Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Investor Day (November 2013)
85 slides from Abercrombie & Fitch's investor day presentation, Nov 8, 2013
Slide 1: Fourth Quarter Analyst Meeting, November 6, 2013
Investor Presentation 2011 Fourth Quarter ANALYST MEETING NOVEMBER 6, 2013
Slide 2: Agenda: Business Update, Opening Remarks, Key Strategies, Q&A
BUSINESS UPDATE OPENING REMARKS AGENDA 1 KEY STRATEGIES Q&A
Slide 3: Safe Harbor Statement
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 4: Agenda: Business Update
BUSINESS UPDATE OPENING REMARKS AGENDA 3 KEY STRATEGIES Q&A
Slide 5: Business Update - 2013 Third Quarter
Net sales of $1.033 billion, down 12% Comparable sales down 14%(1) − U.S. down 14% − International down 15% − DTC up 11% BUSINESS UPDATE - 2013 THIRD QUARTER (1) Comparable sales, including direct-to-consumer, are compared to the thirteen week period ended November 3, 2012 (2) Excludes charges relat
Slide 6: Business Update - 2013 Full Year
Expect diluted EPS of $1.40 to $1.50, excluding charges(1) Comparable sales down low double digits in the fourth quarter BUSINESS UPDATE - 2013 FULL YEAR (1) Excludes charges related to the restructuring plans for the Gilly Hicks brand, other impairment and store closure charges, charges related to
Slide 7: Business Update - Gilly Hicks Restructuring
Close all stand-alone stores Continue to offer intimates in Hollister stores and online Expect pre-tax charges of ~$90M − Asset impairment ~$40M − Lease-related & other charges ~$50M BUSINESS UPDATE - GILLY HICKS RESTRUCTURING Expect pre-tax cash outflow of ~$55M, primarily lease related Anticipate
Slide 8: Business Update - Amended Credit Agreements
Effective November 4, 2013 Allows for the exclusion from debt covenant ratios of up to $60 million of cash charges related to Gilly Hicks BUSINESS UPDATE - AMENDED CREDIT AGREEMENTS restructuring Temporarily reduces coverage ratio through 2Q 2015 7
Slide 9: Agenda: Opening Remarks
BUSINESS UPDATE OPENING REMARKS AGENDA 8 KEY STRATEGIES Q&A
Slide 10: Opening Remarks
OPENING REMARKS MIKE JEFFRIES, CHAIRMAN & CEO JONATHAN RAMSDEN, EVP & CFO 9
Slide 11: Opening Remarks - Sales History
$3.7B $2.9B $4.5B $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 OPENING REMARKS - SALES HISTORY 1996-2007 CAGR +24% 2009-2012 CAGR +15% $0.3B $- $500,000 $1,000,000 $1,500,000 $2,000,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 *Excludes Ruehl 10
Slide 12: Opening Remarks - International Appeal
OPENING REMARKS - INTERNATIONAL APPEAL 11
Slide 13: Opening Remarks - Strategic Objective
LEVERAGE THE INTERNATIONAL APPEAL OF OUR ICONIC BRANDS TO BUILD A HIGHLY OPENING REMARKS - STRATEGIC OBJECTIVE 12 PROFITABLE, SUSTAINABLE, GLOBAL BUSINESS
Slide 14: Opening Remarks - Strengths: Iconic Brands
ICONIC BRANDS WITH GLOBAL APPEAL AND A OPENING REMARKS - STRENGTHS CLEARLY DEFINED AESTHETIC 13
Slide 15: Hollister Yokohama Opening
HOLLISTER YOKOHAMA OPENING 14
Slide 16: Hollister Sanlitun Village Opening
HOLLISTER SANLITUN VILLAGE OPENING 15
Slide 17: Strengths: High Quality Merchandise and Store Environment
HIGH QUALITY MERCHANDISE AND OPENING REMARKS - STRENGTHS STORE ENVIRONMENT 16
