Abercrombie & Fitch Co 10-Q for FY2022 Q2

Abercrombie & Fitch Co (ANF)

10-Q 2021-09-08 For: 2021-07-31

Added on April 11, 2026

About this 10-Q

Abercrombie & Fitch Co filed this 10-Q on September 8, 2021, covering the quarter ended July 31, 2021 (FY2022 Q2).

Headline figures

Quarter ended July 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $864.85M; up 23.8% from $698.33M a year earlier
Net income: $108.5M; up 1885.7% from net income of $5.46M a year earlier
Diluted EPS: $1.69; up 1777.8% from $0.09 a year earlier

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Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐


Class A Common Stock						Shares outstanding as of September 3, 2021
$0.01 Par Value						59,082,477


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Index for Notes to Condensed Consolidated Financial Statements	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 6.	Exhibits	44
	Signatures	45


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Net sales	$	864,850	$	698,328	$	1,646,255	$	1,183,687
Cost of sales, exclusive of depreciation and amortization	301,365		274,720		587,636		495,934
Gross profit	563,485		423,608		1,058,619		687,753
Stores and distribution expense	325,935		310,370		642,543		632,494
Marketing, general and administrative expense	123,913		97,252		244,860		205,509
Flagship store exit benefits	(88)		(3,884)		(1,188)		(4,427)
Asset impairment	786		8,083		3,450		51,011
Other operating income, net	(1,848)		(2,356)		(3,266)		(1,850)
Operating income (loss)	114,787		14,143		172,220		(194,984)
Interest expense, net	11,275		7,098		19,881		10,469
Income (loss) before income taxes	103,512		7,045		152,339		(205,453)
Income tax (benefit) expense	(6,944)		1,253		(823)		32,786
Net income (loss)	110,456		5,792		153,162		(238,239)
Less: Net income attributable to noncontrolling interests	1,956		328		2,894		445
Net income (loss) attributable to A&F	$	108,500	$	5,464	$	150,268	$	(238,684)

Net income (loss) per share attributable to A&F
Basic	$	1.77	$	0.09	$	2.43	$	(3.82)
Diluted	$	1.69	$	0.09	$	2.32	$	(3.82)

Weighted-average shares outstanding
Basic	61,428		62,527		61,914		62,543
Diluted	64,136		63,286		64,803		62,543

Other comprehensive income (loss)
Foreign currency translation, net of tax	$	(1,986)	$	8,734	$	(3,260)	$	3,335
Derivative financial instruments, net of tax	2,703		(2,407)		5,302		6,458
Other comprehensive income	717		6,327		2,042		9,793
Comprehensive income (loss)	111,173		12,119		155,204		(228,446)
Less: Comprehensive income attributable to noncontrolling interests	1,956		328		2,894		445
Comprehensive income (loss) attributable to A&F	$	109,217	$	11,791	$	152,310	$	(228,891)


	July 31, 2021		January 30, 2021
Assets
Current assets:
Cash and equivalents	$	921,504	$	1,104,862
Receivables	87,151		83,857
Inventories	415,604		404,053
Other current assets	77,392		68,857
Total current assets	1,501,651		1,661,629
Property and equipment, net	532,795		550,587
Operating lease right-of-use assets	791,036		893,989
Other assets	229,911		208,697
Total assets	$	3,055,393	$	3,314,902
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	289,475	$	289,396
Accrued expenses	351,991		396,365
Short-term portion of operating lease liabilities	219,453		248,846
Income taxes payable	26,260		24,792
Total current liabilities	887,179		959,399
Long-term liabilities:
Long-term portion of operating lease liabilities	791,793		957,588
Long-term borrowings, net	303,015		343,910
Other liabilities	106,473		104,693
Total long-term liabilities	1,201,281		1,406,191
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	399,891		401,283
Retained earnings	2,275,009		2,149,470
Accumulated other comprehensive loss, net of tax (“AOCL”)	(100,265)		(102,307)
Treasury stock, at average cost: 43,609 and 40,901 shares as of July 31, 2021 and January 30, 2021, respectively	(1,619,102)		(1,512,851)
Total Abercrombie & Fitch Co. stockholders’ equity	956,566		936,628
Noncontrolling interests	10,367		12,684
Total stockholders’ equity	966,933		949,312
Total liabilities and stockholders’ equity	$	3,055,393	$	3,314,902


