x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 31-1469076 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
6301 Fitch Path, New Albany, Ohio | 43054 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Class A Common Stock, $0.01 Par Value | New York Stock Exchange | |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | |||
(Do not check if a smaller reporting company) |
ITEM 1. | ||
ITEM 1A. | ||
ITEM 1B. | ||
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ITEM 7A. | ||
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ITEM 9. | ||
ITEM 9A. | ||
ITEM 9B. | ||
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ITEM 1. | BUSINESS. |
Abercrombie(1) | Hollister(2) | International | United States |
Abercrombie(1) | Hollister(2) | Total | ||||
United States | 311 | 398 | 709 | |||
International | 44 | 145 | 189 | |||
Total | 355 | 543 | 898 |
(1) | Includes Abercrombie & Fitch and abercrombie kids brands. Excludes one international franchise store as of January 28, 2017. |
(2) | Includes Hollister and Gilly Hicks brands. Excludes three international franchise stores as of January 28, 2017. |
ITEM 1A. | RISK FACTORS |
• | changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, could have a material adverse effect on our business, results of operations and liquidity; |
• | our inability to anticipate customer demand and changing fashion trends and to manage our inventory commensurately could adversely impact our sales levels and profitability; |
• | our market share may be negatively impacted by increasing competition and pricing pressures from companies with brands or merchandise competitive with ours; |
• | direct-to-consumer sales channels are a significant component of our growth strategy, and the failure to successfully develop our position in these channels could have an adverse impact on our results of operations; |
• | our ability to conduct business in international markets may be adversely affected by legal, regulatory, political and economic risks; |
• | our inability to successfully implement our strategic plans could have a negative impact on our growth and profitability; |
• | our failure to protect our reputation could have a material adverse effect on our brands; |
• | our business could suffer if our information technology systems are disrupted or cease to operate effectively; |
• | we may be exposed to risks and costs associated with cyber-attacks, credit card fraud and identity theft that would cause us to incur unexpected expenses and reputation loss; |
• | fluctuations in foreign currency exchange rates could adversely impact our financial condition and results of operations; |
• | changes in the cost, availability and quality of raw materials, labor, transportation and trade relations could cause manufacturing delays and increase our costs; |
• | we depend upon independent third parties for the manufacture and delivery of all our merchandise, and a disruption of the manufacture or delivery of our merchandise could result in lost sales and could increase our costs; |
• | our ability to attract customers to our stores depends, in part, on the success of the shopping malls or area attractions that our stores are located in or around; |
• | we rely on the experience and skills of our senior executive officers, the loss of whom could have a material adverse effect on our business; |
• | our reliance on DCs makes us susceptible to disruptions or adverse conditions affecting our supply chain; |
• | our litigation exposure could have a material adverse effect on our financial condition and results of operations; |
• | our inability or failure to adequately protect our trademarks could have a negative impact on our brand image and limit our ability to penetrate new markets; |
• | fluctuations in our tax obligations and effective tax rate may result in volatility in our operating results; |
• | extreme weather conditions and the seasonal nature of our business may cause net sales to fluctuate and negatively impact our results of operations; |
• | our facilities, systems and stores, as well as the facilities and systems of our vendors and manufacturers, are vulnerable to natural disasters, pandemic disease and other unexpected events, any of which could result in an interruption to our business and adversely affect our operating results; |
• | the impact of war or acts of terrorism could have a material adverse effect on our operating results and financial condition; |
• | changes in the regulatory or compliance landscape could adversely affect our business and results of operations; |
• | our Asset-Based Revolving Credit Agreement and our Term Loan Agreement include restrictive covenants that limit our flexibility in operating our business; and, |
• | compliance with changing regulations and standards for accounting, corporate governance and public disclosure could adversely affect our business, results of operations and reported financial results. |
• | anticipating and quickly responding to changing consumer demands or preferences better than our competitors; |
• | maintaining favorable brand recognition and effective marketing of our products to consumers in several diverse demographic markets; |
• | sourcing merchandise efficiently; |
• | developing innovative, high-quality merchandise in styles that appeal to our consumers and in ways that favorably distinguish us from our competitors; and, |
• | countering the aggressive pricing and promotional activities of many of our competitors without diminishing the aspirational nature of our brands and brand equity. |
• | address the different operational characteristics present in each country in which we operate, including employment and labor, transportation, logistics, real estate, lease provisions and local reporting or legal requirements; |
• | hire, train and retain qualified personnel; |
• | maintain good relations with individual associates and groups of associates; |
• | avoid work stoppages or other labor-related issues in our European stores where associates are represented by workers’ councils and unions; |
• | retain acceptance from foreign customers; |
• | manage inventory effectively to meet the needs of existing stores on a timely basis; |
• | manage foreign currency exchange risks effectively. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
U.S. & U.S. Territories: | ||||||||||
Alabama | 3 | Louisiana | 5 | Ohio | 26 | |||||
Arizona | 14 | Maine | 3 | Oklahoma | 4 | |||||
Arkansas | 3 | Maryland | 12 | Oregon | 6 | |||||
California | 105 | Massachusetts | 27 | Pennsylvania | 28 | |||||
Colorado | 6 | Michigan | 18 | Rhode Island | 2 | |||||
Connecticut | 15 | Minnesota | 9 | South Carolina | 8 | |||||
Delaware | 5 | Mississippi | 3 | Tennessee | 13 | |||||
District Of Columbia | 1 | Missouri | 4 | Texas | 66 | |||||
Florida | 67 | Montana | 1 | Utah | 5 | |||||
Georgia | 19 | Nebraska | 2 | Vermont | 1 | |||||
Hawaii | 7 | Nevada | 9 | Virginia | 21 | |||||
Idaho | 2 | New Hampshire | 9 | Washington | 16 | |||||
Illinois | 26 | New Jersey | 36 | West Virginia | 3 | |||||
Indiana | 10 | New Mexico | 3 | Wisconsin | 8 | |||||
Iowa | 4 | New York | 42 | Puerto Rico | 2 | |||||
Kansas | 5 | North Carolina | 16 | |||||||
Kentucky | 8 | North Dakota | 1 | |||||||
International: | ||||||||||
Austria | 6 | Hong Kong | 3 | Republic of Korea | 3 | |||||
Belgium | 3 | Ireland | 2 | Singapore | 1 | |||||
Canada | 18 | Italy | 11 | Spain | 12 | |||||
China | 27 | Japan | 11 | Sweden | 3 | |||||
Denmark | 1 | Kuwait | 2 | United Kingdom | 34 | |||||
France | 15 | Netherlands | 4 | United Arab Emirates | 6 | |||||
Germany | 25 | Poland | 1 |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Sales Price | ||||||||
High | Low | |||||||
Fiscal 2016 | ||||||||
4th quarter | $ | 17.35 | $ | 11.29 | ||||
3rd quarter | $ | 23.29 | $ | 14.71 | ||||
2nd quarter | $ | 27.37 | $ | 16.49 | ||||
1st quarter | $ | 32.83 | $ | 23.45 | ||||
Fiscal 2015 | ||||||||
4th quarter | $ | 28.21 | $ | 18.55 | ||||
3rd quarter | $ | 22.25 | $ | 15.42 | ||||
2nd quarter | $ | 23.72 | $ | 19.36 | ||||
1st quarter | $ | 26.50 | $ | 19.34 |
Period (fiscal month) | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number of Shares that May Yet be Purchased under the Plans or Programs(3) | |||||||||
October 30, 2016 through November 26, 2016 | 1,284 | $ | 15.37 | — | 6,503,656 | ||||||||
November 27, 2016 through December 31, 2016 | 16,544 | $ | 14.62 | — | 6,503,656 | ||||||||
January 1, 2017 through January 28, 2017 | 9,155 | $ | 11.71 | — | 6,503,656 | ||||||||
Total | 26,983 | $ | 13.67 | — | 6,503,656 |
(1) | All of the 26,983 shares of A&F’s Common Stock purchased during the thirteen-week period ended January 28, 2017 represented shares which were withheld for tax payments due upon the exercise of employee stock appreciation rights and the vesting of restricted stock units and restricted share awards. |
(2) | No shares were repurchased during the thirteen-week period ended January 28, 2017 pursuant to A&F’s publicly announced stock repurchase authorization. On August 14, 2012, A&F’s Board of Directors authorized the repurchase of 10.0 million shares of A&F’s Common Stock, which was announced on August 15, 2012. |
(3) | The number shown represents, as of the end of each period, the maximum number of shares of Common Stock that may yet be purchased under A&F’s publicly announced stock repurchase authorization described in footnote 2 above. The shares may be purchased, from time-to-time, depending on market conditions. |
ITEM 6. | SELECTED FINANCIAL DATA |
Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | Fiscal 2013 | Fiscal 2012(1) | |||||||||||||||
Statements of operations data | |||||||||||||||||||
Net sales | $ | 3,326,740 | $ | 3,518,680 | $ | 3,744,030 | $ | 4,116,897 | $ | 4,510,805 | |||||||||
Gross profit | $ | 2,028,568 | $ | 2,157,543 | $ | 2,313,570 | $ | 2,575,435 | $ | 2,816,709 | |||||||||
Operating income | $ | 15,188 | $ | 72,838 | $ | 113,519 | $ | 80,823 | $ | 374,233 | |||||||||
Net income attributable to A&F | $ | 3,956 | $ | 35,576 | $ | 51,821 | $ | 54,628 | $ | 237,011 | |||||||||
Net income per basic share attributable to A&F | $ | 0.06 | $ | 0.52 | $ | 0.72 | $ | 0.71 | $ | 2.89 | |||||||||
Net income per diluted share attributable to A&F | $ | 0.06 | $ | 0.51 | $ | 0.71 | $ | 0.69 | $ | 2.85 | |||||||||
Basic weighted-average shares outstanding | 67,878 | 68,880 | 71,785 | 77,157 | 81,940 | ||||||||||||||
Diluted weighted-average shares outstanding | 68,284 | 69,417 | 72,937 | 78,666 | 83,175 | ||||||||||||||
Cash dividends declared per share | $ | 0.80 | $ | 0.80 | $ | 0.80 | $ | 0.80 | $ | 0.70 | |||||||||
Balance sheet data | |||||||||||||||||||
Working capital(2) | $ | 653,300 | $ | 644,277 | $ | 679,016 | $ | 752,344 | $ | 617,023 | |||||||||
Current ratio(3) | 2.34 | 2.20 | 2.40 | 2.32 | 1.89 | ||||||||||||||
Cash and equivalents | $ | 547,189 | $ | 588,578 | $ | 520,708 | $ | 600,116 | $ | 643,505 | |||||||||
Total assets | $ | 2,295,757 | $ | 2,433,039 | $ | 2,505,167 | $ | 2,850,997 | $ | 2,987,401 | |||||||||
Borrowings, net | $ | 262,992 | $ | 286,235 | $ | 293,412 | $ | 135,000 | $ | — | |||||||||
Leasehold financing obligations | $ | 46,397 | $ | 47,440 | $ | 50,521 | $ | 60,726 | $ | 63,942 | |||||||||
Total stockholders’ equity | $ | 1,252,039 | $ | 1,295,722 | $ | 1,389,701 | $ | 1,729,493 | $ | 1,818,268 | |||||||||
Return on average stockholders’ equity(4) | — | % | 3 | % | 3 | % | 3 | % | 13 | % | |||||||||
Other financial and operating data | |||||||||||||||||||
Net cash provided by operating activities | $ | 184,591 | $ | 309,941 | $ | 312,480 | $ | 175,493 | $ | 684,171 | |||||||||
Net cash used for investing activities | $ | (136,746 | ) | $ | (122,567 | ) | $ | (175,074 | ) | $ | (173,861 | ) | $ | (247,238 | ) | ||||
Net cash used for financing activities | $ | (83,793 | ) | $ | (106,875 | ) | $ | (181,453 | ) | $ | (40,831 | ) | $ | (380,071 | ) | ||||
Capital expenditures | $ | 140,844 | $ | 143,199 | $ | 174,624 | $ | 163,924 | $ | 339,862 | |||||||||
Free cash flow(5) | $ | 43,747 | $ | 166,742 | $ | 137,856 | $ | 11,569 | $ | 344,309 | |||||||||
Comparable sales(6) | (5 | )% | (3 | )% | (8 | )% | (11 | )% | (1 | )% | |||||||||
Net store sales per average gross square foot | $ | 343 | $ | 360 | $ | 381 | $ | 417 | $ | 485 | |||||||||
Total number of stores open | 898 | 932 | 969 | 1,006 | 1,041 | ||||||||||||||
Total store square footage at end of period | 7,007 | 7,292 | 7,517 | 7,736 | 7,958 |
(1) | Fiscal 2012 was a fifty-three week year. |
(2) | Working capital is computed by subtracting current liabilities from current assets. |
(3) | Current ratio is computed by dividing current assets by current liabilities. |
(4) | Return on average stockholders’ equity is computed by dividing net income attributable to A&F by the average stockholders’ equity balance. |
(5) | Free cash flow is computed by subtracting capital expenditures from the GAAP financial measure of net cash provided by operating activities, both of which are disclosed above in the table preceding the measure of free cash flow. The Company believes that the non-GAAP measure of free cash flow is useful to investors to understand available cash flows generated from operations less cash flows used for capital expenditures. The closest GAAP financial measure is net cash provided by operating activities. The non-GAAP financial measure of free cash flow should not be used in isolation or as an alternative to net cash provided by operating activities or an indicator of the ongoing performance of the Company. It is also not intended to supersede or replace the Company’s GAAP financial measure. |
(6) | Comparable sales is defined as the aggregate of: (1) year-over-year sales for stores that have been open as the same brand at least one year and whose square footage has not been expanded or reduced by more than 20% within the past year, with prior year’s net sales converted at the current year’s exchange rate to remove the impact of currency fluctuation, and (2) year-over-year direct-to-consumer sales with prior year’s net sales converted at the current year’s exchange rate to remove the impact of currency fluctuation. Beginning with Fiscal 2012, comparable sales include comparable direct-to-consumer sales. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
January 28, 2017 | January 30, 2016 | |||||||||||||||||||||||
(in thousands, except change in comparable sales, gross profit rate and per share amounts) | GAAP | Excluded Items(1) | Non-GAAP | GAAP | Excluded Items(1) | Non-GAAP | ||||||||||||||||||
Fifty-two Weeks Ended | ||||||||||||||||||||||||
Net sales | $ | 3,326,740 | $ | — | $ | 3,326,740 | $ | 3,518,680 | $ | — | $ | 3,518,680 | ||||||||||||
Change in comparable sales(2) | (5 | )% | — | % | (5 | )% | (3 | )% | — | % | (3 | )% | ||||||||||||
Gross profit rate | 61.0 | % | — | % | 61.0 | % | 61.3 | % | 0.6 | % | 61.9 | % | ||||||||||||
Operating income | $ | 15,188 | $ | (11,926 | ) | $ | 3,262 | $ | 72,838 | $ | 63,657 | $ | 136,495 | |||||||||||
Net income (loss) attributable to A&F | $ | 3,956 | $ | (8,026 | ) | $ | (4,070 | ) | $ | 35,576 | $ | 42,471 | $ | 78,047 | ||||||||||
Net income (loss) per diluted share attributable to A&F | $ | 0.06 | $ | (0.12 | ) | $ | (0.06 | ) | $ | 0.51 | $ | 0.61 | $ | 1.12 |
(1) | Refer to “RESULTS OF OPERATIONS,” in “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” for details on excluded items. |
(2) | Changes in comparable sales are calculated on a constant currency basis by converting prior year store and online sales at current year exchange rates. For inclusion in this calculation, a store must have been open as the same brand at least one year and its square footage must not have been expanded or reduced by more than 20% within the past year. |
• | The comparable sales trend to improve for the full year, but to remain challenging for the first half; with Hollister comparable sales to maintain or grow and the Abercrombie comparable sales trend to improve. |
