Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Q2 2015 Earnings Presentation
14 slides from Abercrombie & Fitch's earnings presentation, Aug 28, 2015
Slide 1: Investor Presentation 2015 Second Quarter
INVESTOR PRESENTATION 2015 SECOND 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: Q2 Adjusted P&L Summary
Q2 ADJUSTED P&L SUMMARY* * The Q2 Adjusted P&L Summary for the current and prior period is presented on a non-GAAP basis and excludes the items set out on page 4. A reconciliation between GAAP and non-GAAP results is included as an appendix to the presentation. 2015 % OF NET SALES 2014 % OF NET SALE
Slide 4: Excluded Items (Pre-Tax)
EXCLUDED ITEMS (PRE-TAX) 2015 Q1 Q2 Q3 Q4 YEAR TO DATE INVENTORY WRITE-DOWN $26,861 $(2,621) $24,240 LEGAL SETTLEMENT CHARGES — 15,753 15,753 ASSET IMPAIRMENT, STORE FIXTURES, LEASE TERMINATION AND STORE CLOSURE COSTS 10,112 1,394 11,506 CONTINUOUS PROFIT IMPROVEMENT PROGRAM 2,479 — 2,479 GILLY HICK
Slide 5: Q2 Comparable Sales by Brand
* Comparable sales are calculated on a constant currency basis and exclude Gilly Hicks. Sales include store and DTC sales. (1) Abercrombie includes the Company's Abercrombie & Fitch and abercrombie kids brands. Q2 COMPARABLE SALES BY BRAND* Q2 SALES MIX Q1 Q2 YTD ABERCROMBIE (1) -9% -7% -8% HOLLISTE
Slide 6: Q2 Comparable Sales by Geography
* Comparable sales are calculated on a constant currency basis and exclude Gilly Hicks. Sales include store and DTC sales. Q2 COMPARABLE SALES BY GEOGRAPHY* Q2 SALES MIX Q1 Q2 YTD U.S. -7% -4% -6% INTERNATIONAL -9% -4% -6% TOTAL COMPANY -8% -4% -6% INTERNATIONAL 37.1% U.S. 62.9% 6 YTD SALES MIX INTE
Slide 7: Q2 Adjusted Operating Expense
Q2 ADJUSTED OPERATING EXPENSE* * Q2 Adjusted Operating Expense excludes the items set out on page 4. A reconciliation between GAAP and non-GAAP results is included as an appendix to the presentation. (1) Includes rent, other landlord charges, utilities, depreciation and other occupancy expense. (2)
Slide 8: Q2 Store Openings
Q2 STORE OPENINGS BRAND CENTER CITY DATE Hollister International APM Shanghai, China 5/9/2015 A&F Siesta Key Sarasota, FL 6/20/2015 A&F MixC Qingdao Qingdao, China 7/25/2015 Hollister MixC Chongqing Chongqing, China 8/1/2015 8
Slide 9: Outlook
OUTLOOK* WITH REGARD TO THE SECOND-HALF OF ITS FISCAL YEAR 2015, THE COMPANY EXPECTS: • FURTHER COMPARABLE SALES TREND IMPROVEMENT, SKEWED TOWARDS THE FOURTH QUARTER • CONTINUED HEADWINDS FROM FOREIGN CURRENCY EXCHANGE RATES • GROSS MARGIN RATE APPROXIMATELY FLAT COMPARED TO LAST YEAR • OPERATING EX
Slide 10: Q2 Store Count Activity
Q2 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 are represented as a single store count. ALL BRANDS TOTAL U.S. CANADA EUROPE REST
Slide 11: Appendix: Reconciliation of Q2 2015 Non-GAAP Financial Measures
APPENDIX: RECONCILIATION OF Q2 2015 NON-GAAP FINANCIAL MEASURES GAAP EXCLUDED ITEMS (1) ADJUSTED NON-GAAP (2) GROSS PROFIT $509,862 $(2,621) $507,241 STORES AND DISTRIBUTION EXPENSE 389,193 1,394 387,799 MARKETING, GENERAL AND ADMINISTRATIVE EXPENSE 119,846 15,753 104,093 OPERATING INCOME 1,962 14,5
Slide 12: Appendix: Reconciliation of YTD 2015 Non-GAAP Financial Measures
APPENDIX: RECONCILIATION OF YTD 2015 NON-GAAP FINANCIAL MEASURES (1) Excluded Items consist of pre-tax charges of $24.2 million related to an inventory write-down recognized in gross profit, $15.8 million related to legal settlement charges, $3.6 million of accelerated depreciation and disposal cost
Slide 13: Appendix: Reconciliation of Q2 2014 Non-GAAP Financial Measures
APPENDIX: RECONCILIATION OF Q2 2014 NON-GAAP FINANCIAL MEASURES (1) Excluded items consist of pre-tax charges of $2.0 million related to the Company's profit improvement initiative, of which $1.2 million was recognized in stores and distribution expense and $0.7 million was recognized in marketing,
Slide 14: Appendix: Reconciliation of YTD 2014 Non-GAAP Financial Measures
APPENDIX: RECONCILIATION OF YTD 2014 NON-GAAP FINANCIAL MEASURES (1) Excluded Items consist of pre-tax charges of $6.9 million for legal, advisory and other charges related to certain corporate governance matters recognized in marketing, general and administrative expense, $6.1 million related to th