ABERCROMBIE & FITCH CO /DE/ANF

ABERCROMBIE & FITCH CO /DE/ Fair Value Disclosure

10-KFiled Mar 26, 20263 min read
FAIR VALUE
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs to measure fair value are as follows:
•Level 1—inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets that the Company can access at the measurement date.
•Level 2—inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities, directly or indirectly.
•Level 3—inputs to the valuation methodology are unobservable.
The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The three levels of the hierarchy and the distribution of the Company’s assets and liabilities that are measured at fair value on a recurring basis, were as follows:
Assets and Liabilities at Fair Value as of January 31, 2026
(in thousands)Level 1Level 2Level 3Total
Assets:
Cash equivalents (1)
$341,768 $19,109 $— $360,877 
Derivative instruments (2)
— 350 — 350 
Rabbi Trust assets (3)
1,164 55,443 — 56,607 
Restricted cash equivalents (1)
3,089 629 — 3,718 
Total assets$346,021 $75,531 $— $421,552 
Liabilities:
Derivative instruments (2)
$— $2,336 $— $2,336 
Total liabilities measured at fair value$— $2,336 $— $2,336 
Assets and Liabilities at Fair Value as of February 1, 2025
(in thousands)Level 1Level 2Level 3Total
Assets:
Cash equivalents (1)
$304,072 $1,013 $— $305,085 
Derivative instruments (2)
— 4,315 — 4,315 
Rabbi Trust assets (3)
1,164 53,921 — 55,085 
Restricted cash equivalents (1)
3,070 1,496 — 4,566 
Total assets measured at fair value$308,306 $60,745 $— $369,051 
(1)    Level 1 assets consisted of investments in money market funds and U.S. treasury bills. Level 2 assets consisted of time deposits with original maturities of less than three months.
(2)    Level 2 assets and liabilities consisted of foreign currency exchange forward contracts.
(3)    Level 1 assets consisted of investments in money market funds. Level 2 assets consisted of trust-owned life insurance policies.

The Company’s Level 2 assets and liabilities consisted of:
•Trust-owned life insurance policies, which were valued using the cash surrender value of the life insurance policies;
•Time deposits with original maturities of three months or less, which were valued at cost, approximating fair value, due to the short-term nature of these investments; and
•Derivative instruments, primarily foreign currency exchange forward contracts, which were valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk.

The Company also holds certain investments that are not measured at fair value on a recurring basis on the Consolidated Balance Sheets, including held-to-maturity securities. Held-to-maturity securities consist primarily of time deposits with maturities less than one year, which are valued at amortized cost, approximating fair value.
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Historical Timeline

Fiscal YearFiled
2026Mar 26, 2026Showing above
2025Mar 31, 2025
2024Apr 1, 2024
2023Mar 27, 2023
2022Mar 28, 2022
2021Mar 29, 2021
2020Mar 31, 2020
2019Apr 1, 2019
2018Apr 2, 2018
2017Mar 27, 2017
2016Mar 28, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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