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Not Applicable
(Former name, former address and former fiscal year, if changed since last report)


	Thirteen Weeks Ended July 31, 2021
	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, May 1, 2021	61,935	$	1,033	$	395,277	$	8,776	$	2,169,748	$	(100,982)	41,365	$	(1,523,902)	$	949,950
Net income	—	—		—		1,956		108,500		—		—	—		110,456
Purchase of Common Stock	(2,374)	—		—		—		—		—		2,374	(100,000)		(100,000)
Share-based compensation issuances and exercises	130	—		(1,873)		—		(3,239)		—		(130)	4,800		(312)
Share-based compensation expense	—	—		6,487		—		—		—		—	—		6,487
Derivative financial instruments, net of tax	—	—		—		—		—		2,703		—	—		2,703
Foreign currency translation adjustments, net of tax	—	—		—		—		—		(1,986)		—	—		(1,986)
Distributions to noncontrolling interests, net	—	—		—		(365)		—		—		—	—		(365)
Ending balance at July 31, 2021	59,691	$	1,033	$	399,891	$	10,367	$	2,275,009	$	(100,265)	43,609	$	(1,619,102)	$	966,933

	Thirteen Weeks Ended August 1, 2020
	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, May 2, 2020	62,284	$	1,033	$	389,904	$	7,827	$	2,022,366	$	(105,420)	41,016	$	(1,517,644)	$	798,066
Net income	—	—		—		328		5,464		—		—	—		5,792


Share-based compensation issuances and exercises	81	—		(1,376)		—		(1,919)		—		(81)	3,202		(93)
Share-based compensation expense	—	—		3,744		—		—		—		—	—		3,744
Derivative financial instruments, net of tax	—	—		—		—		—		(2,407)		—	—		(2,407)
Foreign currency translation adjustments, net of tax	—	—		—		—		—		8,734		—	—		8,734
Distributions to noncontrolling interests, net	—	—		—		(226)		—		—		—	—		(226)
Ending balance at August 1, 2020	62,365	$	1,033	$	392,272	$	7,929	$	2,025,911	$	(99,093)	40,935	$	(1,514,442)	$	813,610


	Twenty-six Weeks Ended July 31, 2021
	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 30, 2021	62,399	$	1,033	$	401,283	$	12,684	$	2,149,470	$	(102,307)	40,901	$	(1,512,851)	$	949,312
Net income	—	—		—		2,894		150,268		—		—	—		153,162
Purchase of Common Stock	(3,451)	—		—		—		—		—		3,451	(135,249)		(135,249)
Share-based compensation issuances and exercises	743	—		(16,329)		—		(24,729)		—		(743)	28,998		(12,060)
Share-based compensation expense	—	—		14,937		—		—		—		—	—		14,937
Derivative financial instruments, net of tax	—	—		—		—		—		5,302		—	—		5,302
Foreign currency translation adjustments, net of tax	—	—		—		—		—		(3,260)		—	—		(3,260)
Distributions to noncontrolling interests, net	—	—		—		(5,211)		—		—		—	—		(5,211)
Ending balance at July 31, 2021	59,691	$	1,033	$	399,891	$	10,367	$	2,275,009	$	(100,265)	43,609	$	(1,619,102)	$	966,933

	Twenty-six Weeks Ended August 1, 2020
	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, February 1, 2020	62,786	$	1,033	$	404,983	$	12,368	$	2,313,745	$	(108,886)	40,514	$	(1,552,065)	$	1,071,178
Net income (loss)	—	—		—		445		(238,684)		—		—	—		(238,239)
Purchase of Common Stock	(1,397)	—		—		—		—		—		1,397	(15,172)		(15,172)
Dividends ($0.20 per share)	—	—		—		—		(12,556)		—		—	—		(12,556)
Share-based compensation issuances and exercises	976	—		(21,617)		—		(36,594)		—		(976)	52,795		(5,416)
Share-based compensation expense	—	—		8,906		—		—		—		—	—		8,906
Derivative financial instruments, net of tax	—	—		—		—		—		6,458		—	—		6,458
Foreign currency translation adjustments, net of tax	—	—		—		—		—		3,335		—	—		3,335
Distributions to noncontrolling interests, net	—	—		—		(4,884)		—		—		—	—		(4,884)
Ending balance at August 1, 2020	62,365	$	1,033	$	392,272	$	7,929	$	2,025,911	$	(99,093)	40,935	$	(1,514,442)	$	813,610