• | Continued adverse effects from foreign currency on sales and operating income. |
• | A gross margin rate flat to the Fiscal 2016 adjusted non-GAAP rate of 61.0%, but to be pressured in the first quarter. |
• | Actions already taken to reduce expense by approximately $100 million, enabling investments in revenue driving activities and resulting in net operating expense down approximately 3% from Fiscal 2016 adjusted non-GAAP operating expense of $2.025 billion, with a commitment to pursue further expense reductions throughout the year. |
• | Net income attributable to noncontrolling interests of approximately $4 million. |
• | A weighted average diluted share count of approximately 68 million shares, excluding the effect of potential share buybacks. |
• | Comparable sales, defined as the aggregate of: (1) year-over-year sales for stores that have been open as the same brand at least one year and whose square footage has not been expanded or reduced by more than 20% within the past year, with prior year’s net sales converted at the current year’s foreign currency exchange rate to remove the impact of currency fluctuation, and (2) year-over-year direct-to-consumer sales with prior year’s net sales converted at the current year’s foreign currency exchange rate to remove the impact of currency fluctuation; |
• | Comparative results of operations with prior year’s results converted at the current year’s foreign currency exchange rate to remove the impact of currency fluctuation; |
• | Gross profit and gross margin rate; |
• | Cost of sales, exclusive of depreciation and amortization, as a percentage of net sales; |
• | Selling margin, defined as sales price less original cost, by brand and product category; |
• | Stores and distribution expense as a percentage of net sales; |
• | Marketing, general and administrative expense as a percentage of net sales; |
• | Operating income and operating income as a percentage of net sales; |
• | Net income and net income attributable to A&F; |
• | Inventory per gross square foot and inventory to sales ratio; |
• | Cash flow and liquidity determined by the Company’s current ratio, working capital and free cash flow; |
• | Store metrics such as sales per gross square foot, average number of transactions per store and store contribution (defined as store sales less direct costs of operating the store); |
• | Transactional metrics such as traffic and conversion, average unit retail price, average unit cost, average units per transaction and average transaction values; and |
• | Return on invested capital and return on equity. |
Fiscal 2016 | Fiscal 2015 | ||||||||||||||||
(in thousands) | Net Sales | Change in Comparable Sales(1) | Net Sales | Change in Comparable Sales(1) | Net Sales $ Change | Net Sales % Change | |||||||||||
Abercrombie(2) | $ | 1,487,024 | (11)% | $ | 1,640,992 | (6)% | $ | (153,968 | ) | (9)% | |||||||
Hollister | 1,839,716 | —% | 1,877,688 | —% | (37,972 | ) | (2)% | ||||||||||
Total net sales | $ | 3,326,740 | (5)% | $ | 3,518,680 | (3)% | $ | (191,940 | ) | (5)% | |||||||
United States | $ | 2,123,808 | (5)% | $ | 2,282,040 | (3)% | $ | (158,232 | ) | (7)% | |||||||
International | 1,202,932 | (6)% | 1,236,640 | (1)% | (33,708 | ) | (3)% | ||||||||||
Total net sales | $ | 3,326,740 | (5)% | $ | 3,518,680 | (3)% | $ | (191,940 | ) | (5)% |
(1) | Changes in comparable sales are calculated on a constant currency basis by converting prior year store and online sales at current year exchange rates. For inclusion in this calculation, a store must have been open as the same brand at least one year and its square footage must not have been expanded or reduced by more than 20% within the past year. |
(2) | Includes Abercrombie & Fitch and abercrombie kids brands. |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Cost of sales, exclusive of depreciation and amortization | $ | 1,298,172 | 39.0% | $ | 1,361,137 | 38.7% | |||||
Inventory write-down, net(1) | — | —% | (20,647 | ) | (0.6)% | ||||||
Adjusted non-GAAP cost of sales, exclusive of depreciation and amortization | $ | 1,298,172 | 39.0% | $ | 1,340,490 | 38.1% | |||||
Gross profit | $ | 2,028,568 | 61.0% | $ | 2,157,543 | 61.3% | |||||
Inventory write-down, net(1) | — | —% | 20,647 | 0.6% | |||||||
Adjusted non-GAAP gross profit | $ | 2,028,568 | 61.0% | $ | 2,178,190 | 61.9% |
(1) | Inventory write-down charges related to a first quarter of Fiscal 2015 decision to accelerate the disposition of certain aged merchandise, net of recoveries. |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Stores and distribution expense | $ | 1,578,460 | 47.4% | $ | 1,604,214 | 45.6% | |||||
Store fixture disposal | — | —% | (4,200 | ) | (0.1)% | ||||||
Lease termination and store closure costs | — | —% | (1,756 | ) | —% | ||||||
Charges related to the Company's profit improvement initiative | — | —% | (709 | ) | —% | ||||||
Adjusted non-GAAP stores and distribution expense | $ | 1,578,460 | 47.4% | $ | 1,597,549 | 45.4% |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Marketing, general and administrative expense | $ | 453,202 | 13.6% | $ | 470,321 | 13.4% | |||||
Indemnification recovery(1) | 6,000 | 0.2% | — | —% | |||||||
Legal settlement charges(2) | — | —% | (15,753 | ) | (0.4)% | ||||||
Charges related to the Company's profit improvement initiative | — | —% | (1,770 | ) | (0.1)% | ||||||
Adjusted non-GAAP marketing, general and administrative expense | $ | 459,202 | 13.8% | $ | 452,798 | 12.9% |
(1) | Includes benefits related to an indemnification recovery of certain legal settlements which were recognized in the second quarter of Fiscal 2015. |
(2) | Accrued expense for certain proposed legal settlements. |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Other operating income, net | $ | 26,212 | 0.8% | $ | 6,441 | 0.2% | |||||
Claims settlement benefits(1) | (12,282 | ) | (0.4)% | — | —% | ||||||
Lease termination and store closure costs(2) | — | —% | 2,211 | 0.1% | |||||||
Adjusted non-GAAP other operating income, net | $ | 13,930 | 0.4% | $ | 8,652 | 0.2% |
(1) | Includes benefits related to a settlement of certain economic loss claims associated with the April 2010 Deepwater Horizon oil spill. |
(2) | Includes charges related to a release of cumulative translation adjustment as the Company substantially completed the liquidation of its Australian operations. |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Operating income | $ | 15,188 | 0.5% | $ | 72,838 | 2.1% | |||||
Asset impairment | 6,356 | 0.2% | 18,209 | 0.5% | |||||||
Indemnification recovery(1) | (6,000 | ) | (0.2)% | — | —% | ||||||
Claims settlement benefits(2) | (12,282 | ) | (0.4)% | — | —% | ||||||
Inventory write-down, net(3) | — | —% | 20,647 | 0.6% | |||||||
Legal settlement charges(4) | — | —% | 15,753 | 0.4% | |||||||
Store fixture disposal | — | —% | 4,200 | 0.1% | |||||||
Lease termination and store closure costs | — | —% | 3,967 | 0.1% | |||||||
Charges related to the Company's profit improvement initiative | — | —% | 2,479 | 0.1% | |||||||
Restructuring benefit | — | —% | (1,598 | ) | —% | ||||||
Adjusted non-GAAP operating income | $ | 3,262 | 0.1% | $ | 136,495 | 3.9% |
(1) | Includes benefits related to an indemnification recovery of certain legal settlements which were recognized in the second quarter of Fiscal 2015. |
(2) | Includes benefits related to a settlement of certain economic loss claims associated with the April 2010 Deepwater Horizon oil spill. |
(3) | Includes inventory write-down charges related to a first quarter of Fiscal 2015 decision to accelerate the disposition of certain aged merchandise, net of recoveries. |
(4) | Accrued expense for certain proposed legal settlements. |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Interest expense | $ | 23,078 | 0.7% | $ | 22,601 | 0.6% | |||||
Interest income | (4,412 | ) | (0.1)% | (4,353 | ) | (0.1)% | |||||
Interest expense, net | $ | 18,666 | 0.6% | $ | 18,248 | 0.5% |
Fiscal 2016 | Fiscal 2015 | ||||||||||
(in thousands, except ratios) | Effective Tax Rate | Effective Tax Rate | |||||||||
Income tax (benefit) expense | $ | (11,196 | ) | 321.9% | $ | 16,031 | 29.4% | ||||
Tax effect of excluded items(1) | (3,900 | ) | 21,186 | ||||||||
Adjusted non-GAAP tax income tax (benefit) expense | $ | (15,096 | ) | 98.0% | $ | 37,217 | 31.5% |
(1) | Refer to “Operating Income,” for details of excluded items. The Company computed the tax effect of excluded items as the difference between the effective tax rate calculated with and without the non-GAAP adjustments on income (loss) before taxes and provision for income taxes. |
Fiscal 2015 | Fiscal 2014 | ||||||||||||||||
(in thousands) | Net Sales | Change in Comparable Sales | Net Sales | Change in Comparable Sales | Net Sales $ Change | Net Sales % Change | |||||||||||
Abercrombie(1) | $ | 1,640,992 | (6)% | $ | 1,771,299 | (5)% | $ | (130,307 | ) | (7)% | |||||||
Hollister | 1,877,688 | —% | 1,947,869 | (10)% | (70,181 | ) | (4)% | ||||||||||
Other(2) | — | —% | 24,862 | —% | (24,862 | ) | —% | ||||||||||
Total net sales | $ | 3,518,680 | (3)% | $ | 3,744,030 | (8)% | $ | (225,350 | ) | (6)% | |||||||
United States | $ | 2,282,040 | (3)% | $ | 2,408,427 | (6)% | $ | (126,387 | ) | (5)% | |||||||
International | 1,236,640 | (1)% | 1,335,603 | (12)% | (98,963 | ) | (7)% | ||||||||||
Total net sales | $ | 3,518,680 | (3)% | $ | 3,744,030 | (8)% | $ | (225,350 | ) | (6)% |
(1) | Includes Abercrombie & Fitch and abercrombie kids brands. |
(2) | Represents net sales from the Company’s Gilly Hicks operations. |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Cost of sales, exclusive of depreciation and amortization | $ | 1,361,137 | 38.7% | $ | 1,430,460 | 38.2% | |||||
Inventory write-down, net(1) | (20,647 | ) | (0.6)% | — | —% | ||||||
Adjusted non-GAAP cost of sales, exclusive of depreciation and amortization | $ | 1,340,490 | 38.1% | $ | 1,430,460 | 38.2% | |||||
Gross profit | $ | 2,157,543 | 61.3% | $ | 2,313,570 | 61.8% | |||||
Inventory write-down, net(1) | 20,647 | 0.6% | — | —% | |||||||
Adjusted non-GAAP gross profit | $ | 2,178,190 | 61.9% | $ | 2,313,570 | 61.8% |
(1) | Inventory write-down charges related to a first quarter of Fiscal 2015 decision to accelerate the disposition of certain aged merchandise, net of recoveries. |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Stores and distribution expense | $ | 1,604,214 | 45.6% | $ | 1,703,051 | 45.5% | |||||
Store fixture disposal | (4,200 | ) | (0.1)% | — | —% | ||||||
Lease termination and store closure costs | (1,756 | ) | —% | (5,612 | ) | (0.1)% | |||||
Charges related to the Company's profit improvement initiative | (709 | ) | —% | (2,723 | ) | (0.1)% | |||||
Adjusted non-GAAP stores and distribution expense | $ | 1,597,549 | 45.4% | $ | 1,694,716 | 45.3% |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Marketing, general and administrative expense | $ | 470,321 | 13.4% | $ | 458,820 | 12.3% | |||||
Legal settlement charges(1) | (15,753 | ) | (0.4)% | — | —% | ||||||
Charges related to the Company's profit improvement initiative | (1,770 | ) | (0.1)% | (3,776 | ) | (0.1)% | |||||
Corporate governance matters(2) | — | —% | (12,644 | ) | (0.3)% | ||||||
Adjusted non-GAAP marketing, general and administrative expense | $ | 452,798 | 12.9% | $ | 442,400 | 11.8% |
(1) | Accrued expense for certain proposed legal settlements. |
(2) | Includes legal, advisory and other charges related to certain corporate governance matters. |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Other operating income, net | $ | 6,441 | 0.2% | $ | 15,239 | 0.4% | |||||
Lease termination and store closure costs(1) | 2,211 | 0.1% | — | —% | |||||||
Adjusted non-GAAP other operating income, net | $ | 8,652 | 0.2% | $ | 15,239 | 0.4% |
(1) | Includes charges related to a release of cumulative translation adjustment as the Company substantially completed the liquidation of its Australian operations. |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Operating income | $ | 72,838 | 2.1% | $ | 113,519 | 3.0% | |||||
Inventory write-down, net(1) | 20,647 | 0.6% | — | —% | |||||||
Asset impairment(2) | 18,209 | 0.5% | 44,988 | 1.2% | |||||||
Legal settlement charges(3) | 15,753 | 0.4% | — | —% | |||||||
Store fixture disposal | 4,200 | 0.1% | — | —% | |||||||
Charges related to the Company's profit improvement initiative | 2,479 | 0.1% | 6,499 | 0.2% | |||||||
Lease termination and store closure costs(4) | 3,967 | 0.1% | 5,612 | 0.1% | |||||||
Restructuring (benefit) charge | (1,598 | ) | —% | 8,431 | 0.2% | ||||||
Corporate governance matters(5) | — | —% | 12,644 | 0.3% | |||||||
Adjusted non-GAAP operating income | $ | 136,495 | 3.9% | $ | 191,693 | 5.1% |
(1) | Inventory write-down charges related to a first quarter of Fiscal 2015 decision to accelerate the disposition of certain aged merchandise, net of recoveries. |
(2) | Includes impairment charges related to stores whose asset carrying values were determined not to be recoverable and exceeded fair value, for Fiscal 2014, a fair value adjustment to the Company-owned aircraft, and for Fiscal 2015, certain store fixtures in connection with changes to the Abercrombie and Hollister store experiences. |
(3) | Includes charges related to certain proposed legal settlements. |
(4) | Includes charges related to lease terminations and store closures, including charges related to a release of cumulative translation adjustment as the Company substantially completed the liquidation of its Australian operations. |
(5) | Includes legal, advisory and other charges related to certain corporate governance matters. |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands) | % of Net Sales | % of Net Sales | |||||||||
Interest expense | $ | 22,601 | 0.6% | $ | 18,305 | 0.5% | |||||
Interest income | (4,353 | ) | (0.1)% | (3,940 | ) | (0.1)% | |||||
Interest expense, net | $ | 18,248 | 0.5% | $ | 14,365 | 0.4% |
Fiscal 2015 | Fiscal 2014 | ||||||||||
(in thousands, except ratios) | Effective Tax Rate | Effective Tax Rate | |||||||||
Income tax expense | $ | 16,031 | 29.4% | $ | 47,333 | 47.7% | |||||
Tax effect of excluded items(1) | 21,186 | 17,686 | |||||||||
Adjusted non-GAAP income tax expense | $ | 37,217 | 31.5% | $ | 65,019 | 36.7% |
(1) | Refer to “Operating Income,” for details of excluded items. The Company computed the tax effect of excluded items as the difference between the effective tax rate calculated with and without the non-GAAP adjustments on income (loss) before taxes and provision for income taxes. |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Borrowings, gross at carrying amount | $ | 268,250 | $ | 293,250 | |||
Unamortized discount | (1,764 | ) | (1,929 | ) | |||
Unamortized fees paid to lenders | (3,494 | ) | (5,086 | ) | |||
Borrowings, net | 262,992 | 286,235 | |||||
Less: short-term portion of borrowings, net | — | — | |||||
Long-term portion of borrowings, net | $ | 262,992 | $ | 286,235 |
Payments due by period | ||||||||||||||||||||
(in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Operating lease obligations (1) | $ | 1,556,771 | $ | 352,811 | $ | 514,967 | $ | 319,284 | $ | 369,709 | ||||||||||
Long-term debt obligations | 268,250 | — | — | 268,250 | — | |||||||||||||||
Purchase obligations | 276,718 | 230,223 | 35,610 | 10,516 | 369 | |||||||||||||||
Other obligations (2) | 137,919 | 25,506 | 31,217 | 40,189 | 41,007 | |||||||||||||||
Capital lease obligations | 2,425 | 1,610 | 790 | 25 | — | |||||||||||||||
Totals | $ | 2,242,083 | $ | 610,150 | $ | 582,584 | $ | 638,264 | $ | 411,085 |
(1) | Includes leasehold financing obligations of $46.4 million. Refer to Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,” of the Notes to Consolidated Financial Statements included in “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this Annual Report on Form 10-K for additional information. |
(2) | Includes estimated interest payments based on the interest rate as of January 28, 2017 and assuming normally scheduled principal payments. |
Abercrombie (1) | Hollister (2) | Total | |||||||||||||||
