What changed in ABERCROMBIE & FITCH CO /DE/'s 10-K — 2023 vs 2024

ITEM 1. BUSINESS .” 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 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 increased rate of merchandise returns, violations of evolving laws and regulations, including those relating to online privacy, credit card fraud, telecommunication failures, electronic break-ins and similar compromises, and disruption of internet service.

Changes in foreign governmental regulations may also negatively impact our ability to 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. Our failure to optimize 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. As a result, global store network optimization is an important part of our business and failure to optimize our global store network could have an adverse impact on our results of operations.

The ability to open new stores experiences and modify existing leases 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.

Our inability to effectively conduct business in international 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 international operations 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; • 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 foreign customers; • managing inventory effectively to meet the needs of existing stores on a timely basis; • political, civil and social unrest, such as the ongoing conflict in Ukraine and escalating China-Taiwan tensions; • 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 recently have experienced year-over-year declines in revenues from our international operations; and • continued and sustained declines in our international revenues could lead to store closures, restructuring costs, and impairment losses, all of which could adversely impact our business, profitability, and results of operations.

Abercrombie & Fitch Co. 16 2022 Form 10-K Table of Contents We are subject to domestic laws related to international 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) matters could have a material adverse impact on our reputation and, as a result, our business.

There is an increased focus from certain government regulators, investors, customers, associates, business partners and other stakeholders concerning ESG matters. The expectations related to ESG matters are rapidly evolving, and, from time to time, we announce certain initiatives and goals, related to ESG matters, such as those through our participation in the United Nations Global Compact.

We could fail, or be perceived to fail to act responsibly, in our ESG efforts, or we could fail in accurately reporting our progress on such initiatives and goals. In addition, we could be criticized for the speed of adoption of such initiatives or 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. This may also impact our ability to attract and retain talent to compete in the marketplace.

There is also uncertainty regarding potential laws, regulations, and policies related to ESG and global environmental sustainability matters, including disclosure obligations and reporting on such matters.

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; • Our associates’ actions don’t align with our values and fail to comply with our Code of Business Conduct and Ethics; • Third parties with which we have a business relationship, including our brand representatives and influencer network, fail to represent our brands in a manner consistent with our brand image or act in a way that harms their reputation; • Third-party vendors fail to comply with our Vendor Code of Conduct or any third parties with which we have a business relationship with fail to represent our brands in a manner consistent with our brand image; • Unfavorable media publicity and consumer perception of our products, operations, brand or experience; and • Our position or perceived lack of position on ESG, 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, Twitter 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, all of which could have a material adverse impact on our business, as well as require additional resources to rebuild our reputation.

If our information technology systems are disrupted or cease to operate effectively, it could have a material adverse impact on our business.

Abercrombie & Fitch Co. 17 2022 Form 10-K Table of Contents We rely heavily on our 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 or third-party service providers, and other technical malfunctions.

If our systems are damaged, fail to function properly, or are obsolete 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.

We regularly evaluate our information technology systems and requirements to ensure appropriate functionality and use in response to business demands. For example, we have started a multi-year process of upgrading our merchandising enterprise resource planning ("ERP") system.

We are aware of the inherent risks associated with replacing and modifying these systems, including inaccurate system information, system disruptions 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, 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.

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 may not have the resources or technical sophistication to 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.

ITEM 1A. RISK FACTORS ,” included in this Annual Report on Form 10-K.

Abercrombie & Fitch Co. 30 2022 Form 10-K Table of Contents Summary of Results A summary of results for Fiscal 2022 and Fiscal 2021 follows: GAAP Non-GAAP (1) (in thousands, except change in net sales, gross profit rate, operating income margin and per share amounts) Fiscal 2022 Fiscal 2021 Fiscal 2022 Fiscal 2021 Net sales $ 3,697,751 $ 3,712,768 Change in net sales from the prior fiscal year — % 19 % Gross profit rate (2) 56.9 % 62.3 % Operating income $ 92,648 $ 343,084 $ 106,679 $ 355,184 Operating income margin 2.5 % 9.2 % 2.9 % 9.6 % Net income attributable to A&F (3) $ 2,816 $ 263,010 $ 13,045 $ 272,689 Net income per diluted share attributable to A&F (3) $ 0.05 $ 4.20 $ 0.25 $ 4.35 (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) Gross profit is derived from cost of sales, exclusive of depreciation and amortization.

