ANF 10-K & 10-Q changes, risk factors and insider trading

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, systems disruptions or outages, 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.

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, fast-fashion retailers, digitally-native brands, and online-exclusive businesses. ProliferationFast fashion, value fashion and off-price retailers have shifted customer expectations of pricing for well-known brands and the proliferation of the digital channel and the rise in popularity of social commerce 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.

•Effectively establishing and maintaining relationships with organizations, 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 do so and to acquire new customers;

•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,new consumer insights.

In light of the competitive challenges we face, we may not be able to compete successfully in the future. Additionally, increases in the number or strength of our competitors could reduce our sales, which in turn could have a material adverse effect on our results of operations and financial condition.

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 or 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. For example, during Fiscal 2025, the U.S. announced a universal baseline tariff on all U.S. imports, plus additional country-specific tariffs for select countries, including the countries from which we source a predominant portion of our merchandise. As a result, we incurred approximately $90 million of net tariff expense, or 170 basis points as a percent of net sales for Fiscal 2025, which negatively impacted our operating profit in Fiscal 2025. See “Changes in tariff policy regarding merchandise produced in, and raw materials sourced from, certain countries have and could continue to adversely affect our business” Other 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.

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 aan “anchor” tenant or other significant tenant in a shopping mall or area attraction, the development of new shopping malls in the U.S. or around the world,internationally, the availability or cost of appropriate locations, the success of individual shopping malls, or the increasing impact of digital channels on shopping mall traffictraffic. andAdditionally, therewe isface competition with other retailers for prominent locations.

The impact of natural disasters, negative climate patterns, public health crises, geopolitical tension, armed conflict, acts of terrorism, social unrest, civil disturbance or disobedience, political crisescrises, 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.

Other factors that would negatively impact our ability to successfully operate due to the impact of naturalthese disasters,types negative climate patterns, public health crises, political crises, significant power interruptions or outages, and other unexpected, catastrophic events and other unexpected and other catastrophicof events include, but are not limited to:

•Physical losses to our stores, distribution centerscenters, 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;

•OurTemporary abilityor toprolonged keepstore ourclosures, storesincluding openin ifsituations there areof severe weather or climate conditions, stay-at-home orders, social distancing requirement, travel restrictions, impacts of armed conflict, or other concerns related to physical safety;safety.

•DifficultyConstraints accessingon our liquidity and our ability to access debt andor 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 conditionswhich may affect our access to capital necessaryability to fund business operations or address maturing liabilities.

While we have successfully executed certainlong-term goals in our Always Forward Plan,initiatives, our continued ability to effectively execute on and maintain the results of our Alwayslong-term Forwardbusiness Planstrategy 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 ofhave our Always Forward Plan ledcontributed 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.

In order to compete in this highly competitive and constantly evolving industry, at times, we mayhave entered into and plan to continue to enter into new strategic partnerships with third parties to expand our global brand reach, orand we may launch new concepts or brands to expand our portfolio. Such strategic partnerships may include sponsorship, 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 licensethe agreements that we have with third-partythird licensors,parties, the abrupt termination of such arrangements, or actions taken by third-party wholesale, franchise, licensees, or licenseeother partners that may materially diminish the value of our intellectual property or our brands’ reputations.

Our inability to effectively conduct business in globalinternational markets, including as a result of operational, legal, tax, regulatory, politicalpolitical, 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 globalinternational markets that could have a material adverse effectimpact on our reputation,business. businessSuch andrisks resultsinclude, ofbut operationsare ifnot welimited failto, tothe address them.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 provisionsprovisions, and local reporting or legal requirements;

•supporting global growth by successfully implementingexecuting our commercial strategy through local customercustomer- and product-facing teams and certain corporate support functions at our regional headquarters located in Shanghai, China and London, United Kingdom;

•avoidinghiring, worktraining, stoppagesand orretaining otherqualified labor-relatedpersonnel issuesand maintaining effective labor relations, including in our European stores,regions where some associates are represented by workers’ councils and unions;