	Twenty-six Weeks Ended
			As Restated
	July 31, 2021		August 1, 2020
Operating activities
Net income (loss)	$	153,162	$	(238,239)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	72,249		82,753
Asset impairment	3,450		51,011
Loss on disposal	2,188		7,617
(Benefit) Provision for deferred income taxes	(21,187)		23,037
Share-based compensation	14,937		8,906
Loss on extinguishment of debt	5,347		—
Changes in assets and liabilities:
Inventories	(11,849)		(18,378)
Accounts payable and accrued expenses	(63,562)		122,004
Operating lease right-of-use assets and liabilities	(93,040)		(20,266)
Income taxes	1,379		(7,379)
Other assets	(11,575)		29,940
Other liabilities	(1,554)		5,227
Net cash provided by operating activities	49,945		46,233
Investing activities
Purchases of property and equipment	(35,269)		(75,621)
Withdrawal of funds from Rabbi Trust assets	—		50,000
Net cash used for investing activities	(35,269)		(25,621)
Financing activities
Proceeds from issuance of senior secured notes	—		350,000
Purchase of senior secured notes	(46,969)		—
Proceeds from borrowings under the senior secured asset-based revolving credit facility	—		210,000
Repayment of borrowings under the term loan facility	—		(233,250)
Repayment of borrowings under the senior secures asset-based revolving credit facility	—		(210,000)
Payment of debt issuance or modification costs and fees	(1,837)		(6,558)
Purchases of Common Stock	(135,249)		(15,172)
Dividends paid	—		(12,556)
Other financing activities	(16,192)		(11,135)
Net cash (used for) provided by financing activities	(200,247)		71,329
Effect of foreign currency exchange rates on cash	(2,547)		1,785
Net (decrease) increase in cash and equivalents, and restricted cash and equivalents	(188,118)		93,726
Cash and equivalents, and restricted cash and equivalents, beginning of period	1,124,157		692,264
Cash and equivalents, and restricted cash and equivalents, end of period	$	936,039	$	785,990
Supplemental information related to non-cash activities
Purchases of property and equipment not yet paid at end of period	$	35,789	$	34,865
Operating lease right-of-use assets additions, net of terminations, impairments and other reductions	$	17,159	$	23,119
Supplemental information related to cash activities
Cash paid for interest	$	14,950	$	8,127
Cash paid for income taxes	$	24,132	$	8,460
Cash received from income tax refunds	$	570	$	1,426
Cash paid for amounts included in measurement of operating lease liabilities, net of abatements	$	230,836	$	122,128


		Page No.
Note 1.	NATURE OF BUSINESS	9
Note 2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9
Note 3.	IMPACT OF COVID-19	11
Note 4.	REVENUE RECOGNITION	12
Note 5.	NET INCOME (LOSS) PER SHARE	12
Note 6.	FAIR VALUE	12
Note 7.	PROPERTY AND EQUIPMENT, NET	14
Note 8.	LEASES	14
Note 9.	ASSET IMPAIRMENT	15
Note 10.	INCOME TAXES	15
Note 11.	BORROWINGS	16
Note 12.	SHARE-BASED COMPENSATION	17
Note 13.	DERIVATIVE INSTRUMENTS	19
Note 14.	ACCUMULATED OTHER COMPREHENSIVE LOSS	21
Note 15.	SEGMENT REPORTING	22
Note 16.	FLAGSHIP STORE EXIT BENEFITS	23


	Twenty-six Weeks Ended
	As Originally Reported				As Restated
(in thousands)	August 1, 2020		Adjustment		August 1, 2020
Net cash provided by operating activities	$	96,233	$	(50,000)	$	46,233
Net cash used for investing activities	$	(75,621)	$	50,000	$	(25,621)
Net cash provided by financing activities	$	71,329	—		$	71,329
Effect of foreign currency exchange rates on cash	$	1,785	—		$	1,785
Net increase in cash and equivalents, and restricted cash and equivalents	$	93,726	—		$	93,726
Cash and equivalents, and restricted cash and equivalents, beginning of period	$	692,264	—		$	692,264
Cash and equivalents, and restricted cash and equivalents, end of period	$	785,990	—		$	785,990


