurance
coverage for any necessary repairs to damages or business disruptions caused by natural disasters or other
unexpected and catastrophic events;
•
Our ability to keep our stores open if there are severe weather or climate conditions, stay-at-home orders, social
distancing requirement, travel restrictions, or other concerns related to physical safety;
•
Our ability to attract customers to our stores, given the risks, or perceived risks, of gathering in public places;
•
Delays in, or our ability to complete, planned store openings on the expected terms or timing, or at all based on
shortages in labor and materials and delays in the production and delivery of materials;
•
Our ability to preserve liquidity to be able to take advantage of market conditions during periods of uncertainty and
instability in the global financial markets; and
•
Difficulty accessing debt and equity capital on attractive terms, or at all, during periods of uncertainty and instability in
the global financial markets, or a deterioration in credit and financing conditions may affect our access to capital
necessary to fund business operations or address maturing liabilities.
Historically, our operations have been seasonal, and natural disasters or unseasonable weather conditions, may diminish
demand for our seasonal merchandise and could also influence consumer preferences and fashion trends, consumer traffic and
shopping habits. In addition, to the extent natural disasters cause physical losses to our stores, distribution centers or offices, we
may incur costs that exceed our applicable insurance coverage for any necessary repairs to damages or business disruption.
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STRATEGIC RISKS.
Changes to our long-term business strategy or a failure to successfully execute on our long-term strategic plans could adversely
impact our financial condition and reputation.
While we have successfully executed certain goals in our Always Forward Plan, our continued ability to effectively execute on
and maintain the results of our Always Forward Plan is subject to various risks and uncertainties as described herein. In addition,
we may modify or adjust future long-term strategies to meet changes in our business environment.
While we believe that our successful execution and ability to attain certain established goals and targets of our Always Forward
Plan led to long-term revenue growth and profitability, there is no assurance regarding the extent to which we will realize the
anticipated objectives or sustain the financial objectives, if at all, or regarding the timing of such anticipated benefits. Our failure
to realize the anticipated objectives or sustain the financial objectives established in our long-term strategic plans, which may be
due to our inability to execute established long-term target or goals, changes in consumer demand, competition, macroeconomic
conditions (including inflation or tariffs), retention of key talent, and other risks described herein, could have a material adverse
effect on our business.
If the continued execution and maintenance of our long-term business strategy is not successful, or we do not realize the full
objectives to the extent or in the timeline that we anticipate, our financial condition and reputation could be adversely affected.
Our failure to attract, retain, and effectively manage strategic partnerships with third parties could have a material adverse impact
on our business.
In order to compete in this highly competitive and constantly evolving industry, at times, we may enter into new strategic
partnerships with third parties to expand our global brand reach, or we may launch new concepts or brands to expand our
portfolio. Such strategic partnerships may include wholesale, franchise, or licensing arrangements in which we license our
brands and intellectual property for use on products produced, marketed and/or sold by third parties, and licensing arrangements
in which we license intellectual property from third parties. Such arrangements are subject to additional risks, including our ability
to comply with obligations under license agreements that we have with third-party licensors, the abrupt termination of such
arrangements, or actions taken by third-party wholesale, franchise, or licensee partners that may materially diminish the value of
our intellectual property or our brands’ reputations.
These initiatives, and others that we may engage in to respond to the highly competitive and evolving industry in which we
operate, could result in significant financial and operational investments that do not provide the anticipated benefits or desired
rates of return and there can be no guarantee that pursuing these investments or strategic partnerships will result in improved
operating results.
Our failure to evaluate and manage our global store network could have a material adverse impact on our business.
With the evolution of digital and omnichannel capabilities, customer expectations have shifted and there has been greater
pressure for a seamless omnichannel experience across all channels. Through our multi-year global store network optimization
initiative, we have taken actions to optimize our store productivity by remodeling, right-sizing or relocating stores to smaller
square footage locations, and closing legacy stores. Modernizing and growing our store fleet is an important part of our business
strategy and failure to evaluate and manage our global store network could have an adverse impact on our results of operations.
The ability to modify existing leases, to remodel or repurpose existing locations, and to open new stores experiences requires
partnership with our landlords. If our partnerships with our landlords were to deteriorate, this could adversely affect the pace of
opening new store experiences and/or lead to an increase in store closures. In addition, if there is an increase in events such as
landlord bankruptcies, or mall foreclosures, competition between retailers could increase for remaining suitable store locations.
Pursuing the wrong opportunities and any delays, cost increases, disruptions or other uncertainties related to those opportunities
could adversely affect our results of operations. If our investments in new stores or remodeling and right-sizing existing stores do
not achieve appropriate returns, our financial condition and results of operations could be adversely affected.
Although we attempt to open new stores in prominent locations, it is possible that locations which were prominent when we
opened our stores may lose favor over time.
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Our failure to realize the anticipated benefits of our recent transition to a regional-based organizational model could have a
negative impact on our business.
During the second quarter of Fiscal 2023, to drive ongoing brand growth and leverage the knowledge and experience of its
regional teams, the Company reorganized its structure and now primarily manages its business on a geographic basis,
consisting of three reportable segments: Americas; Europe; the Middle East and Africa (EMEA) and Asia-Pacific (APAC). As a
result of our regional-based organizational model, we have decentralized execution of our commercial strategy in each
international region from our global home office to our regional headquarters located in Shanghai, China and London, United
Kingdom. Failure to realize the anticipated benefits of our recent transition to a regional-based organizational model could have a
negative impact on our business. In addition, realization of the anticipated benefits of this new regional-based organizational
model is dependent on the effectiveness of this new operating structure.
Our inability to effectively conduct business in global markets, including as a result of legal, tax, regulatory, political and
economic risks could have a material adverse impact on our business.
We operate on a global basis and are subject to risks associated with operating in different global markets that could have a
material adverse effect on our reputation, business and results of operations if we fail to address them.
Such risks include, but are not limited to, the following:
•
addressing the different operational requirements present in each country in which we operate, including those related to
employment and labor, transportation, logistics, real estate, lease provisions and local reporting or legal requirements;
•
supporting global growth by successfully implementing local customer and product-facing teams and certain corporate
support functions at our regional headquarters located in Shanghai, China and London, United Kingdom;
•
supporting global growth by decentralizing execution of our commercial strategy authority from our global home office to
our regional headquarters located in Shanghai, China and London, United Kingdom;
•
hiring, training and retaining qualified personnel;
•
maintaining good labor relations with individual associates and groups of associates;
•
avoiding work stoppages or other labor-related issues in our European stores, where some associates are represented
by workers’ councils and unions;
•
retaining acceptance from local customers;
•
managing inventory effectively to meet the needs of existing stores on a timely basis;
•
political, civil and social unrest, such as the conflict between Russia and Ukraine or conflict in the Middle East;
•
government regulations affecting trade between the U.S. and other countries, including tariffs and customs laws;
•
tax rate volatility and our ability to realize tax benefits resulting from non-U.S. operations;
•
managing foreign currency exchange rate risks effectively;
•
substantial investments of time and resources in our global operations may not result in achievement of acceptable levels
of returns; for example, we have experienced year-over-year declines in revenues from our global operations; and
•
continued and sustained declines in our global revenues could lead to store closures, restructuring costs, and impairment
losses, all of which could adversely impact our business, profitability, and results of operations.
We are subject to domestic laws related to global operations, including the Foreign Corrupt Practices Act, in addition to the laws
of the foreign countries in which we operate. If any of our overseas operations, or our associates or agents, violate such laws, we
could become subject to sanctions or other penalties that could negatively affect our reputation, business and operating results.
Our failure to appropriately address environmental, social, and governance (ESG) topics could have a material adverse impact
on our reputation and, as a result, our business.
There is increased focus from certain government regulators, investors, customers, associates, business partners and other
stakeholders concerning ESG matters.
The expectations related to ESG matters continue to rapidly evolve and diverge. The focus by investors and other stakeholders
on the ESG practices of publicly traded companies, like us, has included or may in the future include expanding mandatory and
voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor and risk oversight, and
could expand the nature, scope, and complexity of matters that we are required to control, assess and report. Furthermore, if we
announce certain initiatives and goals related to ESG matters we could fail, or be perceived to fail, to accurately set, meet or
report our progress on such initiatives and goals and/or we could fail, or be perceived to fail, to act responsibly in our ESG
efforts. In addition, we could be criticized for the speed of adoption of such initiatives and goals, or the scope of such initiatives or
goals. As a result, we could suffer negative publicity and our reputation could be adversely impacted, which in turn could have a
negative impact on investor perception and our products' acceptance by consumers. In addition, in recent years there has been
a rise in the prevalence of the anti-ESG movement, and we could be criticized for the scope or nature of our ESG initiatives and
goals or for any revisions to our goals. We may not be able to meet the diverging expectations and perspectives on these topics,
and we could be subjected to negative responses by consumers (such as boycotts or negative publicity campaigns) that could
adversely affect our reputation, results of operations, financial condition and cash flows. This may also impact our ability to attract
and retain talent to compete in the marketplace
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There is also uncertainty regarding the implementation of laws, regulations, and policies related to ESG and global
environmental sustainability matters, including disclosure obligations and reporting on such matters, and appropriately
responding to potentially competing and/or contradictory regulatory requirements and expectations in the jurisdictions in which
we operate. Changes in the legal or regulatory environment affecting ESG disclosure, responsible sourcing, supply chain
transparency, or environmental protection, among others, including regulations to limit carbon dioxide and other greenhouse gas
emissions, to discourage the use of plastic or to limit or to impose additional costs on commercial water use may result in
increased costs for us and our business partners, all of which may negatively impact our results of operations, financial condition
and cash flows.
OPERATIONAL RISKS.
Failure to protect our reputation could have a material adverse impact on our business.
Our ability to maintain our reputation is critical and public perception about our products or operations, whether justified or not,
could impair our reputation, involve us in litigation, damage our brands and have a material adverse impact on our business.
Events that could jeopardize our reputation, include, but are not limited to, the following:
•
We fail to maintain high standards for merchandise quality and integrity;
•
We fall victim to a cyber-attack, resulting in customer data being compromised;
•
We fail to comply with ethical, social, product, labor, health and safety, legal, accounting or environmental standards, or
related political considerations;
•
Third parties with which we have a business relationship, including our brand representatives and influencer network,
and our wholesale, franchise licensing, or marketplace partners, fail to represent our brands in a manner consistent with
our brand image or act in a way that harms their reputation;
•
Misconduct or illegal activities by our current and former associates, directors, advisors, third-party business partners,
or others affiliated, or perceived to be affiliated, with the Company;
•
Third-party vendors fail to comply with our Vendor Code of Conduct or any third parties with which we have a business
relationship fail to represent our brands in a manner consistent with our brand image;
•
Unfavorable media publicity, influencer reviews on social media, or negative consumer perception of our products,
operations, brand or experience; and
•
Our position or perceived lack of position on ESG topics, public policy or other similar issues and any perceived lack of
transparency about those matters.
In addition, in recent years there has been an increase in media platforms, particularly, social media and our use of social media
platforms is an important element of our omnichannel marketing efforts. For example, we maintain various social media accounts
for our brands, including Instagram, TikTok, Facebook, X (f/k/a Twitter), SnapChat, and Pinterest accounts. Negative publicity or
actions taken by individuals that we partner with, such as brand representatives, influencers or our associates, that fail to
represent our brands in a manner consistent with our brand image or act in a way that harms their reputation, whether through
our social media accounts or their own, could harm our brand reputation and materially impact our business. Social media also
allows for anyone to provide public feedback, which could influence perceptions of our brands and reduce demand for our
merchandise.
Damage to our reputation and loss of consumer confidence for these or any other reasons could lead to adverse consumer
actions, including boycotts, have negative impacts on investor perception and could impact our ability to attract and retain the
talent necessary to compete in the marketplace or to attract or retain business partners for third-party relationships such as
licensing or franchise arrangements, all of which could have a material adverse impact on our business, as well as require
additional resources to rebuild our reputation.
Failure to continue to successfully manage the complexities of our omnichannel operations and of our customers’ omnichannel
shopping experience, or failure to continue to successfully invest in customer, digital and omnichannel initiatives could have a
material adverse impact on our business.
As omnichannel retailing continues to evolve, our customers increasingly interact with our brands through a variety of digital and
physical spaces, and expect seamless integration across all touchpoints. As our success depends on our ability to effectively
manage the complexities of our omnichannel operations and of our customers’ omnichannel shopping experience, including our
ability to respond to shifting consumer traffic patterns, receive and fulfill orders, and engage our customers, we have made
significant investments and operational changes to develop our digital and omnichannel capabilities globally. Such investments
and operational changes include the development of localized fulfillment, shipping and customer service operations, investments
in digital media to attract new customers, and the rollout of omnichannel capabilities listed in “ITEM 1. BUSINESS” of this Annual
Report on Form 10-K.
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While we must keep up to date with technology trends in the retail environment in order to manage our successful omnichannel
shopping experience, it is possible these initiatives may not provide the anticipated benefits or desired rates of return. For
example, we could be at a competitive disadvantage if we are unable to effectively collect data and leverage data analytics to
retrieve timely, customer insights to appropriately respond to customer demands and improve customer engagement across
channels or if innovative digital products and features we develop are not utilized or received by customers as anticipated.
In addition, digital operations are subject to numerous risks, including reliance on third-party computer hardware/software and
service providers, data breaches, the variability of the rate of merchandise returns, violations of evolving government
interpretations of laws and regulations, including those relating to online privacy, credit card fraud, telecommunication failures,
electronic break-ins and similar compromises, and disruption of services. Changes in foreign governmental regulations and
interpretations may also negatively impact our omnichannel operations, including our ability to accept orders and deliver product
to our customers. Failure to successfully respond to these risks may adversely affect sales as well as damage the reputation of
our brands.
If our information technology systems are disrupted or cease to operate effectively, it could have a material adverse impact on
our business.
We rely heavily on our own information technology systems and on third-party information technology systems in both our
customer-facing and corporate operations to: operate our websites and mobile apps; record and process transactions; respond
to customer inquiries; manage inventory; purchase, sell and ship merchandise on a timely basis; maintain cost-efficient
operations; create a customer relationship management database through our loyalty programs; and complete other customer-
facing and business objectives. Given the significant number of transactions that are completed annually, it is vital to maintain
constant operation of our computer hardware, telecommunication systems and software systems, and maintain data security.
Despite efforts to prevent such an occurrence, our information technology systems may be vulnerable, from time to time, to
damage or interruption from computer viruses, power interruptions or outages or other system failures, third-party intrusions,
inadvertent or intentional breaches by our associates, third-party service providers or business partners, or threat actors, and
other technical malfunctions. Further, the sophistication, availability and use of AI by threat actors present an increased level of
risk. If our systems are damaged, fail to function properly, or are outdated in comparison to those of our competition, we may
have to make monetary investments to repairs or replace the systems and we could endure delays in our operations. We have
made and expect to continue to make significant monetary investments and devote significant attention to modernizing our core
systems, and the effectiveness of these investments can be less predictable than others and may fail to provide the expected
benefits. Additionally, we rely on services provided by third-party vendors and platforms for certain information technology
processes, including point-of-sale, digital operations, inventory management, supply chain, planning, sourcing, merchandising,
payroll, scheduling, financial reporting, and managing third-party relationships, including our brand representatives and influencer
network, and our wholesale, franchise licensing, or marketplace partners. This reliance on third parties makes our operations
vulnerable to a failure by any one of these parties to perform adequately or maintain effective internal controls.
We regularly evaluate our information technology systems and requirements to ensure appropriate functionality and use in
response to business demands. For example, in 2022, we began the multi-year process of upgrading our ERP system. We are
continuing to execute this plan in Fiscal 2025 and currently anticipate implementation in Fiscal 2026. We are aware of the
inherent risks associated with replacing and modifying these systems, including system disruptions, inaccurate system
information, and user acceptance and understanding. Any material disruption or slowdown of our systems, including a disruption
or slowdown caused by our failure to successfully upgrade or replace our systems could impact our ability to effectively manage
and maintain our inventory, to ship products to customers on a timely basis, and may cause information to be lost or delayed,
including data related to customer orders. Such a loss or delay, especially if the disruption or slowdown occurred during our peak
selling seasons, could have a material adverse effect on our results of operations. In addition, the upgrading of our ERP system
requires significant financial and operational investments, and such investments may not provide the anticipated benefits or
desired rates of returns.
We may be exposed to risks and costs associated with cyber-attacks, data protection, credit card fraud and identity theft that
could have a material adverse impact on our business.
In the standard course of business, we receive and maintain confidential information about customers, associates and other third
parties. In addition, third parties also receive and maintain certain confidential information. The protection of this information is
critical to our business and subjects us to numerous laws, rules and regulations domestically and in foreign jurisdictions. The
retail industry in particular has been the target of many cyber-attacks and it is possible that an individual or group could defeat
our security measures, or those of a third-party service provider or business partner, and access confidential information about
our business, customers and associates. Further, like other companies in the retail industry, during the ordinary course of
business, we and our vendors have in the past experienced, and we expect to continue to experience, cyber-attacks of varying
degrees and types, including phishing, and other attempts to breach, or gain unauthorized access to, our systems. To date,
cyber-attacks have not had a material impact on our operations, but we cannot provide assurance that cyber-attacks will not
have a material impact in the future.
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We have experienced, and expect to continue to experience, increased costs associated with protecting confidential information
through the implementation of security technologies, processes and procedures, including training programs for associates to
raise awareness about phishing, malware and other cyber risks, especially as we implement new technologies, such as new
payment capabilities or updates to our mobile apps and websites. Additionally, the techniques and sophistication used to conduct
cyber-attacks and breaches of information technology systems change frequently and increase in complexity and are often not
recognized until such attacks are launched or have been in place for a period of time. We (or the third parties on which we rely)
may not have the resources or technical sophistication to sufficiently anticipate, prevent, or immediately identify and remediate
cyber-attacks.
