Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Jefferies 2017 Consumer Conference
23 slides from Abercrombie & Fitch's conference presentation, Jun 23, 2017
Slide 1: Abercrombie & Fitch
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 A&F cautions that any forward-looking statements (as such term is defined in ie Private Securities Liat Reform Act of 1995) contained in as presentation or made by management or spokespeople of AGF involve risks and any
Slide 3: Points of Focus | Strategic Initiatives
POINTS OF FOCUS | STRATEGIC INITIATIVES -. INSPIRE (2). INNOVATE », DEVELOP CUSTOMERS *® RELENTLESSLY LEADERS CUSTOMER OPTIMIZE CENTRICITY BRAND REACH COMPELLING CONTINUOUS PROFIT ASSORTMENTS IMPROVEMENT BRAND ORGANIZE TO POSITIONING SUCCEED ARF | oakh | ue
Slide 4: Comparable Sales
COMPARABLE SALES* 3% 1% 0% 0% (2)% (3)% (a% co (4)% —_—_ = (1% (8)% aoe 13)%, 1% (13) a1 16 0216 03:16 0416 ani7 —@— HOLLISTER © ABERCROMBIE” —®— TOTAL COMPANY (© Abercrombie includes the company’s Abe
Slide 5: Q1 P&L Summary
Q1 P&L SUMMARY 2017 ae 2016 NET SALES $661 100% $685 100% GROSS PROFIT 399 60.3% 426 62.1% OPERATING EXPENSE 469 70.9% 481 70.1% OPERATING LOSS (70) (10.6)% (55) (8.0)% LOSS BEFORE TAXES (74) (11.2)% (59) (8.7)% TAX BENEFIT (13) (2.0)% (21) (3.0% NET LOSS $(62)__(9.3)% $(40)__(5.8)% NET LOSS PER DIL
Slide 6: Q1 Diluted EPS Walk
Q1 DILUTED EPS WALK 2016 $(0.59) CORE OPERATIONS (0.08) FOREIGN CURRENCY EXCHANGE RATE IMPACT | (0.05) CHANGE IN SHARE-BASED COMPENSATION ACCOUNTING STANDARDS (0.14) TAX RATE® (0.05) 2017 $(0.91) 3596 tax rat
Slide 7: Q1 Financial Position
Q1 FINANCIAL POSITION CASH & EQUIVALENTS $421 -14% $491 28% $383 INVENTORIES, NET $399 -8% $436 -1% $441 GROSS BORROWINGS $268 -9% $293 -2% $299 EXPECT TO GENERATE THE CASH SUFFICIENT T0 INVEST IN THE BUSINESS, MEET DEBT OBLIGATIONS AND MAINTAIN THE DIVIDEND ARF | oakh | ue 7
Slide 8: 2017 Outlook | Sales + FX, Gross Profit
2017 OUTLOOK | SALES + FX » GROSS PROFIT COMPARABLE SALES REMAIN CHALLENGING IN THE SECOND QUARTER : + TREND IMPROVEMENT IN THE SECOND HALF OF THE YEAR igs FOREIGN CURRENCY CONTINUED ADVERSE IMPACT ON SALES AND OPERATING INCOME GROSS PROFIT RATE * TO BE DOWN SLIGHTLY TO LAST YEAR’S ADJUSTED NON-GAAP
Slide 9: 2017 Outlook | Operating Expense
2017 OUTLOOK | OPERATING EXPENSE ON TRACK TO DELIVER EXPENSE REDUCTIONS OF AT LEAST $100 MILLION OPERATING EXPENSE DOWN AT LEAST 3% FROM LAST YEAR’S ADJUSTED NON-GAAP OPERATING EXPENSE OF $2 BILLION 65% OF REDUCTION TO OCCUR IN THE SECOND HALF OF THE YEAR ARF | oakh | ue 9
Slide 10: 2017 Outlook | Tax Rate
2017 OUTLOOK | TAX RATE CORE TAX RATE IN THE LOW 30s DISCRETE NON-CASH INCOME TAX CHARGES RELATED TO CHANGE IN SHARE-BASED COMPENSATION ACCOUNTING STANDARDS FULL YEAR ~$11 MILLION Q1 2017 ~$9 MILLION TAX RATE REMAINS HIGHLY SENSITIVE AT LOWER LEVELS OF FULL YEAR PRE-TAX EARNINGS ARF | oakh | ue 10
Slide 11: 2017 Outlook | Channel Optimization
2017 OUTLOOK | CHANNEL OPTIMIZATION SINCE 2010: CLOSED APPROXIMATELY 400 STORES Mi ‘ REMODELED NEARLY 150 STORES CAPEX INVESTMENTS OF ~$400M IN WEB AND MOBILE EXPERIENCES AND OMNICHANNEL AND CRM CAPABILITIES ARF | att | ae
Slide 12: 2017 Outlook | Channel Optimization (Cont.)
