Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Q4 2022 Earnings Presentation
32 slides from Abercrombie & Fitch's earnings presentation, Mar 2, 2023
Slide 1: Investor Presentation: Fourth Quarter 2022
INVESTOR PRESENTATION: FOURTH QUARTER 2022
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 This presentation and related statements by management or spokespeople of A&F contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements, inclu
Slide 3: Table of Contents
Safe Harbor and Other Information 2 Company Overview 4 Q4 2022 and Full Year Results 9 Appendix 22 TABLE OF CONTENTS 3
Slide 4: Company Overview
A COMPANY / £48 OVERVIEW, ssn ~ Abercrombie & Fite
Slide 5: Abercrombie & Fitch Co. at a glance
Abercrombie & Fitch Co. is a global, digitally-led, omni-channel apparel and accessories retailer catering to kids through millennials with assortments curated for their specific lifestyle needs Our corporate purpose of 'Being here for you on the journey to being and becoming who you are' fuels our
Slide 6: Brand descriptions: Hollister, Gilly Hicks, abercrombie kids, Abercrombie & Fitch
The quintessential apparel brand of the global teen consumer, Hollister Co. believes in liberating the spirit of an endless summer inside everyone. At Hollister, summer isn’t just a season, it’s a state of mind. Hollister creates carefree style designed to make all teens feel celebrated and comforta
Slide 7: Global, digitally-led omnichannel retailer
25% 44% GLOBAL, DIGITALLY-LED OMNICHANNEL RETAILER DIGITAL PENETRATION COUNTRIES SERVED VIA DIGITAL FULFILLMENT COUNTRIES WITH COMPANY OPERATED STORES WHOLESALE PARTNERSHIPS, PRIMARILY INTERNATIONAL COMPANY-OPERATED RETAIL STORES OF FISCAL 2022 NET SALES WERE DERIVED INTERNATIONALLY FISCAL 2022 DIGI
Slide 8: Always Forward Plan and 2025 targets
ALWAYS FORWARD PLAN EXECUTE FOCUSED BRAND GROWTH PLANS •data driven approach to store expansion •grow brand lovers through digital marketing and social selling ACCELERATE AN ENTERPRISE-WIDE DIGITAL REVOLUTION • "Know Them Better" - continued expansion and acceleration of investments in customer anal
Slide 9: Q4 2022 and Full Year Results
Q4 2022 AND FULL YEAR RESULTS 9
Slide 10: CEO Commentary
CEO COMMENTARY “We had a solid finish to the quarter delivering year-over-year, fourth quarter net sales growth of 3% on a reported basis and 5% on a constant currency basis. Results were driven by continued, strong momentum in the Abercrombie & Fitch brand and sequential improvement in Hollister as
Slide 11: Net income per share and significant items impacting results
NET INCOME PER SHARE (1) Adjusted non-GAAP results exclude the effect of certain items set out in the Appendix. (2) The estimated impact from foreign currency is calculated by applying current period exchange rates to prior year results using a 26% tax rate. Refer to the Appendix for further details
Slide 12: Q4 net sales growth by brand and region
TOTAL COMPANY NET SALES GROWTH OF 3% TO $1.2B AND 5% ON A CONSTANT CURRENCY BASIS COMPARED TO Q4 2021 ABERCROMBIE $560M UP 14% TO LAST YEAR UP 16% ON A CONSTANT CURRENCY BASIS (1) 46.7% OF TOTAL NET SALES HOLLISTER $639M DOWN 4% TO LAST YEAR DOWN 2% ON A CONSTANT CURRENCY BASIS (1) 53.3% OF TOTAL NE