Furthermore, the global regulatory environment is increasingly complex and demanding with frequent new and changing
requirements surrounding information security and privacy, including new regulations applicable to public companies in the
United States, China’s Cybersecurity Law, the California Consumer Privacy Act, and the European Union’s General Data
Protection Regulation. We may incur significant costs related to compliance with these laws and failure to comply with these
regulatory standards, and others, could have a material adverse impact on our business.
We have also implemented a flexible work policy allowing most of our corporate associates to work remotely, from time to time,
as have certain of our third-party vendors. Offsite working by associates, which requires increased use of public internet
connection, and use of office equipment off premises may make our business more vulnerable to cybersecurity breach attempts,
phishing and other scams, fraud, money laundering, theft and other criminal activity.
If we, or a third-party who has access to our info, were to fall victim to a successful cyber-attack or suffer intentional or
unintentional data and security breaches by associates or third-parties, it could have a material adverse impact on our business,
especially an event that compromises customer data or results in the unauthorized release of confidential business or customer
information. In addition, if we are unable to avert a denial of service attack that renders our website inoperable, it could result in
negative consequences, such as lost sales and customer dissatisfaction. Additional negative consequences that could result
from these and similar events may include, but are not limited to:
•
remediation costs, such as liability for stolen assets or information, potential legal settlements to affected parties, repairs
of system damage, and incentives to customers or business partners in an effort to maintain relationships after an
attack;
•
increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying
additional personnel and protection technologies, training associates, and engaging third party experts and consultants;
•
lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers
following an attack;
•
litigation and legal risks, including costs of litigation and regulatory, fines, penalties or actions by domestic or
international governmental authorities;
•
increased insurance premiums, or the ability to obtain insurance on commercially reasonable terms;
•
reputational damage that adversely affects customer or investor confidence; and
•
damage to the Company’s competitiveness, stock price, and long-term shareholder value.
Although we maintain cybersecurity insurance, there can be no assurance that it will be sufficient for a specific cyber incident, or
that insurance proceeds will be paid to us in a timely fashion.
Changes in the cost, availability and quality of raw materials, transportation and labor, including changes due to trade relations
could have a material adverse impact on our business.
Changes in the cost, availability and quality of the fabrics or other raw materials used to manufacture our merchandise could
have a material adverse effect on our cost of sales, or our ability to meet customer demand. The prices for such fabrics depend
largely on the market prices for the raw materials used to produce them, particularly cotton. The price and availability of such raw
materials may fluctuate significantly, depending on many factors, including crop yields, weather patterns and other unforeseen
events. For example, significant inflationary pressures have and may continue to impact the cost of labor, cotton and other raw
materials. Increased global uncertainty has also impacted and may in the future impact the cost, availability and quality of the
fabrics or other raw materials used to manufacture our merchandise, and compliance with sanctions, customs trade orders and
sourcing laws could impact the price of cotton in the marketplace and the global supply chain.
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Fluctuations in the cost of transportation could also have a material adverse effect on our cost of sales and ability to meet
customer demand. We primarily use six contract carriers to ship merchandise and related materials to our North American
customers, and several contract carriers for our global customers. If the shipping operations of these third parties were disrupted,
and we are unable to respond in a quick and efficient manner, our ability to replace inventory in our stores and process digital
and third-party orders could be interrupted, potentially resulting in adverse impacts to sales or increased costs. Furthermore, we
are susceptible to increases in fuel costs which may increase the cost of distribution. If we are not able to pass this cost on to our
customers, our financial condition and results of operations could be adversely affected.
In addition, we have experienced increasing wage pressures in recent years related to the cost of labor at our third-party
manufacturers, at our distribution centers and at our stores. For example, recent government initiatives in the U.S. or changes to
existing laws, such as the adoption and implementation of national, state, or local government proposals relating to increases in
minimum wage rates, may increase our costs of doing business and adversely affect our results of operations. We may not be
able to pass all or a portion of higher labor costs on to our customers, which could adversely affect our gross margin and results
of operations.
Changes in tax or tariff policy regarding merchandise produced in, and raw materials sourced from, certain countries could
adversely affect our business.
A predominant portion of the merchandise we sell is originally manufactured in countries other than the United States. Refer to
Note 6, “INVENTORIES,” of the Notes to Consolidated Financial Statements included in “ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K for a summary of inventory sourced based on vendor
location during Fiscal 2024. Additionally, many of the raw materials used to manufacture our apparel is sourced internationally.
International trade disputes that result in tariffs and other protectionist measures could adversely affect our business, including
disruption and cost increases in our established patterns for sourcing raw materials and our merchandise and increased
uncertainties in planning our sourcing strategies and forecasting our margins. For example, the United States has imposed
significant new tariffs on China related to the importation of certain product categories. It is also possible that additional tariffs
may be imposed on imports from other countries, including the foreign countries where our apparel is predominantly
manufactured. The imposition of any such tariffs would likely increase the cost of our merchandise and negatively impact our
operating results. Although such changes would have implications across the entire industry, we may fail to effectively adapt to
and manage the adjustments in strategy that would be necessary in response to those changes. We are working with our current
suppliers to mitigate our exposure to current or potential tariffs and seeking opportunities to engage other suppliers, but there
can be no assurance that we will be able to offset any increased costs or secure other suppliers.
In addition, other countries may change their business and trade policies in anticipation of or in response to the U.S.’s increased
import tariffs and other changes in U.S. trade policy and regulations already enacted or that may be enacted in the future.
In addition to the general uncertainty and overall risk from potential changes in trade laws and policies, as we make business
decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities, or fail
to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes.
These risks could adversely affect our revenues, reduce our profitability, and negatively impact our business.
We depend upon independent third parties for the manufacture and delivery of our merchandise, and a disruption of the
manufacture or delivery of our merchandise could have a material adverse impact on our business.
We depend on third parties for the manufacture and delivery of our merchandise. As a result, the continued success of our
operations is tied to our timely receipt of quality merchandise from third-party manufacturers. We source the majority of our
merchandise outside of the U.S. through arrangements with approximately 150 vendors, primarily located in southeast Asia.
Political, social or economic instability in the regions in which our manufacturers are located could cause disruptions in trade,
including exports to the U.S. and EMEA. In addition, the inability of vendors to access liquidity, or the insolvency of vendors,
could lead to their failure to deliver merchandise to us. A manufacturer’s inability to ship orders in a timely manner or meet our
quality standards could cause delays in responding to consumer demand and negatively affect consumer confidence or
negatively impact our competitive position, any of which could have a material adverse effect on our financial condition and
results of operations.
For example, the attacks on cargo vessels in the Red Sea have resulted in delayed deliveries and increased freight costs, and a
prolonged or escalating armed conflict may result in additional costs, including any impact from using air freight instead of ocean
freight to mitigate inventory delays. It is possible that the adverse impact of these and future attacks, including additional costs
associated with mitigation efforts, could materially adversely affect our business and results of operation.
All factories that we partner with are contractually required to adhere to the Company’s Vendor Code of Conduct, go through
social audits which include on-site walk-throughs to appraise the physical working conditions and health and safety practices,
and review payroll and age documentation. If these factories are unwilling or not able to meet the standards set forth within the
Company’s Vendor Code of Conduct, it could limit the options available to us and could result in an increase of costs of
manufacturing, which we may not be able to pass on to our customers.
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Other events that could disrupt the timely delivery of our merchandise include new trade law provisions or regulations, reliance
on a limited number of shipping carriers and associated alliances, weather events, significant labor disputes, port congestion and
other unexpected events.
Our reliance on our distribution centers makes us susceptible to disruptions or adverse conditions affecting our supply chain.
Our distribution center operations are susceptible to local and regional factors, such as system failures, accidents, labor
disputes, economic and weather conditions, natural disasters, significant power interruptions or outages, demographic and
population changes, and other unforeseen events and circumstances. We rely on both company-operated and third-party
distribution centers to manage the receipt, storage, sorting, packing and distribution of our merchandise. If our distribution
centers are not adequate to support our operations, including as a result of capacity constraints in response to an increase in
digital sales or performance issues related to third-party management, the increased rate of merchandise returns, we could
experience adverse impacts such as shipping delays and or customer dissatisfaction. In addition, if our distribution operations
were disrupted due to, for example, labor shortages, natural disasters or power interruptions or outages, and we were unable to
relocate operations or find other property adequate for conducting business, our ability to replace inventory in our stores and
process digital and third-party orders could be interrupted, potentially resulting in adverse impacts to sales or increased costs.
Refer to “ITEM 1. BUSINESS” of this Annual Report on Form 10-K, for a listing of certain distribution centers on which we rely.
We rely on the experience and skills of our executive officers and associates, and the failure to attract or retain this talent,
effectively manage succession, and establish a workforce that can best serve the communities in which we operate could have a
material adverse impact on our business.
Our ability to succeed may be adversely impacted if we are not able to attract, retain and develop talent and future leaders,
including our executive officers. We believe that the attraction, retention and management of qualified talent is integral to our
success in advancing our strategies and key business priorities and avoiding disruptions in our business. We rely on our
associates across the organization, including those at our corporate offices, stores and distribution centers, as well as their
experience and expertise in the retail business.
Our executive officers closely supervise all aspects of our operations, have substantial experience and expertise in the retail
business and have an integral role in the growth and success of our brands. If we were to lose the benefit of the involvement of
our executive officers or other personnel, without adequate succession plans, our business could be adversely affected.
In addition, if we are unable to attract and retain talent at the associate level, our business could be adversely impacted.
Competition for such qualified talent is intense, and we cannot be sure that we will be able to attract, retain and develop a
sufficient number of qualified individuals in future periods. In addition, we cannot guarantee that we will be able to find adequate
temporary or seasonal personnel to staff our operations when needed. For example, as automation, AI and similar technological
advancements continue to evolve, we may need to compete for talent that is familiar with these advancements in technologies in
order to compete effectively with our industry peers. If we are not successful in these efforts, our business may be adversely
affected.
If we are not successful in these efforts or fail to successfully execute against the key human capital management initiatives
discussed in “ITEM 1. BUSINESS” of this Annual Report on Form 10-K, our business could be adversely impacted.
If we identify a material weakness in our internal control over financial reporting, fail to remediate a material weakness, or fail to
establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial
results could be adversely affected.
The effectiveness of any controls or procedures is subject to certain inherent limitations, and as a result, there can be no
assurance that our controls and procedures will prevent or detect misstatements. Even an effective system of internal control
over financial reporting will provide only reasonable, not absolute, assurance with respect to financial statement preparation.
Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
If we fail to remediate a material weakness, or are otherwise unable to maintain effective internal control over financial reporting,
management could be required to expend significant resources. Additionally, we could fail to meet our public reporting
requirements on a timely basis, and be subject to fines, penalties, investigations or judgements, all of which could negatively
affect investor confidence and adversely impact our stock price.
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2024 Form 10-K
LEGAL, TAX, REGULATORY AND COMPLIANCE RISKS.
Misconduct or illegal activities by our current and former associates, directors, advisers, third-party service providers or business
partners, or others affiliated, or perceived to be affiliated, with the Company could subject to us to reputational harm, regulatory
scrutiny or inquiries, or legal liability.
There is a risk that current or former associates, executives, directors, advisers, third party-service providers or business
partners of the Company, or others who are actually or perceived to be affiliated with us, could engage, deliberately or recklessly,
in misconduct or fraud that creates legal exposure for us and adversely affects our business. If such individuals were to engage,
or be accused of engaging in, illegal or suspicious activities, sexual misconduct or harassment, racial or gender discrimination,
improper use or disclosure of confidential information, fraud, payment or solicitation of bribes, or any other type of similar
misconduct or violation of other laws and regulations, during their employment or service with us, we could suffer serious harm to
our brand, reputation, be subject to penalties or sanctions, suffer serious harm to our financial position and current and future
business relationships, and face potentially significant litigation or investigations.
In particular, Michael Jeffries, who served as chief executive officer of the Company from 1992 to 2014, has been accused of
sexual abuse and exploitation, which accusations include claims relating to behavior that is alleged to have occurred during his
prior tenure with us. Criminal charges have been filed against Mr. Jeffries, and there are multiple pending civil actions against Mr.
Jeffries and the Company that relate to this alleged behavior. Although we believe the claims against us are without merit, the
allegations against this former executive, as well as the claims brought against us, have resulted in negative media attention and
may result in additional litigation or may result in other adverse consequences to our reputation, brand, and business. In addition,
in March 2024 and March 2025, the Delaware Court of Chancery ruled that Mr. Jeffries was entitled to advancement by the
Company of his defense costs for the civil litigation and for his defense costs for the criminal prosecution against him,
respectively.
Fluctuations in our tax obligations and effective tax rate may result in volatility in our results of operations could have a material
adverse impact on our business.
We are subject to income taxes in many U.S. and foreign jurisdictions. In addition, our products are subject to import and excise
duties and/or sales, consumption or value-added taxes (“VAT”) in many jurisdictions. We record tax expense based on our
estimates of future payments, which include reserves for estimates of probable settlements of foreign and domestic tax audits. At
any time, many tax years are subject to audit by various taxing jurisdictions. The results of these audits and negotiations with
taxing authorities may affect the ultimate settlement of these issues. As a result, we expect that throughout the year, there could
be ongoing variability in our quarterly tax rates as taxable events occur and exposures are evaluated. In addition, our effective
tax rate in any given financial reporting period may be materially impacted by changes in the mix and level of earnings or losses
by taxing jurisdictions or by changes to existing accounting rules or regulations. Fluctuations in duties could also have a material
impact on our financial condition, results of operations or cash flows.
The Organization for Economic Co-operation and Development (“OECD”), along with members of its inclusive framework, have,
through the Base Erosion and Profit Shifting project, proposed changes to numerous long-standing tax principles (“Pillar Two
Rules”). Although the U.S. effectively withdrew from the OECD global tax agreement in January 2025, other countries where the
Company does business, including the U.K. and Germany, have enacted legislation implementing Pillar Two Rules, which are
effective from January 1, 2024. The implementation of the Pillar Two Rules in each jurisdiction in which the Company operates
did not have a material impact on its effective tax rate for Fiscal 2024, and the Company does not project a material impact on
the effective tax rate for Fiscal 2025.
In some global markets, we are required to withhold and remit VAT to the appropriate local tax authorities. Failure to correctly
calculate or remit the appropriate amounts could subject us to substantial fines and penalties that could have an adverse effect
on our financial condition, results of operations or cash flows.
In the past, tax law has been enacted, domestically and abroad, impacting our current or future tax structure and effective tax
rate, such as the Inflation Reduction Act in the U.S. Tax law may be enacted in the future, domestically or abroad, that impacts
our current or future tax structure and effective tax rate.
Litigation and any future stockholder activism could have a material adverse impact on our business.
We, along with third parties we do business with, are involved, from time to time, in litigation arising in the ordinary course of
business. Litigation matters may include, but are not limited to, contract disputes, employment-related actions, alleged
misconduct by current or former associates, labor relations, commercial litigation, intellectual property rights, privacy litigation,
product safety, environmental matters and shareholder actions.
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Litigation, in general, may be expensive and disruptive. We cannot predict with certainty the outcomes of these legal proceedings
and other contingencies, and the costs incurred in litigation can be substantial, regardless of the outcome. Substantial
unanticipated verdicts, fines and rulings do sometimes occur. As a result, we could, from time to time, incur judgments, enter into
settlements, or revise our expectations regarding the outcome of certain matters, and such developments could have a material
adverse effect on our results of operations in the period in which the amounts are accrued and/or our cash flows in the period in
which the amounts are paid. The outcome of some of these legal proceedings and other contingencies could require us to take,
or refrain from taking, actions which could negatively affect our operations and, depending on the nature of the allegations, could
negatively impact our reputation. Additionally, defending against these legal proceedings may involve significant expense and
diversion of management’s attention and resources.
Stockholder activism, which could take many forms or arise in a variety of situations, remains popular with many public investors.
Due to the volatility of our stock price and for a variety of other reasons, we may become the target of securities litigation
or stockholder activism. Responding to stockholder activists’ campaigns may involve significant expense and diversion of
management’s attention and resources without yielding any improvement in our results of operations or financial condition.
Failure to adequately protect and enforce our intellectual property, or failure to adequately ensure that we are not infringing the
intellectual property rights of others, could have a negative impact on our brand image and limit our ability to penetrate new
markets which could have a material adverse impact on our business.
We believe our core trademarks, Abercrombie & Fitch®, abercrombie®, Hollister®, Gilly Hicks®, and the “Moose” and “Seagull”
logos, are essential to the effective implementation of our strategy. We have obtained or applied for federal registration of these
trademarks with the U.S. Patent and Trademark Office and the registries of countries in key markets within the Company’s
owned and operated sales and distribution channels, and those in which the Company’s franchise, wholesale, and licensing
partners have sales and distribution rights. In addition, these trademarks are either registered, or the Company has applications
for registration pending, with the registries of many of the foreign countries in which the manufacturers of the Company’s
products are located. There can be no assurance that we will obtain registrations that have been applied for or that the
registrations we obtain will prevent the imitation of our products or infringement of our intellectual property rights by others.
Although brand security initiatives are in place, we cannot guarantee that our efforts against the infringement or counterfeiting of
our brands will be successful. If a third party copies our products in a manner that projects lesser quality or carries a negative
connotation, our brand image could be materially adversely affected.
Because we have not yet registered all of our trademarks in all categories, or in all foreign countries in which we source or offer
our merchandise now, or may in the future, our global expansion and our merchandising of products using these marks could be
limited. The pending applications for international registration of various trademarks could be challenged or rejected in those
countries because third parties of whom we are not currently aware have already registered similar marks in those countries.
Accordingly, it may be possible, in those foreign countries where the status of various applications is pending or unclear, for a
third-party owner of the national trademark registration for a similar mark to prohibit the manufacture, sale or exportation of
branded goods in or from that country. Failure to register our trademarks or purchase or license the right to use our trademarks
or logos in these jurisdictions could limit our ability to obtain supplies from, or manufacture in, less costly markets or penetrate
new markets should our business plan include selling our merchandise or granting rights to our franchise, wholesale, and
licensing partners in those non-U.S. jurisdictions.
