ANF

MKT CAP $6.8BP/E 13.7DIV YIELD —FCF YIELD 8.36%REV TTM $5.3B +4.7%NET INCOME $536M −0.9%NET CASH $377.6M52W 65.61 – 162.01SEC XBRL · TTM TO Invalid Date

How ANF rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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Summary of results A summary of results for Fiscal 2025 and Fiscal 2024 follows: GAAP Non-GAAP (1) Fiscal 2025 Fiscal 2024 Fiscal 2025 Fiscal 2024 Net sales (in thousands) $ 5,266,292 $ 4,948,587 Change in net sales from the prior fiscal year 6 % 16 % Comparable sales (2) 3 % 17 % Operating income (in thousands) $ 699,143 $ 740,820 $ 660,569 Operating income margin 13.3 % 15.0 % 12.5 % Net income attributable to A&F (in thousands) $ 506,921 $ 566,223 $ 478,039 Net income per diluted share attributable to A&F $ 10.46 $ 10.69 $ 9.86 (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 January 31, 2026 and February 1, 2025 were as follows: (in thousands) January 31, 2026 February 1, 2025 Cash and equivalents $ 759,540 $ 772,727 Marketable securities 25,036 116,221 Inventories 601,218 575,005 Certain components of the Company’s Consolidated Statements of Cash Flows for Fiscal 2025 and Fiscal 2024 were as follows: (in thousands) Fiscal 2025 Fiscal 2024 Net cash provided by operating activities $ 619,142 $ 710,376 Net cash used for investing activities (150,774) (297,703) Net cash used for financing activities (495,387) (534,877) Abercrombie & Fitch Co. 34 RESULTS OF OPERATIONS The estimated basis point (“BPS”) change disclosed throughout this Results of Operations has been rounded based on the change in the percentage of net sales.
Net sales Net sales by segment are presented by attributing revenues to a physical store location or geographical region that fulfills the order.
The Company’s net sales by reportable segment for Fiscal 2025 and Fiscal 2024 were as follows: (in thousands, except ratios) Fiscal 2025 Fiscal 2024 $ Change % Change Comparable Sales (1) By segment: Americas $ 4,290,395 $ 4,027,514 $ 262,881 7 % 4 % EMEA 818,140 770,519 47,621 6 — APAC 157,757 150,554 7,203 5 (3) Total $ 5,266,292 $ 4,948,587 $ 317,705 6 3 (1) Comparable sales are calculated on a constant currency basis.
Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details on the comparable sales calculation.
For Fiscal 2025, net sales increased 6%, as compared to Fiscal 2024.
The increase was primarily attributable to low-single-digit AUR growth and mid-single-digit unit volume growth, with increases in Company owned and operated stores, and digital channels.
The year-over-year increase in net sales reflects positive comparable sales of 3%, as compared to Fiscal 2024.
On a geographic basis, net sales for Fiscal 2025 were as follows: • Net sales growth in the Americas region of 7% and 4% on a reported and comparable sales basis, respectively.
The increase was led by mid-single-digit unit volume growth, with increases in Company owned and operated stores, and digital channels. • Net sales growth in the EMEA region of 6% and flat on a reported and comparable sales basis, respectively.
The increase on a reported basis was attributable to mid-single-digit AUR growth, favorable foreign currency and an increase in sales volume in net new stores, and third-party channels, offset by relatively flat unit growth. • Net sales growth in the APAC region of 5% on a reported basis and a decline of (3)% on a comparable sales basis.
The increase on a reported basis was attributable to mid-single-digit AUR growth, and low-double-digit increase in digital channels, partially offset by a low-single-digit decline in Company owned and operated stores.
Sales growth was negatively impacted by low-single-digit unit volume decline with declines in Company owned and operated stores, partially offset by unit volume growth in digital channels.
The Company’s net sales by brand for Fiscal 2025 and Fiscal 2024 were as follows: (in thousands, except ratios) Fiscal 2025 Fiscal 2024 $ Change % Change Comparable Sales (1) Abercrombie $ 2,523,662 $ 2,556,434 $ (32,772) (1) % (7) % Hollister 2,742,630 2,392,153 350,477 15 13 Total $ 5,266,292 $ 4,948,587 $ 317,705 6 3 (1) Comparable sales are calculated on a constant currency basis.