Slide 13: Full year net sales by brand and region
TOTAL COMPANY NET SALES APPROXIMATELY FLAT TO $3.7B AND GROWTH OF 2% ON A CONSTANT CURRENCY BASIS COMPARED TO 2021 ABERCROMBIE $1,735M UP 11% TO LAST YEAR UP 13% ON A CONSTANT CURRENCY BASIS (1) 46.9% OF TOTAL NET SALES HOLLISTER $1,963M DOWN 9% TO LAST YEAR DOWN 6% ON A CONSTANT CURRENCY BASIS (1)
Slide 14: Q4 operating expense
(in thousands) Q4 2022 % OF NET SALES Q4 2021 % OF NET SALES 1 YR Δ BPS (3) STORE OCCUPANCY (1) $115,030 9.6% $112,591 9.7% (10) ALL OTHER (2) 322,234 26.9% 322,562 27.8% (90) STORES AND DISTRIBUTION 437,264 36.4% 435,153 37.5% (110) MARKETING, GENERAL & ADMINISTRATIVE 138,084 11.5% 145,686 12.5% (1
Slide 15: Full year operating expense
(1) Gross profit is derived from cost of sales, exclusive of depreciation and amortization. 15 FULL YEAR OPERATING EXPENSE (in thousands) 2022 % OF NET SALES 2021 % OF NET SALES 1 YR Δ BPS (3) STORE OCCUPANCY (1) $433,758 11.7% $427,409 11.5% 20 ALL OTHER (2) 1,049,173 28.4% 1,000,914 27.0% 140 STOR
Slide 16: Income statement
INCOME STATEMENT (1) Gross profit is derived from cost of sales, exclusive of depreciation and amortization. 16 Q4 GAAP FULL YEAR GAAP (in thousands) Q4 2022 % OF NET SALES Q4 2021 % OF NET SALES 2022 % OF NET SALES 2021 % OF NET SALES NET SALES $1,199,814 100.0% $1,161,353 100.0% $3,697,751 100.0%
Slide 17: Balance sheet
BALANCE SHEET 17 (in thousands) JANUARY 28, 2023 JANUARY 29, 2022 CASH AND EQUIVALENTS $517,602 $823,139 RECEIVABLES 104,506 69,102 INVENTORIES 505,621 525,864 OTHER CURRENT ASSETS 100,289 89,654 TOTAL CURRENT ASSETS $1,228,018 $1,507,759 PROPERTY AND EQUIPMENT, NET 551,585 508,336 OPERATING LEASE R
Slide 18: Statement of cash flows
STATEMENT OF CASH FLOWS 18 YEAR TO DATE PERIOD ENDED (in thousands) JANUARY 28, 2023 January 29, 2022 NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES $(2,343) $277,782 PURCHASES OF PROPERTY AND EQUIPMENT (164,566) (96,979) PROCEEDS FROM THE SALE OF PROPERTY AND EQUIPMENT 11,891 — WITHDRAWAL OF
Slide 19: Net store openings while maintaining flat square footage
NET STORE OPENINGS IN 2022 WHILE MAINTAINING ROUGHLY FLAT SQUARE FOOTAGE Total stores FY18 FY19 FY20 FY21 FY 22 GROSS SQUARE FOOTAGE (in thousands) FY 18 FY 19 FY 20 FY 21 FY 22 6,566 6,314 5,232 5,052 5,068 19
Slide 20: Financial position and liquidity
FINANCIAL POSITION AND LIQUIDITY $1,071M $783M $729M $617M $866M Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 $0M $250M $500M $750M $1,000M $1,250M CASH & EQUIVALENTS $518M AS COMPARED TO $823M LAST YEAR SHORT-TERM BORROWINGS NO BORROWINGS OUTSTANDING UNDER ABL FACILITY $348M OF BORROWING AVAILABLE UNDER
Slide 21: Share repurchases and dividends
SHARE REPURCHASES AND DIVIDENDS 21 THE COMPANY REPURCHASED APPROXIMATELY 4.8 MILLION SHARES AND HAS RETURNED $126 MILLION TO SHAREHOLDERS DURING FISCAL YEAR 2022 SHARE REPURCHASES (in thousands, except for average cost) NUMBER OF SHARES COST AVERAGE COST DIVIDENDS TOTAL FY 2017 — $— $— $54,392 $54,3
Slide 22: Appendix
APPENDI Abercrombie x Fitch Co.