In addition, if third parties successfully claim we infringe their intellectual property rights, we may be subject to liability, be
prevented from using our trademarks or other intellectual property rights, or be obligated to remove this merchandise from our
inventory, which could have an adverse effect on our financial conditions and operations. Defending infringement claims could be
expensive and time consuming and might result in our incurring additional costs, entering into costly license agreements, actions
to recover unpaid royalty fees, or other settlement agreements. These risks may be magnified if we increase our use of licensing
arrangements or partnerships with third parties.
Changes in the regulatory or compliance landscape could have a material adverse impact on our business.
We are subject to numerous domestic and foreign laws and regulations, including those related to customs, truth-in-advertising,
securities, environmental and social disclosures, consumer protection, general privacy, health information privacy, identity theft,
online privacy, general employment, employee health and safety, minimum wages, unsolicited commercial communication and
zoning and occupancy laws, as well as ordinances that regulate retailers generally and/or govern the importation, intellectual
property, promotion and sale of merchandise and the operation of retail stores, digital operations and distribution centers. If these
laws and regulations were to change, or were violated by our management, associates, suppliers, vendors or other parties with
whom we do business, the costs of certain merchandise could increase, or we could experience delays in shipments of our
merchandise, be subject to fines or penalties, temporary or permanent store closures, or increased regulatory scrutiny or suffer
reputational harm, which could reduce demand for our merchandise and adversely affect our business and results of operations.
Any changes in regulations, the imposition of additional regulations, or the enactment of any new or more stringent legislation
including the areas referenced above, could adversely affect our business and results of operations.
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Laws and regulations at the local, state, federal and various global levels frequently change, and the ultimate cost of compliance
cannot be precisely estimated. Changes in the legal or regulatory environment affecting responsible sourcing, supply chain
transparency, or environmental protection, among others, may result in increased compliance costs for us and our business
partners. Additionally, we may face regulatory challenges in complying with applicable global sanctions and trade regulations and
reputational challenges with our consumers and other stakeholders if we are unable to sufficiently verify the origins of material
sourced for the manufacture of our products.
In addition, we are subject to a variety of regulatory and reporting requirements, including, but not limited to, those related to
corporate governance and public disclosure. Stockholder activism, the current political environment, financial reform legislation,
government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations. New
requirements or changes in current regulatory reporting requirements may introduce additional complexities, lead to additional
compliance costs, divert management’s time and attention from strategic business activities, and could have a significant effect
on our reported results for the affected periods. Failure to comply with such regulations could result in fines, penalties, or lawsuits
and could have a material adverse impact on our business.
The agreements related to A&F Management’s senior secured asset-based revolving credit facility includes restrictive covenants
that limit our flexibility in operating our business and our inability to obtain additional credit on reasonable terms in the future
could have an adverse impact on our business.
The Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”) of Abercrombie & Fitch Management
Co. (“A&F Management”), a wholly-owned indirect subsidiary of A&F, provides for a senior secured asset-based revolving credit
facility of up to $500 million (the “ABL Facility”), which matures on August 2, 2029. The agreements related to the ABL Facility
contain restrictive covenants that, subject to specified exemptions, restrict, among other things, the ability of the Company and its
subsidiaries to: incur, assume or guarantee additional indebtedness; grant or incur liens; sell or otherwise dispose of assets,
including capital stock of subsidiaries; make investments in certain subsidiaries; pay dividends or make distributions on our
capital stock; redeem or repurchase capital stock; change the nature of our business; and consolidate or merge with or into, or
sell substantially all of the assets of the Company or A&F Management to another entity.
If an event of default under either related agreement occurs, any outstanding obligations under the ABL Facility could be
declared immediately due and payable or the lenders or noteholders could foreclose on or exercise other remedies with respect
to the assets securing the indebtedness under the ABL Facility. In addition, there is no assurance that we would have the cash
resources available to repay such accelerated obligations. Moreover, the ABL Facility is secured by certain of our real property,
inventory, intellectual property, general intangibles and receivables, among other things, and lenders may exercise remedies
against the collateral in an event of default.
We may, from time to time, incur indebtedness. There can be no assurance that we would be able to obtain sufficient funds to
enable us to repay or refinance any future obligations on commercially reasonable terms, or at all. Changes in market conditions
could potentially impact the size and terms of a replacement facility or facilities in the future. The inability to obtain credit on
commercially reasonable terms in the future could adversely impact our liquidity and results of operations as well as limit our
ability to take advantage of business opportunities that may arise.
Our amended and restated bylaws provide that certain courts in the State of Delaware or the federal district courts of the United
States will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our
shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of
Chancery located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding
brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer,
other employee or shareholder to us or our shareholders, any action asserting a claim arising pursuant to any provision of the
General Corporation Law of the State of Delaware, our certificate of incorporation or our bylaws (as either may be amended or
restated) or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of
the State of Delaware, or any action asserting a claim governed by the internal affairs doctrine of the law of the State of
Delaware. However, if the Court of Chancery within the State of Delaware lacks jurisdiction over such action, the action may be
brought in the United States District Court for the District of Delaware. Additionally, unless we consent in writing to the selection
of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of
any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”). The
exclusive forum provisions will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions.
Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created
by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provisions will not apply to suits
brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive
jurisdiction. There is, however, uncertainty as to whether a court would enforce the exclusive forum provisions, and investors
cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Furthermore, Section 22 of
the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability
created by the Securities Act or the rules and regulations thereunder.
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Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy
The Company has established an information security program and related processes for assessing, identifying, and managing
material risks from cybersecurity threats to the Company, including governance at the executive and Board level of the
Company’s cyber risk management strategy and the controls designed to protect its operations. The Company’s information
security program is managed at the executive level, with regular reporting to, and oversight by, the Board as described below.
The Company’s program includes multi-layered governance by management, the Audit and Finance Committee of the Board and
the Board, as described in greater detail below.
The Company’s policies and procedures identify how cybersecurity measures and controls are developed, implemented, and
regularly reviewed and updated. The Company implements and maintains a set of controls to manage information risk,
establishes guidelines for the use of information technology, and defines standards for identifying and mitigating information
risks. The controls are developed based on risk assessments and a review of controls from multiple security frameworks, such
as the Center for Internet Security’s Critical Security Control and the Payment Card Industry Data Security Standard. The
Company, internally and through third parties, conducts multiple information risk assessments each year. Risks identified in such
assessments are considered and evaluated for inclusion in the Company’s information risk portfolio and are then prioritized and
addressed where appropriate to update the Company’s information security programs. Assessments, along with risk-based
analysis and judgment, are used by the Company to determine how it should manage these risks.
In addition, the Company’s Incident Response Plan (“IRP”) provides an outline for the Company on how to identify and address a
significant cybersecurity incident. The IRP includes certain steps to be taken by the Information Security team to, among other
things, assess the severity of an incident, determine the appropriate escalation, and mitigate or remediate the incident. The IRP
is intended to serve as a framework to aid the Information Security team and other corporate functions in coordinating the
Company’s response to an incident in order to minimize the impact on the Company’s business and operations, as well as the
affected parties.
The Company also conducts cybersecurity exercises and training. For example, certain corporate associates and management-
level associates in our stores and distribution centers must complete cybersecurity training on an at least annual basis, which
educates the associates on the Company’s policies and procedures for the handling of customer and employee personal data,
incident reporting, and avoiding common cybersecurity threats such as phishing attacks. In addition, targeted training for
corporate associates occurs throughout the year, and regular audiences include associates on the Company’s marketing, data
analytics, and user experience teams. The Company’s management holds annual executive data incident tabletop exercises and
the information security team holds more frequent technical tabletop exercises.
The Company leverages third-party security firms in different capacities to implement or operate various aspects of the
Company’s information assets and information security program, including to conduct risk assessments and penetration testing.
The Company uses a variety of processes to address cybersecurity threats associated with third parties, including our use of
third-party technology and services, such as conducting risk assessments and reviewing contractual requirements where the
Company has determined it to be appropriate.
The Company (or the third parties on which it relies) may not be able to fully, continuously, and effectively implement security
controls as intended. As described above, we utilize a risk-based approach and judgment to determine the security controls to
implement and it is possible we may not implement sufficient controls if we do not recognize or underestimate a particular risk. In
addition, security controls, no matter how well designed or implemented, may only partially mitigate and not fully eliminate risks.
Events, when detected by security tools or third parties, may not always be immediately understood or acted upon.
Board Governance and Management
Cybersecurity risk is managed as an enterprise risk in the Company’s enterprise risk management process. Responsibility for
risk oversight and management generally lies with the Company’s Board. To manage oversight of our cybersecurity risk
management practices, since 2019 the Board has delegated such responsibility to the Company’s Audit and Finance Committee.
The Company’s Chief Information Security Officer (“CISO”) and the Information Security team provide reports to either the Audit
and Finance Committee or the Board on a quarterly basis on various matters, such as current and emerging cybersecurity risks
to the Company, risks and incidents that were escalated to management during the prior quarter (including those that did not
require immediate escalation to the Audit and Finance Committee and/or full Board), internal and external assessments of the
Company’s information security program, and a roadmap of projects and major initiatives to manage its information security
posture.
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2024 Form 10-K
At the executive and management level, the CISO has primary responsibility for the architecture, implementation, and
management of the Company’s information security program. The CISO has approximately two decades of experience in
technology risk management, including over a decade with the Company, and has passed examinations and received
certifications as a SANS Global Information Security Leader and a Certified Information Systems Auditor. The CISO reports
directly to the Company’s Chief Digital and Technology Officer. The Company’s Information Security team, under the direction of
the CISO, implements and provides governance and functional oversight for cybersecurity controls and services. Information
Security processes include escalation of certain risks and incidents, including those that originate or occur at third parties, to the
CISO and the executive team as appropriate based on the severity or potential severity. In addition, regular updates from the
Information Security team, in conjunction with real-time escalation on an as-needed basis, are also used to assess the risk
landscape and adjust the Company’s strategy and roadmap to address such risk.
Although the risks from cybersecurity threats have not materially affected our business strategy, results of operations, or financial
condition to date, they may in the future and we continue to closely monitor cyber risk. See “ITEM 1A. RISK FACTORS” for
additional information regarding the Company’s cybersecurity risks and which should be read in conjunction with this Item 1C.
Item 2. Properties
The Company’s global headquarters are located on a campus-like setting in New Albany, Ohio, which is owned by the Company.
The Company’s global headquarters also include Company-owned distribution centers that support distribution to all domestic
stores and the majority of domestic digital orders. The Company also leases property for its regional headquarters located in
London, United Kingdom and Shanghai, China. In addition, the Company owns or leases facilities both domestically and
internationally to support the Company’s operations, such as its distribution centers and various support centers.
The Company does not believe any individual regional headquarters, third-party distribution center or support center lease is
material as, if necessary or desirable to relocate an operation, other suitable property could be found. These properties are
utilized by both of the Company’s operating segments and are currently suitable and adequate for conducting the Company’s
business.
As of February 1, 2025, the Company operated 789 retail stores across its brands. The Company does not believe that any
individual store lease is material; however, certain geographic areas may have a higher concentration of store locations.
Item 3. Legal Proceedings
The Company and its affiliates are parties to lawsuits and other adversary proceedings that may range from individual actions
involving a single plaintiff to class action lawsuits. The Company’s legal costs incurred in connection with the resolution of claims
and lawsuits are generally expensed as incurred, and the Company establishes estimated liabilities for the outcome of litigation
where losses are deemed probable and the amount of loss, or range of loss, is reasonably estimable. The Company also
determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued
liabilities, if any, when it has determined that a loss is reasonably possible, and it is able to determine such estimates. For
information regarding legal proceedings, see Note 18 “CONTINGENCIES” to the Consolidated Financial Statements included in
this Annual report on Form 10-K. The Company’s accrued charges for certain legal contingencies are classified within accrued
expenses on the Consolidated Balance Sheets included in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA,” of this Annual Report on Form 10-K. Based on currently available information, the Company cannot estimate a range of
reasonably possible losses in excess of the accrued charges for legal contingencies. In addition, the Company has not
established accruals for certain claims and legal proceedings pending against the Company where it is not possible to
reasonably estimate the outcome or potential liability, and the Company cannot estimate a range of reasonably possible losses
for these legal matters. Actual liabilities may differ from the amounts recorded, due to uncertainties regarding final settlement
agreement negotiations and the terms of any approval by the courts, and there can be no assurance that the final resolution of
legal matters will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.
The Company’s assessment of the current exposure could change in the event of the discovery of additional facts.
In addition, pursuant to Item 103(c)(3)(iii) of Regulation S-K under the Exchange Act, the Company is required to disclose certain
information about environmental proceedings to which a governmental authority is a party if the Company reasonably believes
such proceedings may result in monetary sanctions, exclusive of interest and costs, above a stated threshold. The Company has
elected to apply a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.
Item 4. Mine Safety Disclosures
Not applicable.
Table of Contents
Abercrombie & Fitch Co.
26
2024 Form 10-K
Equity Securities
The following table provides information regarding the purchase of shares of Common Stock made by or on behalf of A&F or any
“affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act during each fiscal month of the thirteen weeks
ended February 1, 2025:
Period (fiscal month)
Total Number of
Shares
Purchased (1)
Average Price
Paid per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (2)
Maximum Number of
Shares (or Approximate
Dollar Value) that May
Yet Be Purchased Under
the Plans or Programs (3)
November 3, 2024 through November 30, 2024
887
$
144.64
—
$
102,378,203
December 1, 2024 through January 4, 2024
395,178
148.05
391,975
44,342,876
January 5, 2024 through February 1, 2025
300,172
139.80
300,172
2,378,213
Total
696,237
$
144.49
692,147
2,378,213
(1)
An aggregate of 4,090 shares of A&F’s Common Stock purchased during the thirteen weeks ended February 1, 2025 were withheld for tax
payments due upon the vesting of employee restricted stock units.
(2)
On November 23, 2021, we announced that the Board of Directors approved a $500 million share repurchase authorization (the “2021
Authorization”).
(3)
The number shown represents, as of the end of each period, the approximate dollar value of Common Stock that may yet be purchased under
A&F’s publicly announced stock repurchase authorization described in footnote 2 above. As described below, on March 5, 2025, the Company
announced that the Board of Directors authorized the 2025 Authorization (defined below). The 2025 Authorization replaced the 2021 Authorization
and shares may no longer be repurchased pursuant to the 2021 Authorization.
On March 5, 2025, the Company announced that the Board of Directors authorized a new $1.3 billion share repurchase program
(the “2025 Authorization”), which replaced the 2021 Authorization. The 2025 Authorization does not have an expiration date.
Under the 2025 Authorization, the Company may repurchase shares from time to time in open market or private transactions in
such manner as may be deemed advisable from time to time (including, without limitation, pursuant to accelerated share
repurchase programs, one or more 10b5-1 trading plans, or any other method deemed advisable) and may be discontinued at
any time. The timing and amount of any such repurchases will be determined based on an evaluation of market conditions, the
Company’s share price, legal requirements, and other factors.
Item 6. [Reserved]
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Abercrombie & Fitch Co.
28
2024 Form 10-K
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 2024 and Fiscal 2023 and provides comparisons between such fiscal years. For
discussion and comparison of Fiscal 2023 and Fiscal 2022, 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 2023, filed with the SEC on April 1,
2024. 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.
In prior periods, the Company included stores and distribution expense and marketing, general and administrative expense as
individual expense categories on the Consolidated Statements of Operations and Comprehensive Income (Loss). Stores &
distribution expense was recaptioned as selling expense, while marketing, general and administrative expense was recaptioned
as general and administrative expense. In conjunction with these changes, all marketing expenses, including amounts previously
presented in marketing, general and administrative expense, were moved into selling expense, while certain management and IT
costs were moved out of stores and distribution expense and into general and administrative expense. The net changes
associated with these reclassifications results in selling expense that is $38.3 million and $35.0 million lower than the stores and
distribution expense that was previously presented for Fiscal 2023 and Fiscal 2022, respectively, and in general and
administrative expense that is $38.3 million and $35.0 million higher than the marketing, general, and administrative expense
that was previously presented for Fiscal 2023 and Fiscal 2022, respectively. Prior period amounts have been reclassified to
conform to the current fiscal year’s presentation.
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 2024 and Fiscal 2023.
•
Results of Operations. An analysis of certain components of the Company’s Consolidated Statements of Operations
and Comprehensive Income (Loss) for Fiscal 2024 as compared to Fiscal 2023.
•
Liquidity and Capital Resources. A discussion of the Company’s financial condition, changes in financial condition and
liquidity as of February 1, 2025, which includes (i) an analysis of changes in cash flows for Fiscal 2024 as compared to
Fiscal 2023, (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 February 1, 2025.
•
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.
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Abercrombie & Fitch Co.
29
2024 Form 10-K
OVERVIEW
Business Summary
Abercrombie & Fitch Co. (“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and its
subsidiaries are referred to as 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 (loss).
The Company’s brand families includes 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:
Fiscal year
Year ended/ ending
Number of weeks
Fiscal 2022
January 28, 2023
52
Fiscal 2023
February 3, 2024
53
Fiscal 2024
February 1, 2025
52
Fiscal 2025
January 31, 2026
52
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 region, 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;
•
Store metrics, such as net sales per gross square foot, and store four-wall operating margins;
•
Digital and omnichannel metrics;
•
Transactional metrics, such as traffic and conversion, performance across key product categories, average unit retail
(“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.
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Abercrombie & Fitch Co.
30
2024 Form 10-K
CURRENT TRENDS AND OUTLOOK
Focus Areas for Fiscal 2025
The Company introduced the Always Forward Plan in June of Fiscal 2022. The Always Forward Plan is anchored on our
strategic growth principles, which are to:
•
Execute focused growth plans;
•
Accelerate an enterprise-wide digital revolution; and
•
Operate with financial discipline
While the Company has significantly outperformed certain financial targets set forth in the Always Forward Plan, the growth
principles continue to serve as a framework for the Company achieving sustainable and profitable growth and profitability.