United States | International | United States | International | United States | International | ||||||||||||
January 31, 2015 | 361 | 32 | 433 | 135 | 794 | 167 | |||||||||||
New | 13 | 7 | 2 | 8 | 15 | 15 | |||||||||||
Closed | (34 | ) | — | (21 | ) | (4 | ) | (55 | ) | (4 | ) | ||||||
January 30, 2016 | 340 | 39 | 414 | 139 | 754 | 178 | |||||||||||
New | 5 | 6 | 3 | 6 | 8 | 12 | |||||||||||
Closed | (34 | ) | (1 | ) | (19 | ) | — | (53 | ) | (1 | ) | ||||||
January 28, 2017 | 311 | 44 | 398 | 145 | 709 | 189 | |||||||||||
Gross square feet (in thousands): | |||||||||||||||||
January 30, 2016 | 2,634 | 619 | 2,856 | 1,183 | 5,490 | 1,802 | |||||||||||
January 28, 2017 | 2,411 | 641 | 2,737 | 1,218 | 5,148 | 1,859 |
(1) | Abercrombie includes the Company’s Abercrombie & Fitch and abercrombie kids brands. Prior period store counts have been restated to combine Abercrombie & Fitch stores with abercrombie kids carveouts into one store. The change reduced total stores by eight stores as of January 31, 2015. Excludes one international franchise store as of January 28, 2017 and January 30, 2016. |
(2) | Excludes three international franchise stores as of January 28, 2017 and two international franchise stores as of January 30, 2016. |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | |||||||||
New store construction, store refreshes and remodels | $ | 73,053 | $ | 71,675 | $ | 86,316 | ||||||
Home office, distribution centers and information technology | 67,791 | 71,524 | 88,291 | |||||||||
Total capital expenditures | $ | 140,844 | $ | 143,199 | $ | 174,607 |
Policy | Effect if Actual Results Differ from Assumptions | |
Revenue Recognition | ||
The Company reserves for sales returns through estimates based on historical returns experience, recent sales activity and various other assumptions that management believes to be reasonable. | The Company has not made any material changes in the accounting methodology used to determine the sales return reserve over the past three fiscal years. | |
The Company does not expect material changes to the underlying assumptions used to measure the sales return reserve as of January 28, 2017. However, actual results could vary from estimates and could result in material gains or losses. | ||
Inventory Valuation | ||
The Company reviews inventories on a quarterly basis. The Company reduces the inventory valuation when the carrying cost of specific inventory items on hand exceeds the amount expected to be realized from the ultimate sale or disposal of the goods, through a lower of cost or market (“LCM”) adjustment. The valuation reserve is established to reduce inventory to its net realizable value based on the Company’s consideration of multiple factors and assumptions including demand forecasts, current sales volumes, expected sell-off activity, composition and aging of inventory, historical recoverability experience and risk of obsolescence from changes in economic conditions or customer preferences. | The Company does not expect material changes to the underlying assumptions used to measure the shrink reserve or the LCM reserve as of January 28, 2017. However, actual results could vary from estimates and could significantly impact the ending inventory valuation at cost, as well as gross margin. An increase or decrease in the LCM reserve of 10% would have affected pre-tax income by approximately $1.8 million for Fiscal 2016. | |
Additionally, as part of inventory valuation, an inventory shrink estimate is made each quarter that reduces the value of inventory for lost or stolen items, based on sales volumes, average unit costs, historical losses and actual shrink results from previous physical inventories. | An increase or decrease in the inventory shrink accrual of 10% would have affected pre-tax income by approximately $0.8 million for Fiscal 2016. | |
Long-lived Assets | ||
Long-lived assets, primarily comprised of leasehold improvements, furniture, fixtures and equipment, are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset might not be recoverable. These include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, other than temporary adverse market conditions and store closure or relocation decisions. On at least a quarterly basis, the Company reviews for indicators of impairment at the individual store level, the lowest level for which cash flows are identifiable. | Impairment loss calculations involve uncertainty due to the nature of the assumptions that management is required to make, including estimating projected cash flows and selecting the discount rate that best reflects the risk inherent in future cash flows. If actual results are not consistent with the estimates and assumptions used, there may be a material impact on the Company’s financial condition or results of operation. As of January 28, 2017, stores that were tested for impairment and not impaired had a net book value of $6.8 million and had undiscounted cash flows which were in the range of 100% to 150% of their respective net asset values. |
Policy | Effect if Actual Results Differ from Assumptions | |
Long-lived Assets (Continued) | ||
Stores that display an indicator of impairment are subjected to an impairment assessment. The Company’s impairment assessment requires management to make assumptions and judgments related, but not limited, to management’s expectations for future operations and projected cash flows. The key assumptions used in the Company’s undiscounted future cash flow models include sales, gross margin and, to a lesser extent, operating expenses. An impairment loss would be recognized when these undiscounted future cash flows are less than carrying amount of the asset group. In the circumstance of impairment, the loss would be measured as the excess of the carrying amount of the asset group over its fair value. The key assumptions used in estimating the fair value of impaired assets may include projected cash flows and discount rate. | For stores assessed by management as having indicators of impairment, a 10% decrease in the sales assumption used to project future cash flows in the impairment testing performed as of January 28, 2017 would have increased the Fiscal 2016 impairment charge by $3.4 million. | |
Income Taxes | ||
The provision for income taxes is determined using the asset and liability approach. Tax laws often require items to be included in tax filings at different times than the items are being reflected in the financial statements. A current liability is recognized for the estimated taxes payable for the current year. Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred taxes are adjusted for enacted changes in tax rates and tax laws. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. | The Company does not expect material changes in the judgments, assumptions or interpretations used to calculate the tax provision for Fiscal 2016. However, changes in these judgments, assumptions or interpretations may occur and could have a material impact on the Company’s income tax provision. As of the end of Fiscal 2016, the Company had recorded valuation allowances of $2.5 million. | |
Historically, the Company has not provided a provision for U.S. income tax on undistributed net income from non-U.S. subsidiaries as the Company had determined that such profits were indefinitely reinvested outside the U.S. However, in connection with the corporate restructuring to support omnichannel growth that was completed in Fiscal 2015, the Company determined that undistributed net income earned through October 31, 2015 and earnings and profits (as defined under the Internal Revenue Code and accompanying regulations) in excess of net income would remain indefinitely reinvested outside of the U.S. while undistributed net income earned after October 31, 2015 would not be indefinitely reinvested. Accordingly, the Company has provided deferred U.S. income taxes for net income generated after October 31, 2015 from our non-U.S. subsidiaries. | The Company has approximately $334 million of undistributed earnings and profits (as defined under the Internal Revenue Code and accompanying regulations), which includes approximately $126.6 million in net income that the Company considers indefinitely reinvested outside of the U.S. and for which the Company has not provided U.S. deferred income taxes. If the Company’s indefinite reinvestment position, or U.S. and/or international tax laws changes in the future, there may be a material impact on the Company's provision for income taxes in the period the change occurs. | |
Legal Contingencies | ||
The Company is a defendant in lawsuits and other adversarial proceedings arising in the ordinary course of business. Legal costs incurred in connection with the resolution of claims and lawsuits are expensed as incurred, and the Company establishes reserves for the outcome of litigation where it is probable that a loss has been incurred and such loss is estimable. Significant judgment may be applied in assessing the probability of loss and in estimating the amount of such losses. | Actual liabilities may exceed or be less than the amounts reserved, and there can be no assurance that the final resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
2016 | 2015 | 2014 | |||||||||
Net sales | $ | 3,326,740 | $ | 3,518,680 | $ | 3,744,030 | |||||
Cost of sales, exclusive of depreciation and amortization | 1,298,172 | 1,361,137 | 1,430,460 | ||||||||
Gross profit | 2,028,568 | 2,157,543 | 2,313,570 | ||||||||
Stores and distribution expense | 1,578,460 | 1,604,214 | 1,703,051 | ||||||||
Marketing, general and administrative expense | 453,202 | 470,321 | 458,820 | ||||||||
Restructuring (benefit) charge | — | (1,598 | ) | 8,431 | |||||||
Asset impairment | 7,930 | 18,209 | 44,988 | ||||||||
Other operating income, net | (26,212 | ) | (6,441 | ) | (15,239 | ) | |||||
Operating income | 15,188 | 72,838 | 113,519 | ||||||||
Interest expense, net | 18,666 | 18,248 | 14,365 | ||||||||
(Loss) income before taxes | (3,478 | ) | 54,590 | 99,154 | |||||||
Income tax (benefit) expense | (11,196 | ) | 16,031 | 47,333 | |||||||
Net income | 7,718 | 38,559 | 51,821 | ||||||||
Less: Net income attributable to noncontrolling interests | 3,762 | 2,983 | — | ||||||||
Net income attributable to A&F | $ | 3,956 | $ | 35,576 | $ | 51,821 | |||||
Net income per share attributable to A&F | |||||||||||
Basic | $ | 0.06 | $ | 0.52 | $ | 0.72 | |||||
Diluted | $ | 0.06 | $ | 0.51 | $ | 0.71 | |||||
Weighted-average shares outstanding | |||||||||||
Basic | 67,878 | 68,880 | 71,785 | ||||||||
Diluted | 68,284 | 69,417 | 72,937 | ||||||||
Dividends declared per share | $ | 0.80 | $ | 0.80 | $ | 0.80 | |||||
Other comprehensive (loss) income | |||||||||||
Foreign currency translation, net of tax | $ | (6,931 | ) | $ | (22,516 | ) | $ | (77,929 | ) | ||
Derivative financial instruments, net of tax | 248 | (8,523 | ) | 15,266 | |||||||
Other comprehensive loss | (6,683 | ) | (31,039 | ) | (62,663 | ) | |||||
Comprehensive income (loss) | 1,035 | 7,520 | (10,842 | ) | |||||||
Less: Comprehensive income attributable to noncontrolling interests | 3,762 | 2,983 | — | ||||||||
Comprehensive (loss) income attributable to A&F | $ | (2,727 | ) | $ | 4,537 | $ | (10,842 | ) |
January 28, 2017 | January 30, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 547,189 | $ | 588,578 | |||
Receivables | 93,384 | 56,868 | |||||
Inventories, net | 399,795 | 436,701 | |||||
Other current assets | 98,932 | 96,833 | |||||
Total current assets | 1,139,300 | 1,178,980 | |||||
Property and equipment, net | 824,738 | 894,178 | |||||
Other assets | 331,719 | 359,881 | |||||
Total assets | $ | 2,295,757 | $ | 2,433,039 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 187,017 | $ | 184,175 | |||
Accrued expenses | 273,044 | 321,237 | |||||
Short-term portion of deferred lease credits | 20,076 | 23,303 | |||||
Income taxes payable | 5,863 | 5,988 | |||||
Total current liabilities | 486,000 | 534,703 | |||||
Long-term liabilities: | |||||||
Long-term portion of deferred lease credits | 76,321 | 89,256 | |||||
Long-term portion of borrowings, net | 262,992 | 286,235 | |||||
Leasehold financing obligations | 46,397 | 47,440 | |||||
Other liabilities | 172,008 | 179,683 | |||||
Total long-term liabilities | 557,718 | 602,614 | |||||
Stockholders’ equity | |||||||
Class A Common Stock - $0.01 par value: 150,000 shares authorized and 103,300 shares issued at each of January 28, 2017 and January 30, 2016 | 1,033 | 1,033 | |||||
Paid-in capital | 396,590 | 407,029 | |||||
Retained earnings | 2,474,703 | 2,530,196 | |||||
Accumulated other comprehensive loss, net of tax | (121,302 | ) | (114,619 | ) | |||
Treasury stock, at average cost: 35,542 and 35,952 shares at January 28, 2017 and January 30, 2016, respectively | (1,507,589 | ) | (1,532,576 | ) | |||
Total Abercrombie & Fitch Co. stockholders’ equity | 1,243,435 | 1,291,063 | |||||
Noncontrolling interests | 8,604 | 4,659 | |||||
Total stockholders’ equity | 1,252,039 | 1,295,722 | |||||
Total liabilities and stockholders’ equity | $ | 2,295,757 | $ | 2,433,039 |
Common stock | Paid-in capital | Non-controlling interest | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total stockholders’ equity | |||||||||||||||||||
Shares outstanding | Par value | Shares | At average cost | ||||||||||||||||||||||
Balance, February 1, 2014 | 76,402 | $ | 1,033 | $ | 433,620 | $ | — | $ | 2,556,270 | $ | (20,917 | ) | 26,898 | $ | (1,240,513 | ) | $ | 1,729,493 | |||||||
Net income | 51,821 | 51,821 | |||||||||||||||||||||||
Purchase of common stock | (7,324 | ) | 7,324 | (285,038 | ) | (285,038 | ) | ||||||||||||||||||
Dividends ($0.80 per share) | (57,362 | ) | (57,362 | ) | |||||||||||||||||||||
Share-based compensation issuances and exercises | 274 | (17,884 | ) | (56 | ) | (274 | ) | 12,989 | (4,951 | ) | |||||||||||||||
Tax effect of share-based compensation issuances and exercises | (4,626 | ) | (4,626 | ) | |||||||||||||||||||||
Share-based compensation expense | 23,027 | 23,027 | |||||||||||||||||||||||
Net change in unrealized gains or losses on derivative financial instruments | 15,266 | 15,266 | |||||||||||||||||||||||
Foreign currency translation adjustments | (77,929 | ) | (77,929 | ) | |||||||||||||||||||||
Balance, January 31, 2015 | 69,352 | $ | 1,033 | $ | 434,137 | $ | — | $ | 2,550,673 | $ | (83,580 | ) | 33,948 | $ | (1,512,562 | ) | $ | 1,389,701 | |||||||
Net income | 2,983 | 35,576 | 38,559 | ||||||||||||||||||||||
Purchase of common stock | (2,461 | ) | 2,461 | (50,033 | ) | (50,033 | ) | ||||||||||||||||||
Dividends ($0.80 per share) | (55,145 | ) | (55,145 | ) | |||||||||||||||||||||
Share-based compensation issuances and exercises | 457 | (37,220 | ) | (908 | ) | (457 | ) | 30,019 | (8,109 | ) | |||||||||||||||
Tax effect of share-based compensation issuances and exercises | (18,247 | ) | (18,247 | ) | |||||||||||||||||||||
Share-based compensation expense | 28,359 | 28,359 | |||||||||||||||||||||||
Net change in unrealized gains or losses on derivative financial instruments | (8,523 | ) | (8,523 | ) | |||||||||||||||||||||
Foreign currency translation adjustments | (22,516 | ) | (22,516 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests, net | 1,676 | 1,676 | |||||||||||||||||||||||
Balance, January 30, 2016 | 67,348 | $ | 1,033 | $ | 407,029 | $ | 4,659 | $ | 2,530,196 | $ | (114,619 | ) | 35,952 | $ | (1,532,576 | ) | $ | 1,295,722 | |||||||
Net income | 3,762 | 3,956 | 7,718 | ||||||||||||||||||||||
Dividends ($0.80 per share) | (54,066 | ) | (54,066 | ) | |||||||||||||||||||||
Share-based compensation issuances and exercises | 410 | (25,043 | ) | (5,383 | ) | (410 | ) | 24,987 | (5,439 | ) | |||||||||||||||
Tax effect of share-based compensation issuances and exercises | (7,516 | ) | (7,516 | ) | |||||||||||||||||||||
Share-based compensation expense | 22,120 | 22,120 | |||||||||||||||||||||||
Net change in unrealized gains or losses on derivative financial instruments | 248 | 248 | |||||||||||||||||||||||
Foreign currency translation adjustments | (6,931 | ) | (6,931 | ) | |||||||||||||||||||||