•political, civil and social unrest, such as the conflict between Russia and Ukraine or conflict in the Middle Eastinstability;

•managing foreign currency exchange rate risks effectively; and

•continuedthe substantial investments of time and resources we make to operate in international markets may not achieve acceptable returns, and sustained declines in ourrevenue globalor revenuesprofitability in one or more international regions or operating segments could leadresult toin store closures, divestitures, restructuring costs, andor impairment losses, all of which could adversely impact our business, profitability, and results of operations.operations; for example, in March 2026, we announced that we are conducting a review of strategic alternatives for our APAC region.

We are subject to domesticU.S. laws related to global operations, including the Foreign Corrupt Practices Act, inas additionwell toas the laws of the foreign countries in which we operate. If anyViolation of such laws by our overseas operations, or our associatesassociates, or agents, violatecould suchresult laws,in wesanctions, penalties, or reputational harm, which could become subject to sanctions or other penalties that could negativelyadversely affect our reputation, business and operating results.

•Our position or perceived lack of position on ESGcorporate social responsibility 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. As social media continues to be an important channel for customer engagement, our brands’ interactions may be subject to heightened public scrutiny. Given the unpredictable nature of consumer reactions to social media messaging, our efforts may not resonate as intended and could result in negative public attention or reputational harm. 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.

If our information technology systems are disrupted or ceasefail to operate effectively, itor if we are unable to successfully implement new technology, including significant system upgrades, our business and results of operations could havebe aadversely material adverse impact on our business.affected.

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, sellsell, and ship merchandise on a timely basis; maintain cost-efficient operations; create a customer relationship management database through our loyalty programs; manage our workforce; and completesupport other customer-facing and business objectives. Given the significant number of transactions that are completed annually, itthe iseffective vitaland to maintain constantsecure operation of our computer hardware, telecommunication systemstelecommunications, and software systems,systems andis maintain data security.critical. Despite efforts to prevent such an occurrence,occurrences, our information technology systems may be vulnerable,vulnerable from time to time,time to damage or interruption resulting from computer viruses, power interruptions or outages or otheroutages, 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 theincreasing sophistication, availabilityavailability, and use of AI by threat actors presentfurther anelevates increasedthese level of risk.risks. If our systems are damaged, fail to function properly, or arebecome outdated in comparisonrelative to those of our competition,competitors, we may havebe to make monetary investments to repairs or replace the systems and we could endure delays in our operations. We have made and expect to continuerequired to make significant monetaryinvestments investmentsto repair or replace such systems and devotecould significantexperience attentionoperational 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,delays 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.disruptions.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) generally discusses our results of operations for Fiscal 20242025 and Fiscal 20232024 and provides comparisons between such fiscal years. For discussion and comparison of Fiscal 20232024 and Fiscal 2022,2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2023,2024, filed with the SEC on AprilMarch 1,31, 2024.2025. This MD&A should be read together with the Company’s audited Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA,” to which all references to Notes in MD&A are made.

•Results of Operations. An analysis of certain components of the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for Fiscal 20242025 as compared to Fiscal 2023.2024.

•Liquidity and Capital Resources. A discussion of the Company’s financial condition, changes in financial condition and liquidity as of FebruaryJanuary 1,31, 2025,2026, which includes (i) an analysis of changes in cash flows for Fiscal 20242025 as compared to Fiscal 2023,2024, (ii) an analysis of liquidity, including availability under the Company’s credit facility, and outstanding debt and covenant compliance and (iii) a summary of contractual and other obligations as of FebruaryJanuary 1,31, 2025.2026.

AbercrombieThe & 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”).APAC. Corporate functions and other income and expenses are evaluated on a consolidated basis and are not allocated to the Company’s segments,segments and therefore are included as a reconciling item between segment and total operating income (loss).income.