The Company’s strategic priorities continue to evolve based on changing consumer demands and new strategic opportunities,
and management reviews and prioritizes investments and strategic focus areas to address such demands and opportunities.
Execute focused growth plans by:
•
driving sales growth across regions and brand families primarily through marketing and store investments in our owned
and operating channels, while pursuing new geographies and markets via franchise, wholesale and licensing
partnerships;
•
using our regionally relevant brand playbooks globally to align the brands’ products, voices, and experiences with
customers, both digitally and in-store; and
•
using testing and chase strategies to deliver compelling assortments and product collections across genders.
Accelerate an enterprise-wide digital revolution to improve the customer and associate experience by:
•
continuing to progress on our multi-year enterprise resource planning (“ERP”) transformation and cloud migration
journey; and
•
investing in digital and technology to improve experiences across key parts of the customer journey while delivering a
consistent omnichannel experience.
Operate with financial discipline by:
•
using our agile inventory model and pricing strategies to position the Company to support customer demand throughout
the year; and
•
maintaining our durable balance sheet and consistent free cash flow profile, underpinned by our disciplined investment
philosophy while balancing against macro environment impacts and efficiency efforts.
Current Macroeconomic Conditions
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, recent changes in legislation and regulations,
including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy. In
periods of perceived or actual unfavorable economic conditions, consumers may reallocate available discretionary spending or
determine that they have fewer funds available for discretionary spending, which may adversely impact demand for our products.
In addition, freight costs have remained heightened since the start of the second quarter of Fiscal 2024, which we expect to
continue through the first half of Fiscal 2025. Continued inflationary pressures could further impact expenses and have a long-
term impact on the Company, as increasing costs may impact its ability to maintain satisfactory margins.
Global Events and Supply Chain Disruptions
As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia,
among other regions, management is mindful of macroeconomic risks, global challenges and the changing global geopolitical
environment. The global supply chain also continues to be negatively impacted by various factors, including disruptions in major
maritime routes, port congestion, higher operational costs, and increased competition for supply chain availability due to
uncertainty regarding tariffs and trade policy. The Company has taken certain mitigating actions in response to these disruptions,
including increasing air freight usage where appropriate and prioritizing critical orders earlier to allow for longer lead times.
Further mitigating actions may be needed, particularly if there is prolonged port congestion or transportation delays, and could
result in higher freight costs in the near-term and beyond.
Management continues to monitor global events and assess the potential impacts that these and similar events may have on the
business in future periods. Although management also develops and updates contingency plans to assist in mitigating potential
impacts, it is possible that the Company’s preparations for such events are not adequate to mitigate their impact, and that these
events could further adversely affect its business and results of operations.
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Abercrombie & Fitch Co.
31
2024 Form 10-K
Global Store Network Modernization and Growth
The Company has a goal of finding the right size, right location and right economics for omni-enabled stores that cater to local
customers. The Company continues to use data to inform its focus on aligning store square footage with digital penetration and
the Company delivered new store experiences across brands during Fiscal 2024 and Fiscal 2023. Details related to these new
store experiences follow:
Type of new store experience
Fiscal 2024
Fiscal 2023
New stores
65
35
Remodels
48
13
Right-sizes
12
9
Total
125
57
During Fiscal 2024, the Company opened 65 new stores, while closing 41 stores. This compares with 35 new stores and 32
closures during Fiscal 2023. Future closures could be completed through natural lease expirations, while certain other leases
include early termination options that can be exercised under specific conditions. The Company may also elect to exit or modify
other leases, and could incur charges related to these actions.
Additional details related to store count and gross square footage follow:
Fifty-Two Weeks Ended February 1, 2025
AMERICAS (1)
EMEA (2)
APAC (3)
Total Company
Abercrombie
Hollister
Abercrombie
Hollister
Abercrombie
Hollister
Abercrombie
Hollister
Total (4)
February 3, 2024
194
384
29
108
24
26
247
518
765
New
25
15
5
1
10
9
40
25
65
Permanently closed
(4)
(14)
(1)
(9)
(4)
(9)
(9)
(32)
(41)
February 1, 2025
215
385
33
100
30
26
278
511
789
Gross square footage (in thousands):
February 3, 2024
1,188
2,459
187
828
149
169
1,524
3,456
4,980
February 1, 2025
1,305
2,478
214
769
174
154
1,693
3,401
5,094
(1)
The Americas segment includes North America and South America.
(2)
The EMEA segment includes Europe, the Middle East and Africa.
(3)
The APAC segment includes the Asia-Pacific region, including Asia and Oceania.
(4)
This store count excludes temporary and international franchise stores.
Pillar Two Model Rules
In 2021, the Organization for Economic Cooperation and Development (“OECD”) released Pillar Two Global Anti-Base Erosion
model rules (“Pillar Two Rules”), designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of
operation. Although the U.S. withdrew the U.S. from the OECD’s global tax agreement in January 2025, other countries where
the Company does business, including the U.K. and Germany, have enacted legislation implementing Pillar Two Rules, which are
effective from January 1, 2024. The implementation of Pillar Two Rules in each jurisdiction in which the Company operates did
not have a material impact on the Company’s effective tax rate for Fiscal 2024, and the Company does not project a material
impact on the effective tax rate for Fiscal 2025. The Company will continue to evaluate the impact as additional jurisdictions
enact legislation and provide further guidance.
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Abercrombie & Fitch Co.
32
2024 Form 10-K
Summary of Results
A summary of results for Fiscal 2024 and Fiscal 2023 follows:
GAAP
Non-GAAP (1)
(in thousands, except change in net sales, operating income margin and
per share amounts)
Fiscal 2024
Fiscal 2023
Fiscal 2024
Fiscal 2023
Net sales
$ 4,948,587
$ 4,280,677
Change in net sales from the prior fiscal year
16 %
16 %
Comparable sales (2)
17 %
13 %
Operating income
$
740,820
$
484,671
$
489,107
Operating income margin
15.0 %
11.3 %
11.4 %
Net income attributable to A&F
$
566,223
$
328,123
$
331,328
Net income per diluted share attributable to A&F
$
10.69
$
6.22
$
6.28
(1)
Refer to “RESULTS OF OPERATIONS” for details on excluded items. A reconciliation of each non-GAAP financial measure presented in this Annual
Report on Form 10-K to the most directly comparable financial measure calculated in accordance with GAAP, as well as a discussion as to why the
Company believes that these non-GAAP financial measures are useful to investors, is provided below under “NON-GAAP FINANCIAL MEASURES.”
(2)
Comparable sales are calculated on a constant currency basis and exclude revenue other than store and digital sales. Refer to the discussion below
in “NON-GAAP FINANCIAL MEASURES,” for further details on the comparable sales calculation.
Certain components of the Company’s Consolidated Balance Sheets as of February 1, 2025 and February 3, 2024 and
Consolidated Statements of Cash Flows for Fiscal 2024 and Fiscal 2023 were as follows:
(in thousands)
Balance Sheets data
February 1, 2025
February 3, 2024
Cash and equivalents
$
772,727
$
900,884
Marketable securities
116,221
—
Gross borrowings outstanding, carrying amount
—
223,214
Inventories
575,005
469,466
Statements of Cash Flows data
Fiscal 2024
Fiscal 2023
Net cash provided by operating activities
$
710,376
$
653,422
Net cash used for investing activities
(297,703)
(157,182)
Net cash used for financing activities
(534,877)
(111,201)
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Abercrombie & Fitch Co.
33
2024 Form 10-K
Selling Expense
Fiscal 2024
Fiscal 2023
(in thousands)
% of Net
Sales
% of Net
Sales
BPS
Change
Selling expense
$ 1,689,988
34.2 %
$ 1,533,438
35.8 %
(160)
For Fiscal 2024, selling expense increased by $157 million compared to Fiscal 2023. Selling expense as a percentage of net
sales, decreased 160 basis points as compared to Fiscal 2023. The decrease as a percent of net sales was primarily driven by
expense leverage from higher net sales, including 190 basis points in stores expense, primarily relating to store occupancy and
store employee compensation costs, and 10 basis points in distribution center and order fulfillment costs. The decrease as a
percent of net sales was partially offset by an increase of 40 basis points in marketing expense, primarily due to media
campaigns and content, as compared to Fiscal 2023.
General and Administrative Expense
Fiscal 2024
Fiscal 2023
(in thousands)
% of Net
Sales
% of Net
Sales
BPS
Change
General and administrative expense
$
750,485
15.2 %
$
681,176
15.9 %
(70)
For Fiscal 2024, general and administrative expense increased by $69 million compared to Fiscal 2023. General and
administrative expense, as a percentage of net sales decreased 70 basis points as compared to Fiscal 2023. The decrease in
expense rate was primarily driven by expense leverage from higher net sales, including 100 basis points in employee
compensation costs, partially offset by 40 basis points in information technology expense.
Other Operating Income, Net
Fiscal 2024
Fiscal 2023
(in thousands)
% of Net
Sales
% of Net
Sales
BPS
Change
Other operating income, net
$
6,632
0.1%
$
5,873
0.1%
—
For Fiscal 2024, other operating income, net, increased as compared to Fiscal 2023, primarily due to $0.7 million foreign
currency gains recognized in Fiscal 2024.
Operating Income
Fiscal 2024
Fiscal 2023
(in thousands)
% of Net
Sales(1)
% of Net
Sales(1)
BPS
Change
Americas
$ 1,210,493
24.5 %
$
940,292
22.0 %
250
EMEA
109,821
2.2
81,216
1.9
30
APAC
(12,011)
(0.2)
(10,558)
(0.2)
—
Operating loss not attributed to segments
(567,483)
(11.5)
(526,279)
(12.3)
80
Operating income
$
740,820
15.0
$
484,671
11.3
370
Excluded items:
Asset impairment charges (2)
—
—
4,436
0.1
(10)
Adjusted non-GAAP operating income
$
740,820
15.0
$
489,107
11.4
360
(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.
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Abercrombie & Fitch Co.
35
2024 Form 10-K
For Fiscal 2024, operating income increased by $256 million or 370 basis points, as a percentage of net sales, as compared to
Fiscal 2023.
•
Operating income for the Americas increased $270 million or 250 basis points as a percentage of region net sales as
compared to Fiscal 2023. The increase as a percent of sales primarily relates to positive comparable sales of 17%,
relating to higher unit volume, increased AUR on reduced promotions, and expense leverage relating to employee
compensation costs and store occupancy expenses.
•
Operating income for EMEA increased $29 million or 30 basis points as a percentage of region net sales as compared
to Fiscal 2023. The increase as a percent of sales primarily relates to positive comparable sales of 16%, relating to
higher unit volume, increased AUR on reduced promotions, and expense leverage relating to employee compensation
costs and store occupancy expenses.
•
Operating (loss) for APAC increased $(1) million or 0 basis points as a percentage of region net sales as compared to
Fiscal 2023. The loss was impacted by marketing, occupancy, and general and administrative investments, which more
than offset the expense leverage from comparable sales growth of 19%.
Interest (Income) Expense, Net
Fiscal 2024
Fiscal 2023
(in thousands)
% of Net
Sales
% of Net
Sales
BPS
Change
Interest expense
$
12,077
0.2 %
$
30,352
0.7 %
(50)
Interest income
(39,934)
(0.8)
(29,980)
(0.7)
(10)
Interest (income) expense, net
$
(27,857)
(0.6)
$
372
—
(60)
For Fiscal 2024, interest (income) expense, net, increased 60 basis points as compared to Fiscal 2023. The net increase was a
result of lower interest expense in Fiscal 2024 compared to Fiscal 2023 as result of the repurchases of Senior Secured Notes in
late Fiscal 2023 and Fiscal 2024 and redemption of the remaining outstanding balance on July 15, 2024. Additionally, interest
income increased due to the increase in balance and rates received on time deposits and money market accounts as compared
to Fiscal 2023.
Income Tax Expense
Fiscal 2024
Fiscal 2023
(in thousands, except ratios)
Effective Tax
Rate
Effective Tax
Rate
Income tax expense
$
194,661
25.3 %
$
148,886
30.7 %
Excluded items:
Tax effect of pre-tax excluded items (1)
—
1,231
Adjusted non-GAAP income tax expense
$
194,661
25.3
$
150,117
30.7
(1)
Refer to “Operating Income” for details of pre-tax excluded items. The tax effect of pre-tax excluded items is the difference between the tax provision
calculation on a GAAP basis and an adjusted non-GAAP basis. Refer to “NON-GAAP FINANCIAL MEASURES” for further details.
The increase in income tax expense compared to Fiscal 2023 can be attributed to higher domestic income resulting from higher
sales volume and higher AURs. The decrease in effective tax rate compared to Fiscal 2023 can be attributed to higher domestic
income, a higher tax benefit recognized on vesting of share based compensation awards, and continued business improvement
in the EMEA and APAC segments.
During Fiscal 2024, the Company did not recognize income tax benefits on $53.8 million of pre-tax losses, primarily in
Switzerland, resulting in adverse tax impacts of $8.2 million. The primary driver relates to expense deleverage within the APAC
and EMEA regions.
During Fiscal 2023, the Company did not recognize income tax benefits on $103.0 million of pre-tax losses, primarily in
Switzerland, resulting in adverse tax impacts of $15.6 million. The primary driver relates to expense deleverage within the APAC
and EMEA regions, although to a lesser extent than in Fiscal 2022.
Refer to Note 11, “INCOME TAXES,” for further discussion on factors that impacted the effective tax rate in Fiscal 2024 and
Fiscal 2023.
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Abercrombie & Fitch Co.
36
2024 Form 10-K
LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company’s capital allocation strategy and priorities are reviewed by A&F’s Board of Directors quarterly considering both
liquidity and valuation factors. The Company believes that it will have adequate liquidity to fund operating activities for the next
twelve months. The Company monitors financing market conditions and may in the future determine whether and when to
repurchase shares of its Common Stock. For a discussion of the Company’s share repurchase activity, please see below under
“Share Repurchases.”
Primary Sources and Uses of Cash
The Company’s business has two principal selling seasons: Spring and Fall. The Company generally experiences its greatest
sales activity during the Fall season, due to the back-to-school and holiday sales periods. The Company relies on excess
operating cash flows, which are largely generated in Fall, to fund operations throughout the fiscal year and to reinvest in the
business to support future growth. The Company also has the ABL Facility available as a source of additional funding, which is
described further below under “Credit Facility.”
Over the next twelve months, the Company expects its primary cash requirements to be directed towards prioritizing investments
in the business and continuing to fund operating activities, including the acquisition of inventory, and obligations related to
compensation, marketing, data and technology, leases and any lease buyouts or modifications it may exercise, taxes and other
operating activities. In addition, management continuously evaluates potential opportunities to strategically deploy excess cash
and/or deleverage the balance sheet, in consideration on various factors, such as market and business conditions, and the
Company’s ability to accelerate investments in the business. Such opportunities may include, but are not limited to, share
repurchases.
When evaluating opportunities for investments in the business, management considers alignment with initiatives that position the
business for sustainable long-term growth that align with its strategic pillars as described within “ITEM 1. BUSINESS -
STRATEGY AND KEY BUSINESS PRIORITIES.” Examples of potential investment opportunities include, but are not limited to,
new store experiences, and investments in the Company’s digital and omnichannel initiatives. Historically, the Company has
utilized free cash flow generated from operations to fund any discretionary capital expenditures, which have been prioritized
towards new store experiences, as well as marketing, digital and omnichannel investments, information technology, and other
projects. For Fiscal 2024, the Company used $182.9 million towards capital expenditures, up from $157.8 million of capital
expenditures in Fiscal 2023. Total capital expenditures for Fiscal 2025 are expected to be approximately $200 million.
Share Repurchases
In November 2021, A&F’s Board of Directors approved a $500 million share repurchase authorization (the “2021 Authorization”).
During Fiscal 2024, the Company repurchased $230 million, or 1.6 million shares, of its Common Stock pursuant to the 2021
Authorization. On March 5, 2025, the Company announced that A&F’s Board of Directors approved a new $1.3 billion share
repurchase authorization program (the “2025 Authorization”). The 2025 Authorization has no expiration date. In addition, the
2025 Authorization replaced the 2021 Authorization, and shares may no longer be repurchased pursuant to the 2021
Authorization.
Historically, the Company has repurchased shares of its Common Stock from time to time, which repurchases are dependent on
excess liquidity, market conditions, and business conditions, with the objectives of returning excess cash to shareholders and
offsetting dilution from issuances of Common Stock associated with the vesting of restricted stock units. Shares may be
repurchased in the open market or in private transactions in such manner as be deemed advisable from time to time (including,
without limitation, pursuant to accelerated share repurchase programs, one or more trading plans established in accordance with
Rule 10b5-1 of the Exchange Act, or any other method deemed advisable) and may be discontinued at any time. Refer to “ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES” of this Annual Report on Form 10-K for additional information regarding the Company’s publicly
announced share repurchase authorization programs.
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Abercrombie & Fitch Co.
38
2024 Form 10-K
NON-GAAP FINANCIAL MEASURES
This Annual Report on Form 10-K includes discussion of certain financial measures on both a GAAP and a non-GAAP basis. The
Company believes that each of the non-GAAP financial measures presented in this “ITEM 7. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” is useful to investors as it provides a
meaningful basis to evaluate the Company’s operating performance excluding the effect of certain items that the Company
believes do not reflect its future operating outlook, such as certain asset impairment charges, therefore supplementing investors’
understanding of comparability of operations across periods. Management used these non-GAAP financial measures during the
periods presented to assess the Company’s performance and to develop expectations for future operating performance. These
non-GAAP financial measures should be used as a supplement to, and not as an alternative to, the Company’s GAAP financial
results, and may not be calculated in the same manner as similar measures presented by other companies.
