Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Conference Presentation (March 2017)
35 slides from Abercrombie & Fitch's conference presentation, Mar 22, 2017
Slide 1: Abercrombie & Fitch New York
Abercrombie & Fitch NEW YORK
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 ARF cautions that any forward-looking statements (as such term is defined in the Private Securities eatin Reform Act of 1996) contained in this peseratin o mate by ieee abled Hi fs at eal a are subject to cl asd ovat np
Slide 3: Fiscal 2016 Sales Summary
FISCAL 2016 SALES SUMMARY COMPARABLE SALES* SALES MIX » 1% 0% ye (4% vig (5)% ABERCROMBIE ye 44.1% @% ys 13)% a1 a 03 u O— ABERCROMBIE” —@— HOLLISTER —@— TOTAL company * Comparable sales are calculated on @ constant currency basis. Sales include store and DIC sales rf ie bercrombi ie & Fite ARF | aa
Slide 4: Full Year P&L Summary
@neuioNs) NET SALES GROSS PROFIT OPERATING EXPENSE OPERATING INCOME INCOME (LOSS) BEFORE TAXES NET INCOME (LOSS) NET INCOME (LOSS) PER DILUTED SHARE WEIGHTED-AVERAGE DILUTED ‘SHARES OUTSTANDING FULL YEAR P&L SUMMARY GAAP ADJUSTED NON-GAAP 2016 sues = 2015 curs 2016 sues 2015 curs $3,327 100% $3,519
Slide 5: Fiscal 2016 Capital Allocation
FISCAL 2016 CAPITAL ALLOCATION OPERATING CASH FLOWS CAPITAL EXPENDITURES DIVIDENDS DEBT REPAYMENTS ARF | aah | ae 5
Slide 6: Financial Position Summary
FINANCIAL POSITION SUMMARY muons 2016 cuince 2015 cusice 2014 CASH & EQUIVALENTS $547 -7% $589 13% $521 INVENTORIES, NET $400 -8% $437 -5% $461 GROSS BORROWINGS $268 -9% $293 -2% $299 WE EXPECT TO GENERATE THE CASH SUFFICIENT TO INVEST in the Business, MEET beer oBLicAtions AND MAINTAIN the oivinenp
Slide 7: 2017 Outlook | Sales / FX / Gross Margin
2017 OUTLOOK | SALES / FX / GROSS MARGIN COMPARABLE SALES TO IMPROVE ¢ BUT TO REMAIN CHALLENGING FOR THE FIRST HALF + HOLLISTER TO MAINTAIN OR IMPROVE + ABERCROMBIE TREND TO IMPROVE THROUGHOUT THE YEAR FOREIGN CURRENCY 10 ADVERSELY IMPACT * SALES BY ~$55 MILLION + OPERATING INCOME BY ~$25 MILLION +
Slide 8: 2017 Outlook | Operating Expense
2017 OUTLOOK | OPERATING EXPENSE OPERATING EXPENSE REDUCTIONS OF $100 MILLION ENABLING INVESTMENTS IN REVENUE series ° NET SAVINGS OF ~ 30 FROM FISCAL 2016 ADJUSTED NON-GAAP OPERATING EXPENSE OF $2 BILLION ARF | ae | ae 8
Slide 9: 2017 Outlook | Tax Rate
2017 OUTLOOK | TAX RATE CORE RATE IN THE MID 30s TAX RATE IS HIGHLY SENSITIVE AT LOWER LEVELS OF PRE-TAX EARNINGS TAX CHARGE OF $9 MILLION ADVERSELY IMPACTING Q1 & FY ETR ARF | aah | ae
Slide 10: 2017 Outlook | Capital Expenditures
2017 OUTLOOK | CAPITAL EXPENDITURES 2017 CAPITAL EXPENDITURES ~$100 MILLION INCREASED INVESTMENTS IN STORE ay EXPERIENCE (~$20M) GLOBAL ROLLOUT OF ae OMNICHANNEL & CRM CAPABILITIES ARF | ae | ae
Slide 11: 2017 Outlook | Channel Optimization
2017 OUTLOOK | CHANNEL OPTIMIZATION RENEGOTIATE - REMODEL RESIZE - CLOSE US STORE ~60 CLOSURES IN 2017 LEASE FLEXIBILITY 50% US LEASES EXPIRE ‘© BY THE END OF FISCAL 2018 ARF | aah | ae
Slide 12: Strategic Initiatives
