Abercrombie & Fitch Company · NYSE:ANF
Abercrombie & Fitch — Q3 2024 Earnings Presentation
28 slides from Abercrombie & Fitch's earnings presentation, Nov 26, 2024
Slide 1: Investor Presentation: Third Quarter 2024
INVESTOR PRESENTATION: THIRD QUARTER 2024
Slide 2: Table of Contents
TABLE OF CONTENTS Safe Harbor and Other Information 3 Company Overview 5 Q3 2024 Results 14 Appendix 20 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 fourth 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 brand: customer, product, net sales and channel
PRODUCT VOICE NFL COLLECTION CUSTOMER EXPERIENCE GLOBAL NET SALES NET SALES BY CHANNEL TARGETING +10% (FY 2023) MILLENNIALS GROWTH CAGR $2.20B $1.73B $1.56B $1.46B $1.29B ~ 40% ~ POST GRAD STORES 60% DIGITAL LOVES TO TRAVEL FASHION OBSESSED STORES DIGITALLY-LED 247 GLOBALLY (FY 2023) FY 2019 FY 2020
Slide 8: Hollister brand: customer, product, net sales and channel
PRODUCT VOICE FEEL GOOD FEST COLLEGIATE GRAPHICS SHOP CUSTOMER 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 ~ 70% DIGITAL COMFORT OBSESSED STORES VALUE VERSA
Slide 9: Sales & Profitability
SALES & PROFITABILITY Net Sales Operating Income (Loss) (in $ billions) (in $ millions) $485 EXPECT AROUND 15% EXPECT $4.3 14% TO 15% MARGIN COVID CLOSURE GROWTH $3.6 $3.6 IMPACT $3.7 $3.7 $343 $3.5 $3.1 $127 $72 $70 COVID CLOSURE $93 IMPACT $(20) Y/Y 5% 3% 1% (14%) 19% 0% 16% OP 2% 4% 2% (1%) 9% 3%
Slide 10: Always Forward Plan Pillars
ALWAYS FORWARD PLAN PILLARS 1 EXECUTE GLOBAL BRAND GROWTH PLANS •Data driven approach to store expansion •Grow brand lovers through digital marketing and social selling 2 ACCELERATE AN ENTERPRISE-WIDE DIGITAL REVOLUTION •"Know Them Better" - continued expansion and acceleration of investments in cus
Slide 11: Global Brand Growth
1 GLOBAL BRAND GROWTH PRODUCT VOICE EXPERIENCE COLLECTIONS & DIGITAL CUSTOMER GEOGRAPHIC EXTENSIONS ACQUISITION EXPANSION • Graphics Licensing • Influencer Channel • Localized Physical/Digital • Activewear • Social Commerce Experiences • A&F Best Dressed Guest (Instagram, TikTok, WeChat) • Fuel Regi
Slide 12: 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 12
Slide 13: Financial Discipline
3 FINANCIAL DISCIPLINE 2022 2023 2024 YTD (2) NET SALES $3.7B $4.3B $3.4B GROSS PROFIT RATE expansion from 2022 on improved AUR and GROSS PROFIT (1) 56.9% 62.9% 65.4% lower freight costs OPERATING 54.5% 51.7% 51.0% OPERATING EXPENSE leverage EXPENSE (1) from 2022 levels driven by sales OPERATING gro
Slide 14: Q3 Update
GLOBAL SALES GROWTH NET SALES $1.2B +14% Y/Y 2024 Q3 UPDATE +15%Y/Y For the sixth consecutive quarter, our global team EMEA delivered double-digit net sales growth. This great +15%Y/Y APAC sales performance led to better-than-expected AMERICAS +32%Y/Y results on both the top and bottom lines. With b
Slide 15: 2024 Q3 Net Sales Results by Segment
2024 Q3 NET SALES RESULTS BY SEGMENT Americas Net Sales EMEA Net Sales APAC Net Sales (in $ millions) (in $ millions) (in $ millions) +14% $1,191 Y/Y $986 +15% Y/Y $868 $901 $820 +32% $219 Y/Y $200 $182 $158 $165 $43 $41 $36 $33 $31 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q2
Slide 16: 2024 Q3 Net Sales Results by Brand
2024 Q3 NET SALES RESULTS BY BRAND Total Company Net Sales Abercrombie Brands Net Sales Hollister Brands Net Sales (in $ millions) (in $ millions) (in $ millions) +14% Y/Y +14% +15% $698 Y/Y Y/Y $755 $579 $1,453 $552 $509 $1,209 $630 $449 $1,134 $548 $572 $582 $1,056 $1,021 Q3 2023 Q4 2023 Q1 2024 Q