Comparable sales
At times, the Company provides comparable sales, defined as the year-over-year percentage change in the aggregate of (1)
sales for stores that have been open as the same brand at least one year and whose square footage has not been expanded or
reduced by more than 20% within the past year, with the prior fiscal year’s net sales converted at the current fiscal year’s foreign
currency exchange rates to remove the impact of foreign currency exchange rate fluctuations, and (2) digital sales with the prior
fiscal year’s net sales converted at the current fiscal year’s foreign currency exchange rates to remove the impact of foreign
currency exchange rate fluctuations. Comparable sales exclude revenue other than store and digital sales. Management uses
comparable sales to understand the drivers of year-over-year changes in net sales and believes comparable sales can be a
useful metric as it can assist investors in distinguishing the portion of the Company’s revenue attributable to existing locations
from the portion attributable to the opening or closing of stores. The most directly comparable GAAP financial measure is change
in net sales.
Excluded Items
The following financial measures are disclosed on a GAAP basis and on an adjusted non-GAAP basis excluding the following
items, as applicable:
Financial measures (1)
Excluded items
Asset impairment
Certain asset impairment charges
Operating income
Certain asset impairment charges
Income tax expense (2)
Tax effect of pre-tax excluded items
Net income and net income per share attributable to A&F (2)
Pre-tax excluded items and the tax effect of pre-tax excluded items
(1)
Certain of these financial measures are also expressed as a percentage of net sales.
(2)
The tax effect of excluded items is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.
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2024 Form 10-K
Financial Information on a Constant Currency Basis
The Company provides certain financial information on a constant currency basis to enhance investors’ understanding of
underlying business trends and operating performance by removing the impact of foreign currency exchange rate fluctuations.
Management also uses financial information on a constant currency basis to award employee performance-based compensation.
The effect from foreign currency exchange rates, calculated on a constant currency basis, is determined by applying the current
period’s foreign currency exchange rates to the prior fiscal year’s results and is net of the year-over-year impact from hedging.
The per diluted share effect from foreign currency exchange rates is calculated using a 26% effective tax rate.
A reconciliation of financial metrics on a constant currency basis to GAAP for Fiscal 2024 and Fiscal 2023 is as follows:
(in thousands, except change in net sales, operating margin and per share
data)
Net sales
Fiscal 2024
Fiscal 2023
% Change
GAAP
$
4,948,587
$
4,280,677
16%
Impact from changes in foreign currency exchange rates
—
(3,769)
0%
Net sales on a constant currency basis
$
4,948,587
$
4,276,908
16%
Operating income
Fiscal 2024
Fiscal 2023
BPS Change (1)
GAAP
$
740,820
$
484,671
370
Excluded items (2)
—
4,436
(10)
Adjusted non-GAAP
$
740,820
$
489,107
360
Impact from changes in foreign currency exchange rates
—
2,955
(10)
Adjusted non-GAAP on a constant currency basis
$
740,820
$
492,062
350
Net income per diluted share attributable to A&F
Fiscal 2024
Fiscal 2023
$ Change
GAAP
$
10.69
$
6.22
$4.47
Excluded items, net of tax (2)
—
0.06
0.06
Adjusted non-GAAP
$
10.69
$
6.28
$4.41
Impact from changes in foreign currency exchange rates
—
0.05
(0.05)
Adjusted non-GAAP on a constant currency basis
$
10.69
$
6.33
$4.36
(1)
The estimated basis point change has been rounded based on the percentage of net sales change.
(2)
Refer to “RESULTS OF OPERATIONS,” for details on excluded items. The tax effect of excluded items is calculated as the difference between the
tax provision on a GAAP basis and an adjusted non-GAAP basis.
EBITDA and Adjusted EBITDA
The Company provides EBITDA and Adjusted EBITDA as supplemental measures used by the Company's executive
management to assess the Company's performance. We also believe that these supplemental performance measures are
meaningful information for investors and other interested parties to use in computing the Company's core financial performance
over multiple periods and with other companies by excluding the impact of differences in tax jurisdictions, debt service levels and
capital investment.
Reconciliations of non-GAAP EBITDA and Adjusted EBITDA to financial measures calculated and presented in accordance with
GAAP for Fiscal 2024 and Fiscal 2023 were as follows:
Fiscal 2024
Fiscal 2023
(in thousands, except ratios)
% of Net
Sales
% of Net
Sales
Net income
$
574,016
11.6 % $
335,413
7.8 %
Income tax expense
194,661
3.9
148,886
3.5
Interest (income) expense, net
(27,857)
(0.6)
372
—
Depreciation and amortization
153,773
3.2
141,104
3.3
EBITDA (1)
$
894,593
18.1
$
625,775
14.6
Adjustments to EBITDA
Asset impairment (1)
—
—
4,436
0.1
Adjusted EBITDA (1)
$
894,593
18.1
$
630,211
14.7
(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 asset impairment.
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2024 Form 10-K
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
INVESTMENT SECURITIES
The Company maintains its cash equivalents in financial instruments, primarily time deposits and money market funds, with
original maturities of three months or less. Recently, the Company invested in short-term marketable securities with maturities
less than twelve months. Due to the short-term nature of these instruments, changes in interest rates are not expected to
materially affect the fair value of these financial instruments.
Refer to Note 5, “INVESTMENTS,” of the Notes to Consolidated Financial Statements included in “ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K for a discussion of the Company’s Rabbi
Trust assets.
INTEREST RATE RISK
Prior to July 2, 2020, the Company’s exposure to market risk due to changes in interest rates related primarily to the increase or
decrease in the amount of interest expense from fluctuations in the LIBO rate, or an alternate base rate associated with the
Company’s former term loan facility (the “Term Loan Facility”) and the ABL Facility. On July 2, 2020, the Company issued the
Senior Secured Notes and repaid all outstanding borrowings under the Term Loan Facility and the ABL Facility, thereby
eliminating any then-existing cash flow market risk due to changes in interest rates. On July 15, 2024, the Company redeemed
all of its outstanding Senior Secured Notes, thereby eliminating that interest rate risk. This analysis for Fiscal 2025 may differ
from actual results due to potential changes in gross borrowings outstanding under the ABL Facility and potential changes in
interest rate terms and limitations described within the ABL Credit Agreement.
In July 2017, the Financial Conduct Authority (the authority that regulates LIBO rate) announced it intended to stop compelling
banks to submit rates for the calculation of LIBO rate after 2021. Certain publications of the LIBO rate were phased out at the
end of 2021 and all LIBO rate publications ceased after June 30, 2023. On March 15, 2023, the Company entered into the First
Amendment to the Amended and Restated Credit Agreement to eliminate LIBO rate-based loans and to use the current market
definitions with respect to the Secured Overnight Financing Rate, as well as to make other conforming changes.
FOREIGN CURRENCY EXCHANGE RATE RISK
A&F’s international subsidiaries generally operate with functional currencies other than the U.S. Dollar. Since the Company’s
Consolidated Financial Statements are presented in U.S. dollars, the Company must translate all components of these financial
statements from functional currencies into U.S. dollars at exchange rates in effect during or at the end of the reporting period.
The fluctuation in the value of the U.S. dollar against other currencies affects the reported amounts of revenues, expenses,
assets and liabilities. The potential impact of foreign currency exchange rate fluctuations increases as international operations
relative to domestic operations increase.
A&F and its subsidiaries have exposure to changes in foreign currency exchange rates associated with foreign currency
transactions and forecasted foreign currency transactions, including the purchase of inventory between subsidiaries and foreign-
currency-denominated assets and liabilities. The Company has established a program that primarily utilizes foreign currency
exchange forward contracts to partially offset the risks associated with the effects of certain foreign currency transactions and
forecasted transactions. Under this program, increases or decreases in foreign currency exchange rate exposures are partially
offset by gains or losses on foreign currency exchange forward contracts, to mitigate the impact of foreign currency exchange
gains or losses. The Company does not use forward contracts to engage in currency speculation. Outstanding foreign currency
exchange forward contracts are recorded at fair value at the end of each fiscal period.
Foreign currency exchange forward contracts are sensitive to changes in foreign currency exchange rates. The Company
assessed the risk of loss in fair values from the effect of a hypothetical 10% devaluation of the U.S. dollar against the exchange
rates for foreign currencies under forward contracts. Such a hypothetical devaluation would decrease derivative instrument fair
values by approximately $17.2 million. As the Company’s foreign currency exchange forward contracts are primarily designated
as cash flow hedges of forecasted transactions, the hypothetical change in fair values would be expected to be largely offset by
the net change in fair values of the underlying hedged items. Refer to Note 14, “DERIVATIVE INSTRUMENTS,” included in
“ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K for the fair value of
outstanding foreign currency exchange forward contracts included in other current assets and accrued expenses as of
February 1, 2025 and February 3, 2024.
For a detailed discussion of material risk factors that have the potential to cause our actual results to differ materially from our
expectations, refer to “ITEM 1A. RISK FACTORS,” included in this Annual Report on Form 10-K.
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2024 Form 10-K
Abercrombie & Fitch Co.
Consolidated Statements of Stockholders’ Equity
(Thousands, except per share amounts)
Common Stock
Paid-in
capital
Non-
controlling
interests
Retained
earnings
AOCL
Treasury stock
Total
stockholders’
equity
Shares
outstanding
Par
value
Shares
At average
cost
Balance, January 29, 2022
52,985 $ 1,033 $
413,190 $
11,234 $ 2,386,156 $ (114,706) 50,315 $ (1,859,583) $
837,324
Net income
—
—
—
7,569
2,816
—
—
—
10,385
Purchase of common stock
(4,770)
—
—
—
—
—
4,770
(125,775)
(125,775)
Share-based compensation
issuances and exercises
787
—
(25,930)
—
(20,157)
—
(787)
31,623
(14,464)
Share-based compensation
expense
—
—
28,995
—
—
—
—
—
28,995
Derivative financial
instruments, net of tax
—
—
—
—
—
(10,857)
—
—
(10,857)
Foreign currency translation
adjustments, net of tax
—
—
—
—
—
(11,964)
—
—
(11,964)
Distribution to noncontrolling
interests, net
—
—
—
(7,075)
—
—
—
—
(7,075)
Balance, January 28, 2023
49,002 $ 1,033 $
416,255 $
11,728 $ 2,368,815 $ (137,527) 54,298 $ (1,953,735) $
706,569
Net income
—
—
—
7,290
328,123
—
—
—
335,413
Share-based compensation
issuances and exercises
1,498
—
(34,768)
—
(53,309)
—
(1,498)
58,592
(29,485)
Share-based compensation
expense
—
—
40,122
—
—
—
—
—
40,122
Derivative financial
instruments, net of tax
—
—
—
—
—
5,438
—
—
5,438
Foreign currency translation
adjustments, net of tax
—
—
—
—
—
(3,879)
—
—
(3,879)
Distribution to noncontrolling
interests, net
—
—
—
(4,191)
—
—
—
—
(4,191)
Balance, February 3, 2024
50,500 $ 1,033 $
421,609 $
14,827 $ 2,643,629 $ (135,968) 52,800 $ (1,895,143) $ 1,049,987
Net income
—
—
—
7,793
566,223
—
—
—
574,016
Purchase of common stock(1)
(1,615)
—
—
—
—
—
1,615
(231,031)
(231,031)
Share-based compensation
issuances and exercises
850
—
(37,364)
—
(13,128)
—
(850)
(19,716)
(70,208)
Share-based compensation
expense
—
—
38,667
—
—
—
—
—
38,667
Derivative financial
instruments, net of tax
—
—
—
—
—
4,168
—
—
4,168
Foreign currency translation
adjustments, net of tax
—
—
—
—
—
(7,351)
—
—
(7,351)
Distribution to noncontrolling
interests, net
—
—
—
(6,925)
—
—
—
—
(6,925)
Balance, February 1, 2025
49,735 $ 1,033 $
422,912 $
15,695 $ 3,196,724 $ (139,151) 53,565 $ (2,145,890) $ 1,351,323
(1)
Includes excise tax on share repurchases
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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2024 Form 10-K
Index for Notes to Consolidated Financial Statements
Page No.
Note 1.
NATURE OF BUSINESS
50
Note 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
50
Note 3.
REVENUE RECOGNITION
61
Note 4.
FAIR VALUE
62
Note 5.
INVESTMENTS
63
Note 6.
INVENTORIES
63
Note 7.
PROPERTY AND EQUIPMENT, NET
64
Note 8.
LEASES
64
Note 9.
ASSET IMPAIRMENT
65
Note 10.
ACCRUED EXPENSES
66
Note 11.
INCOME TAXES
66
Note 12.
BORROWINGS
69
Note 13.
SHARE-BASED COMPENSATION
70
Note 14.
DERIVATIVE INSTRUMENTS
74
Note 15.
ACCUMULATED OTHER COMPREHENSIVE LOSS
75
Note 16.
SAVINGS AND RETIREMENT PLANS
75
Note 17.
SEGMENT REPORTING
76
Note 18.
CONTINGENCIES
79
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2024 Form 10-K
Abercrombie & Fitch Co.
Notes to Consolidated Financial Statements
1. NATURE OF BUSINESS
Abercrombie & Fitch Co. (“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and its
subsidiaries are referred to as 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 (loss).
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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying Consolidated Financial Statements include historical financial statements of, and transactions applicable to,
the Company and reflect its financial position, results of operations and cash flows.
The Company has interests in an Emirati business venture and in a Kuwaiti business venture with Majid al Futtaim Lifestyle
L.L.C. (“MAF”), each of which meets the definition of a variable interest entity (“VIE”). The purpose of the business ventures with
MAF is to operate stores in the United Arab Emirates and Kuwait. The Company is deemed to be the primary beneficiary of these
VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with the noncontrolling
interests’ (“NCI”) portions of net income presented as net income attributable to NCI on the Consolidated Statements of
Operations and Comprehensive Income (Loss) and the NCI portion of stockholders equity presented as NCI on the Consolidated
Balance Sheets.
Fiscal Year
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. Fiscal years are
designated in the Consolidated Financial Statements and notes by the calendar year in which the fiscal year commences. All
references herein to the Company’s fiscal years are as follows:
Fiscal year
Year ended/ ending
Number of weeks
Fiscal 2021
January 29, 2022
52
Fiscal 2022
January 28, 2023
52
Fiscal 2023
February 3, 2024
53
Fiscal 2024
February 1, 2025
52
Fiscal 2025
January 31, 2026
52
Use of Estimates
The preparation of financial statements, in conformity with U.S. generally accepted accounting principles (“GAAP”), requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses
during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. Additionally, these
estimates and assumptions may change as a result of the impact of global economic conditions such as the uncertainty
regarding a slowing economy, volatile interest rates, continued inflation, fluctuation in foreign exchange rates, and geopolitical
concerns, all of which could result in material impacts to the Company’s consolidated financial statements in future reporting
periods.
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2024 Form 10-K
Inventories
Inventories on the Consolidated Balance Sheets are valued at the lower of cost and net realizable value on a weighted-average
cost basis. The Company reduces the carrying value of inventory through a lower of cost and net realizable value adjustment,
the impact of which is reflected in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of
Operations and Comprehensive Income (Loss). The lower of cost and net realizable value adjustment is based on the
Company’s consideration of multiple factors and assumptions including demand forecasts, current sales volumes, expected sell-
off activity, composition and aging of inventory, historical recoverability experience and risk of obsolescence from changes in
economic conditions or customer preferences.
Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical
inventories are made each quarter that reduce the inventory value for lost or stolen items. The Company performs physical
inventories on a periodic basis and adjusts the gross inventory balance and shrink estimate accordingly. Refer to Note 6,
“INVENTORIES.”
The Company’s global sourcing of merchandise is generally negotiated, contracted, and settled in U.S. Dollars.
Other Current Assets
Other current assets on the Consolidated Balance Sheets consist of: prepaid expenses including those related to rent,
information technology maintenance and taxes; current store supplies; derivative contracts and other.
Property and Equipment, Net
Depreciation of property and equipment is computed for financial reporting purposes on a straight-line basis using the following
service lives:
Category of property and equipment
Service lives
Information technology
3 - 7 years
Furniture, fixtures and equipment
3 - 10 years
Leasehold improvements
1 - 15 years
Other property and equipment
5 years
Buildings
30 years
Leasehold improvements are amortized over either their respective lease terms or their service lives, whichever is shorter. The
cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or
loss included in net income on the Consolidated Statements of Operations and Comprehensive Income (Loss). Maintenance and
repairs are charged to expense as incurred. Major remodels and improvements that extend the service lives of the related assets
are capitalized.
The Company capitalizes certain direct costs associated with the development and purchase of internal-use software within
property and equipment and other assets. Capitalized costs are amortized on a straight-line basis over the estimated useful lives
of the software, generally not exceeding seven years.
Refer to Note 7, “PROPERTY AND EQUIPMENT, NET.”
Leases
The Company determines if an arrangement is an operating lease at inception. For new operating leases, the Company
recognizes an asset for the right to use a leased asset and a liability based on the present value of remaining lease payments
over the lease term on the lease commencement date. The commencement date for new leases is when the lessor makes
the leased asset available for use by the Company, typically the possession date.
As the rates implicit in the Company’s leases are not readily determinable, the Company uses its incremental borrowing rate,
based on the local economic environment and the duration of the lease term, for the initial measurement of the operating lease
right-of-use asset and liability.
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2024 Form 10-K
The measurement of operating lease right-of-use assets and liabilities includes amounts related to:
•
Lease payments made prior to the lease commencement date;
•
Incentives from landlords received by the Company for signing a lease, including construction allowances or deferred
lease credits paid to the Company by landlords towards construction and tenant improvement costs, which are
presented as a reduction to the right-of-use asset recorded;
•
Fixed payments related to operating lease components, such as rent escalation payments scheduled at the lease
commencement date;
•
Fixed payments related to nonlease components, such as taxes, insurance, and maintenance costs; and
•
Unamortized initial direct costs incurred in conjunction with securing a lease, including key money, which are amounts
paid directly to a landlord in exchange for securing the lease, and leasehold acquisition costs, which are amounts paid
to parties other than the landlord, such as an existing tenant, to secure the desired lease.