Contributions from noncontrolling interests, net | 183 | 183 | |||||||||||||||||||||||
Balance, January 28, 2017 | 67,758 | $ | 1,033 | $ | 396,590 | $ | 8,604 | $ | 2,474,703 | $ | (121,302 | ) | 35,542 | $ | (1,507,589 | ) | $ | 1,252,039 |
2016 | 2015 | 2014 | |||||||||
Operating activities | |||||||||||
Net income | $ | 7,718 | $ | 38,559 | $ | 51,821 | |||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Depreciation and amortization | 195,414 | 213,680 | 226,421 | ||||||||
Asset impairment | 7,930 | 18,209 | 47,084 | ||||||||
Loss on disposal | 3,836 | 11,082 | 5,794 | ||||||||
Amortization of deferred lease credits | (24,557 | ) | (28,619 | ) | (38,437 | ) | |||||
(Benefit from) provision for deferred income taxes | (7,866 | ) | 7,469 | 1,676 | |||||||
Share-based compensation | 22,120 | 28,359 | 23,027 | ||||||||
Changes in assets and liabilities | |||||||||||
Inventories, net | 24,452 | 21,253 | 62,854 | ||||||||
Accounts payable and accrued expenses | (32,647 | ) | 51,050 | (37,394 | ) | ||||||
Lessor construction allowances | 10,288 | 11,082 | 13,182 | ||||||||
Income taxes | (8,528 | ) | (45,027 | ) | (34,659 | ) | |||||
Long-term lease deposits | 26,649 | (1,237 | ) | (1,570 | ) | ||||||
Other assets | (32,291 | ) | 9,204 | 8,458 | |||||||
Other liabilities | (7,927 | ) | (25,123 | ) | (15,777 | ) | |||||
Net cash provided by operating activities | 184,591 | 309,941 | 312,480 | ||||||||
Investing activities | |||||||||||
Purchases of property and equipment | (140,844 | ) | (143,199 | ) | (174,624 | ) | |||||
Proceeds from sale of property and equipment | 4,098 | 11,109 | — | ||||||||
Other investing activities | — | 9,523 | (450 | ) | |||||||
Net cash used for investing activities | (136,746 | ) | (122,567 | ) | (175,074 | ) | |||||
Financing activities | |||||||||||
Purchase of treasury stock | — | (50,033 | ) | (285,038 | ) | ||||||
Repayments of borrowings | (25,000 | ) | (6,000 | ) | (195,750 | ) | |||||
Proceeds from borrowings | — | — | 357,000 | ||||||||
Dividends paid | (54,066 | ) | (55,145 | ) | (57,362 | ) | |||||
Other financing activities | (4,727 | ) | 4,303 | (303 | ) | ||||||
Net cash used for financing activities | (83,793 | ) | (106,875 | ) | (181,453 | ) | |||||
Effect of exchange rates on cash | (5,441 | ) | (12,629 | ) | (35,361 | ) | |||||
Net (decrease) increase in cash and equivalents | (41,389 | ) | 67,870 | (79,408 | ) | ||||||
Cash and equivalents, beginning of period | 588,578 | 520,708 | 600,116 | ||||||||
Cash and equivalents, end of period | $ | 547,189 | $ | 588,578 | $ | 520,708 | |||||
Significant non-cash investing activities | |||||||||||
Change in accrual for construction in progress | $ | (6,104 | ) | $ | 12,859 | $ | 6,525 | ||||
Supplemental information | |||||||||||
Cash paid for interest | $ | 15,254 | $ | 16,060 | $ | 18,609 | |||||
Cash paid for income taxes, net of refunds | $ | 23,651 | $ | 48,702 | $ | 74,685 |
Category of Property and Equipment | Service Lives | |
Information technology | 3 - 7 years | |
Furniture, fixtures and equipment | 3 - 15 years | |
Leasehold improvements | 3 - 15 years | |
Other property and equipment | 3 - 20 years | |
Buildings | 30 years |
(in thousands) | 2016 | 2015 | 2014 | ||||||||
Store rent: | |||||||||||
Fixed minimum(1) | $ | 408,575 | $ | 404,836 | $ | 432,794 | |||||
Contingent | 11,690 | 10,161 | 8,886 | ||||||||
Deferred lease credits amortization | (24,557 | ) | (28,619 | ) | (38,437 | ) | |||||
Total store rent expense | 395,708 | 386,378 | 403,243 | ||||||||
Buildings, equipment and other | 5,772 | 3,849 | 4,619 | ||||||||
Total rent expense | $ | 401,480 | $ | 390,227 | $ | 407,862 |
(in thousands) | |||
Fiscal 2017 | $ | 350,503 | |
Fiscal 2018 | $ | 289,742 | |
Fiscal 2019 | $ | 221,797 | |
Fiscal 2020 | $ | 178,719 | |
Fiscal 2021 | $ | 139,477 | |
Thereafter | $ | 369,709 |
(in thousands) | 2016 | 2015 | 2014 | |||||
Shares of common stock issued | 103,300 | 103,300 | 103,300 | |||||
Weighted-average treasury shares | (35,422 | ) | (34,420 | ) | (31,515 | ) | ||
Weighted-average — basic shares | 67,878 | 68,880 | 71,785 | |||||
Dilutive effect of share-based compensation awards | 406 | 537 | 1,152 | |||||
Weighted-average — diluted shares | 68,284 | 69,417 | 72,937 | |||||
Anti-dilutive shares (1) | 6,107 | 8,967 | 6,144 |
(1) | Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net income per diluted share because the impact would have been anti-dilutive. |
Accounting Standards Update (ASU) | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
Standards not yet adopted | ||||||
ASU 2015-11, Simplifying the Measurement of Inventory | This update amends ASC 330, Inventory. The new guidance applies to inventory measured using first-in, first-out (FIFO) or average cost. Under this amendment, inventory should be measured at the lower of cost and net realizable value, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. | January 29, 2017* | The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. | |||
ASU 2016-09, Compensation—Stock Compensation | This update amends ASC 718, Compensation. Under the new guidance, tax benefits and certain tax deficiencies arising from the settlement of share-based payments will be recognized as income tax benefits or expenses in the statement of operations, whereas under the current guidance such benefits and deficiencies are recorded in additional paid-in-capital. The cash flow effects of the tax benefit will be reported in cash flows from operating activities, whereas they are currently reported in cash flows from financing activities. This guidance also allows for entities to make a policy election to estimate forfeitures or account for them when they occur. | January 29, 2017* | Based on share-based compensation awards currently outstanding at current stock prices, the adoption of this guidance will result in additional non-cash income tax expense of approximately $9 million and $15 million in Fiscal 2017 and 2018, respectively, primarily related to the expiration of certain stock appreciation rights. The Company does not expect share-based compensation awards currently outstanding to have a material impact on income tax expense beyond Fiscal 2018. | |||
ASU 2014-09, Revenue from Contracts with Customers | This update supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. The new guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods or services. | February 4, 2018 | The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. | |||
ASU 2016-02, Leases | This update supersedes the leasing requirements in ASC 840, Leases. The new guidance requires an entity to recognize lease assets and lease liabilities on the balance sheet and disclose key leasing information that depicts the lease rights and obligations of an entity. | February 3, 2019* | The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements, but expects that it will result in a significant increase in the Company’s long-term assets and long-term liabilities on the Company's consolidated balance sheets. |
• | Level 1—inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets that the Company can access at the measurement date. |
• | Level 2—inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities, directly or indirectly. |
• | Level 3—inputs to the valuation methodology are unobservable. |
Assets and Liabilities at Fair Value as of January 28, 2017 | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | |||||||||||||||
Trust-owned life insurance policies (at cash surrender value) | $ | — | $ | 99,655 | $ | — | $ | 99,655 | |||||||
Money market funds | 94,026 | — | — | 94,026 | |||||||||||
Derivative financial instruments | — | 6,041 | — | 6,041 | |||||||||||
Total assets | $ | 94,026 | $ | 105,696 | $ | — | $ | 199,722 | |||||||
Liabilities: | |||||||||||||||
Derivative financial instruments | $ | — | $ | 492 | $ | — | $ | 492 | |||||||
Total liabilities | $ | — | $ | 492 | $ | — | $ | 492 |
Assets and Liabilities at Fair Value as of January 30, 2016 | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 311,349 | $ | — | $ | — | $ | 311,349 | |||||||
Derivative financial instruments | — | 4,166 | — | 4,166 | |||||||||||
Total assets | $ | 311,349 | $ | 4,166 | $ | — | $ | 315,515 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Gross borrowings outstanding, carrying amount | $ | 268,250 | $ | 293,250 | |||
Gross borrowings outstanding, fair value | $ | 260,551 | $ | 284,453 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Inventories | $ | 425,807 | $ | 466,918 | |||
Less: Lower of cost or market reserve | (18,402 | ) | (19,616 | ) | |||
Less: Shrink reserve | (7,610 | ) | (10,601 | ) | |||
Inventories, net | $ | 399,795 | $ | 436,701 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Land | $ | 36,875 | $ | 37,451 | |||
Buildings | 282,564 | 287,081 | |||||
Furniture, fixtures and equipment | 691,918 | 682,013 | |||||
Information technology | 480,352 | 479,269 | |||||
Leasehold improvements | 1,224,398 | 1,283,613 | |||||
Construction in progress | 54,080 | 19,875 | |||||
Other | 1,952 | 3,135 | |||||
Total | $ | 2,772,139 | $ | 2,792,437 | |||
Less: Accumulated depreciation and amortization | (1,947,401 | ) | (1,898,259 | ) | |||
Property and equipment, net | $ | 824,738 | $ | 894,178 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Rabbi Trust assets: | |||||||
Trust-owned life insurance policies (at cash surrender value) | $ | 99,655 | $ | 96,567 | |||
Money market funds | 20 | 23 | |||||
Total Rabbi Trust assets | $ | 99,675 | $ | 96,590 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Rabbi Trust | $ | 99,675 | $ | 96,590 | |||
Deferred tax assets | 91,141 | 89,677 | |||||
Long-term deposits | 40,451 | 64,098 | |||||
Intellectual property | 27,092 | 28,057 | |||||
Long-term supplies | 22,050 | 25,475 | |||||
Restricted cash | 20,443 | 20,581 | |||||
Prepaid income tax on intercompany items | 6,400 | 7,344 | |||||
Other | 24,467 | 28,059 | |||||
Other assets | $ | 331,719 | $ | 359,881 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Accrued payroll and related costs | $ | 37,235 | $ | 60,464 | |||
Construction in progress | 36,853 | 43,129 | |||||
Accrued taxes | 34,077 | 37,203 | |||||
Gift card liability | 29,685 | 36,384 | |||||
Accrued rent | 29,410 | 24,739 | |||||
Other | 105,784 | 119,318 | |||||
Accrued expenses | $ | 273,044 | $ | 321,237 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Deferred lease credits | $ | 442,788 | $ | 472,279 | |||
Amortized deferred lease credits | (346,391 | ) | (359,720 | ) | |||
Total deferred lease credits, net | 96,397 | 112,559 | |||||
Less: short-term portion of deferred lease credits | (20,076 | ) | (23,303 | ) | |||
Long-term portion of deferred lease credits | $ | 76,321 | $ | 89,256 |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
Domestic | $ | (52,041 | ) | $ | 8,412 | $ | 100,115 | ||||
Foreign | 48,563 | 46,178 | (961 | ) | |||||||
Income (loss) before taxes | $ | (3,478 | ) | $ | 54,590 | $ | 99,154 |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
Current: | |||||||||||
Federal | $ | (18,888 | ) | $ | (3,124 | ) | $ | 21,287 | |||
State | (74 | ) | (434 | ) | 1,944 | ||||||
Foreign | 15,633 | 12,120 | 28,614 | ||||||||
(3,329 | ) | 8,562 | 51,845 | ||||||||
Deferred: | |||||||||||
Federal | (5,787 | ) | 9,224 | 8,971 | |||||||
State | (346 | ) | 3,297 | 1,783 | |||||||
Foreign | (1,734 | ) | (5,052 | ) | (15,266 | ) | |||||
(7,867 | ) | 7,469 | (4,512 | ) | |||||||
Income tax (benefit) expense | $ | (11,196 | ) | $ | 16,031 | $ | 47,333 |
Fiscal 2016(1) | Fiscal 2015 | Fiscal 2014 | ||||||
U.S. Federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income tax, net of U.S. federal income tax effect | 5.0 | 4.6 | 4.3 | |||||
Foreign taxation of non-U.S. operations | 248.9 | (10.2 | ) | 5.4 | ||||
U.S. taxation of non-U.S. operations(2) | (212.6 | ) | 20.0 | — | ||||
Net change in valuation allowances | (16.5 | ) | (8.7 | ) | 6.6 | |||
Audit and other adjustments to prior years’ accruals | (0.1 | ) | (8.7 | ) | (1.3 | ) | ||
Statutory tax rate and law changes | 94.3 | 4.2 | 0.2 | |||||
Permanent items | 122.3 | (4.6 | ) | (1.1 | ) | |||
Credit items | 43.8 | (2.3 | ) | (1.2 | ) | |||
Other items, net | 1.8 | 0.1 | (0.2 | ) | ||||
Total | 321.9 | % | 29.4 | % | 47.7 | % |
(1) | Given the low level of income in absolute dollars in Fiscal 2016, effective tax rate reconciling items that may have been considered de minimis in prior years in terms of absolute dollars and on a percentage basis are amplified on a percentage basis in the current year even as the absolute dollar value of the reconciling items are similar to prior years. Accordingly, year over year comparability may be difficult as a result of the amplifying effect of the lower levels of income. |
(2) | U.S. branch operations in Canada and Puerto Rico are subject to tax at the full U.S. tax rates. As a result, income from these operations do not create reconciling items. |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Deferred tax assets: | |||||||
Deferred compensation | $ | 54,552 | $ | 62,679 | |||
Accrued expenses and reserves | 13,168 | 19,862 | |||||
Rent | 33,917 | 36,929 | |||||
Net operating losses (NOL), tax credit and other carryforwards | 26,812 | 14,248 | |||||
Investments in subsidiaries | 8,791 | 2,895 | |||||
Other | 3,030 | 619 | |||||
Valuation allowances | (2,429 | ) | (1,643 | ) | |||
Total deferred tax assets | $ | 137,841 | $ | 135,589 | |||
Deferred tax liabilities: | |||||||
Property, equipment and intangibles | $ | (20,177 | ) | $ | (20,708 | ) | |
Inventory | (11,955 | ) | (9,480 | ) | |||
Store supplies | (4,892 | ) | (6,054 | ) | |||
Prepaid expenses | (3,262 | ) | (3,653 | ) | |||
Undistributed net income of non-U.S. subsidiaries | (5,609 | ) | (4,390 | ) | |||
Other | (950 | ) | (1,011 | ) | |||
Total deferred tax liabilities | (46,845 | ) | (45,296 | ) | |||
Net deferred income tax assets | $ | 90,996 | $ | 90,293 |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
Uncertain tax positions, beginning of the year | $ | 2,455 | $ | 3,212 | $ | 4,182 | |||||
Gross addition for tax positions of the current year | 67 | 13 | 152 | ||||||||
Gross addition for tax positions of prior years | 19 | 598 | 33 | ||||||||
Reductions of tax positions of prior years for: | |||||||||||
Lapses of applicable statutes of limitations | (1,211 | ) | (986 | ) | (348 | ) | |||||
Settlements during the period | (40 | ) | (64 | ) | (4 | ) | |||||
Changes in judgment/ excess reserve | (51 | ) | (318 | ) | (803 | ) | |||||
Uncertain tax positions, end of year | $ | 1,239 | $ | 2,455 | $ | 3,212 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Borrowings, gross at carrying amount | $ | 268,250 | $ | 293,250 | |||
Unamortized discount | (1,764 | ) | (1,929 | ) | |||
Unamortized fees paid to lenders | (3,494 | ) | (5,086 | ) | |||
Borrowings, net | 262,992 | 286,235 | |||||
Less: short-term portion of borrowings | — | — | |||||
Long-term portion of borrowings, net | $ | 262,992 | $ | 286,235 |
(in thousands) | January 28, 2017 | January 30, 2016 | |||||
Accrued straight-line rent | $ | 82,241 | $ | 90,445 | |||
Deferred compensation | 44,531 | 48,058 | |||||
Other | 45,236 | 41,180 | |||||
Other liabilities | $ | 172,008 | $ | 179,683 |
• | For non-associate directors: awards with an aggregate fair market value on the date of the grant of no more than $300,000; |
• | For the non-associate director occupying the role of Non-Executive Chairman of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $500,000; and |
• | For the non-associate director occupying the role of Executive Chairman of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $2,500,000. |
Number of Underlying Shares | Weighted- Average Exercise Price | Aggregate Intrinsic Value | Weighted-Average Remaining Contractual Life | |||||||||
Outstanding at January 30, 2016 | 271,000 | $ | 63.05 | |||||||||
Granted | — | — | ||||||||||
Exercised | (2,000 | ) | 22.87 | |||||||||
Forfeited or expired | (79,200 | ) | 31.53 | |||||||||
Outstanding at January 28, 2017 | 189,800 | $ | 76.62 | $ | — | 0.7 | ||||||