Slide 18: Strengths: Highly Consistent Store Execution
HIGHLY CONSISTENT STORE EXECUTION OPENING REMARKS - STRENGTHS 17
Slide 19: Strengths: Top Talent and Can-Do Culture
TOP TALENT AND OPENING REMARKS - STRENGTHS CAN-DO CULTURE 18
Slide 20: Strengths: Direct to Consumer Business
LARGE, FAST GROWING, HIGHLY PROFITABLE $0.7B $400,000 $500,000 $600,000 $700,000 CAGR +34% DTC SALES OPENING REMARKS - STRENGTHS DIRECT TO CONSUMER BUSINESS $0.3B $- $100,000 $200,000 $300,000 2008 2009 2010 2011 2012 19
Slide 21: DTC Strengths
Over $700M in sales Industry-leading margins 46 websites Ship-to countries: 120+ 7 currencies, 9 languages, 16 payment types OPENING REMARKS - DTC STRENGTHS 20 Global mobile capabilities European fulfillment New state-of-the-art order management system
Slide 22: Strengths: International Sales and Infrastructure
SIGNIFICANT INTERNATIONAL PENETRATION, AND $1.4B $800,000 $1,000,000 $1,200,000 $1,400,000 CAGR +58% INTERNATIONAL SALES OPENING REMARKS - STRENGTHS INFRASTRUCTURE TO EXPAND $0.2B $- $200,000 $400,000 $600,000 2008 2009 2010 2011 2012 21 Percent of sales 12%7% 19% 25% 32%
Slide 23: International Presence
$1.4B in sales 151 stores in 19 countries In Europe: − Sales over $1B OPENING REMARKS - INTERNATIONAL PRESENCE 22 − 4-wall margins remain close to 30% − Hollister productivity 30% higher than mall on average − European DTC +30% YTD
Slide 24: Strengths: Strong Operating Cash Flow
STRONG OPERATING CASH FLOW $450 $500 $550 $600 $650 $700 OPERATING CASH FLOW ($ M) OPENING REMARKS - STRENGTHS $200 $250 $300 $350 $400 2008 2009 2010 2011 2012 23
Slide 25: Opening Remarks: Strategy, Operational Excellence, Right Organization
OPENING REMARKS STRATEGY OPERATIONAL EXCELLENCE RIGHT ORGANIZATION 24 RAPID TEST-AND-REACT APPROACH
Slide 26: Financial Review - Our Focus
OPERATING MARGIN DISCIPLINED CAPITAL SIGNIFICANT ROIC FINANCIAL REVIEW - OUR FOCUS EXPANSION ALLOCATION IMPROVEMENT 25
Slide 27: Opening Remarks
OPENING REMARKS MIKE JEFFRIES, CHAIRMAN & CEO JONATHAN RAMSDEN, EVP & CFO 26
Slide 28: Financial Review - Operating Margin History
19.4% 17.7% 20.9% 21.3% 21.1% 14.5%15.0% 20.0% 25.0% FINANCIAL REVIEW - OPERATING MARGIN HISTORY 5.2% 8.4% 8.3% 8.5% 0.0% 5.0% 10.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * Excludes Ruehl and other charges (see appendix for reconciliation from GAAP to non-GAAP measures); 2010 forward rep
Slide 29: Financial Review - 4-Wall Margins: 2012
FINANCIAL REVIEW - 4-WALL MARGINS: 2012 16.8% 31.8% 38.5% 20.0% 30.0% 40.0% 28 0.0% 10.0% U.S STORES INTERNATIONAL STORES DTC
Slide 30: Financial Review - ROIC History (GAAP Basis)
FINANCIAL REVIEW - ROIC HISTORY (GAAP BASIS) 26% 28% 40% 35% 31% 20% 25% 30% 35% 40% 45% 29 * 2010 forward reported under the Cost Method of accounting for inventory 16% 0% 8% 7% 13% 0% 5% 10% 15% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 31: Financial Review - Operating Margin Drivers
INCREASING DTC PENETRATION PROFITABLE INTERNATIONAL GROWTH FINANCIAL REVIEW - OPERATING MARGIN DRIVERS EXPANDING OPERATING MARGIN 30 RECOVERING PRODUCTIVITY & AUR IN U.S. STORES REDUCING EXPENSES
Slide 32: Financial Review - Impact of Strategies