Cost of sales, exclusive of depreciation and amortization Fiscal 2025 Fiscal 2024 (in thousands, except ratios) % of Net Sales % of Net Sales BPS Change Cost of sales, exclusive of depreciation and amortization $ 2,028,884 38.5 % $ 1,773,926 35.8 % 270 For Fiscal 2025, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales, increased approximately 270 basis points as compared to Fiscal 2024.
The percentage increase was primarily attributable to cost of sales deleverage with higher AUC primarily related to $90 million or 170 basis point adverse net tariff impact and unfavorable product and channel mix, partially offset by a low-single-digit increase in AUR, driven by volume mix and targeted promotions compared to Fiscal 2024.
Abercrombie & Fitch Co. 35 Selling expense Fiscal 2025 Fiscal 2024 (in thousands, except ratios) % of Net Sales % of Net Sales BPS Change Selling expense $ 1,809,633 34.4 % $ 1,689,988 34.2 % 20 Excluded item: Litigation Settlement (1) 42,874 0.8 — — 80 Adjusted non-GAAP selling expense $ 1,852,507 35.2 $ 1,689,988 34.2 100 (1) Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details.
For Fiscal 2025, selling expense increased by $120 million compared to Fiscal 2024.
Selling expense, as a percentage of net sales increased 20 basis points as compared to Fiscal 2024.
The increase in rate was primarily driven by an approximate 80 basis point increase in store occupancy and payroll costs and an approximate 40 basis point increase in marketing, partially offset by an approximate 80 basis point benefit resulting from the Litigation Settlement and approximately a 20 basis point benefit in fulfillment expense.
Excluding 80 basis points of benefits related to the Litigation Settlement, adjusted non-GAAP selling expense as a percentage of net sales increased by approximately 100 basis points during Fiscal 2025, as compared to Fiscal 2024.
General and administrative expense Fiscal 2025 Fiscal 2024 (in thousands, except ratios) % of Net Sales % of Net Sales BPS Change General and administrative expense $ 725,471 13.8 % $ 750,485 15.2 % (140) Excluded item: Litigation Settlement (1) (4,300) (0.1) — — (10) Adjusted non-GAAP general and administrative expense $ 721,171 13.7 $ 750,485 15.2 (150) (1) Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details.
For Fiscal 2025, general and administrative expense decreased by $25 million compared to Fiscal 2024.
General and administrative expense, as a percentage of net sales, decreased 140 basis points as compared to Fiscal 2024.
The decrease in expense rate was primarily driven by an approximate 150 basis point decrease in employee compensation costs, partially offset by approximately 10 basis points in legal fees relating to the Litigation Settlement and other administrative expenses.
Excluding 10 basis points of legal fees related to the Litigation Settlement, adjusted non-GAAP general and administrative expense as a percentage of net sales during Fiscal 2025, decreased by approximately 150 basis points, as compared to Fiscal 2024.
Other operating loss (income), net Fiscal 2025 Fiscal 2024 (in thousands, except ratios) % of Net Sales % of Net Sales BPS Change Other operating loss (income), net $ 3,161 0.1 % $ (6,632) (0.1) % 20 For Fiscal 2025, other operating loss (income), net, as a percentage of net sales, increased by 20 basis points as compared to Fiscal 2024, primarily due to $7.3 million foreign currency losses recognized in Fiscal 2025 compared to $2.7 million in foreign currency gains in Fiscal 2024 .
Abercrombie & Fitch Co. 36 Operating income Fiscal 2025 Fiscal 2024 (in thousands, except ratios) % of Net Sales (1) % of Net Sales (1) BPS Change Americas $ 1,187,253 27.7 % $ 1,210,493 30.1 % (240) EMEA 91,514 11.2 109,821 14.3 (310) APAC (27,597) (17.5) (12,011) (8.0) (950) Operating loss not attributed to segments (552,027) (567,483) Operating income $ 699,143 13.3 $ 740,820 15.0 (170) Excluded item: Litigation Settlement (2) 38,574 0.7 — — 70 Adjusted non-GAAP operating income $ 660,569 12.5 $ 740,820 15.0 (250) (1) Segment operating income as a percentage of net sales is calculated by attributing the segment’s operating income with the respective net sales in the segment.