Stock options exercisable at January 28, 2017 | 189,900 | $ | 76.62 | $ | — | 0.7 |
Number of Underlying Shares | Weighted-Average Exercise Price | Aggregate Intrinsic Value | Weighted-Average Remaining Contractual Life | |||||||||
Outstanding at January 30, 2016 | 5,301,115 | $ | 45.02 | |||||||||
Granted | — | — | ||||||||||
Exercised | (10,483 | ) | 22.45 | |||||||||
Forfeited or expired | (1,211,582 | ) | 37.19 | |||||||||
Outstanding at January 28, 2017 | 4,079,050 | $ | 47.49 | $ | — | 2.6 | ||||||
Stock appreciation rights exercisable at January 28, 2017 | 3,532,119 | $ | 50.62 | $ | — | 1.9 | ||||||
Stock appreciation rights expected to become exercisable in the future as of January 28, 2017 | 436,030 | $ | 27.72 | $ | — | 7.7 |
Executive Officers | All Other Associates | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Grant date market price | $ | 22.46 | $ | 35.08 | $ | 22.42 | $ | 37.05 | |||||||
Exercise price | $ | 22.46 | $ | 35.49 | $ | 22.42 | $ | 37.22 | |||||||
Fair value | $ | 9.11 | $ | 12.85 | $ | 8.00 | $ | 12.92 | |||||||
Assumptions: | |||||||||||||||
Price volatility | 49 | % | 49 | % | 49 | % | 50 | % | |||||||
Expected term (years) | 6.1 | 4.9 | 4.3 | 4.1 | |||||||||||
Risk-free interest rate | 1.5 | % | 1.6 | % | 4.2 | % | 1.4 | % | |||||||
Dividend yield | 1.7 | % | 2.0 | % | 1.7 | % | 1.9 | % |
Service-based Restricted Stock Units | Performance-based Restricted Stock Units | Market-based Restricted Stock Units | ||||||||||||||||||
Number of Underlying Shares | Weighted- Average Grant Date Fair Value | Number of Underlying Shares | Weighted- Average Grant Date Fair Value | Number of Underlying Shares | Weighted- Average Grant Date Fair Value | |||||||||||||||
Unvested at January 30, 2016 | 1,671,597 | $ | 28.13 | 185,500 | $ | 23.42 | 117,711 | $ | 25.00 | |||||||||||
Granted | 1,182,198 | 24.57 | 129,725 | 25.70 | 129,734 | 31.01 | ||||||||||||||
Adjustments for performance achievement | — | — | — | — | — | — | ||||||||||||||
Vested | (678,033 | ) | 29.96 | (32,625 | ) | 36.12 | — | — | ||||||||||||
Forfeited | (260,301 | ) | 26.81 | (78,677 | ) | 24.22 | (62,553 | ) | 31.91 | |||||||||||
Unvested at January 28, 2017 | 1,915,461 | $ | 25.47 | 203,923 | $ | 22.53 | 184,892 | $ | 26.89 |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
Service-based restricted stock units: | |||||||||||
Total grant date fair value of awards granted | $ | 29,047 | $ | 23,101 | $ | 33,075 | |||||
Total grant date fair value of awards vested | 20,314 | 23,608 | 17,078 | ||||||||
Performance-based restricted stock units: | |||||||||||
Total grant date fair value of awards granted | $ | 3,334 | $ | 2,278 | $ | 4,709 | |||||
Total grant date fair value of awards vested | 1,178 | 1,861 | 515 | ||||||||
Market-based restricted stock units: | |||||||||||
Total grant date fair value of awards granted | $ | 4,023 | $ | 2,158 | $ | 3,756 | |||||
Total grant date fair value of awards vested | — | — | — |
Fiscal 2016 | Fiscal 2015 | ||||||
Grant date market price | $ | 28.06 | $ | 22.46 | |||
Fair value | $ | 31.01 | $ | 19.04 | |||
Assumptions: | |||||||
Price volatility | 45 | % | 45 | % | |||
Expected term (years) | 2.7 | 2.8 | |||||
Risk-free interest rate | 1 | % | 0.9 | % | |||
Dividend yield | 3 | % | 3.5 | % | |||
Average volatility of peer companies | 34.5 | % | 34.0 | % | |||
Average correlation coefficient of peer companies | 0.3415 | 0.3288 |
(in thousands) | Notional Amount(1) | ||
Euro | $ | 77,247 | |
British pound | $ | 25,751 | |
Canadian dollar | $ | 14,380 | |
Japanese yen | $ | 10,492 |
(1) | Amounts reported are the U.S. Dollar notional amounts outstanding as of January 28, 2017. |
(in thousands) | Notional Amount(1) | ||
Euro | $ | 18,813 | |
Japanese yen | $ | 1,767 | |
British pound | $ | 1,249 | |
Swedish krona | $ | 1,020 |
(1) | Amounts reported are the U.S. Dollar notional amounts outstanding as of January 28, 2017. |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
(in thousands) | Location | January 28, 2017 | January 30, 2016 | Location | January 28, 2017 | January 30, 2016 | |||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign currency exchange forward contracts | Other current assets | $ | 5,920 | $ | 4,097 | Accrued expenses | $ | 486 | $ | — | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign currency exchange forward contracts | Other current assets | $ | 122 | $ | 69 | Accrued expenses | $ | 6 | $ | — | |||||||||
Total | Other current assets | $ | 6,042 | $ | 4,166 | Accrued expenses | $ | 492 | $ | — |
Fiscal 2016 | Fiscal 2015 | ||||||||
(in thousands) | Location | Gain/(Loss) | Gain/(Loss) | ||||||
Derivatives not designated as hedging instruments: | |||||||||
Foreign currency exchange forward contracts | Other operating income, net | $ | 627 | $ | 751 |
Effective Portion | Ineffective Portion and Amount Excluded from Effectiveness Testing | ||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative Contracts (1) | Location of Gain (Loss) Reclassified from AOCL into Earnings | Amount of Gain (Loss) Reclassified from AOCL into Earnings (2) | Location of Gain Recognized in Earnings on Derivative Contracts | Amount of Gain Recognized in Earnings on Derivative Contracts (3) | |||||||||||||||||||||||
(in thousands) | January 28, 2017 | January 30, 2016 | January 28, 2017 | January 30, 2016 | January 28, 2017 | January 30, 2016 | |||||||||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||||||||||||
Foreign currency exchange forward contracts | $ | 7,078 | $ | 7,204 | Cost of sales, exclusive of depreciation and amortization | $ | 6,195 | $ | 15,596 | Other operating income, net | $ | 1,873 | $ | 242 |
(1) | The amount represents the change in fair value of derivative contracts due to changes in spot rates. |
(2) | The amount represents the reclassification from AOCL into earnings when the hedged item affects earnings, which is when merchandise is sold to the Company’s customers. |
(3) | The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and, therefore, recognized in earnings. |
Fiscal 2016 | |||||||||||
(in thousands) | Foreign Currency Translation Adjustment | Unrealized Gain (Loss) on Derivative Financial Instruments | Total | ||||||||
Beginning balance at January 30, 2016 | $ | (119,196 | ) | $ | 4,577 | $ | (114,619 | ) | |||
Other comprehensive (loss) income before reclassifications | (7,091 | ) | 7,078 | (13 | ) | ||||||
Reclassified from accumulated other comprehensive loss(1) | — | (6,195 | ) | (6,195 | ) | ||||||
Tax effect | 160 | (635 | ) | (475 | ) | ||||||
Other comprehensive loss | (6,931 | ) | 248 | (6,683 | ) | ||||||
Ending balance at January 28, 2017 | $ | (126,127 | ) | $ | 4,825 | $ | (121,302 | ) |
(1) | For Fiscal 2016, a gain was reclassified from accumulated other comprehensive income (loss) to the cost of sales, exclusive of depreciation and amortization on the Consolidated Statement of Operations and Comprehensive Income (Loss). |
Fiscal 2015 | |||||||||||
(in thousands) | Foreign Currency Translation Adjustment | Unrealized Gain (Loss) on Derivative Financial Instruments | Total | ||||||||
Beginning balance January 31, 2015 | $ | (96,680 | ) | $ | 13,100 | $ | (83,580 | ) | |||
Other comprehensive (loss) income before reclassifications | (22,623 | ) | 7,204 | (15,419 | ) | ||||||
Reclassified from accumulated other comprehensive loss(1) | — | (15,596 | ) | (15,596 | ) | ||||||
Tax effect | 107 | (131 | ) | (24 | ) | ||||||
Other comprehensive loss | (22,516 | ) | (8,523 | ) | (31,039 | ) | |||||
Ending balance at January 30, 2016 | $ | (119,196 | ) | $ | 4,577 | $ | (114,619 | ) |
(1) | For Fiscal 2015, a gain was reclassified from accumulated other comprehensive income (loss) to cost of sales, exclusive of depreciation and amortization on the Consolidated Statement of Operations and Comprehensive Income (Loss). Additionally, a foreign currency translation loss related to the Company's dissolution of its Australian operations was reclassified to other operating income, net. |
Fiscal 2014 | |||||||||||
(in thousands) | Foreign Currency Translation Adjustment | Unrealized Gain (Loss) on Derivative Financial Instruments | Total | ||||||||
Beginning balance February 1, 2014 | $ | (18,751 | ) | $ | (2,166 | ) | $ | (20,917 | ) | ||
Other comprehensive (loss) income before reclassifications | (76,891 | ) | 16,572 | (60,319 | ) | ||||||
Reclassified from accumulated other comprehensive loss(1) | — | (440 | ) | (440 | ) | ||||||
Tax effect | (1,038 | ) | (866 | ) | (1,904 | ) | |||||
Other comprehensive (loss) income | (77,929 | ) | 15,266 | (62,663 | ) | ||||||
Ending balance at January 31, 2015 | $ | (96,680 | ) | $ | 13,100 | $ | (83,580 | ) |
(1) | For Fiscal 2014, a gain was reclassified from accumulated other comprehensive income (loss) to cost of sales, exclusive of depreciation and amortization on the Consolidated Statement of Operations and Comprehensive Income (Loss). |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
Abercrombie | $ | 1,487,024 | $ | 1,640,992 | $ | 1,771,299 | |||||
Hollister | 1,839,716 | 1,877,688 | 1,947,869 | ||||||||
Other (1) | — | — | 24,862 | ||||||||
Total | $ | 3,326,740 | $ | 3,518,680 | $ | 3,744,030 |
(1) | Represents net sales from the Company’s Gilly Hicks operations. |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
United States | $ | 2,123,808 | $ | 2,282,040 | $ | 2,408,427 | |||||
Europe | 768,630 | 832,923 | 959,981 | ||||||||
Other | 434,302 | 403,717 | 375,622 | ||||||||
Total | $ | 3,326,740 | $ | 3,518,680 | $ | 3,744,030 |
(in thousands) | Fiscal 2016 | Fiscal 2015 | Fiscal 2014 | ||||||||
United States | $ | 543,923 | $ | 548,983 | $ | 556,967 | |||||
Europe | 215,124 | 263,977 | 332,435 | ||||||||
Other | 92,783 | 109,275 | 105,542 | ||||||||
Total | $ | 851,830 | $ | 922,235 | $ | 994,944 |
(in thousands, except per share amounts) | |||||||||||||||
Fiscal Quarter 2016 | First | Second | Third | Fourth | |||||||||||
Net sales | $ | 685,483 | $ | 783,160 | $ | 821,734 | $ | 1,036,363 | |||||||
Gross profit | $ | 425,721 | $ | 477,107 | $ | 510,739 | $ | 615,001 | |||||||
Net (loss) income | $ | (38,630 | ) | $ | (12,031 | ) | $ | 8,274 | $ | 50,105 | |||||
Net (loss) income attributable to A&F(2) | $ | (39,587 | ) | $ | (13,129 | ) | $ | 7,881 | $ | 48,791 | |||||
Net (loss) income per diluted share attributable to A&F(1) | $ | (0.59 | ) | $ | (0.19 | ) | $ | 0.12 | $ | 0.71 |
(in thousands, except per share amounts) | |||||||||||||||
Fiscal Quarter 2015 | First | Second | Third | Fourth | |||||||||||
Net sales | $ | 709,422 | $ | 817,756 | $ | 878,572 | $ | 1,112,930 | |||||||
Gross profit | $ | 411,549 | $ | 509,862 | $ | 559,787 | $ | 676,345 | |||||||
Net (loss) income | $ | (63,246 | ) | $ | 612 | $ | 42,285 | $ | 58,908 | ||||||
Net (loss) income attributable to A&F(3)(4) | $ | (63,246 | ) | $ | (810 | ) | $ | 41,891 | $ | 57,741 | |||||
Net (loss) income per diluted share attributable to A&F(1) | $ | (0.91 | ) | $ | (0.01 | ) | $ | 0.60 | $ | 0.85 |
(1) | Net income (loss) per diluted share for each of the quarters was computed using the weighted average number of shares outstanding during the quarter while the full year is computed using the average of the weighted average number of shares outstanding each quarter; therefore, the sum of the quarters may not equal the total for the year. |
(2) | Net income (loss) attributable to A&F for Fiscal 2016 included certain items related to asset impairment, indemnification recoveries and claims settlement benefits. These items adversely impacted net income (loss) attributable to A&F by $3.7 million and $6.5 million for the second and third quarters of Fiscal 2016, respectively. |
(3) | Net income (loss) attributable to A&F for Fiscal 2015 included certain items related to inventory write-down, asset impairment, legal settlement charges, store fixture disposal, the Company’s profit improvement initiative, lease termination and store closure costs and restructuring. These items adversely impacted net income (loss) attributable to A&F by $26.1 million, $9.4 million and $16.0 million for the first, second and fourth quarters of Fiscal 2015, respectively, and increased net income attributable to A&F by $9.0 million for the third quarter of Fiscal 2015. |
(4) | Net income (loss) attributable to A&F for Fiscal 2015 included the correction of certain errors relating to prior periods. The impact of the amounts recorded out-of-period resulted in a decrease in net income attributable to A&F of $2.6 million and $1.9 million for the second and fourth quarters of Fiscal 2015, respectively, and an increase in net income attributable to A&F of $1.2 million for the third quarter of Fiscal 2015. The Company does not believe these corrections were material to any current or prior interim or annual periods that were affected. |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Exhibit No. | Document |
3.1 | Amended and Restated Certificate of Incorporation of A&F as filed with the Delaware Secretary of State on August 27, 1996, incorporated herein by reference to Exhibit 3.1 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 1996 (File No. 001-12107). |
3.2 | Certificate of Designation of Series A Participating Cumulative Preferred Stock of A&F as filed with the Delaware Secretary of State on July 21, 1998, incorporated herein by reference to Exhibit 3.2 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 30, 1999 (File No. 001-12107). |
3.3 | Certificate of Decrease of Shares Designated as Class B Common Stock as filed with the Delaware Secretary of State on July 30, 1999, incorporated herein by reference to Exhibit 3.3 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended July 31, 1999 (File No. 001-12107). |
3.4 | Certificate of Amendment of the Amended and Restated Certificate of Incorporation of Abercrombie & Fitch Co. as filed with the Delaware Secretary of State on June 16, 2011, incorporated herein by reference to Exhibit 3.1 to A&F’s Current Report on Form 8-K dated and filed June 17, 2011 (File No. 001-12107). |
3.5 | Amended and Restated Certificate of Incorporation of A&F, reflecting amendments through the date of this Annual Report on Form 10-K, incorporated herein by reference to Exhibit 3.2 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2011 (File No. 001-12107). [This document represents the Amended and Restated Certificate of Incorporation of Abercrombie & Fitch Co. in compiled form incorporating all amendments. This compiled document has not been filed with the Delaware Secretary of State.] |
3.6 | Certificate regarding Approval of Amendment to Section 2.03 of Amended and Restated Bylaws of Abercrombie & Fitch Co. by Stockholders of Abercrombie & Fitch Co. at Annual Meeting of Stockholders held on June 10, 2009, incorporated herein by reference to Exhibit 3.1 to A&F’s Current Report on Form 8-K dated and filed June 16, 2009 (File No. 001-12107). |
3.7 | Certificate regarding Approval of Addition of New Article IX of Amended and Restated Bylaws by Board of Directors of Abercrombie & Fitch Co. on June 10, 2009, incorporated herein by reference to Exhibit 3.2 to A&F’s Current Report on Form 8-K dated and filed June 16, 2009 (File No. 001-12107). |
3.8 | Certificate regarding Approval of Amendments to Sections 1.09 and 2.04 of Amended and Restated Bylaws of Abercrombie & Fitch Co. by Board of Directors of Abercrombie & Fitch Co. on November 15, 2011, incorporated herein by reference to Exhibit 3.1 to A&F’s Current Report on Form 8-K dated and filed November 21, 2011 (File No. 001-12107). |
3.9 | Amended and Restated Bylaws of Abercrombie & Fitch Co. reflecting amendments through the date of this Annual Report in Form 10-K, incorporated herein by reference to Exhibit 3.2 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended October 29, 2011 (File No. 001-12107). [This document represents the Amended and Restated Bylaws of Abercrombie & Fitch Co. in compiled form incorporating all amendments.] |
4.1 | Agreement to furnish instruments and agreements defining rights of holders of long-term debt. |