RECOVERING PRODUCTIVITY AND AUR PROFITABLE INTERNATIONAL GROWTH INCREASING DTC PENETRATION REDUCING EXPENSES BRAND / MARKETING DTC / OMNICHANNEL ASSORTMENT FINANCIAL REVIEW - IMPACT OF STRATEGIES 31 INVENTORY PLANNING & OPTIMIZATION SOURCING REAL ESTATE PROCESS IMPROVEMENT
Slide 33: Financial Review - Capital Allocation Philosophy
ALLOCATE AVAILABLE CAPITAL TO THOSE INVESTMENTS EXPECTED TO FINANCIAL REVIEW - CAPITAL ALLOCATION PHILOSOPHY 32 GENERATE THE GREATEST RISK- ADJUSTED RETURNS
Slide 34: Financial Review - Disciplined Capital Allocation
MINIMUM 30% ROI HURDLE PRIORITIZING DTC AND IT INVESTMENTS SHORT-TERM FINANCIAL REVIEW - DISCIPLINED CAPITAL ALLOCATION 33 MAINTAIN CAPEX AT ~$200M PER YEAR RETURNING CASH TO SHAREHOLDERS DISCIPLINED CAPITAL ALLOCATION
Slide 35: Financial Review - Capital Allocation (Last 10 Quarters)
SHARE REPURCHASES $634M OTHER CAPEX $237M FINANCIAL REVIEW - CAPITAL ALLOCATION (LAST 10 QUARTERS) Other Capex includes maintenance CapEx, IT, DTC, and DC Investments SHARE REPURCHASES 34 DIVIDENDS $150M NEW STORES $503M
Slide 36: Financial Review - Our Focus
OPERATING MARGIN DISCIPLINED CAPITAL SIGNIFICANT ROIC FINANCIAL REVIEW - OUR FOCUS EXPANSION ALLOCATION IMPROVEMENT 35
Slide 37: Agenda: Key Strategies
BUSINESS UPDATE OPENING REMARKS AGENDA 36 KEY STRATEGIES Q&A
Slide 38: Key Strategies - Process Overview
GOALS “SWOT” DEEP DIVE INSIGHTS STRATEGIC PLAN PROCESS KEY STRATEGIES - PROCESS OVERVIEW TIMELINE: March-September DEDICATED TEAM OF 5 PEOPLE APPROXIMATELY 100 ASSOCIATES INVOLVED 37 COMPANY PEFORMANCE COMPETITIVE LANDSCAPE CONSUMER EVOLUTION CATEGORY & MARKET DYNAMICS CHANNEL EVOLUTION COUNTRY PRIO
Slide 39: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 38 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 40: Brand / Marketing Strategies - Customer Evolution
BRAND / MARKETING STRATEGIES - CUSTOMER EVOLUTION 39
Slide 41: Brand / Marketing Strategies - Branding
BRAND / MARKETING STRATEGIES - BRANDING 40
Slide 42: Brand / Marketing Strategies - Data-Driven Approach
PRIMARY CUSTOMER RESEARCH: customer preferences MARKET DATA: market and competitive dynamics BRAND / MARKETING STRATEGIES - DATA-DRIVEN APPROACH 41 OTHER TESTING TOOLS: quickly test and react
Slide 43: Brand / Marketing Strategies - Quantitative Research
GLOBAL: U.S., Canada, UK, Germany, China, Japan, Hong Kong, South Korea LARGE SAMPLE SIZE: 20,000+ BRANDS: A&F, Hollister, key competitors by country BRAND / MARKETING STRATEGIES - QUANTITATIVE RESEARCH 42 SEVERAL KEY MEASUREMENT AREAS: − Marketing funnel − Brand and category perceptions − Drivers o
Slide 44: Brand / Marketing Strategies - Qualitative Research
INNOVATIVE INTERFACE: maximize quality of results SEVERAL KEY FOCUS AREAS: − Newness and fashion − Price and value − Store experience − Fit and sizing BRAND / MARKETING STRATEGIES - QUALITATIVE RESEARCH 43 − Various brand personalities RESULTS DUE EARLY 2014 ONGOING APPROACH: remain connected to our
Slide 45: Brand / Marketing Strategies - New Content Strategies
NATIONAL MARKETING TESTS: for Hollister, Q4 2013 NEW NATIONAL MARKETING CAMPAIGNS: for both A&F and Hollister, summer, 2014 BRAND / MARKETING STRATEGIES - NEW CONTENT STRATEGIES 44 CONTENT FOCUS: video and user- generated content