(2) Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details.
For Fiscal 2025, operating income decreased by $42 million or 170 basis points, as a percentage of net sales, as compared to Fiscal 2024. • Operating income for the Americas decreased $23 million and decreased 240 basis points as a percentage of segment net sales as compared to Fiscal 2024.
The decrease as a percent of sales was primarily attributed to higher cost of sales, inclusive of tariffs, and deleverage on marketing investments, partially offset by leverage in fulfillment expenses and a benefit from the Litigation Settlement included in selling expense. • Operating income for EMEA decreased $18 million or 310 basis points as a percentage of segment net sales as compared to Fiscal 2024.
The decrease as a percent of sales primarily related to deleverage on fulfillment expenses and marketing investments. • Operating (loss) for APAC increased $16 million or 950 basis points as a percentage of segment net sales as compared to Fiscal 2024.
The increase as a percent of sales is primarily attributed to higher cost of sales, and deleverage on store occupancy expenses, partially offset by leverage on general and administrative expenses. • Operating (loss) not attributed to segments decreased primarily related to a decrease in employee compensation costs, partially offset by increases in other administrative expenses and foreign currency losses.
Excluding the benefits related to the Litigation Settlement, adjusted non-GAAP operating income as a percentage of net sales decreased by approximately 250 basis points during Fiscal 2025, as compared to Fiscal 2024.
Interest (income) expense, net Fiscal 2025 Fiscal 2024 (in thousands, except ratios) % of Net Sales % of Net Sales BPS Change Interest expense $ 2,375 — % $ 12,077 0.2 % (20) Interest income (24,004) (0.5) (39,934) (0.8) 30 Interest (income) expense, net $ (21,629) (0.4) $ (27,857) (0.6) 20 For Fiscal 2025, interest (income) expense, net, decreased $6.2 million, as compared to Fiscal 2024.
The net decrease was a result of a reduction in interest income due to the decrease in balance of time deposits and money market accounts compared to Fiscal 2024.
This was partially offset by lower interest expense in Fiscal 2025 compared to Fiscal 2024 as a result of the redemption of the remaining outstanding balance of the 8.75% Senior Secured Notes on July 15, 2024.
Income tax expense Fiscal 2025 Fiscal 2024 (in thousands, except ratios) Effective Tax Rate Effective Tax Rate Income tax expense $ 205,777 28.5 % $ 194,661 25.3 % Excluded items: Tax effect of pre-tax excluded items (1) (9,692) — Adjusted non-GAAP income tax expense $ 196,085 28.7 $ 194,661 25.3 (1) The tax effect of pre-tax excluded items is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.

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Consolidated Statements of Operations and Comprehensive Income (Loss) (Thousands, except per share amounts) Fiscal 2024 Fiscal 2023 Fiscal 2022 Net sales $ 4,948,587 $ 4,280,677 $ 3,697,751 Cost of sales, exclusive of depreciation and amortization 1,773,926 1,587,265 1,593,213 Selling expense 1,689,988 1,533,438 1,462,011 General and administrative expense 750,485 681,176 552,553 Other operating income, net ( 6,632 ) ( 5,873 ) ( 2,674 ) Operating income 740,820 484,671 92,648 Interest expense 12,077 30,352 30,236 Interest income ( 39,934 ) ( 29,980 ) ( 4,604 ) Interest (income) expense, net ( 27,857 ) 372 25,632 Income before income taxes 768,677 484,299 67,016 Income tax expense 194,661 148,886 56,631 Net income 574,016 335,413 10,385 Less: Net income attributable to noncontrolling interests 7,793 7,290 7,569 Net income attributable to A&F $ 566,223 $ 328,123 $ 2,816 Net income per share attributable to A&F Basic $ 11.14 $ 6.53 $ 0.06 Diluted $ 10.69 $ 6.22 $ 0.05 Weighted-average shares outstanding Basic 50,839 50,250 50,307 Diluted 52,971 52,726 52,327 Other comprehensive (loss) income Foreign currency translation, net of tax $ ( 7,351 ) $ ( 3,879 ) $ ( 11,964 ) Derivative financial instruments, net of tax 4,168 5,438 ( 10,857 ) Other comprehensive (loss) income ( 3,183 ) 1,559 ( 22,821 ) Comprehensive income (loss) 570,833 336,972 ( 12,436 ) Less: Comprehensive income attributable to noncontrolling interests 7,793 7,290 7,569 Comprehensive income (loss) attributable to A&F $ 563,040 $ 329,682 $ ( 20,005 ) The accompanying Notes are an integral part of these Consolidated Financial Statements.
