Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Q1 2024 Earnings Presentation
29 slides from Abercrombie & Fitch's earnings presentation, May 29, 2024
Slide 1: Investor Presentation: First Quarter 2024
INVESTOR PRESENTATION: FIRST QUARTER 2024
Slide 2: Table of Contents
TABLE OF CONTENTS Safe Harbor and Other Information 3 Company Overview 5 Q1 2024 Results 15 Appendix 21 2
Slide 3: 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 contains forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements, including, without limitation, statements regarding our second q
Slide 4: Reporting and Use of GAAP and Non-GAAP Measures
REPORTING AND USE OF GAAP AND NON-GAAP MEASURES The following presentation includes certain adjusted non-GAAP financial measures. Additional details about non-GAAP financial measures and a reconciliation of GAAP financial measures to non-GAAP financial measures is included in the Appendix to this pr
Slide 5: Global, digitally-led, omnichannel apparel and accessories retailer
Abercrombie & Fitch Co. is a global, digitally-led, omnichannel apparel and accessories retailer catering to kids through millennials with assortments curated for their specific lifestyle needs Our corporate purpose of 'We are here for you on the journey to being and becoming who you are' fuels our
Slide 6: Company Overview
COMPANY OVERVIEW 6
Slide 7: Abercrombie Brands: Global Net Sales and Customer
PRODUCT VOICE CUSTOMER EXPERIENCE GLOBAL NET SALES NET SALES BY CHANNEL TARGETING (FY 2023) +10% MILLENNIALS GROWTH CAGR $2.20B $1.73B $1.46B $1.56B $1.29B ~ 40% ~ POST GRAD STORES 60% DIGITAL LOVES TO TRAVEL FASHION OBSESSED STORES DIGITALLY-LED 247 GLOBALLY (FY 2023) FY 2019 FY 2020 FY 2021 FY 202
Slide 8: Hollister Brands: Global Net Sales and Customer
PRODUCT VOICE TEENS ENGAGE DIGITALLY PURCHASE CUSTOMER IN-STORE EXPERIENCE TARGETING GLOBAL NET SALES NET SALES BY GEN Z 2023 BACK TO CHANNEL W/ MILLENNIAL GROWTH +6% (FY 2023) Y/Y PARENTS $2.16B $2.15B $2.08B $1.96B $1.83B 30% ~ COMING INTO THEIR OWN DIGITAL COMFORT OBSESSED ~ 70% STORES VALUE VERS
Slide 9: Focus on Sustainable, Profitable Growth
FOCUS ON SUSTAINABLE, PROFITABLE GROWTH BUILT ON YEARS OF TRANSFORMATION Longer-Term Ambition1: $5B Sales 10%+ Op Margin 2023 Results: 2025 Target1: $4.3B Sales $4.1-$4.3B Sales 11% Op Margin 8%+ Op Margin 2022: $3.7B Sales 3% Op Margin Fiscal 2017 - 2022 2023 - 2025 STABILIZE & ALWAYS FORWARD PLAN
Slide 10: Sales & Profitability
SALES & PROFITABILITY Net Sales Operating Income (Loss) (in $ billions) (in $ millions) EXPECT EXPECT $485 ~14% $4.3 ~10% MARGIN COVID GROWTH CLOSURE $3.6 $3.6 IMPACT $3.7 $3.7 $343 $3.5 $3.1 $127 COVID $72 $70 CLOSURE $93 IMPACT $(20) Y/Y 5% 3% 1% (14%) 19% 0% 16% OP 2% 4% 2% (1%) 9% 3% 11% GROWTH
Slide 11: Always Forward Plan