The Company’s brand families includesinclude 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.

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 yearyear, 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.

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

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

Current Macroeconomicmacroeconomic Conditionsconditions and tariffs

Macroeconomic conditions, such as a volatile interest rate environment, ongoing inflation, the geopolitical landscape, and foreign exchange rate fluctuations, continue to impact the global economy. In addition, recent changes in legislationtrade policy and regulations,related uncertainty, including enacted and proposed tariffs andaffecting othercountries 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,from which we expectsource toa continuesignificant through the first halfportion of Fiscalour 2025. Continued inflationary pressures could further impact expensesmerchandise and raw materials, have created a long-termdynamic impactand onunpredictable thetrade Company,environment asthat increasingadversely costsimpacted mayour impactbusiness itsand abilityoperations toduring maintainFiscal satisfactory2025 margins.and continues into Fiscal 2026.

As a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, managementwe isare mindfulexposed to global events and geopolitical developments, including armed conflicts in certain regions, that may adversely impact our operations. In addition to the impacts of macroeconomictariffs risks,discussed global challenges and the changing global geopolitical environment. Theabove, global supply chain alsoconditions continuescontinue to be negatively impactedaffected by variousother factors, including disruptions in major maritime routes, port congestion, higher operationaltransportation and logistics costs, and increased competition for supply chain availabilitycapacity due to uncertainty regardingin tariffsthe global trade environment and tradeongoing policy.armed Theconflicts. CompanyFor hasexample, takenarmed certain mitigating actionsconflicts in responsethe Middle East have contributed to these disruptions, including increasing airelevated freight usage where appropriaterates and prioritizinglonger criticaltransit orderstimes earliercompared to allowhistorical forlevels, longer lead times. Further mitigating actions may be needed, particularly if there isand prolonged port congestion or transportationescalating delays, andconflicts could result in additional supply chain disruption, including higher energy and transportation costs (such as fuel related charges), shipping delays, or increased costs from using air freight costsinstead inof theocean near-termfreight andto beyond.mitigate inventory delays.

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 penetrationpenetration, and the Companyhas delivered new store experiences across brands during Fiscal 20242025 and Fiscal 2023.2024. Details related to these new Company owned and operated store experiences follow:

During Fiscal 2024,2025, the Company opened 6562 new stores, remodeled 47 stores, and right-sized 11 stores, while closing 4122 stores. This compares with 3565 new storesstores, 48 remodeled stores, 12 right-sized stores, and 3241 closures during Fiscal 2023.2024. 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 Company owned and operated store count and gross square footage follow:

(4)This store count excludes temporary and international franchise stores.

Certain components of the Company’s Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025 and February 3, 2024 and Consolidated Statements of Cash Flows for Fiscal 2024 and Fiscal 2023 were as follows:

The estimated basis point (“BPS”) changeschange disclosed throughout this Results of Operations havehas been rounded based on the change in the percentage of net sales.

For Fiscal 2024,2025, net sales increased 16%,6%, as compared to Fiscal 2023.2024. The increase was primarily attributable to a high-single-digit increase inlow-single-digit AUR from lower promotional activitygrowth and category mix into higher ticket items. High-single-digit growth inmid-single-digit unit volume alsogrowth, contributed to the increase in net sales, followingwith increases in trafficCompany and transactions in Company-ownedowned and operated stores, and digital channels. Additionally, there was a headwind of approximately $50 million due to the timing of sales volume based on the impact of the calendar shift in Fiscal 2024 as a result of the 53rd selling week in Fiscal 2023. The year-over-year increase in net sales reflects positive comparable sales of 17%,3%, as compared to Fiscal 2023.2024. On a geographic basis, net sales for Fiscal 2025 were as follows:

•Net sales growth in the Americas region of 17%7% and 4% on both a reported and comparable sales basis.basis, respectively. The increase was attributableled toby a higher AUR from lower promotional activity and category mix into higher ticket items and direct channelmid-single-digit unit volume growthgrowth, fromwith increased traffic and transactionsincreases in companyCompany owned and operated storesstores, and digital channels.