Slide 17: 2024 Q3 Gross Profit / Operating Income
2024 Q3 GROSS PROFIT/ OPERATING INCOME Gross Profit Rate Operating Income (as a % of net sales) (in $ millions) +20 bps Y/Y 64.9% 66.4% 64.9% 65.1% $ 62.9% + 41M Y/Y $223 $176 $179 $138 $130 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 • Benefit from higher AUR gro
Slide 18: 2024 Q3 Financial Position
2024 Q3 FINANCIAL POSITION CASH & EQUIVALENTS Inventory • $683M as compared to $649M last year $800M INVENTORIES $700M $693M • $693M, up 16.4% from last year • Clean, current inventory position across brands $595M $600M $540M SHORT-TERM BORROWINGS $500M $469M • No borrowings outstanding under the co
Slide 19: 2024 Fiscal Outlook
PREVIOUS FULL YEAR OUTLOOK (1) 2024 FISCAL OUTLOOK The following outlook replaces all previous full year guidance. For fiscal 2024, the company now expects: FY 2024 CURRENT FULL YEAR OUTLOOK PREVIOUS FULL YEAR OUTLOOK (1) NET SALES IN THE RANGE OF 14% TO 15% (2) IN THE RANGE OF 12% TO 13% (3) OPERAT
Slide 20: Appendix
APPENDIX 20
Slide 21: 2024 Q3 Income Statement
2024 Q3 INCOME STATEMENT Thirteen Weeks Ended GAAP % OF % OF (in thousands) Q3 2024 NET SALES Q3 2023 NET SALES NET SALES $1,208,966 100.0% $1,056,431 100.0% GROSS PROFIT (1) 786,932 65.1% 685,669 64.9% OPERATING EXPENSE 609,236 50.4% 546,393 51.7% OTHER OPERATING (INCOME) LOSS, NET (1,586) (0.1)% 1
Slide 22: 2024 YTD Income Statement
2024 YTD INCOME STATEMENT Thirty-Nine Weeks Ended GAAP % OF % OF (in thousands) YTD 2024 NET SALES YTD 2023 NET SALES NET SALES $3,363,670 100.0% $2,827,770 100.0% GROSS PROFIT (1) 2,200,651 65.4% 1,779,843 62.9% OPERATING EXPENSE 1,719,506 51.1% 1,522,305 53.8% OTHER OPERATING (INCOME) LOSS, NET (3
Slide 23: Balance Sheet
BALANCE SHEET (in thousands) NOVEMBER 2, 2024 FEBRUARY 3, 2024 OCTOBER 28, 2023 CASH AND EQUIVALENTS $683,089 $900,884 $649,489 RECEIVABLES 111,583 78,346 96,762 INVENTORIES 692,596 469,466 595,067 OTHER CURRENT ASSETS 168,499 88,569 100,085 TOTAL CURRENT ASSETS $1,655,767 $1,537,265 $1,441,403 PROP
Slide 24: Statement of Cash Flows
STATEMENT OF CASH FLOWS YEAR TO DATE PERIOD ENDED NOVEMBER 2, OCTOBER 28, (in thousands) 2024 2023 NET CASH PROVIDED BY OPERATING ACTIVITIES $402,756 $350,142 PURCHASES OF MARKETABLE SECURITIES (55,000) — PURCHASES OF PROPERTY AND EQUIPMENT (132,040) (128,601) PROCEEDS FROM THE SALE OF PROPERTY AND
Slide 25: Share Repurchases
SHARE REPURCHASES SINCE THE START OF 2021, THE COMPANY REPURCHASED APPROXIMATELY 16 MILLION SHARES FOR APPROXIMATELY $633 MILLION. THERE IS APPROXIMATELY $102 MILLION REMAINING UNDER OUR PREVIOUSLY AUTHORIZED SHARE REPURCHASE PROGRAM. SHARE REPURCHASES (1) NUMBER OF AVERAGE (in thousands, except for
Slide 26: Reconciliation of GAAP to Non-GAAP Results
RECONCILIATION OF GAAP TO NON-GAAP RESULTS NET SALES BY GEOGRAPHY AND BRAND Q3 2023 NON-GAAP IMPACT FROM CONSTANT CHANGES IN FOREIGN NON-GAAP CURRENCY CURRENCY EXCHANGE CONSTANT GAAP BASIS (in thousands) Q3 2024 GAAP RATES (1) CURRENCY BASIS Δ% Δ% NET SALES BY SEGMENT: (2) AMERICAS $986,449 $867,566
Slide 27: Reconciliation of GAAP to Non-GAAP Results
RECONCILIATION OF GAAP TO NON-GAAP RESULTS STATEMENT OF OPERATIONS NET SALES Q3 2024 Q3 2023 Δ% GAAP $1,208,966 $1,056,431 14% (1) IMPACT FROM CHANGES IN FOREIGN CURRENCY EXCHANGE RATES — 5,289 (1)% NON-GAAP CONSTANT CURRENCY BASIS $1,208,966 $1,061,720 14% GROSS PROFIT Q3 2024 Q3 2023 Δ BPS (2) GAA
Slide 28: Abercrombie & Fitch Co.
Abercrombie & Fitch Co.
Abercrombie & Fitch Company — Q3 2024 Earnings Presentation on 6ix