ALWAYS FORWARD PLAN PILLARS ALWAYS FORWARD ALWAYS FORWARD PLAN INTRODUCED AT PLAN JUNE 2022 INVESTOR DAY 1 EXECUTE GLOBAL BRAND GROWTH PLANS 2025 TARGETS: •Data driven approach to store expansion •Grow brand lovers through digital marketing and social selling $4.1B - $4.3B REVENUES 8%+ OPERATING MAR
Slide 12: Global Brand Growth
1 GLOBAL BRAND GROWTH PRODUCT VOICE EXPERIENCE COLLECTIONS & DIGITAL CUSTOMER GEOGRAPHIC EXTENSIONS ACQUISITION EXPANSION • Active (YPB in A&F) • Influencer Channel • Localized Physical/Digital • A&F Best Dressed Guest • Social Commerce Experiences • Graphics Licensing (Instagram, TikTok, WeChat) •
Slide 13: Enterprise-Wide Digital Revolution
2 ENTERPRISE-WIDE DIGITAL REVOLUTION • Modernize Foundation (Retail ERP, Data Infrastructure) • Consistent Omnichannel experience (Digital and In-Store) • Powerful, Modern Loyalty Program • Lead with Personalization • Fast, Digital Product Testing • Real Estate Location Analytics COMPANY OVERVIEW 13
Slide 14: Financial Discipline
3 FINANCIAL DISCIPLINE 2023 SIGNIFICANT ACHIEVEMENT TO 2025 TARGETS 2022 2023 2025 TARGET GROSS PROFIT RATE expansion NET SALES $3.7B $4.3B $4.1B-$4.3B from 2022 on improved AUR and GROSS PROFIT (1) 56.9% 62.9% 60% - 63% lower freight costs OPERATING EXPENSE (1) 54.5% 51.7% 52% - 53% OPERATING EXPEN
Slide 15: Q1 Update
GLOBAL SALES GROWTH NET SALES $1B +22% Y/Y 2024 Q1 UPDATE "With excellent first quarter +31%Y/Y performance, we are increasing EMEA our full year sales and operating margin outlook. We remain on track to achieve our 2024 goal +19%Y/Y APAC of demonstrating sustainable, profitable growth after a AMERI
Slide 16: 2024 Q1 Net Sales Results by Segment
2024 Q1 NET SALES RESULTS BY SEGMENT Americas Net Sales EMEA Net Sales APAC Net Sales (in $ millions) (in $ millions) (in $ millions) +23% Y/Y $1,191 $868 +19% $820 $731 $219 Y/Y +10% $665 Y/Y $172 $165 $158 $43 $138 $36 $32 $32 $31 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4
Slide 17: 2024 Q1 Net Sales Results by Brand
2024 Q1 NET SALES RESULTS BY BRAND Total Company Net Sales Abercrombie Brands Net Sales Hollister Brands Net Sales (in $ millions) (in $ millions) (in $ millions) +22% +31% $698 +12% Y/Y Y/Y $1,453 Y/Y $755 $509 $473 $449 $548 $572 $400 $1,056 $1,021 $935 $436 $463 $836 Q1 2023 Q2 2023 Q3 2023 Q4 20
Slide 18: 2024 Q1 Gross Profit / Operating Income
2024 Q1 GROSS PROFIT/ OPERATING INCOME Gross Profit Rate Operating Income (as a % of net sales) (in $ millions) +540 bps Y/Y 64.9% 66.4% 61.0% 62.5% 62.9% $ + 96M Y/Y $223 $138 $130 $90 $34 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 • Benefit from lower raw mater
Slide 19: 2024 Q1 Financial Position
2024 Q1 FINANCIAL POSITION CASH & EQUIVALENTS • $864M as compared to $447M last year Inventory $700M INVENTORIES $595M • $449M, up 0.3% from last year $600M • Clean, current inventory position with regained chase capability $493M $500M $469M $448M $449M SHORT-TERM BORROWINGS $400M • No borrowings ou