(3) Fiscal 2021 results include $42.5 million of tax benefits due to the release of valuation allowances as a result of the improvement seen in business conditions.

Refer to Note 11, “ INCOME TAXES .” Certain components of the Company’s Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022 and Consolidated Statements of Cash Flows for Fiscal 2022 and Fiscal 2021 were as follows: (in thousands) Balance Sheets data January 28, 2023 January 29, 2022 Cash and equivalents $ 517,602 $ 823,139 Gross borrowings outstanding, carrying amount 299,730 307,730 Inventories 505,621 525,864 Statements of Cash Flows data Fiscal 2022 Fiscal 2021 Net cash (used for) provided by operating activities $ (2,343) $ 277,782 Net cash used for investing activities (140,675) (96,979) Net cash used for financing activities (155,329) (446,898) Abercrombie & Fitch Co. 31 2022 Form 10-K Table of Contents RESULTS OF OPERATIONS The estimated basis point (“BPS”) changes disclosed throughout this Results of Operations have been rounded based on the change in the percentage of net sales.

Net Sales The Company’s net sales by operating segment for Fiscal 2022 and Fiscal 2021 were as follows: (in thousands) Fiscal 2022 Fiscal 2021 $ Change % Change Hollister $ 1,962,885 $ 2,147,979 $ (185,094) (9)% Abercrombie 1,734,866 1,564,789 170,077 11% Total Company $ 3,697,751 $ 3,712,768 $ (15,017) 0% Net sales by geographic area are presented by attributing revenues on the basis of the country in which the merchandise was sold for in-store purchases and the shipping location provided by customers for digital orders.

The Company’s net sales by geographic area for Fiscal 2022 and Fiscal 2021 were as follows: (in thousands) Fiscal 2022 Fiscal 2021 $ Change % Change United States $ 2,758,294 $ 2,652,158 $ 106,136 4% EMEA 665,828 755,072 (89,244) (12)% APAC 122,367 171,701 (49,334) (29)% Other (1) 151,262 133,837 17,425 13% International $ 939,457 $ 1,060,610 $ (121,153) (11)% Total Company $ 3,697,751 $ 3,712,768 $ (15,017) 0% (1) Other includes all sales that do not fall within the United States, EMEA, or APAC regions, which are derived primarily in Canada.

For Fiscal 2022, net sales were essentially flat as compared to Fiscal 2021, with a year-over year increase in AUR, offset by the adverse impact of foreign currency exchange rates.

While sales in the United States grew 4% compared to Fiscal 2021, this was more than offset by an 11% decline in International, with continued softness in the APAC and EMEA regions.

Cost of Sales, Exclusive of Depreciation and Amortization Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Cost of sales, exclusive of depreciation and amortization $ 1,593,213 43.1% $ 1,400,773 37.7% 540 For Fiscal 2022, cost of sales, exclusive of depreciation and amortization, as a percentage of net sales increased approximately 540 basis points as compared to Fiscal 2021.

The year-over-year increase was primarily driven by 520 basis points of higher freight and raw material costs and 40 basis points from the adverse impact of exchange rates, partially offset by higher average unit retail.