Slide 23: Excluded items
23 EXCLUDED ITEMS (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 ASSET IMPAIRMENT $3,422 $2,170 $3,744 $4,695 14,031 TAX EFFECT (1) (918) (611) (976) (1,297) (3,802) TOTAL EXCLUDED ITEMS $2,504 $1,559 $2,768 $3,398 $10,229 (in thousands) Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 ASSET IMPAIRME
Slide 24: Q4 reconciliation of GAAP to non-GAAP results
24 (1) The tax effect of excluded items is the difference between the tax provision calculation on a GAAP basis and an adjusted non-GAAP basis. Q4 RECONCILIATION OF GAAP TO NON-GAAP RESULTS STATEMENT OF OPERATIONS Q4 2022 GAAP EXCLUDED ITEMS Q4 2022 NON-GAAP ASSET IMPAIRMENT $4,695 $4,695 $— OPERATI
Slide 25: Full year reconciliation of GAAP to non-GAAP results
(1) The tax effect of excluded items, calculated as the difference between the tax provision on a GAAP basis and an adjusted non-GAAP basis. FULL YEAR RECONCILIATION OF GAAP TO NON-GAAP RESULTS STATEMENT OF OPERATIONS FY 2022 GAAP EXCLUDED ITEMS FY 2022 NON-GAAP ASSET IMPAIRMENT $14,031 $14,031 $— O
Slide 26: Q4 reconciliation of constant currency results
Q4 RECONCILIATION OF CONSTANT CURRENCY RESULTS NET SALES Q4 2022 Q4 2021 Δ % GAAP $1,199,814 $1,161,353 3% IMPACT FROM CHANGES IN FOREIGN CURRENCY EXCHANGE RATES (1) — (23,290) 2% NON-GAAP CONSTANT CURRENCY BASIS $1,199,814 $1,138,063 5% GROSS PROFIT Q4 2022 Q4 2021 Δ BPS (2) GAAP $668,285 $677,132
Slide 27: Full year reconciliation of constant currency results
FULL YEAR RECONCILIATION OF CONSTANT CURRENCY RESULTS NET SALES FY 2022 FY 2021 Δ % GAAP $3,697,751 $3,712,768 0% IMPACT FROM CHANGES IN FOREIGN CURRENCY EXCHANGE RATES (1) — (81,803) 2% NON-GAAP CONSTANT CURRENCY BASIS $3,697,751 $3,630,965 2% GROSS PROFIT FY 2022 FY 2021 Δ BPS (2) GAAP $2,104,538
Slide 28: Q4 net sales constant currency by brand and region
(1) The estimated impact from foreign currency is determined by applying current period exchange rates to prior year results and is net of the year-over-year impact from hedging. The per diluted share estimated impact from foreign currency is calculated using a 26% tax rate. (2) Hollister includes t
Slide 29: Full year net sales constant currency by brand and region
(1) The estimated impact from foreign currency is determined by applying current period exchange rates to prior year results and is net of the year-over-year impact from hedging. The per diluted share estimated impact from foreign currency is calculated using a 26% tax rate. (2) Hollister includes t
Slide 30: Cash flow summary and free cash flow
(1) Free cash flow is a non-GAAP measure and is computed by subtracting capital expenditures from net cash (used for) provided by operating activities, both of which are disclosed in the table above, preceding the measure of free cash flow. CASH FLOW SUMMARY 30 FULL YEAR ENDED (in thousands) JANUARY
Slide 31: Q4 2022 global fleet position
Q4 2022 GLOBAL FLEET POSITION 91% OF U.S. STORES LOCATED IN A/B MALLS (2) Mall rating based on Green Street Advisors as of January 2023. (3) Other includes street and outlet locations. YTD STORE ACTIVITY Q4 2022 STORE FLEET DETAIL Q4 2022 U.S. STORE FLEET (2) 31 (1) Hollister store openings include
Slide 32: Abercrombie & Fitch Co.
Abercrombie & Fitch Co. ” Aberrombie | abercrombie | yoiTisrer | GIS | Reh