2017 OUTLOOK | CHANNEL OPTIMIZATION (CONT). AQ. HoLLisTER stoRE REMODELS, INCLUDING 10 DOWNSIZES . A&F PROTOTYPE STORES, \ STORES 7 INCLUDING 4 DOWNSIZES 2017 CAPITAL \ ~$70M EXPENDITURES } NEW FULL-PRICE STORES ~$1 00M 2 NEW OUTLET STORES | \ pic / IT ~60 U.S. STORE ~$20M CLOSURES IN 2017 | THE CON
Slide 13: Inspire Customers, Innovate Relentlessly, Develop Leaders
INSPIRE ¢ INNOVATE » DEVELOP PHUVUET CUSTOMER EARERIEN Ui YUipe ARF | anf | ee 13
Slide 14: Omnichannel
OMNICHANNEL FULL OMNICHANNEL OFFERING IN THE U.S., CANADA & THE U.K. ¢ PURCHASE ONLINE PICKUP IN-STORE + RESERVE IN-STORE + ORDER IN-STORE + ONLINE AND IN-STORE RETURNS ¢ SHARED CART BETWEEN MOBILE AND DESKTOP INTERNATIONAL ROLLOUT IN 2017 a1 2017 DTC 27% OF TOTAL SALES PLACED 4" OVERALL IN TOTAL RE
Slide 15: 5.7 Million Loyalty Program Members
5.7 MILLION MEMBERS LOYALTY PROGRAMS 1.7 MILLION MEMBERS SINCE MARCH ROLLOUT PROVIDING TIMELY CUSTOMER INSIGHTS DRIVING CUSTOMER ENGAGEMENT & HIGHER AVERAGE SPEND ARF | oakh | ue
Slide 16: A&F Prototype
A&F PROTOTYPE
Slide 17: Wholesale & Franchise
WHOLESALE & FRANCHISE NEWEST PARTNERSHIP WITH ZALORA —RNReRUNNES Grupo Axo (fi ~PLbsatinoto MAJID AL FUTTAIM. Abercrombie & Fitch Poplin shirt WHOLESALE PARTNERS: asos Next ® zalando ZALORA ARF | oakh | ue
Slide 18: Customer Engagement
CUSTOMER ENGAGEMENT — Se ovouistenco |e Community «suzzFee el You'll Never Believe What Abercrombie | And Fitch Did For These Random oa halite Wire wuld web tout ou geet? Tap he Fy W: i People On Valentine's Day For V.Day this yeor Abercrombie and Fitch mode Some pizza loving twitter users dreams co
Slide 19: Customer Engagement
CUSTOMER ENGAGEMENT NEW PARTNERSHIP WITH AWESOMENESS TV wD ERE SENTED|EY LAUNCHED HOLLISTER wh SURF GAME FOR HOLLISTER MOBILE PLAY —_ 27 MILLION IMPRESSIONS ARF | oakh | ue 19
Slide 20: Innovation & Emerging Categories
INNOVATION © EMERGING CATEGORIES TWENTY 9% fichag- CARVEOUTS PLANNED IN 2017 MOST JEANS SOLD IN ANY Q1 IN HOLLISTER’S HISTORY ARF | att | ae 0
Slide 21: A&F Brand Positioning
A&F BRAND POSITIONING | Ss as == REFLECTS THE CONFIDENCE EMBODIES EFFORTLESS AMERICAN STYLE FOR LIFE’S OF TODAY'S 20+ CONSUMER EVERYDAY PURSUITS ARF | oakh | ue a
Slide 22: Looking Ahead
LOOKING AHEAD INSPIRE INNOVATE = DEVELOP CUSTOMERS RELENTLESSLY LEADERS ARF | anf | ee 2
Slide 23: Est. 1892 Abercrombie
EST. 1892 Abercrombie
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