Slide 20: Fiscal Outlook
PREVIOUS FULL YEAR OUTLOOK (1) 2024 FISCAL OUTLOOK Q2 2024 Q2 OUTLOOK NET SALES UP MID-TEENS OPERATING MARGIN IN THE RANGE OF 13% TO 14%(1) EFFECTIVE TAX RATE MID-20S(2) The following outlook replaces all previous full year guidance. For fiscal 2024, the company now expects: FY 2024 CURRENT FULL YEA
Slide 21: Appendix
APPENDIX 21
Slide 22: Income Statement
INCOME STATEMENT GAAP % OF % OF (in thousands) Q1 2024 NET SALES Q1 2023 NET SALES NET SALES $1,020,730 100.0% $835,994 100.0% GROSS PROFIT (1) 677,457 66.4% 509,794 61.0% OPERATING EXPENSE 549,566 53.8% 478,680 57.3% OTHER OPERATING INCOME, NET (1,958) (0.2)% (2,894) (0.3)% OPERATING INCOME 129,849
Slide 23: Operating Expense
OPERATING EXPENSE % OF % OF 1 YR Δ (in thousands) Q1 2024 NET SALES Q1 2023 NET SALES BPS (1) STORES AND DISTRIBUTION $371,686 36.4% $336,049 40.2% (380) MARKETING, GENERAL & ADMINISTRATIVE 177,880 17.4% 142,631 17.1% 30 TOTAL OPERATING EXPENSE - GAAP $549,566 53.8% $478,680 57.3% (350) RECONCILIATI
Slide 24: Balance Sheet
BALANCE SHEET (in thousands) MAY 4, 2024 FEBRUARY 3, 2024 APRIL 29, 2023 CASH AND EQUIVALENTS $864,195 $900,884 $446,952 RECEIVABLES 93,605 78,346 106,149 INVENTORIES 449,267 469,466 447,806 OTHER CURRENT ASSETS 102,516 88,569 107,684 TOTAL CURRENT ASSETS $1,509,583 $1,537,265 $1,108,591 PROPERTY AN
Slide 25: Statement of Cash Flows
STATEMENT OF CASH FLOWS YEAR TO DATE PERIOD ENDED MAY 4, 2024 APRIL 29, 2023 (in thousands) NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $95,010 $(560) PURCHASES OF PROPERTY AND EQUIPMENT (38,886) (46,391) NET CASH USED FOR INVESTING ACTIVITIES $(38,886) $(46,391) PURCHASE OF SENIOR SECURED
Slide 26: Share Repurchases
SHARE REPURCHASES SINCE THE START OF 2021, THE COMPANY REPURCHASED APPROXIMATELY 15 MILLION SHARES FOR APPROXIMATELY $518 MILLION. THERE IS APPROXIMATELY $217 MILLION REMAINING UNDER OUR PREVIOUSLY AUTHORIZED SHARE REPURCHASE PROGRAM. SHARE REPURCHASES (1) NUMBER OF AVERAGE (in thousands, except for
Slide 27: Reconciliation of GAAP to Non-GAAP Results
RECONCILIATION OF GAAP TO NON-GAAP RESULTS NET SALES BY GEOGRAPHY AND BRAND Q1 2023 NON-GAAP IMPACT FROM CONSTANT CHANGES IN FOREIGN NON-GAAP CURRENCY CURRENCY EXCHANGE CONSTANT GAAP BASIS (in thousands) Q1 2024 GAAP RATES (1) CURRENCY BASIS Δ% Δ% NET SALES BY SEGMENT: (2) AMERICAS $ 820,121 $ 665,4
Slide 28: Reconciliation of GAAP to Non-GAAP Results
RECONCILIATION OF GAAP TO NON-GAAP RESULTS STATEMENT OF OPERATIONS NET SALES Q1 2024 Q1 2023 Δ% GAAP $1,020,730 $835,994 22% (1) IMPACT FROM CHANGES IN FOREIGN CURRENCY EXCHANGE RATES — (551) 0% NON-GAAP CONSTANT CURRENCY BASIS $1,020,730 $835,443 22% GROSS PROFIT Q1 2024 Q1 2023 Δ BPS (2) GAAP $677
Slide 29: Abercrombie & Fitch Co.
Abercrombie & Fitch Co.
Abercrombie & Fitch Company — Q1 2024 Earnings Presentation on 6ix