(in thousands)	Location	July 31, 2021		January 30, 2021		August 1, 2020		February 1, 2020
Cash and equivalents	Cash and equivalents	$	921,504	$	1,104,862	$	766,721	$	671,267
Long-term restricted cash and equivalents	Other assets	14,268		14,814		19,269		18,696
Short-term restricted cash and equivalents	Other current assets	267		4,481		—		2,301
Cash and equivalents and restricted cash and equivalents		$	936,039	$	1,124,157	$	785,990	$	692,264


	Assets and Liabilities at Fair Value as of July 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents (1)	$	131,301	$	46,598	$	—	$	177,899
Derivative instruments (2)	—		1,872		—		1,872
Rabbi Trust assets (3)	1		61,538		—		61,539
Restricted cash equivalents (1)	3,109		4,798		—		7,907
Total assets	$	134,411	$	114,806	$	—	$	249,217

Liabilities:
Derivative instruments (2)	$	—	$	794	$	—	$	794
Total liabilities	$	—	$	794	$	—	$	794


(in thousands)	July 31, 2021		January 30, 2021		August 1, 2020		February 1, 2020
Gift card liability	$	29,038	$	28,561	$	22,461	$	28,844
Loyalty program liability	$	20,962	$	20,426	$	19,674	$	23,051


	Thirteen Weeks Ended				Twenty-six Weeks Ended
(in thousands)	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Revenue associated with gift card redemptions and gift card breakage	$	17,353	$	10,066	$	33,509	$	21,075
Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs	$	9,897	$	7,982	$	19,450	$	13,691


	Service-based Restricted Stock Units			Performance-based Restricted Stock Units			Market-based Restricted Stock Units
	Number of Underlying Shares	Weighted- Average Grant Date Fair Value		Number of Underlying Shares	Weighted- Average Grant Date Fair Value		Number of Underlying Shares	Weighted- Average Grant Date Fair Value
Unvested at January 30, 2021	3,037,098	$	11.62	297,216	$	22.43	721,879	$	21.46
Granted	659,612	32.38		146,580	31.78		73,294	49.81
Adjustments for performance achievement	—	—		(106,715)	21.31		(6,084)	33.69
Vested	(1,019,420)	12.19		—	—		(100,634)	33.69
Forfeited	(45,199)	12.73		(1,704)	23.05		(10,657)	17.84
Unvested at July 31, 2021 (1)	2,632,091	$	16.58	335,377	$	26.87	677,798	$	22.66


(in thousands)	Service-based Restricted Stock Units		Performance-based Restricted Stock Units		Market-based Restricted Stock Units
Unrecognized compensation cost	$	36,486	$	5,076	$	9,330
Remaining weighted-average period cost is expected to be recognized (years)	1.3		1.2		1.0


	July 31, 2021
Grant date market price	$	31.78
Fair value	$	49.81
Assumptions:
Price volatility	66		%
Expected term (years)	2.9
Risk-free interest rate	0.3		%
Dividend yield	—		%
Average volatility of peer companies	72.0		%
Average correlation coefficient of peer companies	0.4694


	Number of Underlying Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Life (years)
Outstanding at January 30, 2021	384,757	$	33.04
Granted	—	—
Exercised	(107,068)	26.89
Forfeited or expired	(34,150)	54.87
Outstanding at July 31, 2021	243,539	$	32.69	$	2,029,216	2.8
Stock appreciation rights exercisable at July 31, 2021	243,539	$	32.69	$	2,029,216	2.8
Stock appreciation rights expected to become exercisable in the future as of July 31, 2021	—	$	—	$	—	0.0


(in thousands)	July 31, 2021
Total grant date fair value of awards exercised	$	1,020


(in thousands)	Notional Amount (1)
Euro	$	123,157
British pound	$	82,236
Canadian dollar	$	18,181
Japanese yen	$	7,120