10.1* | Abercrombie & Fitch Co. Incentive Compensation Performance Plan, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed June 18, 2012 (File No. 001-12107). |
10.2* | 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors (reflects amendments through January 30, 2003 and the two-for-one stock split distributed June 15, 1999 to stockholders of record on May 25, 1999), incorporated herein by reference to Exhibit 10.3 to A&F’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003 (File No. 001-12107). |
10.3* | Abercrombie & Fitch Co. 2002 Stock Plan for Associates (as amended and restated May 22, 2003), incorporated herein by reference to Exhibit 10.4 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003 (File No. 001-12107). |
10.4* | Amended and Restated Employment Agreement, entered into effective as of August 15, 2005, by and between A&F and Michael S. Jeffries, including as Exhibit A thereto the Abercrombie & Fitch Co. Supplemental Executive Retirement Plan (Michael S. Jeffries) effective February 2, 2003, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed August 26, 2005 (File No. 001-12107). [NOTE: Only the Abercrombie & Fitch Co. Supplemental Executive Retirement Plan (Michael S. Jeffries) is still in effect.] |
10.5* | Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (as amended and restated May 22, 2003) — as authorized by the Board of Directors of A&F on December 17, 2007, to become one of two plans following the division of said Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (as amended and restated May 22, 2003) into two separate plans effective January 1, 2005 and to be named the Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (Plan I) [terms to govern “amounts deferred” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended) in taxable years beginning before January 1, 2005 and any earnings thereon], incorporated herein by reference to Exhibit 10.7 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003 (File No. 001-12107). |
10.6* | Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan (January 1, 2001 Restatement) — as authorized by the Compensation Committee of the A&F Board of Directors on August 14, 2008, to become one of two sub-plans following the division of said Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan (January 1, 2001 Restatement) into two sub-plans effective immediately before January 1, 2009 and to be named the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan I [terms to govern amounts “deferred” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended) before January 1, 2005, and any earnings thereon], incorporated herein by reference to Exhibit 10.9 to A&F’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003 (File No. 001-12107). |
10.7* | First Amendment to the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan I (Plan I) (January 1, 2001 Restatement), as authorized by the Compensation Committee of the A&F Board of Directors on August 14, 2008 and executed on behalf of A&F on September 3, 2008, incorporated herein by reference to Exhibit 10.13 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2008 (File No. 001-12107). |
10.8* | Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (II) — as authorized by the Compensation Committee of the A&F Board of Directors on August 14, 2008, to become one of two sub-plans following the division of the Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan (January 1, 2001 Restatement) into two sub-plans effective immediately before January 1, 2009 and to be named the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan II [terms to govern amounts “deferred” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended) in taxable years beginning on or after January 1, 2005, and any earnings thereon], incorporated herein by reference to Exhibit 10.12 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2008 (File No. 001-12107). |
10.9* | Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors, incorporated herein by reference to Exhibit 10.9 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003 (File No. 001-12107). |
10.10* | Form of Stock Option Agreement used for grants under the Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors after November 28, 2004 and before June 13, 2007, incorporated herein by reference to Exhibit 10.22 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended October 30, 2004 (File No. 001-12107). |
10.11* | Form of Stock Option Agreement (Nonstatutory Stock Options) used for grants under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates on or after March 6, 2006 and before June 13, 2007, incorporated herein by reference to Exhibit 10.36 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 28, 2006 (File No. 001-12107). |
10.12* | Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed June 17, 2005 (File No. 001-12107). |
10.13* | Summary of Terms of the Annual Restricted Stock Unit Grants made to the Non-Associate Directors of A&F under the 2016 Long-Term Incentive Plan for Directors in Fiscal 2016. |
10.14* | Summary of Compensation Structure for Non-Associate Directors of A&F for Fiscal 2016. |
10.15* | Form of Restricted Stock Unit Award Agreement for Associates used for grants under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 6, 2006, incorporated herein by reference to Exhibit 10.34 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 28, 2006 (File No. 001-12107). |
10.16* | Trust Agreement, made as of October 16, 2006, between A&F and Wilmington Trust Company, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed October 17, 2006 (File No. 001-12107). |
10.17* | Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed June 17, 2011 (File No. 001-12107). |
10.18* | Form of Stock Option Agreement used to evidence the grant of nonstatutory stock options to associates (employees) of A&F and its subsidiaries under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan (formerly known as the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan) after August 21, 2007, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed August 27, 2007 (File No. 001-12107). |
10.19* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan (formerly known as the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan) after August 21, 2007 and prior to March 26, 2013, incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K dated and filed August 27, 2007 (File No. 001-12107). |
10.20* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to Executive Vice Presidents of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on and after March 4, 2008 and prior to March 26, 2013, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed March 6, 2008 (File No. 001-12107). |
10.21* | Abercrombie & Fitch Co. Associate Stock Purchase Plan (Effective July 1, 1998), incorporated herein by reference to Exhibit 1 to the Schedule 13D filed by Michael S. Jeffries on May 2, 2006. |
10.22* | Form of Stock Appreciation Right Agreement used to evidence the grant of stock appreciation rights to associates (employees) of A&F and its subsidiaries under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan (formerly known as the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan) on and after February 12, 2009 and prior to March 26, 2013, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed February 17, 2009 (File No. 001-12107). |
10.23* | Form of Stock Appreciation Right Agreement used to evidence the Semi-Annual Grants of stock appreciation rights to Michael S. Jeffries under the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan (now known as the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan) as contemplated by the Employment Agreement, entered into as of December 19, 2008, by and between A&F and Michael S. Jeffries, incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K dated and filed February 17, 2009 (File No. 001-12107). |
10.24* | Form of Stock Appreciation Right Agreement used to evidence the grant of stock appreciation rights to associates (employees) of Abercrombie & Fitch Co. and its subsidiaries under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan after February 12, 2009 and prior to March 26, 2013, incorporated herein by reference to Exhibit 10.6 to A&F’s Current Report on Form 8-K dated and filed February 17, 2009 (File No. 001-12107). |
10.25* | Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (Plan II) — as authorized by the Board of Directors of A&F on December 17, 2007, to become one of two plans following the division of the Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (as amended and restated May 22, 2003) into two separate plans effective January 1, 2005 and to be named Abercrombie & Fitch Co. Directors’ Deferred Compensation Plan (Plan II) [terms to govern “amounts deferred” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended) in taxable years beginning on or after January 1, 2005 and any earnings thereon], incorporated herein by reference to Exhibit 10.50 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009 (File No. 001-12107). |
10.26* | Form of Stock Appreciation Right Agreement used to evidence the grant of stock appreciation rights to associates (employees) of A&F and its subsidiaries under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.27* | Form of Stock Appreciation Right Agreement used to evidence the grant of stock appreciation rights to associates (employees) of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.28* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.3 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.29* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.4 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.30* | Form of Performance Share Award Agreement used to evidence the grant of performance shares to associates (employees) of A&F and its subsidiaries under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.5 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.31* | Form of Performance Share Award Agreement used to evidence the grant of performance shares to associates (employees) of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.6 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.32* | Form of Stock Appreciation Right Agreement used to evidence the grant of stock appreciation rights to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.7 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.33* | Form of Stock Appreciation Right Agreement used to evidence the grant of stock appreciation rights to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.8 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.34* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.9 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.35* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.10 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.36* | Form of Performance Share Award Agreement used to evidence the grant of performance shares to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.11 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.37* | Form of Performance Share Award Agreement used to evidence the grant of performance shares to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 26, 2013 and prior to August 20, 2013, incorporated herein by reference to Exhibit 10.12 to A&F’s Current Report on Form 8-K dated and filed April 29, 2013 (File No. 001-12107). |
10.38* | Form of Stock Appreciation Right Award Agreement used for grants of awards after August 20, 2013 under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan [For associates (employees); grant of award forms all or part of the consideration for the execution by associate of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.1 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.39* | Form of Stock Appreciation Right Award Agreement used for grants of awards after August 20, 2013 under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.2 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.40* | Form of Restricted Stock Unit Award Agreement used for grants of awards after August 20, 2013 under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan [For associates (employees); grant of award forms all or part of the consideration for the execution by associate of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.3 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.41* | Form of Restricted Stock Unit Award Agreement used for grants of awards after August 20, 2013 under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.4 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.42* | Form of Performance Share Award Agreement used for grants of awards after August 20, 2013 under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan [For associates (employees); grant of award forms all or part of the consideration for the execution by associate of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.5 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.43* | Form of Performance Share Award Agreement used for grants of awards after August 20, 2013 under the Amended and Restated Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.6 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.44* | Form of Stock Appreciation Right Award Agreement used for grants of awards after August 20, 2013 under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award forms all or part of the consideration for the execution by associate of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.8 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.45* | Form of Stock Appreciation Right Award Agreement used for grants of awards after August 20, 2013 under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.9 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.46* | Form of Restricted Stock Unit Award Agreement used for grants of awards after August 20, 2013 under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award forms all or part of the consideration for the execution by associate of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.10 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.47* | Form of Restricted Stock Unit Award Agreement used for grants of awards after August 20, 2013 under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.11 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.48* | Form of Performance Share Award Agreement used for grants of awards after August 20, 2013 under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award forms all or part of the consideration for the execution by associates of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.12 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.49* | Form of Performance Share Award Agreement used for grants of awards after August 20, 2013 under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.13 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.50* | Form of Performance Share Award Agreement used for grants of awards to participants involved in the profit improvement initiative under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan [For associates (employees); grant of award not associated with execution of Non-Competition and Non-Solicitation Agreement], incorporated herein by reference to Exhibit 10.7 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2013 (File No. 001-12107). |
10.51* | Letter, dated April 3, 2014, from Abercrombie & Fitch to Joanne C. Crevoiserat setting forth terms of employment as Executive Vice President and Chief Financial Officer, and accepted by Joanne C. Crevoiserat on April 8, 2014, together with the related Agreement, made and entered into April 27, 2014, executed by Joanne C. Crevoiserat on April 8, 2014 and by Abercrombie & Fitch Management Co. on April 27, 2014, incorporated herein by reference to Exhibit 10.1 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2014 (File No. 001-12107). |