The measurement of operating lease right-of-use assets and liabilities excludes amounts related to:
•
Costs expected to be incurred to return a leased asset to its original condition, also referred to as asset retirement
obligations, which are classified within other liabilities on the Consolidated Balance Sheets;
•
Variable payments related to operating lease components, such as contingent rent payments made by the Company
based on performance, the expense of which is recognized in the period incurred on the Consolidated Statements of
Operations and Comprehensive Income (Loss);
•
Variable payments related to nonlease components, such as taxes, insurance, and maintenance costs, the expense of
which is recognized in the period incurred in the Consolidated Statements of Operations and Comprehensive Income
(Loss); and
•
Leases not related to Company-operated retail stores with an initial term of 12 months or less, the expense of which is
recognized in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss).
Certain of the Company’s operating leases include options to extend the lease or to terminate the lease. The Company assesses
these operating leases and, depending on the facts and circumstances, may or may not include these options in the
measurement of the Company’s operating lease right-of-use assets and liabilities. Generally, the Company’s options to extend its
operating leases are at the Company’s sole discretion and at the time of lease commencement are not reasonably certain of
being exercised. There may be instances in which a lease is being renewed on a month-to-month basis and, in these instances,
the Company will recognize lease expense in the period incurred in the Consolidated Statements of Operations and
Comprehensive Income (Loss) until a new agreement has been executed. Upon the signing of the renewal agreement, the
Company recognizes an asset for the right to use the leased asset and a liability based on the present value of remaining lease
payments over the lease term.
Amortization and interest expense related to operating lease right-of-use assets and liabilities are generally calculated on a
straight-line basis over the lease term. Amortization and interest expense related to previously impaired operating lease right-of-
use assets are calculated on a front-loaded pattern. Depending on the nature of the operating lease, amortization and interest
expense are primarily recorded within selling expense, or general and administrative expense, on the Consolidated Statements
of Operations and Comprehensive Income (Loss).
The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive
covenants. In addition, the Company does not have any sublease arrangements with any related party.
Refer to Note 8, “LEASES.”
Long-lived Asset Impairment
For the purposes of asset impairment, the Company’s long-lived assets, primarily operating lease right-of-use assets, leasehold
improvements, furniture, fixtures and equipment, are grouped with other assets and liabilities at the store level, which is the
lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. On at least a
quarterly basis, management reviews the Company’s asset groups for indicators of impairment, which include, but are not limited
to, material declines in operational performance, a history of losses, an expectation of future losses, adverse market conditions,
store closure or relocation decisions, and any other events or changes in circumstances that would indicate the carrying amount
of an asset group might not be recoverable.
If an asset group displays an indicator of impairment, it is tested for recoverability by comparing the sum of the estimated future
undiscounted cash flows attributable to the asset group to the carrying amount of the asset group. This recoverability test
requires management to make assumptions and judgments related, but not limited, to management’s expectations for future
cash flows from operating the store. The key assumption used in developing these projected cash flows used in the
recoverability test is estimated sales growth rate.
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2024 Form 10-K
If the sum of the estimated future undiscounted cash flows attributable to an asset group is less than its carrying amount, and it is
determined that the carrying amount of the asset group is not recoverable, management determines if there is an impairment
loss by comparing the carrying amount of the asset group to its fair value. Fair value of an asset group measured on a non-
recurring basis is based on the highest and best use of the asset group, often using a discounted cash flow model that utilizes
Level 3 fair value inputs. The key assumptions used in the Company’s fair value analyses are estimated sales growth rate and
comparable market rents. An impairment loss is recognized based on the excess of the carrying amount of the asset group over
its fair value.
Refer to Note 9, “ASSET IMPAIRMENT.”
Other Assets
Other assets on the Consolidated Balance Sheets consist primarily of the Company’s trust-owned life insurance policies held in
the irrevocable rabbi trust (the “Rabbi Trust”), deferred tax assets, long-term deposits, intellectual property, long-term restricted
cash and equivalents, long-term supplies, certain costs incurred to develop internal-use computer software during the application
development stage and various other assets.
The Company defers costs incurred with the implementation of a cloud computing arrangement (“CCA”) that is a service
contract. The deferred implementation costs of cloud computing arrangements are amortized on a straight-line basis over the
term of the cloud computing arrangement, generally ranging from 1 to 5 years, in general and administrative expenses on
Consolidated Statements of Operations and Comprehensive Income (Loss). The eligible implementation costs incurred of a
cloud computing arrangement are included in other assets on the Consolidated Balance Sheets, and in operating cash flows of
the Consolidated statements of cash flows. The deferred CCA implementation costs were $73.3 million and $49.9 million, net of
accumulated amortization of $25.5 million and $12.2 million for the years ended February 1, 2025 and February 3, 2024,
respectively.
The Rabbi Trust includes amounts, restricted in their use, to meet funding obligations to participants in the Abercrombie & Fitch
Co. Nonqualified Savings and Supplemental Retirement Plan I, the Abercrombie & Fitch Co. Nonqualified Savings and
Supplemental Retirement Plan II and the Supplemental Executive Retirement Plan. The Rabbi Trust assets primarily consist of
trust-owned life insurance policies which are recorded at cash surrender value and are included in other assets on the
Consolidated Balance Sheets. The change in cash surrender value of the life insurance policies in the Rabbi Trust is recorded in
interest expense, net on the Consolidated Statements of Operations and Comprehensive Income (Loss).
Refer to Note 5, “INVESTMENTS.”
Intellectual Property
Intellectual property primarily includes trademark assets associated with the Company’s international operations, consisting of
finite-lived and indefinite-lived intangible assets. The Company’s finite-lived intangible assets are amortized over a useful life of
10 to 20 years.
Supply Chain Finance Program
Under the supply chain finance (“SCF”) program, which is administered by a third party, the Company’s vendors, at their sole
discretion, are given the opportunity to sell receivables from the Company to a participating financial institution at a discount that
leverages the Company’s credit profile. The commercial terms negotiated by the Company with its vendors are consistent,
irrespective of whether a vendor participates in the SCF program. A participating vendor has the option to be paid by the financial
institution earlier than the original invoice due date. The Company’s responsibility is limited to making payment on the terms
originally negotiated by the Company with each vendor, regardless of whether the vendor sells its receivable to a financial
institution. If a vendor chooses to participate in the SCF program, the Company pays the financial institution the stated amount of
confirmed merchandise invoices on the stated maturity date, which is typically 75 days from the invoice date. The agreement
with the financial institution does not require the Company to provide assets pledged as security or other forms of guarantees for
the SCF program.
As of February 1, 2025 and February 3, 2024, $88.4 million and $72.4 million of SCF program liabilities were recorded in
accounts payable in the Consolidated Balance Sheets, respectively, and reflected as a cash flow from operating activities in the
Consolidated Statements of Cash Flows when settled.
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2024 Form 10-K
Derivative Instruments
The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments,
primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to
engage in currency speculation and does not enter into derivative financial instruments for trading purposes.
In order to qualify for hedge accounting treatment, a derivative instrument must be considered highly effective at offsetting
changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include
the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge
effectiveness will be assessed prospectively and retrospectively. The extent to which a hedging instrument has been, and is
expected to continue to be, effective at offsetting changes in fair value or cash flows is assessed and documented at least
quarterly. If the underlying hedged item is no longer probable of occurring, hedge accounting is discontinued.
For derivative instruments that either do not qualify for hedge accounting or are not designated as hedges, all changes in the fair
value of the derivative instrument are recognized in earnings. For qualifying cash flow hedges, the change in the fair value of the
derivative instrument is recorded as a component of other comprehensive income (loss) (“OCI”) and recognized in earnings
when the hedged cash flows affect earnings. If the cash flow hedge relationship is terminated, the derivative instrument gains or
losses that are deferred in OCI will be recognized in earnings when the hedged cash flows occur. However, for cash flow hedges
that are terminated because the forecasted transaction is not expected to occur in the original specified time period, or a two-
month period thereafter, the derivative instrument gains or losses are immediately recognized in earnings.
The Company uses derivative instruments, primarily forward contracts designated as cash flow hedges, to hedge the foreign
currency exchange rate exposure associated with forecasted foreign-currency-denominated intercompany inventory transactions
with foreign subsidiaries before inventory is sold to third parties. Fluctuations in exchange rates will either increase or decrease
the Company’s intercompany equivalent cash flows and affect the Company’s U.S. Dollar earnings. Gains or losses on the
foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this
variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the
currency of another country at an agreed upon settlement date. These forward contracts typically have a maximum term of
twelve months. The conversion of the inventory to cost of sales, exclusive of depreciation and amortization, will result in the
reclassification of related derivative gains and losses that are reported in AOCL on the Consolidated Balance Sheets into
earnings.
The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net
monetary assets and liabilities, such as cash balances, receivables and payables. Fluctuations in foreign currency exchange
rates result in transaction gains and losses being recorded in earnings as monetary assets and liabilities are remeasured at the
spot exchange rate at the Company’s fiscal month-end or upon settlement. The Company has chosen not to apply hedge
accounting to these foreign currency exchange forward contracts because there are no differences in the timing of gain or loss
recognition on the hedging instruments and the hedged items.
The Company presents its derivative assets and derivative liabilities at their gross fair values within other current assets and
accrued liabilities, respectively, on the Consolidated Balance Sheets. However, the Company’s derivative instruments allow net
settlements under certain conditions.
Refer to Note 14, “DERIVATIVE INSTRUMENTS.”
Stockholders’ Equity
A summary of the Company’s Class A Common Stock, $0.01 par value, and Class B Common Stock, $0.01 par value, follows:
(in thousands)
February 1, 2025
February 3, 2024
Class A Common Stock
Shares authorized
150,000
150,000
Shares issued
103,300
103,300
Shares outstanding
49,735
50,500
Class B Common Stock (1)
Shares authorized
106,400
106,400
(1)
No shares were issued or outstanding as of each of February 1, 2025 and February 3, 2024.
Holders of Class A Common Stock generally have identical rights to holders of Class B Common Stock, except holders of
Class A Common Stock are entitled to one vote per share while holders of Class B Common Stock are entitled to three votes per
share on all matters submitted to a vote of stockholders.
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2024 Form 10-K
Revenue Recognition
The Company recognizes revenue from product sales when control of the good is transferred to the customer, generally upon
pick up at, or shipment from, a Company location.
Revenue is recorded net of estimated returns, associate discounts, promotions and other similar customer incentives. The
Company estimates reserves for sales returns based on historical experience among other factors. The sales return reserve is
classified in accrued expenses with a corresponding asset related to the projected returned merchandise recorded in inventory
on the Consolidated Balance Sheets.
The Company accounts for gift cards sold to customers by recognizing an unearned revenue liability at the time of sale, which is
recognized as net sales when redeemed by the customer or when the Company has determined the likelihood of redemption to
be remote, referred to as gift card breakage. Gift card breakage is recognized proportionally with gift card redemptions in net
sales. Gift cards sold to customers do not expire or lose value over periods of inactivity and the Company is not required by law
to escheat the value of unredeemed gift cards to the jurisdictions in which it operates.
The Company also maintains loyalty programs, which primarily provide customers with the opportunity to earn points toward
future merchandise discount rewards with qualifying purchases. The Company accounts for expected future reward redemptions
by recognizing an unearned revenue liability as customers accumulate points, which remains until revenue is recognized at the
earlier of redemption or expiration.
Unearned revenue liabilities related to the Company’s gift card program and loyalty programs are classified in accrued expenses
on the Consolidated Balance Sheets and are typically recognized as revenue within a 12-month period.
For additional details on the Company’s unearned revenue liabilities related to the Company’s gift card and loyalty programs,
refer to Note 3, “REVENUE RECOGNITION.”
The Company also recognizes revenue under wholesale arrangements when control passes to the wholesale partner, which is
generally upon shipment. Revenue from the Company’s franchise and license arrangements, primarily royalties earned upon the
sale of merchandise, is generally recognized at the time merchandise is sold to the franchisees’ retail customers or to the
licensees’ wholesale customers.
The Company does not include tax amounts collected from customers on behalf of third parties, including sales and indirect
taxes, in net sales.
All revenues are recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income (Loss). For a
discussion of the disaggregation of revenue, refer to Note 17, “SEGMENT REPORTING.”
Cost of Sales, Exclusive of Depreciation and Amortization
Cost of sales, exclusive of depreciation and amortization on the Consolidated Statements of Operations and Comprehensive
Income (Loss), primarily consists of cost incurred to ready inventory for sale, including product costs, freight, and import costs, as
well as provisions for reserves for shrink and lower of cost and net realizable value. Gains and losses associated with the
effective portion of designated foreign currency exchange forward contracts related to the hedging of intercompany inventory
transactions are also recognized in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of
Operations and Comprehensive Income (Loss).
The Company’s cost of sales, exclusive of depreciation and amortization, and consequently gross profit, may not be comparable
to those of other retailers, as inclusion of certain costs vary across the industry. Some retailers include all costs related to buying,
design and distribution operations in cost of sales, while others may include either all or a portion of these costs in selling,
general and administrative expenses.
Selling Expense
Selling expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) is comprised of stores,
fulfillment and marketing expenses. Stores expenses include non-management employee compensation; costs associated with
operating stores including occupancy costs; including lease costs; utilities and other landlord expenses; depreciation and
amortization; repairs and maintenance. Fulfillment costs primarily consists of costs related to the Company’s digital operations;
shipping and handling costs; non-management employee compensation; and distribution center (“DC”) expenses. Marketing
expenses include costs associated with the Company’s marketing and advertising activities.
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2024 Form 10-K
A summary of shipping and handling costs, which includes costs incurred to store, move and prepare product for shipment and
costs incurred to physically move product to our customers across channels, follows:
(in thousands)
Fiscal 2024
Fiscal 2023
Fiscal 2022
Shipping and handling costs
$
410,004
$
362,545
$
356,280
Marketing costs consist primarily of paid media advertising, direct digital advertising, including e-mail distribution, digital content
and in-store photography and signage.
Marketing costs related specifically to digital operations are expensed as incurred and the production of in-store photography and
signage is expensed when the marketing campaign commences. All other marketing costs are expensed as incurred.
A summary of marketing costs follows:
(in thousands)
Fiscal 2024
Fiscal 2023
Fiscal 2022
Marketing costs
$
270,598
$
217,276
$
189,347
General and Administrative Expense
General and administrative expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily
consists of: home office and support functions including; store management and DC management compensation; information
technology; outside services, such as legal and consulting; depreciation, primarily related to IT and other home office assets;
amortization related to trademark assets; costs to design and develop the Company’s merchandise; relocation; recruiting; and
travel expenses.
Other Operating Income, Net
Other operating income, net on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily consists
of gains and losses resulting from foreign-currency-denominated transactions. A summary of foreign-currency-denominated
transaction gains (losses), including those related to derivative instruments, follows:
(in thousands)
Fiscal 2024
Fiscal 2023
Fiscal 2022
Foreign-currency-denominated transaction gains (losses)
$
2,665
$
1,936
$
(1,626)
Interest Expense and Interest Income
Interest expense primarily consists of interest expense on the Company’s long-term borrowings outstanding. Interest income
primarily consists of interest income earned on the Company’s investments and cash holdings and realized gains from the Rabbi
Trust assets.
Share-based Compensation
The Company issues shares of Class A Common Stock, $0.01 par value (the “Common Stock”) from treasury stock upon
exercise of stock appreciation rights and vesting of restricted stock units, including those converted from performance share
awards. As of February 1, 2025, the Company had sufficient treasury stock available to settle restricted stock units and stock
appreciation rights outstanding. Settlement of stock awards in Common Stock also requires that the Company have sufficient
shares available in stockholder-approved plans at the applicable time.
In the event there are not sufficient shares of Common Stock available to be issued under the Abercrombie & Fitch Co. 2016
Long-Term Incentive Plan for Directors (as amended effective May 20, 2020, the “2016 Directors LTIP”) and the Abercrombie &
Fitch Co. 2016 Long-Term Incentive Plan for Associates (as amended effective June 8, 2023, the “2016 Associates LTIP”), or
under a successor or replacement plan at each reporting date as of which share-based compensation awards remain
outstanding, the Company may be required to designate some portion of the outstanding awards to be settled in cash, which
would result in liability classification of such awards. The fair value of liability-classified awards would be re-measured each
reporting date until such awards no longer remain outstanding or until sufficient shares of Common Stock become available to be
issued under the existing plans or under a successor or replacement plan. As long as the awards are required to be classified as
a liability, the change in fair value would be recognized in current period expense based on the requisite service period rendered.
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2024 Form 10-K
3. REVENUE RECOGNITION
Disaggregation of revenue
All revenues are recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income (Loss). For
information regarding the disaggregation of revenue, refer to Note 17, “SEGMENT REPORTING.”
Contract liabilities
The following table details certain contract liabilities representing unearned revenue as of February 1, 2025, February 3, 2024
and January 28, 2023:
(in thousands)
February 1, 2025
February 3, 2024
January 28, 2023
Gift card liability (1)
$
45,364
$
41,144
$
39,235
Loyalty programs liability
32,199
27,937
25,640
(1)
Includes $19.8 million and $20.0 million of revenue recognized during Fiscal 2024 and Fiscal 2023, respectively, that was included in the gift card
liability at the beginning of February 3, 2024 and January 28, 2023, respectively.
The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for Fiscal
2024, Fiscal 2023, and Fiscal 2022:
(in thousands)
Fiscal 2024
Fiscal 2023
Fiscal 2022
Revenue associated with gift card redemptions and gift card breakage
$
141,380
$
112,749 $
98,488
Revenue associated with reward redemptions and breakage related to the
Company’s loyalty programs
65,776
56,406
48,624
Refer to Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition,” for discussion regarding
significant accounting policies related to the Company’s revenue recognition.