•Net sales growth in the APACEMEA region of 9%6% and 19%flat on a reported and comparable sales basis, respectively. ComparableThe increase on a reported basis was attributable to mid-single-digit AUR growth, favorable foreign currency and an increase in sales growthvolume percentage is higher thanin net salesnew growth percentage, as comparable sales exclude the net impact of store closures during the periodstores, and thethird-party effectschannels, ofoffset foreignby currency,relatively bothflat of which had negative impacts on net salesunit growth.

The Company’s risk factors as of MayAugust 2,1, 2026 have not changed materially from those disclosed in Part I, “Item 1A. Risk Factors” of the Fiscal 2025 Form 10-K.

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

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.

•Current Trends and Outlook. A discussion related to certain of the Company’s focus areas for the current fiscal year and a discussion of certain risks and challenges, as well as a summary of the Company’s performance for the thirteen and twenty-six weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025.

•Results of Operations. An analysis of certain components of the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income for the thirteen and twenty-six weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025.

•Liquidity and Capital Resources. A discussion of the Company’s financial condition, changes in financial condition and liquidity as of MayAugust 2,1, 2026, which includes (i) an analysis of financial condition as compared to January 31, 2026; (ii) an analysis of changes in cash flows for the thirteentwenty-six weeks ended MayAugust 2,1, 2026, as compared to the thirteentwenty-six weeks ended MayAugust 3,2, 2025; and (iii) an analysis of liquidity, including availability under the Company’s ABL Facility (as defined below), the Company’s share repurchase program, and covenant compliance.

The Company’sCompany brandoperates familiesa includefamily of brands, including Abercrombie brands and HollisterHollister, brands. These brands sharewith a shared commitment to offering unique products of enduring quality and exceptional comfort that allowsupport global customers aroundon thetheir worldjourney to express their own individualitybeing and style.becoming who they are.

While certain tariffs have been struck down, modified, or replaced, other tariffs remain in effect or have subsequently been imposed orunder proposed,various trade authorities, including thetariffs imposition of a temporary 10% global tariffimposed pursuant to Section 122301 of the Trade Act of 19741974, throughand July 24, 2026. Additional, increased, or modifiedadditional tariffs may be imposed without warning through various statutes and trade authorities, which could lead to weakened business conditions for our industry and could result in increasesthe tofuture. Such tariffs may increase the cost of merchandise or materials sourced from impacted countries.countries, adversely affect our supply chain, and negatively impact our results of operations.

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. Recently, the global markets have experienced fluctuations in fuel and other energy related costs, which could lead to greater uncertainty regarding the overall economic environment and consumer spending. During 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 also adversely impact demand for our products. Continued inflationary pressures could further impact expenses and have a longer-term impact on our ability to maintain satisfactory margins.

In addition, as a global multi-brand omnichannel specialty retailer, with operations in North America, Europe, the Middle East, and Asia, among other regions, we are exposed to global events and geopolitical developments, including armed conflicts in certain regions, that may adversely impact our operations and consumer demand in affected markets. For example, armed conflicts in the Middle East have disrupted, and may continue to affect, consumer demand patterns in affected markets. 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 theseThese events could further adversely affect its business and results of operations.

Global supply chain conditions continue to be affected by disruptions in major maritime routes, higher transportation and logistics costs, and increased competition for supply chain capacity due to uncertainty in the global trade environment and ongoing armed conflicts. For example, armed conflicts in the Middle East have contributed to elevated freight rates and longer transit times compared to historical levels, and prolonged or escalating conflicts could result in additional supply chain disruption, including higher energy and transportation costs (such as fuel related charges), shipping delays, or increased costs from using air freight instead of ocean freightusage to mitigate inventory delays.