10.52 | Credit Agreement, dated as of August 7, 2014 (the “2014 ABL Credit Agreement”), among Abercrombie & Fitch Management Co., as lead borrower for the borrowers and guarantors named therein; Wells Fargo Bank, National Association, as administrative agent, collateral agent, a letter of credit issuer and swing line lender; PNC Bank, National Association, as syndication agent and a letter of credit issuer; JPMorgan Chase Bank, N.A., as documentation agent and a letter of credit issuer; Wells Fargo Bank, National Association, PNC Capital Markets LLC and J.P. Morgan Securities LLC, as joint lead arrangers and joint bookrunners; and the other lenders party thereto, incorporated herein by reference to Exhibit 10.3 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107).† |
10.53 | Term Loan Credit Agreement, dated as of August 7, 2014 (the “2014 Term Loan Credit Agreement”), among Abercrombie & Fitch Management Co., as borrower; Abercrombie & Fitch Co. and certain of its wholly-owned subsidiaries, as guarantors; Wells Fargo Bank, National Association, as administrative agent and collateral agent; PNC Bank, National Association and JPMorgan Chase Bank, N.A., as syndication agents; Goldman Sachs Lending Partners, as documentation agent; Wells Fargo Securities, LLC, PNC Capital Markets LLC, J.P. Morgan Securities LLC and Goldman Sachs Lending Partners, as joint lead arrangers and joint book-runners; and the other lenders party thereto, incorporated herein by reference to Exhibit 10.4 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107).† |
10.54 | Guaranty, dated as of August 7, 2014, made by Abercrombie & Fitch Co., as guarantor, and certain of its wholly-owned subsidiaries, each as a guarantor, in favor of Wells Fargo Bank, National Association, as administrative agent and collateral agent for its own benefit and the benefit of the other Credit Parties (as defined in the 2014 ABL Credit Agreement), and the Credit Parties, incorporated herein by reference to Exhibit 10.5 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107). |
10.55 | Term Loan Guaranty, dated as of August 7, 2014, made by Abercrombie & Fitch Co., as guarantor, and certain of its wholly-owned subsidiaries, each as a guarantor, in favor of Wells Fargo Bank, National Association, as administrative agent and collateral agent for its own benefit and for the benefit of the other Credit Parties (as defined in the 2014 Term Loan Credit Agreement), and the Credit Parties, incorporated herein by reference to Exhibit 10.6 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107). |
10.56 | Security Agreement, dated as of August 7, 2014, made by Abercrombie & Fitch Management Co., as lead borrower for itself and the other Borrowers (as defined in the 2014 ABL Credit Agreement), Abercrombie & Fitch Co. and certain of its wholly-owned subsidiaries, in their respective capacities as a guarantor, and the other borrowers and guarantors from time to time party thereto, in favor of Wells Fargo Bank, National Association, as administrative agent and collateral agent for the Credit Parties (as defined in the 2014 ABL Credit Agreement), incorporated herein by reference to Exhibit 10.7 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107).† |
10.57 | Term Loan Security Agreement, dated as of August 7, 2014, made by Abercrombie & Fitch Management Co., as borrower, Abercrombie & Fitch Co. and certain of its wholly-owned subsidiaries, in their respective capacities as a guarantor, and the other guarantors from time to time party thereto, in favor of Wells Fargo Bank, National Association, as administrative agent and collateral agent for the Credit Parties (as defined in the 2014 Term Loan Credit Agreement), incorporated herein by reference to Exhibit 10.8 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107).† |
10.58 | Intercreditor Agreement, dated as of August 7, 2014, by and between Wells Fargo Bank, National Association, in its capacity as “ABL Agent,” and Wells Fargo Bank, National Association, in its capacity as “Term Agent,” incorporated herein by reference to Exhibit 10.9 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 2, 2014 (File No. 001-12107). |
10.59* | Employment Offer, accepted October 9, 2014, between Fran Horowitz and A&F, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed October 15, 2014 (File No. 001-12107). |
10.60 | First Amendment to Credit Agreement, dated as of September 10, 2015, entered into by Abercrombie & Fitch Management Co., as the Lead Borrower, and the other Borrowers and Guarantors party thereto, with the Lenders party thereto and Wells Fargo Bank, National Association, as administrative agent for the Lenders, incorporated herein by reference to Exhibit 10.4 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2015 (File No. 001-12107). |
10.61 | First Amendment to Term Loan Credit Agreement, dated as of September 10, 2015, entered into by Abercrombie & Fitch Management Co., as Borrower, Abercrombie & Fitch Co., as Parent, and the other Guarantors party thereto, with the Lenders party thereto and Wells Fargo Bank, National Association, as administrative agent for the Lenders, incorporated herein by reference to Exhibit 10.5 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended October 31, 2015 (File No. 001-12107). |
10.62* | Form of Director and Officer Indemnification Agreement, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed October 21, 2014 (File No. 001-12107). |
10.63* | Retirement Agreement, dated December 8, 2014, between Michael S. Jeffries and A&F, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K filed December 9, 2014 (File No. 001-12107). |
10.64* | Agreement entered into between Abercrombie & Fitch Management Co. and Jonathan E. Ramsden as of July 7, 2015, the execution date by Abercrombie & Fitch Management Co., incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed July 9, 2015 (File No. 001-12107). |
10.65* | Form of Agreement entered into between Abercrombie & Fitch Management Co. and Fran Horowitz as of July 7, 2015, the execution date by Abercrombie & Fitch Management Co., incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K, dated and filed July 9, 2015 (File No. 001-12107). |
10.66* | Form of Agreement entered into between Abercrombie & Fitch Management Co. and Robert E. Bostrom as of July 7, 2015, the execution date by Abercrombie & Fitch Management Co., incorporated herein by reference to Exhibit 10.3 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 1, 2015 (File No. 001-12107). |
10.67* | Agreement entered into between Abercrombie & Fitch Management Co. and Joanne C. Crevoiserat as of October 15, 2015, the execution date by Abercrombie & Fitch Management Co., incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K, dated and filed October 19, 2015 (File No. 001-12107). |
10.68* | Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (II), as amended and restated effective as of January 1, 2014, incorporated herein by reference to Exhibit 10.3 to A&F’s Current Report on Form 8-K, dated and filed October 19, 2015 (File No. 001-12107). |
10.69* | First Amendment to the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan (II), as approved on October 14, 2015, incorporated herein by reference to Exhibit 10.4 to A&F’s Current Report on Form 8-K, dated and filed October 19, 2015 (File No. 001-12107). |
10.70* | Letter, dated December 16, 2015, from Abercrombie & Fitch Management Co. to Fran Horowitz setting forth terms of employment as President and Chief Merchandising Officer, and accepted by Fran Horowitz on December 19, 2015, incorporated herein by reference to Exhibit 10.74 to A&F's Annual Report on Form 10-K for the fiscal year ended January 30, 2016 (File No. 001-12107). |
10.71* | Offer Letter from Abercrombie & Fitch to Stacia Andersen, executed by Ms. Andersen on May 11, 2016, incorporated herein by reference to Exhibit 10.1 to A&F's Current Report on Form 8-K, dated and filed May 23, 2016 (File No. 001-12107). |
10.72* | Executive Agreement entered into between Abercrombie & Fitch Management Co. and Stacia Andersen, effective as of May 20, 2016, the execution date by Abercrombie & Fitch Management Co., incorporated herein by reference to Exhibit 10.2 to A&F's Current Report on Form 8-K, dated and filed May 23, 2016 (File No. 001-12107). |
10.73* | Offer Letter from Abercrombie & Fitch to Kristin Scott, executed by Ms. Scott on May 15, 2016, incorporated herein by reference to Exhibit 10.3 to A&F's Current Report on Form 8-K, dated and filed May 23, 2016 (File No. 001-12107). |
10.74* | Executive Agreement entered into between Abercrombie & Fitch Management Co. and Kristin Scott, effective as of May 20, 2016, the execution date by Abercrombie & Fitch Management Co., incorporated herein by reference to Exhibit 10.4 to A&F's Current Report on Form 8-K, dated and filed May 23, 2016 (File No. 001-12107). |
10.75* | Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Directors, incorporated herein by reference to Exhibit 4.10 to A&F's Registration Statement on Form S-8 (Registration No. 333-212059) filed on June 16, 2016. |
10.76* | Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates, incorporated herein by reference to Exhibit 4.10 to A&F's Registration Statement on Form S-8 of Abercrombie & Fitch Co. (Registration No. 333-212060) filed on June 16, 2016. |
10.77* | Certificate regarding Approval of Amendment of Section 3(b) of the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates by the Board of Directors of Abercrombie & Fitch Co. on August 31, 2016, incorporated herein by reference to Exhibit 10.5.2 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.78* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates after June 16, 2016, incorporated herein by reference to Exhibit 10.6 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.79* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to associates (employees) of A&F and its subsidiaries, subject to special non-competition and non-solicitation agreements, under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates after June 16, 2016, incorporated herein by reference to Exhibit 10.7 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.80* | Form of Performance Share Award Agreement used to evidence the grant of performance shares to associates (employees) of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates after June 16, 2016, incorporated herein by reference to Exhibit 10.8 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.81* | Form of Restricted Stock Unit Award Agreement used to evidence the grant of restricted stock units to non-associate directors of A&F under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Directors on and after June 16, 2016, incorporated herein by reference to Exhibit 10.10 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.82* | Certificate regarding Approval of Amendment of Section 3(b) of the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan by Board of Directors of Abercrombie & Fitch Co. on August 20, 2014, incorporated herein by reference to Exhibit 10.11 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.83* | Certificate regarding Approval of Amendment of Section 3(b) of the Abercrombie & Fitch Co. Amended and Restated 2007 Long-Term Incentive Plan by Board of Directors of Abercrombie & Fitch Co. on August 20, 2014, incorporated herein by reference to Exhibit 10.12 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2016 (File No. 001-12107). |
10.84* | Agreement between Diane Chang and Abercrombie & Fitch Trading Co., executed by Ms. Chang on October 25, 2016 and by Abercrombie & Fitch Trading Co. on November 3, 2016, incorporated herein by reference to Exhibit 10.4 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended October 29, 2016 (File No. 001-12107). |
10.85* | Letter Agreement between Abercrombie & Fitch Co. and Stacia Andersen, executed by Abercrombie & Fitch Co. on December 8, 2016. |
21.1 | List of Subsidiaries of A&F. |
23.1 | Consent of Independent Registered Public Accounting Firm — PricewaterhouseCoopers LLP. |
24.1 | Powers of Attorney. |
31.1 | Certifications by Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certifications by Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certifications by Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
101 | The following materials from A&F’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015; (ii) Consolidated Balance Sheets at January 28, 2017 and January 30, 2016; (iii) Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015; (iv) Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015; and (v) Notes to Consolidated Financial Statements. |
* | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(a)(3) of Annual Report on Form 10-K. |
** | These certifications are furnished. |
† | Certain portions of this exhibit have been omitted based upon a request for confidential treatment filed with the Securities and Exchange Commission (the “SEC”). The non-public information has been separately filed with the SEC in connection with that request. |
ABERCROMBIE & FITCH CO. | ||
Date: March 27, 2017 | By | /s/ Joanne C. Crevoiserat |
Joanne C. Crevoiserat | ||
Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer and Authorized Officer) |
* | ||
Arthur C. Martinez | Executive Chairman of the Board and Director | |
/s/ Fran Horowitz | ||
Fran Horowitz | Chief Executive Officer and Director (Principal Executive Officer) | |
* | ||
James B. Bachmann | Director | |
* | ||
Bonnie R. Brooks | Director | |
* | ||
Terry L. Burman | Director | |
/s/ Joanne C. Crevoiserat | ||
Joanne C. Crevoiserat | Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
* | ||
Sarah M. Gallagher | Director | |
* | ||
Michael E. Greenlees | Director | |
* | ||
Archie M. Griffin | Director | |
* | ||
Charles R. Perrin | Director | |
* | ||
Stephanie M. Shern | Director | |
* | ||
Craig R. Stapleton | Director |
* | The undersigned, by signing her name hereto, does hereby sign this Annual Report on Form 10-K on behalf of each of the above-named directors of the Registrant pursuant to powers of attorney executed by such directors, which powers of attorney are filed with this Annual Report on Form 10-K as Exhibit 24.1, in the capacities as indicated and on March 27, 2017. |
By | /s/ Joanne C. Crevoiserat | |
Joanne C. Crevoiserat | ||
Attorney-in-fact |
Exhibit No. | Document |
4.1 | Agreement to furnish instruments and agreements defining rights of holders of long-term debt. |
10.13* | Summary of Terms of the Annual Restricted Stock Unit Grants made to the Non-Associate Directors of A&F under the 2016 Long-Term Incentive Plan for Directors in Fiscal 2016. |
10.14* | Summary of Compensation Structure for Non-Associate Directors of A&F for Fiscal 2016. |
10.85* | Letter Agreement between Abercrombie & Fitch Co. and Stacia Andersen, executed by Abercrombie & Fitch Co. on December 8, 2016. |
21.1 | List of Subsidiaries of A&F |
23.1 | Consent of Independent Registered Public Accounting Firm — PricewaterhouseCoopers LLP |
24.1 | Powers of Attorney |
31.1 | Certifications by Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certifications by Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certifications by Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
101 | The following materials from A&F’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015; (ii) Consolidated Balance Sheets at January 28, 2017 and January 30, 2016; (iii) Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015; (iv) Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2017, January 30, 2016 and January 31, 2015; and (v) Notes to Consolidated Financial Statements. |
* | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(a)(3) of Annual Report on Form 10-K. |
Very truly yours, | ||
ABERCROMBIE & FITCH CO. | ||
/s/ JOANNE C. CREVOISERAT | ||
Joanne C. Crevoiserat Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer and Authorized Officer) |
• | RSUs were granted on the date of the 2016 Annual Meeting of Stockholders of the Company (the “2016 Annual Meeting”) pursuant to the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Directors; and |