Gross Profit, Exclusive of Depreciation and Amortization Fiscal 2022 Fiscal 2021 % of Net Sales % of Net Sales BPS Change Gross profit, exclusive of depreciation and amortization $ 2,104,538 56.9% $ 2,311,995 62.3% (540) Abercrombie & Fitch Co. 32 2022 Form 10-K Table of Contents Stores and Distribution Expense Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Stores and distribution expense $ 1,482,931 40.1% $ 1,428,323 38.5% 160 For Fiscal 2022, stores and distribution expense increased 4% as compared to Fiscal 2021, primarily driven by a $40 million increase in digital fulfillment expense, reflecting higher shipping and handling and other fulfillment expenses, including costs associated with a new third-party fulfillment facility in the United States.

Marketing, General and Administrative Expense Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Marketing, general and administrative expense $ 517,602 14.0% $ 536,815 14.5% (50) For Fiscal 2022, marketing, general and administrative expense decreased 4% as compared to Fiscal 2021, primarily driven by a $26 million reduction in marketing and advertising expenses, as well as $26 million in lower incentive-based compensation.

These amounts were partially offset by $23 million in higher payroll and $6 million in higher consulting and information technology expense.

Asset Impairment Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Asset impairment $ 14,031 0.4% $ 12,100 0.3% 10 Excluded items: Asset impairment charges (1) (14,031) (0.4)% (12,100) (0.3)% (10) Adjusted non-GAAP asset impairment, exclusive of flagship store exit charges $ — 0.0% $ — 0.0% — (1) Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details.

Refer to Note 8, “ ASSET IMPAIRMENT ,” for further discussion.

Other Operating Income, Net Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Other operating income, net $ 2,674 0.1% $ 8,327 0.2% (10) For Fiscal 2022, other operating income, net, decreased as compared to Fiscal 2021, primarily due to $5.9 million foreign currency losses recognized in Fiscal 2022.

Operating Income Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Operating income $ 92,648 2.5% $ 343,084 9.2% (670) Excluded items: Asset impairment charges (1) 14,031 0.4% 12,100 0.3% 10 Adjusted non-GAAP operating income $ 106,679 2.9% $ 355,184 9.6% (670) (1) Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details.

Abercrombie & Fitch Co. 33 2022 Form 10-K Table of Contents Interest Expense, Net Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Interest expense $ 30,236 0.8% $ 37,958 1.0% (20) Interest income (4,604) (0.1)% (3,848) (0.1)% — Interest expense, net $ 25,632 0.7% $ 34,110 0.9% (20) For Fiscal 2022, interest expense, net, decreased 25% primarily driven by lower interest paid on a lower average outstanding balance in Fiscal 2022 resulting from current year and prior year debt repurchases, as compared to Fiscal 2021.

Income Tax Expense Fiscal 2022 Fiscal 2021 (in thousands, except ratios) Effective Tax Rate Effective Tax Rate Income tax expense $ 56,631 84.5% $ 38,908 12.6% Excluded items: Tax effect of pre-tax excluded items (1) 3,802 2,421 Adjusted non-GAAP income tax expense $ 60,433 74.6% $ 41,329 12.9% (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. During Fiscal 2022, the Company did not recognize income tax benefits on $136.5 million of pre-tax losses, primarily in Switzerland, resulting in adverse tax impacts of $20.0 million.

The primary driver relates to lower sales volume, higher AUC and overall expense deleverage within the APAC and EMEA regions.

During Fiscal 2021, as a result of the improvement seen in business conditions, the Company recognized $42.5 million of tax benefits due to the release of valuation allowances, primarily in the U.S. and Germany, and a discrete tax benefit of $3.9 million due to a rate change in the U.K.

The Company did not recognize income tax benefits on $25.3 million of pre-tax losses generated in Fiscal 2021, primarily in Switzerland, resulting in adverse tax impacts of $4.6 million Refer to Note 11, “ INCOME TAXES ,” for further discussion on factors that impacted the effective tax rate in Fiscal 2022 and Fiscal 2021.