As of MayAugust 2,1, 2026, the Company operated 834846 retail stores and the Company’s franchisees operated 6261 franchise stores across the Company’s regions and brands as detailed in the table below.

ThroughDuring the endtwenty-six ofweeks theended firstAugust fiscal1, quarter,2026, the Company opened six24 new stores, remodeled 2440 stores and right-sized twofive stores, while closing oneseven store.stores. As part of this focus, the Company’s store investment plan includes delivering approximately 30 net store openings during Fiscal 2026 consisting of opening approximately 50 new stores, while closing approximately 20 stores, pending negotiations with our landlord partners. Additionally, the Company expects approximately 80 remodels and right-sizes during Fiscal 2026, pending negotiations with our landlord partners.

The following provides a summary of results for the thirteen and twenty-six weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025:

Certain components of the Company’s Condensed Consolidated Balance Sheets as of MayAugust 2,1, 2026 and January 31, 2026 were as follows:

Certain components of the Company’s Condensed Consolidated Statements of Cash Flows for the thirteen-weektwenty-six-week periods ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025 were as follows:

Net sales by segment are presented by attributing revenues to a physical store location or geographical region that fulfills the order. The Company’s net sales by reportable segment for the thirteen and twenty-six weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025 were as follows:

For the firstsecond quarter of Fiscal 2026, net sales increased 2%,5% on a reported basis and were flat on a comparable sales basis, as compared to the firstsecond quarter of Fiscal 2025. The reported increase was primarily attributable to low-single-digitmid-single-digit AUR growth, driven by selected changes to tickets and promotions, coupled withand an increase in new owned and operated storesstores, andwhich favorablewas foreignpartially currency.offset by a low-single-digit decline in unit volume. The year-over-yearspread increase inbetween net sales reflects negativeand comparable net sales ofis (1)%,primarily as comparedattributable to thenet firstnew quarterstore ofopenings Fiscaland 2025.third-party channel performance. On a geographic basis for the firstsecond quarter of Fiscal 2026:

•Net sales growth in the Americas region of 3%5% and 1% on a reported and comparable sales basis, respectively. The increase on a reported increasebasis was primarily attributable to low-single-digitmid-single-digit AUR growth, with selected changes to tickets and promotions, partially offset by a low-single-digit directdecline channelin unit volume growth with an increases in Company-owned and operated stores, and digital channels.volume. The comparablespread sales growth percentage is lower thanbetween net sales growth percentage, asand comparable net sales excludesis theprimarily attributable to net impact of new store openings duringand thethird-party periodchannel which had a benefit on net sales growth.performance.

•Net sales growth in the APACAmericas region of 24%4% and 15%1% on a reported and comparable sales basis, respectively. The increase on a reported increasebasis was led by high-single-digitmid-single-digit AUR growth, higherwith third-partyselected volumechanges to tickets and favorablepromotions, foreignwith currency.around Directflat unit channel volume increased low-double digits with increases in Company-owned and operated stores and digital channels.volume. The comparablespread sales growth percentage is lower thanbetween net sales growth percentage, asand comparable net sales excludesis theprimarily attributable to net impact of new store openings during the period which had a benefit on net sales growth.openings.

The Company’s net sales by brand for the thirteen and twenty-six weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025 were as follows:

For the firstsecond quarter of Fiscal 2026, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales decreased by approximately 80850 basis points, as compared to the firstsecond quarter of Fiscal 2025. The percentage decrease was primarily attributable to cost of sales leverage from a 180690 basis pointpoints declinenet intariff freightbenefit costs,which aincludes declinethe inimpact foreignof currencyIEEPA tariff refunds and ongoing tariff expense, AUR growth driven by selected changes to tickets and promotions, partially offset by 180an approximate 20 basis pointspoint ofincrease adversein tarifffreight impacts, compared to the first quarter of Fiscal 2025.costs.