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2024 Form 10-K
The Second Amendment amended the ABL Credit Agreement to, among other things:
•
increase the aggregate commitments thereunder from $400 million to $500 million;
•
establish a $100 million sub-facility for the benefit of Abfico Netherlands Distribution B.V. (“Abfico”) and AFH Stores UK
Limited (“AFH UK”) that is (i) secured by a first priority security interest in all assets (subject to specified exclusions) of
each of Abfico and AFH UK, (ii) guaranteed by A&F and certain of its domestic direct and indirect wholly-owned
subsidiaries, and (iii) subject to a borrowing base as described therein;
•
extend the maturity date from April 29, 2026 to August 2, 2029;
•
increase the letter of credit sub-limit from $50 million to $62.5 million;
•
decrease the swing line availability from $50 million to $30 million;
•
decrease the unused line fee from a variable rate of 25 basis points to 37.5 basis points to a flat rate of 25 basis points;
and
•
increase pricing of the interest rate margin applicable to borrowings as follows:
◦
from 1.25% to 1.50% when average availability is greater than or equal to 50% of the Loan Cap (as defined in
the Second Amendment); and
◦
from 1.50% to 1.75% when average availability is less than 50% of the Loan Cap.
The ABL Facility is subject to a borrowing base, consisting primarily of inventory located in the U.S., the United Kingdom and the
Netherlands, with a letter of credit sub-limit of $62.5 million, a swing line loan sub-limit of $30 million, and an accordion feature
allowing A&F to increase the revolving commitment by up to $150 million subject to specified conditions. The ABL Facility is
available for working capital, capital expenditures, and other general corporate purposes.
As of February 1, 2025, availability under the ABL Facility was $500 million, net of $0.4 million in outstanding stand-by letters of
credit. As the Company must maintain excess availability equal to the greater of 10% of the Loan Cap or $36 million under the
ABL Facility, borrowing capacity available to the Company under the ABL Facility was $450 million as of February 1, 2025.
Representations, Warranties and Covenants
The agreements related to the ABL Facility contain various representations, warranties and restrictive covenants that, among
other things and subject to specified exceptions, restrict the ability of the Company and its subsidiaries to: grant or incur liens;
incur, assume or guarantee additional indebtedness; sell or otherwise dispose of assets, including capital stock of subsidiaries;
make investments in certain subsidiaries; pay dividends, make distributions or redeem or repurchase capital stock; change the
nature of their business; and consolidate or merge with or into, or sell substantially all of the assets of the Company or A&F
Management to another entity.
Certain of the agreements related to the ABL Facility also contain certain affirmative covenants, including reporting requirements,
such as delivery of financial statements, certificates and notices of certain events, maintaining insurance and providing additional
guarantees and collateral in certain circumstances.
The Company was in compliance with all covenants under these agreements as of February 1, 2025.
13. SHARE-BASED COMPENSATION
Plans
As of February 1, 2025, the Company had two primary share-based compensation plans: (i) the 2016 Directors LTIP, with
900,000 shares of Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock,
restricted stock units, stock appreciation rights, stock options and deferred stock awards to non-associate members of the Board
of Directors; and (ii) the 2016 Associates LTIP, with 10,965,000 shares of Common Stock authorized for issuance, under which
the Company is authorized to grant restricted stock, restricted stock units, performance share awards, stock appreciation rights
and stock options to associates of the Company. The Company also has outstanding shares from two other share-based
compensation plans under which the Company granted restricted stock units, performance share awards, stock appreciation
rights and stock options to associates of the Company and restricted stock units, stock options and deferred stock awards to
non-associate members of the Board of Directors in prior years. No new shares may be granted under these previously-
authorized plans and any outstanding awards continue in effect in accordance with their respective terms.
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2024 Form 10-K
Restricted Stock Units
The following table summarizes activity for restricted stock units for Fiscal 2024:
Service-based Restricted
Stock Units
Performance-based Restricted
Stock Units
Market-based Restricted
Stock Units
Number of
Underlying
Shares
Weighted-
Average Grant
Date Fair
Value
Number of
Underlying
Shares (1)
Weighted-
Average Grant
Date Fair
Value
Number of
Underlying
Shares (1)
Weighted-
Average Grant
Date Fair
Value
Unvested at February 3, 2024
1,886,085
$
27.12
521,212
$
30.03
260,619
$
43.90
Granted
241,183
123.15
53,775
120.56
26,895
180.71
Change due to performance
criteria achievement
—
—
150,446
32.10
75,227
50.34
Vested
(876,699)
25.02
(300,892)
32.10
(150,454)
50.34
Forfeited
(77,384)
35.95
—
—
—
—
Unvested at February 1, 2025 (1)
1,173,185
$
47.95
424,541
$
40.76
212,287
$
58.95
(1)
Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target
vesting amount in the table above. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions
can be achieved at up to 200% of their target vesting amount.
The following table details unrecognized compensation cost and the remaining weighted-average period over which these costs
are expected to be recognized for restricted stock units as of February 1, 2025:
(in thousands)
Service-based
Restricted
Stock Units
Performance-
based Restricted
Stock Units
Market-based
Restricted
Stock Units
Unrecognized compensation cost
$
36,477
$
13,983
$
5,211
Remaining weighted-average period cost is expected to be recognized (years)
0.9
0.9
0.9
Additional information pertaining to restricted stock units for Fiscal 2024, Fiscal 2023 and Fiscal 2022 follows:
(in thousands)
Fiscal 2024
Fiscal 2023
Fiscal 2022
Service-based restricted stock units:
Total grant date fair value of awards granted
$
29,702
$
26,237
$
28,878
Total grant date fair value of awards vested
21,935
23,326
16,794
Total intrinsic value of awards vested
115,768
44,110
28,037
Performance-based restricted stock units:
Total grant date fair value of awards granted
6,483
6,300
5,600
Total grant date fair value of awards vested
9,659
—
4,482
Total intrinsic value of awards vested
39,670
—
6,468
Market-based restricted stock units:
Total grant date fair value of awards granted
4,860
4,576
3,852
Total grant date fair value of awards vested
7,574
16,040
4,105
Total intrinsic value of awards vested
19,836
24,890
3,768
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15. ACCUMULATED OTHER COMPREHENSIVE LOSS
For Fiscal 2024, the activity in AOCL was as follows:
Fiscal 2024
(in thousands)
Foreign Currency
Translation Adjustment
Unrealized Gain (Loss)
on Derivative Financial
Instruments
Total
Beginning balance at February 3, 2024
$
(136,532) $
564
$
(135,968)
Other comprehensive (loss) income before reclassifications
(7,351)
6,473
(878)
Reclassified gain from AOCL (1)
—
(2,113)
(2,113)
Tax effect
—
(192)
(192)
Other comprehensive (loss) income after reclassifications
(7,351)
4,168
(3,183)
Ending balance at February 1, 2025
$
(143,883) $
4,732
$
(139,151)
(1)
Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of
Operations and Comprehensive Income (Loss).
For Fiscal 2023, the activity in AOCL was as follows:
Fiscal 2023
(in thousands)
Foreign Currency
Translation Adjustment
Unrealized Gain (Loss)
on Derivative Financial
Instruments
Total
Beginning balance at January 28, 2023
$
(132,653) $
(4,874) $
(137,527)
Other comprehensive (loss) income before reclassifications
(3,879)
3,618
(261)
Reclassified loss from AOCL (1)
—
1,846
1,846
Tax effect
—
(26)
(26)
Other comprehensive (loss) income after reclassifications
(3,879)
5,438
1,559
Ending balance at February 3, 2024
$
(136,532) $
564
$
(135,968)
(1)
Amount represents loss reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of
Operations and Comprehensive Income (Loss).
For Fiscal 2022, the activity in AOCL was as follows:
Fiscal 2022
(in thousands)
Foreign Currency
Translation Adjustment
Unrealized Gain (Loss)
on Derivative Financial
Instruments
Total
Beginning balance at January 29, 2022
$
(120,689) $
5,983
$
(114,706)
Other comprehensive (loss) income before reclassifications
(11,964)
2,844
(9,120)
Reclassified gain from AOCL (1)
—
(13,781)
(13,781)
Tax effect
—
80
80
Other comprehensive loss after reclassifications
(11,964)
(10,857)
(22,821)
Ending balance at January 28, 2023
$
(132,653) $
(4,874) $
(137,527)
(1)
Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of
Operations and Comprehensive Income (Loss).
16. SAVINGS AND RETIREMENT PLANS
The Company maintains the Abercrombie & Fitch Co. Savings and Retirement Plan, a qualified plan. All U.S. associates are
eligible to participate in this plan if they are at least 21 years of age. In addition, the Company maintains the Abercrombie & Fitch
Nonqualified Savings and Supplemental Retirement Plan, comprised of two sub-plans (Plan I and Plan II). Plan I contains
contributions made through December 31, 2004, while Plan II contains contributions made on and after January 1, 2005.
Participation in these plans is based on service and compensation. The Company’s contributions to these plans are based on a
percentage of associates’ eligible annual compensation. The cost of the Company’s contributions to these plans was $18.0
million, $16.9 million and $14.7 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.
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In addition, the Company maintains the Supplemental Executive Retirement Plan, which provides retirement income to its former
Chief Executive Officer for life, based on averaged compensation before retirement, including base salary and cash incentive
compensation. As of February 1, 2025 and February 3, 2024, the Company had recorded $6.1 million and $6.7 million,
respectively, in other liabilities on the Consolidated Balance Sheets related to Supplemental Executive Retirement Plan
distributions.
17. SEGMENT REPORTING
The Company’s reportable segments are based on the financial information the chief operating decision maker (“CODM”) uses to
allocate resources and assess performance of its business.
During the second quarter of Fiscal 2023, to leverage the knowledge and experience of our regional teams to better drive brand
growth, the Company reorganized its structure and now 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 (loss). The Americas reportable
segment includes the results of operations in North America and South America. The EMEA reportable segment includes the
results of operations in Europe, the Middle East and Africa. The APAC reportable segment includes the results of operations in
the Asia-Pacific region, including Asia and Oceania. Intersegment sales and transfers are recorded at cost and are treated as a
transfer of inventory. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment
performance. All prior periods presented are recast to conform to the new segment presentation.
The group comprised of the Company’s (i) Chief Executive Officer, (ii) Chief Operating Officer, and (iii) Chief Financial Officer
functions as the Company’s CODM. The Company’s CODM manages business operations and evaluates the performance of
each segment based on the net sales and operating income (loss) of the segment. The CODM considers actual performance
relative to expectations, and growth potential to determine the appropriate allocation of resources to each segment.
Net sales by segment are presented by attributing revenues on the basis of the segment that fulfills the order. Operating income
(loss) for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributed to the
segment. Corporate/other expenses include expenses incurred that are not directly attributed to a reportable segment and
primarily relate to corporate or global functions such as design, sourcing, brand management, corporate strategy, information
technology, finance, treasury, legal, human resources, and other corporate support services, as well as certain globally managed
components of the planning, merchandising, and marketing functions.
The Company reports inventories by segment as that information is used by the CODM in determining allocation of resources to
the segments. The Company does not report its other assets by segment as that information is not used by the CODM in
assessing segment performance or allocating resources.
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2024 Form 10-K
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Abercrombie & Fitch Co.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Abercrombie & Fitch Co. and its subsidiaries (the
“Company”) as of February 1, 2025 and February 3, 2024, and the related consolidated statements of operations and
comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended
February 1, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have
audited the Company's internal control over financial reporting as of February 1, 2025, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of the Company as of February 1, 2025 and February 3, 2024, and the results of its operations and its cash flows for each of the
three years in the period ended February 1, 2025 in conformity with accounting principles generally accepted in the United States
of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of February 1, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control
over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in
Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to
express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of Long-Lived Assets – Stores
As described in Notes 2, 7 and 9 to the consolidated financial statements, the Company’s consolidated property and equipment,
net balance was $575.8 million and consolidated operating lease right-of-use assets balance was $803.1 million as of
February 1, 2025. During the year ended February 1, 2025, the Company recognized long-lived asset store impairment charges
of $11.6 million. The Company’s long-lived assets, primarily operating lease right-of-use assets, leasehold improvements,
furniture, fixtures and equipment, are grouped with other assets and liabilities at the store level, which is the lowest level for
which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. On at least a quarterly
basis, management reviews the Company’s asset groups for indicators of impairment, which include, but are not limited to,
material declines in operational performance, a history of losses, an expectation of future losses, adverse market conditions,
store closure or relocation decisions, and any other events or changes in circumstances that would indicate the carrying amount
of an asset group might not be recoverable. If an asset group displays an indicator of impairment, it is tested for recoverability by
comparing the sum of the estimated future undiscounted cash flows attributable to the asset group to the carrying amount of the
asset group. This recoverability test requires management to make assumptions and judgments related, but not limited, to
management’s expectations for future cash flows from operating the store. The key assumption used in developing these
projected cash flows used in the recoverability test is estimated sales growth rate. If the sum of the estimated future
undiscounted cash flows attributable to an asset group is less than its carrying amount, and it is determined that the carrying
amount of the asset group is not recoverable, management determines if there is an impairment loss by comparing the carrying
amount of the asset group to its fair value. Fair value of an asset group is based on the highest and best use of the asset group,
often using a discounted cash flow model that utilizes Level 3 fair value inputs. The key assumptions used in the Company’s fair
value analysis are estimated sales growth rate and comparable market rents. An impairment loss is recognized based on the
excess of the carrying amount of the asset group over its fair value.
The principal considerations for our determination that performing procedures relating to the impairment of long-lived assets -
stores is a critical audit matter are (i) the significant judgment by management when developing the future undiscounted cash
flows attributable to an asset group when testing for recoverability and when estimating the fair value of the asset groups to
measure for impairment; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating management’s significant assumptions related to estimated sales growth rate when developing the future
undiscounted cash flows, and comparable market rents when estimating the fair value.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s store impairment assessments, including controls over the recoverability test and fair value estimate of the asset
groups. These procedures also included, among others (i) testing management’s process for developing the future undiscounted
cash flows attributable to an asset group when testing for recoverability and when estimating the fair value of the asset groups to
measure for impairment; (ii) evaluating the appropriateness of the models used by management in estimating the fair value of the
asset groups; (iii) testing the completeness and accuracy of underlying data used in the models; and (iv) evaluating the
reasonableness of the significant assumptions used by management related to estimated sales growth rate when developing the
future undiscounted cash flows and comparable market rents when estimating the fair value. Evaluating management’s
assumptions involved evaluating whether the assumptions used by management were reasonable considering the current and
past performance of the asset groups as it relates to estimated sales growth rate, the consistency with evidence obtained in
other areas of the audit as it relates to estimated sales growth rate, and the consistency with external market data as it relates to
estimated sales growth rate and comparable market rents.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
March 31, 2025
We have served as the Company’s auditor since 1996.
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Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
Item 9A. Controls and Procedures
DISCLOSURE CONTROLS AND PROCEDURES
A&F maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be
disclosed in the reports that A&F files or submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to
A&F’s management, including A&F’s Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, no matter how well
designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and
procedures are met.
A&F’s management, including the Chief Executive Officer of A&F (who serves as Principal Executive Officer of A&F) and the
Senior Vice President, Chief Financial Officer of A&F (who serves as Principal Financial Officer of A&F), evaluated the
effectiveness of A&F’s disclosure controls and procedures as of February 1, 2025. The Chief Executive Officer of A&F (in such
individual’s capacity as the Principal Executive Officer of A&F) and the Senior Vice President, Chief Financial Officer of A&F (in
such individual’s capacity as the Principal Financial Officer of A&F) concluded that A&F’s disclosure controls and procedures
were effective at a reasonable level of assurance as of February 1, 2025, the end of the period covered by this Annual Report on
Form 10-K.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
The management of A&F is responsible for establishing and maintaining adequate internal control over financial reporting. A&F’s
internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
With the participation of the Chief Executive Officer of A&F and the Senior Vice President and Chief Financial Officer of A&F,
management evaluated the effectiveness of A&F’s internal control over financial reporting as of February 1, 2025 using criteria
established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”). Based on the assessment of A&F’s internal control over financial reporting, under the criteria
described in the preceding sentence, management has concluded that, as of February 1, 2025, A&F’s internal control over
financial reporting was effective.
The effectiveness of A&F’s internal control over financial reporting as of February 1, 2025 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included in
“ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in A&F’s internal control over financial reporting during the quarter ended February 1, 2025 that have
materially affected, or are reasonably likely to materially affect, A&F’s internal control over financial reporting.
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Item 9B. Other Information
Rule 10b5-1 Trading Plans
During the thirteen weeks ended February 1, 2025, no director or officer of the Company adopted a new “Rule 10b5-1 trading
arrangement” or “non-Rule 10b5-1 trading arrangement,” and no director or officer of the Company modified or terminated an
existing “Rule 10b5-1 trading arrangement ” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of
Regulation S-K under the Exchange Act.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
DIRECTORS, EXECUTIVE OFFICERS AND PERSONS NOMINATED OR CHOSEN TO
BECOME DIRECTORS OR EXECUTIVE OFFICERS
Information concerning directors will be included under the caption “Proposal 1 — Election of Directors” in A&F’s definitive Proxy
Statement for the 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”) and is incorporated by reference herein.
Information concerning executive officers is included under the caption “INFORMATION ABOUT OUR EXECUTIVE OFFICERS”
within “ITEM 1. BUSINESS” in this Annual Report on Form 10-K and is incorporated by reference herein.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Information concerning beneficial ownership reporting compliance under Section 16(a) of the Exchange Act will be included
under the caption “Ownership of Our Shares — Delinquent Section 16(a) Reports” in the 2025 Proxy Statement and is
incorporated by reference herein.
CODE OF BUSINESS CONDUCT AND ETHICS
The Board of Directors has adopted the Abercrombie & Fitch Co. Code of Business Conduct and Ethics, which applies to all
associates and directors worldwide and incorporates an additional Code of Ethics applicable to our Chief Executive Officer, our
Chief Financial Officer, and other designated financial associates. The Code of Business Conduct and Ethics is available on the
“Corporate Governance” page of the Company’s corporate website at corporate.abercrombie.com.
INSIDER TRADING POLICY
The Company has adopted insider trading policies and procedures regarding securities transactions (the “Insider Trading Policy”)
that apply to all officers, directors, employees, consultants and contractors of the Company and its subsidiaries, as well as the
Company itself. The Company believes that the Insider Trading Policy is reasonably designed to promote compliance with insider
trading laws, rules and regulations with respect to the purchase, sale and/or other dispositions of the Company’s securities, as
well as the applicable rules and regulations of the New York Stock Exchange. A copy of the Insider Trading Policy is filed as
Exhibit 19 to this Annual Report on Form 10-K.