	Thirteen Weeks Ended July 31, 2021
(in thousands)	Foreign Currency Translation Adjustment		Unrealized Gain (Loss) on Derivative Financial Instruments		Total
Beginning balance at May 1, 2021	$	(99,046)	$	(1,936)	$	(100,982)
Other comprehensive (loss) income before reclassifications	(1,986)		1,084		(902)
Reclassified loss from accumulated other comprehensive loss (1)	—		1,697		1,697
Tax effect	—		(78)		(78)
Other comprehensive (loss) income after reclassifications	(1,986)		2,703		717
Ending balance at July 31, 2021	$	(101,032)	$	767	$	(100,265)

	Twenty-six Weeks Ended July 31, 2021
(in thousands)	Foreign Currency Translation Adjustment		Unrealized Gain (Loss) on Derivative Financial Instruments		Total
Beginning balance at January 30, 2021	$	(97,772)	$	(4,535)	$	(102,307)
Other comprehensive (loss) income before reclassifications	(3,260)		2,228		(1,032)
Reclassified loss from accumulated other comprehensive loss (1)	—		3,152		3,152
Tax effect	—		(78)		(78)
Other comprehensive income after reclassifications	(3,260)		5,302		2,042
Ending balance at July 31, 2021	$	(101,032)	$	767	$	(100,265)


	Hollister (1)		Abercrombie (2)		Total Company (3)
	U.S.	International	U.S.	International	U.S.	International	Total
Number of stores:
January 30, 2021	347	150	190	48	537	198	735
New	8	4	4	2	12	6	18
Permanently closed	—	(4)	(15)	(1)	(15)	(5)	(20)
July 31, 2021	355	150	179	49	534	199	733





Gross square footage (in thousands):
July 31, 2021	2,349	1,203	1,216	382	3,565	1,585	5,150


	GAAP						Non-GAAP (1)
(in thousands, except change in net sales, gross profit rate, operating margin and per share amounts)	July 31, 2021 (2)			August 1, 2020 (3)			July 31, 2021 (2)			August 1, 2020 (3)
Thirteen Weeks Ended
Net sales	$	864,850		$	698,328
Change in net sales	23.8		%	(17.0)		%

Gross profit rate	65.2		%	60.7		%
Operating income	$	114,787		$	14,143		$	115,573		$	22,226
Operating income margin	13.3		%	2.0		%	13.4		%	3.2		%
Net income attributable to A&F	$	108,500		$	5,464		$	109,062		$	14,713
Net income per diluted share attributable to A&F	$	1.69		$	0.09		$	1.70		$	0.23
Twenty-six Weeks Ended
Net sales	$	1,646,255		$	1,183,687
Change in net sales	39.1		%	(24.8)		%
Gross profit rate	64.3		%	58.1		%
Operating income (loss)	$	172,220		$	(194,984)		$	175,670		$	(143,973)
Operating income (loss) margin	10.5		%	(16.5)		%	10.7		%	(12.2)		%
Net income (loss) attributable to A&F	$	150,268		$	(238,684)		$	153,045		$	(190,939)
Net income (loss) per diluted share attributable to A&F	$	2.32		$	(3.82)		$	2.36		$	(3.05)


(in thousands)	July 31, 2021
Borrowing base	$	279,400
Less: Outstanding stand-by letters of credit	(846)
Borrowing capacity	278,554
Less: Minimum excess availability (1)	(30,000)
Borrowing available	$	248,554


Financial measures (1)						Excluded items
Asset impairment						Asset impairment charges
Operating income (loss)						Asset impairment charges
Income tax (benefit) expense (2)						Tax effect of pre-tax excluded items
Net income (loss) and net income (loss) per share attributable to A&F (2)						Pre-tax excluded items and the tax effect of pre-tax excluded items


Period (fiscal month)	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (3)
May 2, 2021 through May 29, 2021	4,890	$	43.32	—	8,922,785
May 30, 2021 through July 3, 2021	1,373,626	$	42.23	1,372,073	7,550,712
July 4, 2021 through July 31, 2021	1,002,702	$	41.97	1,001,899	6,548,813
Total	2,381,218	$	42.13	2,373,972	6,548,813