Abercrombie & Fitch Co. 45 Abercrombie & Fitch Co.
Consolidated Balance Sheets (Thousands, except par value amounts) February 1, 2025 February 3, 2024 Assets Current assets: Cash and equivalents $ 772,727 $ 900,884 Marketable securities 116,221 — Receivables 105,324 78,346 Inventories 575,005 469,466 Other current assets 104,154 88,569 Total current assets 1,673,431 1,537,265 Property and equipment, net 575,773 538,033 Operating lease right-of-use assets 803,121 678,256 Other assets 247,562 220,679 Total assets $ 3,299,887 $ 2,974,233 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 364,532 $ 296,976 Accrued expenses 504,922 436,655 Short-term portion of operating lease liabilities 211,600 179,625 Income taxes payable 45,890 53,564 Total current liabilities 1,126,944 966,820 Long-term liabilities: Long-term portion of operating lease liabilities 740,013 646,624 Long-term portion of borrowings, net — 222,119 Other liabilities 81,607 88,683 Total long-term liabilities 821,620 957,426 Stockholders’ equity Class A Common Stock - $ 0.01 par value: 150,000 shares authorized and 103,300 shares issued for all periods presented 1,033 1,033 Paid-in capital 422,912 421,609 Retained earnings 3,196,724 2,643,629 Accumulated other comprehensive loss, net of tax (“AOCL”) ( 139,151 ) ( 135,968 ) Treasury stock, at average cost: 53,565 and 52,800 shares at February 1, 2025 and February 3, 2024, respectively ( 2,145,890 ) ( 1,895,143 ) Total Abercrombie & Fitch Co. stockholders’ equity 1,335,628 1,035,160 Noncontrolling interests 15,695 14,827 Total stockholders’ equity 1,351,323 1,049,987 Total liabilities and stockholders’ equity $ 3,299,887 $ 2,974,233 The accompanying Notes are an integral part of these Consolidated Financial Statements.
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.
Consolidated Statements of Cash Flows (Thousands) Fiscal 2024 Fiscal 2023 Fiscal 2022 Operating activities Net income $ 574,016 $ 335,413 $ 10,385 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 153,773 141,104 132,243 Amortization of capitalized cloud computing arrangement implementation costs 15,572 10,796 1,347 Asset impairment 11,596 8,289 14,031 Loss on disposal 3,440 6,408 552 (Benefit) provision for deferred income taxes ( 12,278 ) ( 4,743 ) 11,500 Share-based compensation 38,667 40,122 28,995 Loss (gain) on extinguishment of debt 1,114 1,975 ( 52 ) Changes in assets and liabilities Inventories ( 106,874 ) 35,043 18,505 Accounts payable and accrued expenses 129,262 82,925 ( 115,152 ) Operating lease right-of use assets and liabilities ( 3,288 ) ( 55,646 ) ( 18,495 ) Income taxes ( 9,845 ) 35,806 ( 7,390 ) Other assets ( 71,361 ) 22,827 ( 88,270 ) Other liabilities ( 13,418 ) ( 6,897 ) 9,458 Net cash provided by (used for) operating activities 710,376 653,422 ( 2,343 ) Investing activities Purchases of marketable securities ( 139,600 ) — — Proceeds from maturities of marketable securities 24,800 — — Purchases of property and equipment ( 182,903 ) ( 157,797 ) ( 164,566 ) Proceeds from the sale of property and equipment — 615 11,891 Withdrawal of funds from Rabbi Trust assets — — 12,000 Net cash used for investing activities ( 297,703 ) ( 157,182 ) ( 140,675 ) Financing activities Repayment/redemption of senior secured notes ( 223,331 ) ( 77,972 ) ( 7,862 ) Payment of debt modification costs and fees ( 3,291 ) ( 180 ) ( 181 ) Purchases of common stock ( 229,807 ) — ( 125,775 ) Acquisition of Common stock for tax withholding obligations ( 70,208 ) ( 29,485 ) ( 14,464 ) Other financing activities ( 8,240 ) ( 3,564 ) ( 7,047 ) Net cash used for financing activities ( 534,877 ) ( 111,201 ) ( 155,329 ) Effect of foreign currency exchange rates on cash ( 7,086 ) ( 2,923 ) ( 8,452 ) Net (decrease) increase in cash and equivalents, and restricted cash and equivalents ( 129,290 ) 382,116 ( 306,799 ) Cash and equivalents, and restricted cash and equivalents, beginning of period 909,685 527,569 834,368 