AUDIT AND FINANCE COMMITTEE
Information concerning the Audit and Finance Committee of the Board of Directors (the “Audit and Finance Committee”) will be
included under the captions “Corporate Governance — Committees of the Board and Meeting Attendance — Committees of the
Board” and “Audit and Finance Committee Matters” in the 2025 Proxy Statement and is incorporated by reference herein.
PROCEDURES BY WHICH STOCKHOLDERS MAY RECOMMEND NOMINEES TO THE
BOARD OF DIRECTORS
Information concerning changes in the procedures by which stockholders of A&F may recommend nominees to the Board of
Directors will be included under the captions “Corporate Governance — Director Nominations — Stockholder Recommendations
and Nominations for Director Candidates,” “Corporate Governance — Director Qualifications and Consideration of Director
Candidates,” “Stockholder Proposals and Nominations for 2026 Annual Meeting” and “Additional Information About Our Annual
Meeting and Voting — How do I nominate a director using the ‘Proxy Access’ provisions under the Company’s Bylaws?” in the
2025 Proxy Statement and is incorporated by reference herein.
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Item 11. Executive Compensation
Information regarding executive compensation will be included under the captions “Corporate Governance — Board Role in Risk
Oversight,” “Compensation of Directors,” “Compensation Discussion and Analysis,” “Report of the Compensation and Human
Capital Committee on Executive Compensation,” and “Executive Compensation Tables” in the 2025 Proxy Statement and is
incorporated by reference herein.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
Information concerning the security ownership of certain beneficial owners and management will be included under the caption
“Ownership of Our Shares” in the 2025 Proxy Statement and is incorporated by reference herein.
Information regarding Common Stock authorized for issuance under A&F’s equity compensation plans will be included under the
caption “Equity Compensation Plans” in the 2025 Proxy Statement and is incorporated by reference herein.
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Information concerning relationships and transactions with related persons will be included under the caption “Corporate
Governance — Director Independence and Related Person Transactions” in the 2025 Proxy Statement and is incorporated by
reference herein.
Information concerning director independence will be included under the captions “Corporate Governance — Board Leadership
Structure,” “Corporate Governance — Committees of the Board and Meeting Attendance,” and “Corporate Governance —
Director Independence and Related Person Transactions” in the 2025 Proxy Statement and is incorporated by reference herein.
Item 14. Principal Accountant Fees and Services
Information concerning pre-approval policies and procedures of the Audit and Finance Committee and fees for services rendered
by the Company’s principal independent registered public accounting firm will be included under the caption “Audit and Finance
Committee Matters — Audit Fees” in the 2025 Proxy Statement and is incorporated by reference herein.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as a part of this Annual Report on Form 10-K:
(1) Consolidated Financial Statements:
Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal years ended
February 1, 2025, February 3, 2024 and January 28, 2023.
Consolidated Balance Sheets at February 1, 2025 and February 3, 2024.
Consolidated Statements of Stockholders’ Equity for the fiscal years ended February 1, 2025, February 3,
2024 and January 28, 2023.
Consolidated Statements of Cash Flows for the fiscal years ended February 1, 2025, February 3, 2024 and
January 28, 2023.
Notes to Consolidated Financial Statements.
Report of Independent Registered Public Accounting Firm — PricewaterhouseCoopers LLP. (PCAOB ID 238)
(2) Consolidated Financial Statement Schedules:
All financial statement schedules for which provision is made in the applicable accounting regulations of the SEC are
omitted because the required information is either not applicable or not material.
(3) Exhibits:
The documents listed in the Index to Exhibits that immediately precedes the Signatures page of this Annual Report on
Form 10-K are filed or furnished with this Annual Report on Form 10-K as exhibits or incorporated into this Annual
Report on Form 10-K by reference as noted. Each management contract or compensatory plan or arrangement is
identified as such in the Index to Exhibits.
(b) The documents listed in the Index to Exhibits that immediately precedes the Signatures page of this Annual Report on
Form 10-K are filed or furnished with this Annual Report on Form 10-K as exhibits or incorporated into this Annual
Report on Form 10-K by reference.
(c) Financial Statement Schedules
None
Item 16. Form 10-K Summary
None.
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Index to Exhibits
Exhibit
Document
3.1
Amended and Restated Certificate of Incorporation of Abercrombie & Fitch Co., reflecting amendments through the date of this
Annual Report on Form 10-K, incorporated herein by reference to Exhibit 3.2 to A&F’s Quarterly Report on Form 10-Q for the
quarterly period ended July 30, 2011 (File No. 001-12107). [This document represents the Amended and Restated Certificate of
Incorporation of Abercrombie & Fitch Co. in compiled form incorporating all amendments. This compiled document has not been
filed with the Delaware Secretary of State.]
3.2
Amended and Restated Bylaws of Abercrombie & Fitch Co. reflecting amendments through the date of this Annual Report on Form
10-K, incorporated herein by reference to Exhibit 3.1 to A&F's Current Report on Form 8-K dated and filed November 26, 2024
(File No. 001-12107). [This document represents the Amended and Restated Bylaws of Abercrombie & Fitch Co. in compiled form
incorporating all amendments.]
4.1
Agreement to furnish instruments and agreements defining rights of holders of long-term debt.
4.2
Description of Abercrombie & Fitch Co.’s Securities Registered under Section 12 of the Securities Exchange Act of 1934,
incorporated herein by referenced to Exhibit 4.2 to A&F’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024
(File No. 001-12107).
10.1*
1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors, incorporated herein by reference
to Exhibit 10.3 to A&F’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003 (File No. 001-12107).
10.2*
Amended and Restated Employment Agreement, entered into as of August 15, 2005, by and between A&F and Michael S. Jeffries,
including (as Exhibit A thereto) the Abercrombie & Fitch Co. Supplemental Executive Retirement Plan (Michael S. Jeffries),
effective February 2, 2003, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed
August 26, 2005 (File No. 001-12107). [NOTE: Only the Abercrombie & Fitch Co. Supplemental Executive Retirement Plan
(Michael S. Jeffries) is still in effect.]
10.3*
Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (Plan I) (prior to January 1, 2005, known as the Abercrombie &
Fitch Co. Directors’ Deferred Compensation Plan), as amended and restated May 22, 2003, incorporated herein by reference to
Exhibit 10.7 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003 (File No. 001-12107).
10.4*
Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (Plan II), effective January 1, 2005, incorporated herein by
reference to Exhibit 10.50 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009 (File No. 001-12107).
10.5*
Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan I (prior to January 1, 2009, known as the
Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan), as amended and restated effective January 1,
2001, incorporated herein by reference to Exhibit 10.9 to A&F’s Annual Report on Form 10-K for the fiscal year ended February 1,
2003 (File No. 001-12107).
10.6*
First Amendment to the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (Plan I) (January 1,
2001 Restatement), effective as of January 1, 2009, incorporated herein by reference to Exhibit 10.13 to A&F’s Quarterly Report
on Form 10-Q for the quarterly period ended August 2, 2008 (File No. 001-12107).
10.7*
Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (Plan II), as amended and restated effective as
of January 1, 2014, incorporated herein by reference to Exhibit 10.3 to A&F’s Current Report on Form 8-K dated and filed October
19, 2015 (File No. 001-12107).
10.8*
First Amendment to the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (Plan II), dated as of
October 14, 2015, incorporated herein by reference to Exhibit 10.4 to A&F’s Current Report on Form 8-K dated and filed October
19, 2015 (File No. 001-12107).
10.9*
Second Amendment to the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (Plan II), dated as of
December 16, 2019, incorporated herein by reference to Exhibit 10.33 to A&F's Annual Report on Form 10-K for the fiscal year
ended February 1, 2020 (File No. 001-12107).
10.10*
Trust Agreement, made as of October 16, 2006, between A&F and Wilmington Trust Company, incorporated herein by reference to
Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed October 17, 2006 (File No. 001-12107).
10.11
Amended and Restated Credit Agreement, dated as of April 29, 2021, among Abercrombie & Fitch Management Co., as Lead
Borrower; the other Borrowers and Guarantors party thereto; Wells Fargo Bank, National Association, as administrative agent for
the lenders, a L/C Issuer and Swing Line Lender; the other lenders party thereto; Citizens Business Capital, as a L/C Issuer;
Citizens Bank, N.A., as Syndication Agent; JPMorgan Chase Bank, N.A., as Documentation Agent and a L/C Issuer; and Wells
Fargo Bank, National Association, Citizens Bank, N.A. and JPMorgan Chase Bank, N.A., as Joint Lead Arrangers and Joint
Bookrunners, incorporated herein by reference to Exhibit 10.3 to A&F’s Quarterly Report on Form 10 Q for the quarterly period
ended May 1, 2021 (File No. 001 12107).†
10.12
First Amendment to Amended and Restated Credit Agreement and First Amendment to Security Agreement, dated as of March 15,
2023, among Abercrombie & Fitch Management Co., as Lead Borrower; the other Borrowers and Guarantors party thereto, and
Wells Fargo Bank, National Association, as administrative agent for the Lenders, incorporated herein by reference to Exhibit 10.12
to A&F's Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (File No. 001-12107).
10.13
Second Amendment to Amended and Restated Credit Agreement Credit Agreement, dated as of August 2, 2024, among
Abercrombie & Fitch Management Co., as Lead Borrower; the other Borrowers and Guarantors party thereto, the Lenders party
thereto, and Wells Fargo Bank, National Association, as administrative agent for the Lenders, incorporated herein by reference to
Exhibit 10.1 to A&F’s Current Report 8-K dated and filed August 7, 2024 (File No. 001-12107).
10.14
Guaranty, dated as of August 7, 2014, made by Abercrombie & Fitch Co., as guarantor, and certain of its wholly-owned
subsidiaries, each as a guarantor, in favor of Wells Fargo Bank, National Association, as administrative agent and collateral agent
for its own benefit and the benefit of the other Credit Parties, and the Credit Parties, incorporated herein by reference to Exhibit
10.5 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107).
10.15
Security Agreement, dated as of August 7, 2014, made by Abercrombie & Fitch Management Co., as lead borrower for itself and
the other Borrowers, Abercrombie & Fitch Co. and certain of its wholly-owned subsidiaries, in their respective capacities as a
guarantor, and the other borrowers and guarantors from time to time party thereto, in favor of Wells Fargo Bank, National
Association, as administrative agent and collateral agent for the Credit Parties, incorporated herein by reference to Exhibit 10.7 to
A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107).††
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10.16
Confirmation, Ratification and Amendment of Ancillary Loan Documents, made as of April 29, 2021, among Abercrombie & Fitch
Co., for itself and as Lead Borrower; the other Borrowers from time to time party thereto; the Guarantors from time to time party
thereto; and Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent , incorporated herein by
reference to Exhibit 10.19 to A&F’s Annual Report on 10-K for the fiscal year ended January 29, 2022 (File No. 001-12107).†
10.17*
Retirement Agreement, dated December 8, 2014, between Michael S. Jeffries and A&F, incorporated herein by reference to Exhibit
10.1 to A&F’s Current Report on Form 8-K dated and filed December 9, 2014 (File No. 001-12107).
10.18*
Employment Offer, dated October 8, 2014, between Fran Horowitz and A&F, incorporated herein by reference to Exhibit 10.1 to
A&F’s Current Report on Form 8-K dated and filed October 15, 2014 (File No. 001-12107).
10.19*
Letter, dated December 16, 2015, between A&F Management and Fran Horowitz setting forth terms of employment as President
and Chief Merchandising Officer, incorporated herein by reference to Exhibit 10.74 to A&F’s Annual Report on Form 10-K for the
fiscal year ended January 30, 2016 (File No. 001-12107).
10.20*
Form of Agreement entered into between A&F Management and Fran Horowitz as of May 10, 2017, incorporated herein by
reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed May 12, 2017 (File No. 001-12107).
10.21*
Non-Compete Amendment entered into between A&F Management and Fran Horowitz as of November 5, 2021 (including a
schedule identifying executive officers of A&F party to substantially identical Non-Compete Agreements with A&F Management,
incorporated herein by reference to Exhibit 10.1 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended October
30, 2021 (File No. 001-12107).
10.22*
Employment Offer, dated May 6, 2016, between Kristin Scott and A&F, incorporated herein by reference to Exhibit 10.3 to A&F’s
Current Report on Form 8-K dated and filed May 23, 2016 (File No. 001-12107).
10.23*
Form of Agreement entered into between A&F Management and Kristin Scott as of May 10, 2017, incorporated herein by reference
to Exhibit 10.2 to A&F’s Current Report on Form 8-K dated and filed May 12, 2017 (File No. 001-12107).
10.24*
Separation Agreement entered into by and between A&F Management and Kristin Scott, effective February 13, 2024 (filed
herewith), incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K/A dated and filed February 16,
2024 (File No. 001-12107).
10.25*
Employment Offer, dated August 17, 2017, between Scott Lipesky and A&F, incorporated herein by reference to Exhibit 10.1 to
A&F's Current Report on Form 8-K dated and filed September 6, 2017 (File No. 001-12107).
10.26*
Form of Agreement entered into between A&F Management and Scott Lipesky as of September 7, 2017, incorporated herein by
reference to Exhibit 10.2 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended October 28, 2017 (File No.
001-12107).
10.27*
Employment Offer, dated August 24, 2018, between Gregory J. Henchel and A&F, incorporated herein by reference to Exhibit 10.1
to A&F's Quarterly Report on Form 10-Q for the quarterly period ended November 3, 2018 (File No. 001-12107).
10.28*
Agreement entered into between A&F Management and Gregory J. Henchel as of September 13, 2018, incorporated herein by
reference to Exhibit 10.2 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended November 3, 2018 (File No.
001-12107).
10.29*
Employment Offer, dated May 20, 2021, between Samir Desai and A&F (including, as Exhibit A, the Agreement entered into
between A&F Management and Samir Desai as of May 20, 2021), incorporated herein by reference to Exhibit 10.2 to A&F’s
Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2021 (File No. 001-12107).
10.30*
Agreement entered into between A&F Management and Jay Rust as of May 9, 2023, the execution date by A&F Management and
Mr. Rust, incorporated herein by reference to Exhibit 10.2 to A&F's Quarterly Report on Form 10-Q dated and filed September 1,
2023 for the quarterly period ended July 29, 2023 (File No. 001-12107).
10.31*
Form of Agreement entered into between A&F Management and Robert J. Ball as of November 20, 2024, incorporated herein by
reference to Exhibit 10.1 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2024 (File No.
001-12107).
10.32*
Form of Director and Officer Indemnification Agreement, incorporated herein by reference to Exhibit 10.3 to A&F's Quarterly Report
on Form 10-Q/A for the quarterly period ended April 29, 2017 (File No. 001-12107).
10.33*
Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report
on Form 8-K dated and filed June 17, 2005 (File No. 001-12107).
10.34*
Certificate regarding Approval of Amendment of Section 3(b) of the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan by
Board of Directors of Abercrombie & Fitch Co. on August 20, 2014, incorporated herein by reference to Exhibit 10.11 to A&F’s
Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107).
10.35*
Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan, incorporated herein by reference to Exhibit 10.1
to A&F’s Current Report on Form 8-K dated and filed June 17, 2011 (File No. 001-12107).
10.36*
Certificate regarding Approval of Amendment of Section 3(b) of the Abercrombie & Fitch Co. Amended and Restated 2007 Long-
Term Incentive Plan by Board of Directors of Abercrombie & Fitch Co. on August 20, 2014, incorporated herein by reference to
Exhibit 10.12 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107).
10.37*
Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates (as amended on June 8, 2023), incorporated herein by
reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed on June 14, 2023 (File No. 001-12107).
10.38*
Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of
Abercrombie & Fitch Co. and its subsidiaries under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates on
and after March 26, 2019 and prior to March 7, 2023, (3-year vesting), incorporated herein by reference to Exhibit 10.1 to A&F’s
Quarterly Report on Form 10-Q for the quarterly period ended May 2, 2020 (File No. 001-12107).
10.39*
Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of
Abercrombie & Fitch Co. and its subsidiaries under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates on
and after June 16, 2016 and prior to March 7, 2023 (4-year vesting), incorporated herein by reference to Exhibit 10.6 to A&F’s
Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107).
10.40*
Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of
Abercrombie & Fitch Co. and its subsidiaries under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates on
and after March 7, 2023 (3-year vesting), incorporated herein by reference to Exhibit 10.38 to A&F’s Annual Report on Form 10-K
for the fiscal year ended January 28, 2023 (File No. 001-12107).
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
ABERCROMBIE & FITCH CO.
Date: March 31, 2025
By: /s/ Robert J. Ball
Robert J. Ball
Senior Vice President, Chief Financial Officer
(Principal Financial Officer and Authorized Officer)
By: /s/ Joseph Frericks
Joseph Frericks
Group Vice President, Corporate Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on March 31, 2025.
*
Nigel Travis
Chairperson of the Board and Director
/s/ Fran Horowitz
Fran Horowitz
Chief Executive Officer and Director (Principal Executive Officer)
*
Kerrii B. Anderson
Director
/s/ Robert J. Ball
Robert J. Ball
Senior Vice President, Chief Financial Officer (Principal Financial Officer and Authorized
Officer)
*
Andrew Clarke
Director
*
Susie Coulter
Director
/s/ Joseph Frericks
Joseph Frericks
Group Vice President, Corporate Controller (Principal Accounting Officer)
*
James A. Goldman
Director
*
Helen E. McCluskey
Director
*
Arturo Nuñez
Director
*
Kenneth B. Robinson
Director
*
Helen Vaid
Director
*The undersigned, by signing his name hereto, does hereby sign this Annual Report on Form 10-K on behalf of each of the
above-named directors of the Registrant pursuant to powers of attorney executed by such directors, which powers of attorney
are filed with this Annual Report on Form 10-K as Exhibit 24.1
By:
/s/ Robert J. Ball
Robert J. Ball
Attorney-in-fact
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