Slide 46: Brand / Marketing Strategies - Engaging New Storefront
BRAND / MARKETING STRATEGIES - ENGAGING NEW STOREFRONT 45
Slide 47: Brand / Marketing Strategies - CRM Current Status
DATABASE SIZE: 25M, up from 4M in 2010 VIEW OF CUSTOMER: single, cross-channel view, consolidated across 80+ datapoints BRAND / MARKETING STRATEGIES - CRM CURRENT STATUS 46 CLUB MEMBERS: 5M, top 10% purchasing 8x/year ID RATE: 20% of transactions
Slide 48: Brand / Marketing Strategies - CRM Priorities
ID RATE: increase to > 50% of transactions CLUB PROGRAMS: re-launch, including introduction of rewards RELEVANCE: increase segmentation and BRAND / MARKETING STRATEGIES - CRM PRIORITIES 47 personalization of marketing messages PHYSICAL + DIGITAL: improve in-store experience by connecting physical an
Slide 49: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 48 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 50: DTC Strategies - Upgraded Digital Experience
ELEVATE OUR SITES: “brand senses” for e-commerce DELIVER RICH EXPERIENCES: combine editorial and user-generated content with context-aware, emerging technologies DTC STRATEGIES - UPGRADED DIGITAL EXPERIENCE 49 IMPROVE FUNCTIONAL CAPABILITIES: navigational tools, searching / filtering, etc. RE-LAUNCH
Slide 51: DTC Strategies - Assortment Breadth and Depth
EXISTING SOURCING CHANNELS VENDOR-DESIGNED SKUs DTC STRATEGIES - ASSORTMENT BREADTH AND DEPTH 50 3rd-PARTY SKUs 2013 20152014 DTC SKU COUNT
Slide 52: DTC Strategies - Service Excellence
DTC STRATEGIES - SERVICE EXCELLENCE 2-3 DAY SHIPPING TIMES IS THE “NEW NORMAL” SHIPPING TIMES DRIVEN BY E- 51 COMMERCE PURE-PLAYS IMPROVED CUSTOMER SUPPORT
Slide 53: DTC Strategies - Further Enhanced International Capabilities
DTC STRATEGIES - FURTHER ENHANCED INTERNATIONAL CAPABILITIES RUSSIA JAPAN SOUTH KOREA CHINA 52 Planned localization BRAZIL AUSTRALIA
Slide 54: DTC Strategies - Omnichannel
ORDER-IN-STORE: pilot this month; chain roll-out late 2014, pending pilot results SHIP-FROM-STORE: under review DTC STRATEGIES - OMNICHANNEL 53 EXISTING CAPABILITIES: − Find-in-store − Return online orders in-store − Mobile scan-and-buy (Hollister)
Slide 55: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 54 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 56: Assortment, Sourcing, Inventory Planning & Optimization Strategies
MARKET SHARE AUR AUC REDLINE MIX SPEED-TO-MARKET STORE OPERATING EXPENSES TEST-AND-REACT FABRIC PLATFORMING CHASE CORE ASSORTMENT PRIVATE-LABEL AND VENDOR- DESIGNED SKUs ASSORTMENT, SOURCING, INVENTORY PLANNING & OPTIMIZATION STRATEGIES 55 ADJACENT CATEGORIES SKU-COUNT OPTIMIZATION REDUCE FLOORSETS
Slide 57: Assortment Strategies - Speed and Accuracy
NEW TEST-AND-REACT CALENDARS: test nearly 100% of our assortment FABRIC PLATFORMING: improve speed and efficiency ASSORTMENT STRATEGIES - SPEED AND ACCURACY 56 VENDOR-DESIGNED AND PRIVATE LABEL PRODUCT: supplement assortment quickly
Slide 58: Assortment Strategies - Increase Fashion Relevance
