Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Q3 2015 Earnings Presentation
16 slides from Abercrombie & Fitch's earnings presentation, Nov 23, 2015
Slide 1: Investor Presentation 2015 Third Quarter
INVESTOR PRESENTATION 2015 THIRD QUARTER
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
2 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 ri
Slide 3: Q3 Adjusted P&L Summary
3 Q3 ADJUSTED P&L SUMMARY* * The Q3 Adjusted P&L Summary for the current and prior periods is presented on a non-GAAP basis and excludes the items set out on page 4. Non-GAAP financial measures should not be used as alternatives to the most directly comparable GAAP financial measures and are also no
Slide 4: Excluded Items (Pre-Tax)
4 EXCLUDED ITEMS (PRE-TAX) 2015 Q1 Q2 Q3 Q4 YEAR TO DATE INVENTORY WRITE-DOWN (RECOVERY) $26,861 $(2,621) $(2,573) $21,667 LEGAL SETTLEMENT CHARGES — 15,753 — 15,753 ASSET IMPAIRMENT, STORE FIXTURES, LEASE TERMINATION AND STORE CLOSURE COSTS 10,112 1,394 12,659 24,165 PROFIT IMPROVEMENT INITIATIVE 2
Slide 5: Fiscal 2015 Comparable Sales by Brand
5 * Comparable sales are calculated on a constant currency basis. Sales include store and DTC sales. (1) Abercrombie includes the company's Abercrombie & Fitch and abercrombie kids brands. FISCAL 2015 COMPARABLE SALES BY BRAND* Q3 SALES MIX Q1 Q2 Q3 YTD ABERCROMBIE (1) -9% -7% -5% -7% HOLLISTER -6%
Slide 6: Fiscal 2015 Comparable Sales by Geography
6 * Comparable sales are calculated on a constant currency basis. Sales include store and DTC sales. FISCAL 2015 COMPARABLE SALES BY GEOGRAPHY* Q3 SALES MIX Q1 Q2 Q3 YTD U.S. -7% -4% -3% -5% INTERNATIONAL -9% -4% 1% -4% TOTAL COMPANY -8% -4% -1% -4% INTERNATIONAL 34.8% U.S. 65.2% YTD SALES MIX INTER
Slide 7: Q3 Adjusted Operating Expense
7 Q3 ADJUSTED OPERATING EXPENSE* * Q3 Adjusted Operating Expense excludes the items set out on page 4. Non-GAAP financial measures should not be used as alternatives to the most directly comparable GAAP financial measures and are also not intended to supersede or replace the company's GAAP financial
Slide 8: Share Repurchases
8 SHARE REPURCHASES FY 2015 FY 2014 SHARES REPURCHASED COST AVERAGE COST SHARES REPURCHASED COST AVERAGE COST FIRST QUARTER — — — 3,825.7 $150,000 $39.21 SECOND QUARTER — — — 1,459.4 $60,000 $41.11 THIRD QUARTER 2,460.5 $50,029 $20.33 2,039.0 $75,038 $36.80 FOURTH QUARTER — — — TOTAL 2,460.5 $50,029
Slide 9: Q3 Store Openings
9 Q3 STORE OPENINGS* BRAND CENTER CITY DATE U.S . Hollister Mall of San Juan San Juan, PR 8/8/2015 A&F Coolsprings Galleria Franklin, TN 9/2/2015 Hollister Liberty Center Liberty Center, OH 10/22/2015 INTERN ATIONA L Hollister Joy City Chaoyang Beijing, China 8/15/2015 Hollister YOHO Mall Hong Kong
Slide 10: Outlook
10 OUTLOOK* FOR THE FOURTH QUARTER OF FISCAL 2015, THE COMPANY EXPECTS: • COMPARABLE SALES TO BE APPROXIMATELY FLAT • CONTINUED ADVERSE EFFECTS FROM FOREIGN CURRENCY EXCHANGE RATES • GROSS MARGIN RATE TO BE APPROXIMATELY FLAT TO LAST YEAR ON A CONSTANT CURRENCY BASIS • OPERATING EXPENSE TO BE APPROX
Slide 11: Q3 Store Count Activity
11 Q3 STORE COUNT ACTIVITY * Includes Asia and the Middle East. (1) Abercrombie includes the company's Abercrombie & Fitch and abercrombie kids brands. Locations with abercrombie kids carveouts within Abercrombie & Fitch stores are represented as a single store count. ALL BRANDS TOTAL U.S. CANADA EU
Slide 12: Strategic Initiatives
12 STRATEGIC INITIATIVES ONGOING EFFORTS TO TURN AROUND THE BUSINESS ARE FOCUSED ON: • PUTTING THE CUSTOMER AT THE CENTER OF EVERYTHING WE DO • DELIVERING A COMPELLING AND DIFFERENTIATED ASSORTMENT • OPTIMIZING OUR BRAND REACH DOMESTICALLY AND INTERNATIONALLY AND OPTIMIZING OUR PERFORMANCE IN EACH C
Slide 13: Appendix: Reconciliation of Q3 2015 Non-GAAP Financial Measures
13 APPENDIX: RECONCILIATION OF Q3 2015 NON-GAAP FINANCIAL MEASURES GAAP (1) EXCLUDED ITEMS ADJUSTED NON-GAAP (6) GROSS PROFIT (2) $559,787 $(2,573) $557,214 STORES AND DISTRIBUTION EXPENSE (3) 392,942 583 392,359 ASSET IMPAIRMENT (4) 12,076 12,076 — OPERATING INCOME 40,990 10,086 51,076 INCOME BEFOR
Slide 14: Appendix: Reconciliation of YTD 2015 Non-GAAP Financial Measures
14 APPENDIX: RECONCILIATION OF YTD 2015 NON-GAAP FINANCIAL MEASURES (1) "GAAP" refers to accounting principles generally accepted in the United States of America. (2) Excluded Items consist of charges of $21.7 million related to an inventory write-down, net of recoveries. (3) Excluded Items consist
Slide 15: Appendix: Reconciliation of Q3 2014 Non-GAAP Financial Measures
15 APPENDIX: RECONCILIATION OF Q3 2014 NON-GAAP FINANCIAL MEASURES (1) "GAAP" refers to accounting principles generally accepted in the United States of America. (2) Excluded Items consist of charges of $2.3 million related to lease termination and store closure costs. (3) Excluded Items consist of
Slide 16: Appendix: Reconciliation of YTD 2014 Non-GAAP Financial Measures
16 APPENDIX: RECONCILIATION OF YTD 2014 NON-GAAP FINANCIAL MEASURES (1) "GAAP" refers to accounting principles generally accepted in the United States of America. (2) Excluded Items consist of charges of $2.3 million related to lease termination and store closure costs and $2.1 million related to th