Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Q2 2018 Earnings Presentation
20 slides from Abercrombie & Fitch's earnings presentation, Aug 31, 2018
Slide 1: Investor Presentation 2018 Second Quarter
INVESTOR PRESENTATION 2018 SECOND QUARTER
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 A&F cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this presentation or made by management or spokespeople of A&F involve risk
Slide 3: Q2 P&L Summary
Q2 P&L SUMMARY % OF NET % OF NET 2018 SALES 2017 SALES NET SALES $842,414 100.0% $779,321 100.0% GROSS PROFIT 506,895 60.2% 460,895 59.1% OPERATING EXPENSE 507,106 60.2% 484,783 62.2% OTHER OPERATING INCOME, NET (434) (0.1)% (2,799) (0.4)% OPERATING INCOME (LOSS) 223 —% (21,089) (2.7)% INTEREST EXPE
Slide 4: Q2 Adjusted P&L Summary
Q2 ADJUSTED P&L SUMMARY* % OF NET % OF NET 2018 SALES 2017 SALES NET SALES $842,414 100.0% $779,321 100.0% GROSS PROFIT 506,895 60.2% 460,895 59.1% OPERATING EXPENSE 498,435 59.2% 478,648 61.4% OTHER OPERATING INCOME, NET (434) (0.1)% (2,799) (0.4)% OPERATING INCOME (LOSS) 8,894 1.1% (14,954) (1.9)%
Slide 5: Q2 Non-GAAP Reconciliation
Q2 NON-GAAP RECONCILIATION 2018 EXCLUDED GAAP ITEMS NON-GAAP ASSET IMPAIRMENT (1) $8,671 $8,671 $— OPERATING INCOME 223 (8,671) 8,894 (LOSS) INCOME BEFORE TAXES (2,800) (8,671) 5,871 TAX EXPENSE (2) 24 (647) 671 NET (LOSS) INCOME $(3,853) $(8,024) $4,171 NET (LOSS) INCOME PER DILUTED SHARE $(0.06) $
Slide 6: Q2 Sales Summary
Q2 SALES SUMMARY % COMPARABLE 2018 2017 CHANGE (1) SALES (2) HOLLISTER $500.8 $446.6 12% 4% ABERCROMBIE 341.6 332.7 3% 2% TOTAL COMPANY $842.4 $779.3 8% 3% % COMPARABLE 2018 2017 CHANGE (1) SALES (2) UNITED STATES $531.4 $470.3 13% 7% INTERNATIONAL 311.0 309.0 1% (4)% TOTAL COMPANY $842.4 $779.3 8%
Slide 7: Q2 Sales Mix
Q2 SALES MIX YTD BRAND GEOGRAPHY ABERCROMBIE ABE41.2%RCRO MBIE 40.5% HOLLISTER UNITED STATES HOHOLLISTERLLISTER C CO.O. 58.8%59. 5% 59.5% 63.1% INTERNATIONAL ABERCROMBIE 40.5% 37.7% ABERCROMBIE INTERNATIONAL HUNITEDOLLIST STATESER CO. 62.3%59 .5% 40.5% 36.9% 7
Slide 8: Q2 Operating Expense
Q2 OPERATING EXPENSE GAAP % OF NET GAAP % OF NET 2018 SALES 2017 SALES Δ bps (3) STORE OCCUPANCY (1) $156,112 18.5% $161,829 20.8% (230) ALL OTHER (2) 218,440 25.9% 207,466 26.6% (70) STORES AND DISTRIBUTION 374,552 44.5% 369,295 47.4% (290) MARKETING, GENERAL & ADMINISTRATIVE 123,883 14.7% 109,353
Slide 9: Share Repurchases
SHARE REPURCHASES 2018 2017 SHARES AVERAGE SHARES AVERAGE REPURCHASED COST COST REPURCHASED COST COST Q1 778.2 $18,670 $23.99 — — — Q2 969.1 25,000 25.80 — — — YTD 1,747.2 $43,670 $24.99 — — — 9
Slide 10: Q2 Store Count Activity