INCREASE STYLE DIFFERENTIATION INCREASE FASHION RELEVANCY ACROSS THE ASSORTMENT ASSORTMENT STRATEGIES - INCREASE FASHION RELEVANCE 57 EVOLVE OUR LOGO BUSINESS MINIMALLY AND NON-MARKETED STYLES
Slide 59: Assortment Strategies - Increased DTC SKU Breadth
DTC-EXCLUSIVE: expanded styles EXISTING STYLES: expanded sizes, ASSORTMENT STRATEGIES - INCREASED DTC SKU BREADTH 58 washes, colors, and fits
Slide 60: Assortment Strategies - Adjacent Categories
EXPANDED DTC ASSORTMENT 3RD PARTY COLLABORATIONS ASSORTMENT STRATEGIES - ADJACENT CATEGORIES 59 ACCESSORIES
Slide 61: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 60 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 62: Sourcing Strategies - Strategic Alliances
VENDOR-DESIGNED PRODUCT: supplement assortment quickly FABRIC PLATFORMING: improve speed SOURCING STRATEGIES - STRATEGIC ALLIANCES 61 and efficiency ADVANCED FACTORY RESERVATIONS
Slide 63: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 62 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 64: Inventory Planning & Optimization Strategies
SKU-COUNT: longer-term view to planning/assorting line REDUCE FLOORSETS AND/OR FLOORSET UPDATES IMPROVE INVENTORY VISIBILITY AND INVENTORY PLANNING & OPTIMIZATION STRATEGIES 63 ACCURACY EVOLVE PRESENTATION STANDARDS AND MARKDOWN STRATEGIES INCREASE INVENTORY TURNS
Slide 65: Assortment, Sourcing, Inventory Planning & Optimization Strategies
MARKET SHARE AUR AUC REDLINE MIX SPEED-TO-MARKET STORE OPERATING EXPENSES TEST-AND-REACT FABRIC PLATFORMING CHASE CORE ASSORTMENT PRIVATE-LABEL AND VENDOR- DESIGNED SKUs ASSORTMENT, SOURCING, INVENTORY PLANNING & OPTIMIZATION STRATEGIES 64 ADJACENT CATEGORIES SKU-COUNT OPTIMIZATION REDUCE FLOORSETS
Slide 66: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 65 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 67: Real Estate Strategies - Optimize Domestic Productivity
CLOSE UNDERPERFORMING STORES SELECTIVELY OPEN FULL-PRICE STORES, USING A NEW FORMAT REAL ESTATE STRATEGIES - OPTIMIZE DOMESTIC PRODUCTIVITY 66 INCREASE OUTLET PENETRATION
Slide 68: Real Estate Strategies - Domestic Store Count
843 -171 891 961 1,014 REAL ESTATE STRATEGIES - DOMESTIC STORE COUNT 2012201120102009 67 Note: full-priced stores only; excludes Gilly Hicks and Ruehl
Slide 69: Real Estate Strategies - New Formats
ELEVATED DESIGN: includes select, cost-engineered flagship elements CAPEX: significantly reduced REAL ESTATE STRATEGIES - NEW FORMATS 68 per store SELLING SQUARE FOOTAGE: higher ratio
Slide 70: Real Estate Strategies - Prioritized International Expansion
FOCUS ON CHINA AND JAPAN EUROPE: limited full-priced store-count growth REAL ESTATE STRATEGIES - PRIORITIZED INTERNATIONAL EXPANSION 69 MIDDLE EAST: entry in 2013 FRANCHISING: use in large, complex markets
Slide 71: Real Estate Strategies - China
2013 − Comping +40% through Q3 − 7 stores by the end of 2013 2014 − 11-13 stores by end of year REAL ESTATE STRATEGIES - CHINA 70 − A&F Shanghai flagship opening Q1 − First mall-based A&F store LONG-TERM POTENTIAL: 100+ stores
Slide 72: Real Estate Strategies - Hollister Japan
2013 − Yokohama: 3x plan − 2nd store in December 2014: 3-5 store openings REAL ESTATE STRATEGIES - HOLLISTER JAPAN 71 LONG-TERM POTENTIAL: TBD