Cash and equivalents, and restricted cash and equivalents, end of period $ 780,395 $ 909,685 $ 527,569 Supplemental information related to non-cash activities Purchases of property and equipment accrued in accounts payable $ 48,856 $ 35,568 $ 57,313 Excise tax liability accrued on share repurchases 1,224 — — Operating lease right-of-use assets additions, net of terminations, impairments and other reductions 365,813 155,184 269,430 Supplemental information related to cash activities Cash paid for interest 9,527 24,891 26,687 Cash paid for income taxes 217,654 120,448 53,011 Cash received from income tax refunds 502 1,843 3,701 Cash paid for amounts included in measurement of operating lease liabilities, net of abatements 278,229 296,834 263,269 The accompanying Notes are an integral part of these Consolidated Financial Statements.
ACCUMULATED OTHER COMPREHENSIVE LOSS Note 16.
CONTINGENCIES Abercrombie & Fitch Co. 49 Abercrombie & Fitch Co.
The Company has interests in an Emirati business venture and in a Kuwaiti business venture with Majid al Futtaim Lifestyle L.L.C.
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.
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.
Abercrombie & Fitch Co. 50 Abercrombie & Fitch Co.
Reclassifications 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.
Refer to selling expense and general and administrative expense below for details regarding the composition of these expenses categories.
There were no changes to operating income (loss) or net income (loss).
Prior period amounts have been reclassified to conform to the current fiscal year’s presentation.
Cash and Equivalents A summary of cash and equivalents on the Consolidated Balance Sheets follows: (in thousands) February 1, 2025 February 3, 2024 Cash (1) $ 467,642 $ 524,735 Cash equivalents: (2) Time deposits 1,013 26,975 Money market funds 304,072 349,174 Cash and equivalents $ 772,727 $ 900,884 (1) Primarily consists of amounts on deposit with financial institutions.
Consolidated Statements of Cash Flows Reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Consolidated Statements of Cash Flows: (in thousands) Location February 1, 2025 February 3, 2024 January 28, 2023 Cash and equivalents Cash and equivalents $ 772,727 $ 900,884 $ 517,602 Restricted cash and equivalents (1) Other assets 7,668 8,801 9,967 Cash and equivalents and restricted cash and equivalents $ 780,395 $ 909,685 $ 527,569 (1) Restricted cash and equivalents primarily consist of amounts on deposit with banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements.
Refer to Note 5, “ INVESTMENTS .” Receivables Receivables on the Consolidated Balance Sheets primarily include credit card receivables, lessor construction allowance and lease incentive receivables, value added tax (“VAT”) receivables and trade receivables or refunds.
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).
Refer to Note 6, “ INVENTORIES .” The Company’s global sourcing of merchandise is generally negotiated, contracted, and settled in U.S.
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).
Refer to Note 7, “ PROPERTY AND EQUIPMENT, NET .” Leases The Company determines if an arrangement is an operating lease at inception.
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).
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.
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).
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.
The key assumptions used in the Company’s fair value analyses are estimated sales growth rate and comparable market rents.
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 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 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.
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.
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.
Abercrombie & Fitch Co. 54 Abercrombie & Fitch Co.

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