Net Income Attributable to A&F Fiscal 2022 Fiscal 2021 (in thousands) % of Net Sales % of Net Sales BPS Change Net income attributable to A&F $ 2,816 0.1% $ 263,010 7.1% (700) Excluded items, net of tax (1) 10,229 0.3% 9,679 0.3% — Adjusted non-GAAP net income attributable to A&F (2) $ 13,045 0.4% $ 272,689 7.3% (690) (1) Excludes items presented above under “ Operating Income , ” and “ Income Tax Expense . ” Net Income Per Diluted Share Attributable to A&F Fiscal 2022 Fiscal 2021 $ Change Net income per diluted share attributable to A&F $ 0.05 $ 4.20 $(4.15) Excluded items, net of tax (1) 0.20 0.15 0.05 Adjusted non-GAAP net income per diluted share attributable to A&F $ 0.25 $ 4.35 $(4.10) Impact from changes in foreign currency exchange rates — (0.36) 0.36 Adjusted non-GAAP net income per diluted share attributable to A&F on a constant currency basis (2) $ 0.25 $ 3.99 $(3.74) (1) Excludes items presented above under “ Operating Income , ” and “ Income Tax Expense . ” (2) Refer to “ NON-GAAP FINANCIAL MEASURES ,” for further details.

Abercrombie & Fitch Co. 34 2022 Form 10-K Table of Contents LIQUIDITY AND CAPITAL RESOURCES Overview The Company’s capital allocation strategy, priorities and investments are reviewed by the Board of Directors considering both liquidity and valuation factors. The Company believes that it will have adequate liquidity to fund operating activities over the next twelve months.

The Company monitors financing market conditions and may in the future determine whether and when to amend, modify, or restructure its ABL Facility and/or Senior Secured Notes.

For a discussion of the Company’s share repurchase activity and suspended dividend program, please see below under “Share repurchases and dividends.” Primary Sources and Uses of Cash The Company’s business has two principal selling seasons: Spring and Fall. The Company experiences its greatest sales activity during Fall, due to 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 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 and Senior Secured Notes” .

Over the next twelve months, the Company expects its primary cash requirements to be directed towards prioritizing investments in the business, including the modernization of our retail merchandising systems, and continuing to fund operating activities, including the acquisition of inventory, and obligations related to compensation, marketing, leases and any lease buyouts or modifications it may exercise, taxes and other operating activities.

The Company evaluates opportunities for investments in the business that are in line 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 continued investments in its digital and omnichannel initiatives. Historically, the Company has utilized cash flow generated from operations to fund any discretionary capital expenditures, which have been prioritized towards new store experiences, as well as digital and omnichannel investments, information technology, and other projects.

For Fiscal 2022, the Company used $164.6 million towards capital expenditures, up from $97.0 million of capital expenditures in Fiscal 2021. Total capital expenditures for Fiscal 2023 are expected to be approximately $160 million.

Share Repurchases and Dividends In November 2021, the Board of Directors approved a $500 million share repurchase authorization, replacing the prior 2021 share repurchase authorization of 10.0 million shares, which had approximately 3.9 million shares remaining available. During Fiscal 2022, the Company repurchased 4.8 million shares for approximately $126 million.

Historically, the Company has repurchased shares of its Common Stock, from time to time, dependent on market and business conditions, with the objectives of returning excess cash to shareholders and offsetting dilution from issuances of Common Stock associated with the exercise of employee stock appreciation rights and the vesting of restricted stock units.

Shares may be repurchased in the open market, including pursuant to any trading plans established in accordance with Rule 10b5-1 of the Exchange Act, through privately negotiated transactions or other transactions or by a combination of such methods. Refer to “

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ,” of this Annual Report on Form 10-K.

The Company may in the future review its dividend program to determine, in light of facts and circumstances at that time, whether and when to reinstate. Any dividends are declared at the discretion of the Board of Directors.

The Board of Directors reviews and establishes a dividend amount, if at all, based on A&F’s financial condition, results of operations, capital requirements, current and projected cash flows, business prospects and other factors and any restrictions under the Company’s agreements related to the Senior Secured Notes and the ABL Facility.

There can be no assurance that the Company will pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.