Exhibit						Document
3.1						Amended and Restated Certificate of Incorporation of Abercrombie & Fitch Co., reflecting amendments through the date of this Quarterly Report on Form 10-Q, incorporated herein by reference to Exhibit 3.2 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2011 (File No. 001-12107). [This document represents the Amended and Restated Certificate of Incorporation of Abercrombie & Fitch Co. in compiled form incorporating all amendments. This compiled document has not been filed with the Delaware Secretary of State.]
3.2						Amended and Restated Bylaws of Abercrombie & Fitch Co. reflecting amendments through the date of this Quarterly Report on Form 10-Q, incorporated herein by reference to Exhibit 3.10 to A&F’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018 (File No. 001-12107). [This document represents the Amended and Restated Bylaws of Abercrombie & Fitch Co. in compiled form incorporating all amendments.]
10.1						Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates (as amended effective June 9 , 202 1 ), incorporated herein by reference to Exhibit 10.1 to A&F’s Current Re port on Form 8-K dated and filed on June 10 , 202 1 (File No. 001-12107).
10.2						Offer Letter from Abercrombie & Fitch Co. to Samir Desai (including as Exhibit A thereto the Agreement entered into between Abercrombie & Fitch Management Co. and Samir Desai, effective as of May 20, 2021, the execution date by Abercrombie & Fitch Management Co.), executed by Mr. Desai on May 24, 2021. *
31.1						Certifications by Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2						Certifications by Executive Vice President and Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1						Certifications by Chief Executive Officer (who serves as Principal Executive Officer) and Executive Vice President and Chief Financial Officer (who serves as Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document.*
101.SCH						Inline XBRL Taxonomy Extension Schema Document.*
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104						Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).*


	Abercrombie & Fitch Co.

Date: September 8, 2021	By:	/s/ Scott Lipesky
		Scott Lipesky
		Executive Vice President and Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer and Authorized Officer)



Position			Executive Vice President & Chief Digital and Technology Officer, reporting to Fran Horowitz, Chief Executive Officer

Start Date			July 19, 2021

Base Salary			$650,000 annually, paid bi-weekly. Your annual salary will be reviewed again in March 2022.

IC Bonus Program			You will be eligible to participate in A&F’s Designated Officer Annual Incentive Compensation (IC) Program for Fiscal Year 2021, at a target payout level of 100% of your annual base salary and a maximum payout of 200% of your annual base salary. Your IC eligibility for 2021 will be pro-rated based on your start date. IC for you and other Designated Officers will be based on annual Company financial results, and if earned will typically be paid in March following the conclusion of the prior Fiscal Year, subject to participants’ being actively employed on the payout date. (Please note that the Designated Officer Annual IC Program is subject to change each year in the discretion of the Compensation Committee of the A&F Board of Directors (the “Compensation Committee”)).

Sign-On Bonus			Upon your commencement of employment, A&F will provide you a one-time sign-on bonus of $600,000. This sign-on bonus (less applicable taxes and other withholdings) will be made along with your first regular paycheck. In order to obtain this payment, you will be required to sign an agreement to repay this bonus in full if you resign or are terminated for “Cause” (as that term is defined in Section 2(e)(2) of the Agreement annexed hereto as Exhibit A ) within twenty- four (24) months of your start date.


Equity Inducement Grant: Restricted Stock Units (RSUs)			Subject to approval of the Compensation Committee and to the terms and conditions of the grant, you will receive an equity inducement grant with an approximate value of $1,000,000, in the form of A&F Restricted Stock Units (RSUs). The actual number of RSUs granted will be based on the closing share price on the date of the grant, which will occur (subject to Compensation Committee approval) at the next regularly scheduled meeting of the Compensation Committee following your start date or as soon as practicable thereafter. Upon vesting, one RSU converts to one share of A&F stock. Subject to continued employment with A&F, these RSUs will vest ratably over the next three years.

2021 Annual Equity Grant			Subject to approval of the Compensation Committee and to the terms and conditions of the grant, you will receive an annual equity grant for Fiscal 2021 with an approximate value of $1,200,000, in the form of 50% Performance Shares (PSAs) and 50% RSUs, and otherwise subject to the applicable equity award agreements. The actual number of RSUs and PSAs granted will be based on the closing share price on the date of the grant, which will occur (subject to Compensation Committee approval) at the next regularly scheduled meeting of the Compensation Committee following your start date or as soon as practicable thereafter.

Relocation Bonus			In lieu of benefits under A&F’s executive relocation assistance program, the Company will provide you with a one-time relocation bonus payment of $100,000 to assist with commuting and housing costs during your first year of employment. This relocation bonus (less applicable taxes and other withholdings) will be made along with your first regular paycheck. In order to obtain this payment, you will be required to sign an agreement to repay this bonus in full if you resign or are terminated for Cause within twenty-four (24) months of your start date.