Q2 STORE COUNT ACTIVITY UNITED MIDDLE ALL BRANDS TOTAL STATES CANADA EUROPE ASIA EAST START OF Q2 2018 869 680 18 117 46 8 OPENINGS 4 2 — — 1 1 CLOSINGS (3) (3) — — — — END OF Q2 2018 870 679 18 117 47 9 HOLLISTER (1) START OF Q2 2018 539 395 11 100 28 5 OPENINGS 1 1 — — — — CLOSINGS — — — — — — END
Slide 11: Q2 Store Openings
Q2 STORE OPENINGS BRAND CENTER CITY DATE Hollister Cross County Shopping Center Yonkers, NY 7/20/2018 UNITED STATES kids Somerset North Troy, MI 8/3/2018 kids Dubai Mall Dubai, UAE 7/5/2018 INTERNATIONAL A&F IFS Changsha Changsha, China 7/13/2018 11
Slide 12: Store Optimization Activity
STORE OPTIMIZATION ACTIVITY Q2 2018 HOLLISTER ABERCROMBIE (1) TOTAL COMPANY NEW STORES 1 3 4 REMODELS 9 — 9 RIGHT-SIZES 2 4 6 TOTAL NEW EXPERIENCES 12 7 19 YTD 2018 HOLLISTER ABERCROMBIE (1) TOTAL COMPANY NEW STORES 2 3 5 REMODELS 14 — 14 RIGHT-SIZES 4 4 8 TOTAL NEW EXPERIENCES 20 7 27 (1) Includes
Slide 13: Store Optimization Full Year Outlook
STORE OPTIMIZATION FULL YEAR OUTLOOK WE PLAN TO DELIVER 70 ENGAGING NEW CUSTOMER EXPERIENCES THROUGH PROTOTYPES, NEW STORE FORMATS AND REMODELS WHILE ALSO RIGHT-SIZING OR CLOSING SOME OF OUR LESS PRODUCTIVE STORES. HOLLISTER ABERCROMBIE (1) TOTAL COMPANY NEW STORES 13 9 22 REMODELS 30 1 31 RIGHT-SIZ
Slide 14: Transformation Initiatives Continued
TRANSFORMATION INITIATIVES CONTINUED GLOBAL STORE NETWORK OPTIMIZATION RIGHTSIZING STORE FLEET AND ADAPTING TO THE EVOLVING ROLE OF THE STORE AS CUSTOMERS' SHOPPING PREFERENCES SHIFT ENHANCING DIGITAL AND OMNICHANNEL CAPABILITIES CREATING BEST-IN-CLASS CUSTOMER EXPERIENCES WHILE GROWING PROFITABLY A
Slide 15: Outlook
OUTLOOK FOR FISCAL 2018, THE COMPANY EXPECTS: • COMPARABLE SALES TO BE UP IN THE RANGE OF 2% TO 4% • NET SALES TO BE UP IN THE RANGE OF 2% TO 4%, WITH NET SALES IN THE THIRD QUARTER TO BE APPROXIMATELY FLAT TO LAST YEAR, INCLUDING THE ADVERSE EFFECTS FROM THE CALENDAR SHIFT AND CHANGES IN FOREIGN CU
Slide 16: Full Year Outlook
FULL YEAR OUTLOOK PREVIOUS OUTLOOK CURRENT OUTLOOK NET SALES (1) UP 2% TO 4% * CHANGES IN FOREIGN CURRENCY $50M BENEFIT TO NET SALES $20M BENEFIT TO NET SALES LOSS OF FISCAL 2017'S 53RD WEEK $40M ADVERSE IMPACT TO NET SALES * COMPARABLE SALES (2) UP 2% TO 4% * GROSS PROFIT (3) UP SLIGHTLY * GAAP OPE
Slide 17: Appendix
APPENDIX 17
Slide 18: Abercrombie Opens New Campus Store Formats
ABERCROMBIE OPENS NEW CAMPUS STORE FORMATS THE OHIO STATE UNIVERSITY COLUMBUS, OHIO UNIVERSITY OF SOUTHERN CALIFORNIA LOS ANGELES, CALIFORNIA 18
Slide 19: ip oF Is
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Slide 20: Abercrombie & Fitch Co.
Abercrombie & Fitch Co. Abercrombie | abercrombie) HQITISTER | 2%, Aifag—