STRATEGIC INITIATIVES TIGHTLY MANAGE tue susiness 10 < DRIVE BOTTOM-LINE IMPROVEMENTS & FUND TOP-LINE GROWTH INITIATIVES ARF | aah | ae
Slide 13: Strategic Initiatives
STRATEGIC INITIATIVES La ~~ MO VOICE = EXPERIENCE y “ A Z
Slide 14: Experience | Hollister Prototype
6 EXPERIENCE | HOLLISTER PROTOTYPE ZY REMODELS eo 4 ADDITIONAL COMPLETED-1NE2016- EXPECTED IN 2017 ARF | aah |
Slide 15: Experience | Loyalty Programs
EXPERIENCE | LOYALTY PROGRAMS 2 \ ae 5 MILLION | etc! MEMBERS agrclue. | YS ROLLOUT Smee IN MARCH 2017 INCREASED — SPEND PER pm | TRANSACTION OQ) ARF | aah | ae 15
Slide 16: Experience | Omnichannel
EXPERIENCE | OMNICHANNEL DTC/OMNICHANNEL y] 6 a! OF TOTAL PURCHASE ONLINE PICKUP IN-STORE O SALES 1% ts OF US, UK & CANADA’s O COMBINED DTC ORDERS : = DRIVES ‘ — ATTACHMENT = Q Aber ARF | aah | ae 16
Slide 17: Experience | Digital
EXPERIENCE | DIGITAL ——\ MOBILE g FO I RELAXED V-NECK TEE x 7s __.\ DEVICES account For 40 % OF TOTAL ‘© ONLINE SALES NEW payment \ CAPABILITIES: ADDED = \ & wechatray RATINGS \ a @ Pay & REVIEWS — ARF | aah | ae uv
Slide 18: Product
PRODUCT | —— rane FoR YOU ARF aul | ae 18
Slide 19: Voice | Customer Engagement
VOICE | CUSTOMER ENGAGEMENT INSTAGRAM " E-COMMERCE FEATURE SNAPCHAT 1ST RETAILER wits custom sponsorep LENS Community »BuzzFeeo 7 News Videos Quizzes Tasty DIY Moew cucu You’ll Never Believe What Abercrombie And Fitch Did For These Random People Valentine’s Day TWITTER : BUILDING RELATIONSHIPS & REC
Slide 20: Voice
VOICE | AMERICAN @ CASUAL LUXURY ARF | at | ae THE CONFIDENCE | OF TODAY'S |
Slide 21: Voice | Wholesale
VOICE | WHOLESALE " DOUBLED IN FISCAL 2016 “eHitch INCLUDES NEWEST PARTNERSHIP with ZALANDO Zl’ 2 ARF | aah | ae a
Slide 22: Voice | Franchise Openings
VOICE | FRANCHISE OPENINGS QATAR SAUDI ARABIA IN QATAR OPENED MARCH 2017 ARF | aah | ae 2
Slide 23: Introducing Wave by Hollister | Licensing
INTRODUCING WAVE BY HOLLISTER VOICE | LICENSING ARF | ae | ae ~~ (2 FIRST INSTINCT BY A&F
Slide 24: Points of Focus
POINTS OF FOCUS INSPIRE CUSTOMERS —EEE— INNOVATE RELENTLESSLY 4 DEVELOP LEADERS ARF | ah |
Slide 25: Points of Focus | Inspire Our Customers
POINTS OF FOCUS | INSPIRE OUR CUSTOMERS CONTINUOUSLY RECEIVE ano RESPOND to CUSTOMER FEEDBACK PRODUCT tuat NEVER EW an COMPROMISES CREATE EXPERIENCES WHEREVER WHENEVER HOWEVER THE CUSTOMER SHOPS ARF | ate ,
Slide 26: Slide 26
Slide 27: Slide 27
Slide 28: Showcasing Key Trends
SHOWCASING KEY TRENDS
Slide 29: Seasonal Collection
‘T SEASGNAL COLLE
Slide 30: “7 ey Ely
” ae m = - = f = “7 ey Ely Be Bre
Slide 31: Looking to Provide a Unique and Personal Experience
LOOKING TO PROVIDE A UNIQUE AND PERSONAL EXPE ‘tap
Slide 32: Checkout Experience
CHECKOUT EXPERIENCE B ENABLING A QUICKER, MORE ACCESSIBLE
Slide 33: Points of Focus | Develop Leaders
POINTS OF FOCUS | DEVELOP LEADERS NEW BRAND PRESIDENTS NEW CHIEF | MARKETING OFFICER
Slide 34: Looking Ahead
LOOKING AHEAD s Cie © GENERATE SUSTAINABLE ARF | ae | ae
Slide 35: Est. 1892 Abercrombie
EST. 1892 Abercrombie
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