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ABERCROMBIE & FITCH CO . REPORTS SECOND QUARTER RESULTS Abercrombie delivers highest Q2 sales since 2015 , offset by pressures at Hollister New Albany , Ohio , August 25 , 2022 : Abercrombie & Fitch Co. ( NYSE : ANF ) today announced results for the second quarter ended July 30 , 2022. These compare to results for the second quarter ended July 31 , 2021. Descriptions of the use of non- GAAP financial measures and reconciliations of GAAP and non - GAAP financial measures accompany this release . Fran Horowitz , Chief Executive Officer , said " As the global macro environment deteriorated in the second quarter , we experienced a divergence in brand performance . Abercrombie delivered its highest Q2 sales since 2015 and its ninth consecutive quarter of average unit retail ( " AUR " ) growth . This was more than offset by Hollister , where we saw a greater than anticipated impact from inflation and a shift away from core categories to more fashion - driven product , contributing to lower - than- expected conversion and basket size . We expect macro headwinds to persist and have taken action to adjust receipts across brands to fuel winning categories for late fall and holiday . In addition , we have right - sized the Hollister inventory receipt plan for holiday and beyond . Looking ahead , we will continue to monitor sales volumes and react with agility to ensure inventory turns appropriately , and we expect year - over- year inventory growth to have peaked in Q2 and to moderate significantly in the back half as we lap late receipts from last year . Thus far in August , we have experienced a steady improvement in weekly sales trend , although total quarter - to - date remains in line with Q2 . Our revised outlook reflects the uncertain environment for the back half . As we have successfully done over the last several years , we will continue to navigate near - term challenges and reduce spend where appropriate while executing to our long - term goals . We remain confident that we have the balance sheet and strategies in place to drive continued progress towards our 2025 Always Forward Plan introduced at our June 2022 Investor Day . " Details related to net ( loss ) income per diluted share for the second quarter are as follows : 2022 2021 GAAP $ ( 0.33 ) $ 1.69 Excluded items , net of tax effect ( 1 ) ( 0.03 ) ( 0.01 ) Adjusted non - GAAP $ ( 0.30 ) $ 1.70 Impact from changes in foreign currency exchange rates ( 2 ) ( 0.09 ) Adjusted non - GAAP constant currency $ ( 0.30 ) $ 1.61 ( 1 ) Excluded items consist of pre - tax store asset impairment charges . ( 2 ) The estimated impact from foreign currency is calculated by applying current period exchange rates to prior year results using a 26 % tax rate . A summary of results for the second quarter ended July 30 , 2022 as compared to the second quarter ended July 31 , 2021 : • • • • • Net sales of $ 805 million , down 7 % as compared to last year on a reported basis and down 4 % on a constant currency basis . Gross profit rate of 57.9 % , down approximately 730 basis points as compared to last year . The year - over - year decrease was primarily driven by higher product costs , which contributed 750 basis points , and the adverse impact of exchange rates , which accounted for 30 basis points . These impacts where partially offset by higher AUR at Abercrombie . Operating expense , excluding other operating income , net , was up 4 % compared to last year . The increase was driven primarily by inflation and higher digital fulfillment expenses partially offset by lower incentive - based compensation . Operating expense as a percentage of sales increased to 58.0 % from 52.1 % last year . Operating loss of $ 2 million and $ 0 million on a reported and adjusted non - GAAP basis , respectively , as compared to operating income of $ 115 million and $ 116 million last year , on a reported and adjusted non - GAAP basis , respectively . Net loss per diluted share of $ 0.33 and $ 0.30 on a reported and adjusted non - GAAP basis , respectively , as compared to net income per diluted share last year of $ 1.69 and $ 1.70 on a reported and adjusted non - GAAP basis , respectively . 1