Executive Severance Agreement (ESA)			In consideration of (and as a condition of) this offer of employment and your continued employment following hire, you agree to enter into an Executive Severance Agreement (ESA) in the form attached as Exhibit A to this offer letter. The ESA includes severance protection and other benefits for you, as well as protections for the company such as non-competition and non- solicitation provisions.

Benefits			You will be eligible to participate in various A&F benefit programs as set forth in this letter and in other relevant documents. All benefit programs are subject to change in accordance with A&F’s policies and procedures.


A&F Qualified Savings			As of the first of the following month of your start date, you will be eligible to participate in the Abercrombie & Fitch Co. Savings and Retirement Plan. As a participant in this plan, you will be eligible to defer up to 50% of your base salary and bonus payouts, up to the IRS maximum annual deferral limit ($19,500 for 2021), subject to the IRS annual compensation limit ($290,000 for 2021). After one year of employment, the first 5% of your base salary and bonus payouts that you defer into this plan will be matched by A&F at 100%. Company matching contributions and earnings are always 100% vested.

A&F Non-Qualified Savings Plan			After 30 days of employment, you will be eligible to participate in the Abercrombie & Fitch Co. Non-Qualified Savings Plan. This plan allows you to defer up to 75% of your base salary each year, and up to 75% of your Bonus payouts.

Healthcare Coverage			After one month of employment, you will be eligible to participate in our Healthcare Benefit plans. For 2021, the associate contribution for these benefits is as follows:


	Medical/Dental	Vision
Single Coverage	$ 48.00 bi-weekly	$ 1.95 bi-weekly
Single (+) Spouse	$ 173.00 bi-weekly	$ 3.71 bi-weekly
Single (+) Child(ren)	$ 119.00 bi-weekly	$ 3.90 bi-weekly
Family Coverage	$ 200.00 bi-weekly	$ 5.74 bi-weekly



Life & Disability Insurance			After one month of employment, you will automatically be enrolled in A&F’s Life & Disability Insurance plans.

Flexible Spending Account (FSA)			After one month of employment, you will be eligible to participate in A&F’s Flexible Spending Account (FSA) plan. FSAs allow you to save money by paying for certain healthcare expenses with pre-tax dollars via automatic payroll deductions.

Associate Assistance Program (AAP)			After one month of employment, you will automatically be enrolled in A&F’s Associate Assistance Program (AAP). The AAP gives you or any covered dependents access to free and confidential psychological, financial, and legal counseling through our AAP provider. Up to 8 free visits, per specific issue, are available through the AAP.

A&F Gym			Effective upon hire, you will be eligible to join the A&F Gym, our state of the art 8,000 square foot on-site fitness facility. The cost of membership can be paid via automatic payroll deduction after you enroll.

Merchandise Discount			You will receive a discount of 40% on qualifying purchases at all Abercrombie & Fitch and abercrombie kids stores. You will also receive a discount of 30% on qualifying purchases at all Hollister Co. stores. (Please note that this benefit is subject to the terms of the Associate Discount Policy as set forth in our Associate Handbook.)


Paid Time Off (PTO)/Holidays			You will be eligible for 33 paid time off (PTO) days per fiscal year. PTO will be pro-rated during the first year based on your start date. Unused PTO days do not carry over into subsequent fiscal years. A&F also grants 9 paid holidays to all Global Home Office associates annually, plus one Floating Holiday.

Additional A&F Perks			In addition to benefits listed above, you will be eligible for the following A&F perks: •Volunteer Day •Extended Summer Hours •On-Site Café •Stock Purchase Plan Please see the Home Office Associate Handbook or your HR Business Partner for more information on these programs.

Background/Reference Inquiry and Worth Authorization			This offer of employment is contingent on successful completion of background and reference checks, and on successful demonstration of your authorization to work in the United States. Please complete the enclosed Fair Credit Reporting Act Disclosure and Authorization Form (attached as Exhibit B) and return it along with your signed copy of this employment offer letter.


Signature:			/s/ Samir Desai
Name:			Samir Desai
Date:			5/24/2021

Approved by:			/s/ Holly May
Name:			Holly May
			Chief Human Resources Officer


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