For the firstsecond quarter of Fiscal 2026, selling expense increased by $31$69 million, as compared to the firstsecond quarter of Fiscal 2025. Selling expense as a percentage of net sales increased 230400 basis points, as compared to the firstsecond quarter of Fiscal 2025. The increase in rate was primarily driven by expense deleverage, withincluding an approximate 190350 basis point prior year benefit resulting from the favorable settlement of claims to resolve payment card interchange fee litigation (the “Litigation Settlement”), and an approximate 80 basis point increase in store occupancy, payroll and other controllable costs, an approximate 90 basis point increase in marketing, partially offset by an approximate 60 basis point decline intotal fulfillment expense.

For the firstsecond quarter of Fiscal 2026, general and administrative expense increased by $8$29 million, as compared to the firstsecond quarter of Fiscal 2025. General and administrative expense as a percentage of net sales increased 50170 basis points, as compared to the firstsecond quarter of Fiscal 2025. The increase in expense rate was primarily driven by a 60120 basis point increase in total employee compensation costs, occupancyand anda 70 basis point increase in other administrativeoutside expenses.services, partially offset by an approximate adverse 40 basis point impact in prior year legal fees relating to the Litigation Settlement.

(2) Refer to “NON-GAAP FINANCIAL MEASURES” for further details For the firstsecond quarter of Fiscal 2026, operating income decreasedincreased by $13$46 million, or 130280 basis points,points as a percentage of net sales, as compared to the firstsecond quarter of Fiscal 2025.

•Operating income for the EMEAAmericas region decreasedincreased $12.6$63 millionmillion, or 670470 basis points as a percentage of region net sales, as compared to the firstsecond quarter of Fiscal 2025. The decreaseincrease as a percent of sales iswas primarily attributed to deleveragean increase in store-relatedAUR, expenses,cost of sales leverage, inclusive of IEEPA tariff refunds, partially offset by costa ofprior salesyear leverage.benefit from the Litigation Settlement included in selling expense, as well as deleverage in fulfillment expenses.

•Operating (loss)income for the APACEMEA region decreasedincreased by$2.7 $3.5 millionmillion, or 990110 basis points as a percentage of region net sales, as compared to the firstsecond quarter of Fiscal 2025. The decreaseincrease as a percent of sales iswas primarily attributed to leverage in cost of sales,sales store-related,leverage, fulfillmentpartially offset by deleverage in store-related and administrativemarketing expenses.investment.

For the firstyear-to-date quarterperiod of Fiscal 2026, interestoperating income,income netincreased decreasedby $1.5$33 million, asmillion compared to the firstyear-to-date quarterperiod of Fiscal 2025. TheAs a percentage of net decreasesales, was a result of a reduction in interestoperating income dueincreased to90 thebasis decrease in balance and yield on time deposits and money market accountspoints compared to the firstyear-to-date quarterperiod of Fiscal 2025.

The change in the effective tax rate for the firstsecond quarter and year-to-date period of Fiscal 2026, as compared with the firstsecond quarter and year-to-date period of Fiscal 2025, is due to jurisdictionalhigher mixpre-tax and a lower tax benefit on share-based compensationincome compared with the prior-year period Refer to Note 9, “INCOME TAXES.”period.

(1)EBITDA isand aAdjusted EBITDA are supplemental financial measuremeasures that isare not defined or prepared in accordance with GAAP. EBITDA is defined as net income before interest, income taxes and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for excluded items.

When evaluating opportunities for investments in the business, management considers alignment with initiatives that position the business for sustainable long-term growth and with the Company’s strategic priorities as described within Part I, “Item 1. Business - STRATEGY AND KEY BUSINESS PRIORITIES” included in the Fiscal 2025 Form 10-K, including being opportunistic regarding areas for growth. 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, and information technology. For the year-to-date period ended MayAugust 2,1, 2026, the Company invested $61.3$129.4 million towards capital expenditures. Total capital expenditures for Fiscal 2026 are expected to be around $225$250 million.