Slide 73: Real Estate Strategies - Franchising Opportunities
MEXICO RUSSIA BRAZIL REAL ESTATE STRATEGIES - FRANCHISING OPPORTUNITIES POTENTIAL: >20 stores POTENTIAL: >10 stores POTENTIAL: >20 stores Note: Store count with full roll-out 72
Slide 74: Key Strategies
KEY STRATEGIES BRAND / MARKETING DIRECT-TO-CONSUMER ASSORTMENT SOURCING 73 INVENTORY PLANNING & OPTIMIZATION REAL ESTATE PROCESS IMPROVEMENT
Slide 75: Process & Profit Improvement - Calendar and Process
Opportunity Areas FY 2013 FY 2014 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Wave 2 Implementation Wave 2 Implementation Store Marketing Supply Chain Non- Merchandise PROCESS & PROFIT IMPROVEMENT - CALENDAR AND PROCESS Wave 1 Implementation Wave 1 Impementation Wave 1 Implementa
Slide 76: Process & Profit Improvement - Store Pilot Calendar
Store Pilot Studies FY 2013 FY 2014 2Q 3Q 4Q 1Q 2Q 3Q 4Q Presentation Standards Customize standards Modify merchandise presentations Reduce coverage Reduce forms International Roll-Out U.S. Roll-Out Plan Roll-OutExecutePlan PROCESS & PROFIT IMPROVEMENT - STORE PILOT CALENDAR Perfect Assortment Produ
Slide 77: Process & Profit Improvement - Highlights
Annualized net savings >$100M Potential upside tied to store pilot studies Portion of savings above $100M will fund PROCESS & PROFIT IMPROVEMENT - HIGHLIGHTS marketing efforts tied to our strategy Institute continuous process improvement and cost management 76
Slide 78: Agenda: Q&A
BUSINESS UPDATE OPENING REMARKS AGENDA 77 KEY STRATEGIES Q&A
Slide 79: Short-Term Objectives - Next 12-18 Months
Stabilize comp store sales Implement process changes and cost reductions Disproportionately direct CapEx to DTC and IT SHORT-TERM OBJECTIVES - NEXT 12-18 MONTHS 78 Ensure the right organization to deliver against our goals Ensure clear measurement and accountability
Slide 80: Mid- to Long-Term Objectives
INCREASING DTC PENETRATION 25%+ OF SALES PROFITABLE INTERNATIONAL GROWTH ~50% PENETRATION 30% 4-WALL MARGIN MID- TO LONG-TERM OBJECTIVES 79 RECOVERING PRODUCTIVITY & AUR IN U.S. STORES MSD COMP SALES GROWTH MSD AUR INCREASE REDUCING EXPENSES INCREASE SAVINGS BEYOND $100MEXPANDING OPERATING MARGIN
Slide 81: Mid- to Long-Term Objectives
INCREASING DTC PENETRATION 100-200 BPS PROFITABLE INTERNATIONAL GROWTH 200-300 BPS MID- TO LONG-TERM OBJECTIVES 80 RECOVERING PRODUCTIVITY & AUR IN U.S. STORES 300-500 BPS REDUCING EXPENSES 250-TBD BPSEXPANDING OPERATING MARGIN
Slide 82: Strategic Objective
STRATEGIC OBJECTIVE LEVERAGE THE INTERNATIONAL APPEAL OF OUR ICONIC BRANDS TO BUILD A HIGHLY 81 PROFITABLE, SUSTAINABLE, GLOBAL BUSINESS
Slide 83: Agenda: Q&A
BUSINESS UPDATE OPENING REMARKS AGENDA 82 KEY STRATEGIES Q&A
Slide 84: Fourth Quarter Analyst Meeting, November 6, 2013
Investor Presentation 2011 Fourth Quarter ANALYST MEETING NOVEMBER 6, 2013
Slide 85: Appendix - Operating Margin Reconciliation
2008 2009 2010 2011 2012 OPERATING MARGIN - GAAP 14.3% 4.0% 6.8% 5.3% 8.3% Asset impairment charges 0.2% 1.2% 1.5% 1.6% 0.2% Store closure and lease exit charges 0.1% 0.5% Asset write-downs 0.4% Legals charges 0.2% FULL YEAR OPERATING MARGIN RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1) APPENDIX