• | RSUs will vest on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders of the Company, subject to earlier vesting in the event of a non-associate director’s death or total disability or upon a change of control of the Company. |
• | RSUs were granted on the date of the 2016 Annual Meeting pursuant to the Abercrombie & Fitch Co. 2016 Long‑Term Incentive Plan for Directors; and |
• | RSUs will vest on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of the stockholders of the Company, subject to earlier vesting in the event of Mr. Martinez’s death or total disability or upon a change of control of the Company. |
• | RSUs were granted on the date of the 2016 Annual Meeting pursuant to the Abercrombie & Fitch Co. 2016 Long‑Term Incentive Plan for Directors; |
• | RSUs will vest on earliest of: (i) the date on which the Board of Directors of the Company (the “Board”) appoints a Chief Executive Officer of the Company, unless the Board determines otherwise (as of the date of the filing of the Company’s Annual Report on Form 10‑K for Fiscal 2016, the Board had not made its determination with respect to this vesting alternative); (ii) the first anniversary of the grant date; or (iii) the date of the next regularly scheduled annual meeting of stockholders; in each case, subject to earlier vesting in the event of Mr. Martinez’s death or total disability or upon a change of control of the Company; |
• | RSUs that vest due to the appointment of a Chief Executive Officer of the Company will be pro-rated for the portion of the year that has elapsed between the grant date and the date of appointment of a Chief Executive Officer, unless the Board determines otherwise (as of the date of the filing of the Company’s Annual Report on Form 10‑K for Fiscal 2016, the Board had not made its determination with respect to the related vesting alternative or any pro-rated vesting associated therewith); and |
• | if Mr. Martinez’s service as Executive Chairman of the Board ends for any reason other than his death or total disability or appointment of a Chief Executive Officer of the Company, a pro-rata portion of unvested RSUs will vest to reflect the portion of the year that has elapsed between the grant date and the date on which his service as Executive Chairman of the Board ends. |
• | an annual cash retainer of $65,000 for Board service (paid quarterly in arrears); |
• | an additional annual cash retainer for each standing committee Chair and member of $25,000 and $12,500, respectively, other than (i) the Chair and the members of the Audit and Finance Committee received an additional annual cash retainer of $40,000 and $25,000, respectively, and (ii) the Chair of the Compensation and Organization Committee who received an additional annual cash retainer of $30,000, in each case for serving in the stated capacity. In each case, the retainers were paid quarterly in arrears; and |
• | an annual grant of restricted stock units (“RSUs”), granted on the date of the annual meeting of stockholders of the Company pursuant to the Abercrombie & Fitch Co. 2016 Long‑Term Incentive Plan for Directors, and which will vest on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders of the Company; in each case, subject to earlier vesting in the event of a non-associate director’s death or total disability or upon a change of control of the Company. |
• | an additional annual cash retainer of $200,000 (the “Non-Executive Chairman Cash Retainer”), paid quarterly in arrears; and |
• | an additional annual grant of RSUs, with the market value of the underlying shares of Common Stock on the grant date being $100,000 (the “Non‑Executive Chairman RSU Retainer”). |
• | RSUs were granted on the date of the 2016 Annual Meeting pursuant to the Abercrombie & Fitch Co. 2016 Long‑Term Incentive Plan for Directors; and |
• | RSUs will vest on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders of the Company, subject to earlier vesting in the event of Mr. Martinez’s death or total disability or upon a change of control of the Company. |
• | an additional annual cash retainer of $625,000 (the “Executive Chairman Cash Retainer”), paid quarterly in arrears; and |
• | an additional annual grant of RSUs, with the market value of the underlying shares of Common Stock on the grant date being $1,875,000 (the “Executive Chairman RSU Retainer”). |
• | RSUs were granted on the date of the 2016 Annual Meeting pursuant to the Abercrombie & Fitch Co. 2016 Long‑Term Incentive Plan for Directors; |
• | RSUs will vest on earliest of: (i) the date on which the Board appoints a Chief Executive Officer of the Company, unless the Board determines otherwise (as of the date of the filing of the Company’s Annual Report on Form 10‑K for Fiscal 2016, the Board had not made its determination with respect to this vesting alternative); (ii) the first anniversary of the grant date; or (iii) the date of the next regularly scheduled annual meeting of stockholders; in each case, subject to earlier vesting in the event of Mr. Martinez’s death or total disability or upon a change of control of the Company; |
• | RSUs that vest due to the appointment of a Chief Executive Officer of the Company will be pro-rated for the portion of the year that has elapsed between the grant date and the date of appointment of a Chief Executive Officer, unless the Board determines otherwise (as of the date of the filing of the Company’s Annual Report on Form 10‑K for Fiscal 2016, the Board had not made its determination with respect to the related vesting alternative or any pro-rated vesting associated therewith); and |
• | if Mr. Martinez’s service as Executive Chairman of the Board ends for any reason other than his death or total disability or appointment of a Chief Executive Officer of the Company, a pro-rata portion of unvested RSUs will vest to reflect the portion of the year that has elapsed between the grant date and the date on which his service as Executive Chairman of the Board ends. |
Subsidiaries of Abercrombie & Fitch Co.: | Jurisdiction: | ||
1. | Abercrombie & Fitch Holding Corporation (a) | Delaware | |
2. | Abercrombie & Fitch Distribution Company (b) | Ohio | |
3. | Abercrombie & Fitch Management Co. (b) | Delaware | |
4. | A & F Trademark, Inc. (c) | Delaware | |
5. | Abercrombie & Fitch Stores, Inc. (c) | Ohio | |
6. | Hollister Co. (c) | Delaware | |
7. | Abercrombie & Fitch International, Inc. (c) | Delaware | |
8. | Fan Company, LLC (c) | Ohio | |
9. | Canoe, LLC (c) | Ohio | |
10. | Crombie, LLC (c) | Ohio | |
11. | DFZ, LLC (c) | Ohio | |
12. | NSOP, LLC (c) | Ohio | |
13. | J.M.H. Trademark, Inc. (d) | Delaware | |
14. | J.M. Hollister, LLC (e) | Ohio | |
15. | Ruehl No. 925, LLC (e) | Ohio | |
16. | Gilly Hicks, LLC (e) | Ohio | |
17. | Abercrombie & Fitch Europe SAGL (o) | Switzerland | |
18. | Abercrombie & Fitch Hong Kong Limited (f) | Hong Kong | |
19. | AFH Puerto Rico LLC (f) | Ohio (Qualified in PR) | |
20. | A&F Canada Holding Co. (f) | Delaware | |
21. | Abercrombie & Fitch Trading Co. (g) | Ohio | |
22. | AFH Canada Stores Co. (h) | Nova Scotia | |
23. | AFH Japan GK (i) | Japan | |
24. | Abercrombie & Fitch Italia SRL (i) | Italy | |
25. | Abercrombie & Fitch (UK) Limited (i) | United Kingdom | |
26. | AFH Stores UK Limited (i) | United Kingdom | |
27. | Abercrombie & Fitch (France) SAS (i) | France | |
28. | Abercrombie & Fitch (Denmark) ApS (i) | Denmark | |
29. | Abercrombie & Fitch (Spain) S.L. (i) | Spain | |
30. | Abfico Netherlands Distribution B.V. (i) | The Netherlands | |
31. | European Regional Inventory Control NL B.V. (i) | The Netherlands | |
32. | AFH Hong Kong Limited (i) | Hong Kong | |
33. | A&F Hollister Ireland Limited (i) | Ireland | |
34. | AFH Hong Kong Stores Limited (i) | Hong Kong | |
35. | AFH Singapore Pte. Ltd. (i) | Singapore | |
36. | A&F HCo Stores AT GmbH (i) | Austria | |
37. | AFH Belgium SPRL (i)* | Belgium | |
38. | AFH Korea Yuhan Hoesa (i) | South Korea | |
39. | AFH Poland Sp. Z o.o (i) | Poland | |
40. | AFHCo Stores NL BV (i) | The Netherlands | |
41. | AFH Fulfillment NL BV (i) | The Netherlands | |
42. | AFH Australia Pty. Ltd. (i) | Australia | |
43. | AFH Finland Oy (i) | Finland | |
44. | AFH Taiwan Co., Ltd. (i) | Taiwan |
45. | AFH Logistics DWC-LLC (i) | United Arab Emirates (Dubai) | |
46. | Abercrombie & Fitch Procurement Services, LLC (j) | Ohio | |
47. | Hollister Co. California, LLC (j) | California | |
48. | AFH Germany GmbH (k) | Germany | |
49. | AFH Sweden AB (k) | Sweden | |
50. | AFH Trading (Shanghai) Co., Ltd. (l) | China | |
51. | AFH International Trading Shanghai Co., Ltd. (l) | China | |
52. | Hollister Fashion L.L.C (m) | United Arab Emirates (Dubai) | |
53. | AFH BLP HK Limited (i) | Hong Kong | |
54. | AFH Netherlands I B.V. (f) | Netherlands | |
55. | Majid Al Futtaim Fashion Apparel Ready / WLL (p) | Kuwait | |
56. | Abercrombie & Fitch Europe Holding GmbH (n) | Switzerland |
(a) | Wholly-owned subsidiary of Abercrombie & Fitch Co., the registrant |
(b) | Wholly-owned subsidiary of Abercrombie & Fitch Holding Corporation |
(c) | Wholly-owned subsidiary of Abercrombie & Fitch Management Co. |
(d) | Wholly-owned subsidiary of A&F Trademark, Inc. |
(e) | Wholly-owned subsidiary of Abercrombie & Fitch Stores, Inc. |
(f) | Wholly-owned subsidiary of Abercrombie & Fitch International, Inc. |
(g) | Wholly-owned subsidiary of J.M.H. Trademark, Inc. |
(h) | Wholly-owned subsidiary of A&F Canada Holding Co. |
(i) | Wholly-owned subsidiary of Abercrombie & Fitch Europe SAGL |
(j) | Wholly-owned subsidiary of Abercrombie & Fitch Trading Co. |
(k) | Wholly-owned subsidiary of Abfico Netherlands Distribution B.V. |
(l) | Wholly-owned subsidiary of AFH Hong Kong Limited |
(m) | Subsidiary of Majid Al Futlaim Fashion LLC (51%) and AFH Logistics DWC-LLC (49%) |
(n) | Wholly-owned subsidiary of AFH Netherlands I B.V. |
(o) | Subsidiary of AFH Netherlands II B.V. (56%) and Abercrombie & Fitch Trading Co. (44%) |
(p) | A&F has no equity interest in this joint venture |
* | Abfico Netherlands Distribution B.V. owns three shares (EUR 300.00) of AFH Belgium SPRL. Abercrombie & Fitch Europe Sagl owns the remaining 169,997 shares. |
/s/ ARTHUR C. MARTINEZ | |||
Arthur C. Martinez |
/s/ FRAN HOROWITZ | |||
Fran Horowitz |
/s/ JOANNE C. CREVOISERAT | |||
Joanne C. Crevoiserat |
/s/ JAMES B. BACHMANN | |||
James B. Bachmann |
/s/ BONNIE R. BROOKS | |||
Bonnie R. Brooks |
/s/ TERRY L. BURMAN | |||
Terry L. Burman |
/s/ SARAH M. GALLAGHER | |||
Sarah M. Gallagher |
/s/ MICHAEL E. GREENLEES | |||
Michael E. Greenlees |
/s/ ARCHIE M. GRIFFIN | |||
Archie M. Griffin |
/s/ CHARLES R. PERRIN | |||
Charles R. Perrin |
/s/ STEPHANIE M. SHERN | |||
Stephanie M. Shern |
/s/ CRAIG R. STAPLETON | |||
Craig R. Stapleton |
1. | I have reviewed this Annual Report on Form 10-K of Abercrombie & Fitch Co. for the fiscal year ended January 28, 2017; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 27, 2017 | By: | /s/ FRAN HOROWITZ |
Fran Horowitz Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Annual Report on Form 10-K of Abercrombie & Fitch Co. for the fiscal year ended January 28, 2017; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: March 27, 2017 | By: | /s/ JOANNE C. CREVOISERAT |
Joanne C. Crevoiserat Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Corporation and its subsidiaries. |
By | /s/ FRAN HOROWITZ |
Fran Horowitz Chief Executive Officer (Principal Executive Officer) | |
Dated: March 27, 2017 |
By | /s/ JOANNE C. CREVOISERAT |
Joanne C. Crevoiserat Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) | |
Dated: March 27, 2017 |
* | These certifications are being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. These certifications shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Corporation specifically incorporates these certifications by reference in such filing. |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Mar. 22, 2017 |
Jul. 29, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ABERCROMBIE & FITCH CO /DE/ | ||
Entity Central Index Key | 0001018840 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 28, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --01-28 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 67,985,481 | ||
Entity Public Float | $ 1,390,361,149 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Stockholders’ equity | ||
Treasury Stock shares, at Average Cost | 35,542,000 | 35,952,000 |
Common Stock, shares issued | 103,300,000 | 103,300,000 |
Common Class A | ||
Stockholders’ equity | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 150,000,000 | 150,000,000 |
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Statement of Stockholders' Equity [Abstract] | |||
Common stock, dividends declared (in dollars per share) | $ 0.80 | $ 0.80 | $ 0.80 |
NATURE OF BUSINESS |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS Abercrombie & Fitch Co. (“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and its subsidiaries are referred to as “Abercrombie & Fitch” or the “Company”), is a specialty retailer who primarily sells its products through store and direct-to-consumer operations, as well as through various wholesale, franchise and licensing arrangements. The Company offers a broad array of apparel products, including knit tops, woven shirts, graphic t-shirts, fleece, sweaters, jeans, woven pants, shorts, outerwear, dresses, intimates and swimwear; and personal care products and accessories for men, women and kids under the Abercrombie & Fitch, abercrombie kids, Hollister and Gilly Hicks brands. The Company has operations in North America, Europe, Asia and the Middle East. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its assets, liabilities, results of operations and cash flows. The Company has interests in a United Arab Emirates business venture and in a Kuwait business venture with Majid al Futtaim Fashion L.L.C. (“MAF”), each of which meets the definition of a variable interest entity (“VIE”). The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with MAF’s portion of net income presented as net income attributable to noncontrolling interests (“NCI”) in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) and MAF’s portion of equity presented as NCI in the Consolidated Balance Sheets. Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. All references herein to “Fiscal 2016” represent the fifty-two week fiscal year ended January 28, 2017; to “Fiscal 2015” represent the fifty-two week fiscal year ended January 30, 2016; and to “Fiscal 2014” represent the fifty-two week fiscal year ended January 31, 2015. In addition, all references herein to “Fiscal 2017” represent the fifty-three week fiscal year that will end on February 3, 2018. Use of estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. Cash and equivalents Cash and equivalents include amounts on deposit with financial institutions, United States treasury bills and other investments, primarily held in money market accounts, with original maturities of less than three months. Restricted cash Any cash that is legally restricted from use is recorded in Other Assets on the Consolidated Balance Sheets. The restricted cash balance was $20.4 million and $20.6 million on January 28, 2017 and January 30, 2016, respectively. Restricted cash includes various cash deposits with international banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements. Receivables Receivables primarily include credit card receivables, construction allowances, value added tax (“VAT”) receivables, trade receivables, income tax receivables and other tax credits or refunds. As part of the normal course of business, the Company has approximately three to four days of proceeds from sales transactions outstanding with its third-party credit card vendors at any point. The Company classifies these outstanding balances as credit card receivables. Construction allowances are recorded for certain store lease agreements for improvements completed by the Company. VAT receivables are payments the Company has made on purchases of goods that will be recovered as those goods are sold. Trade receivables are amounts billed by the Company to wholesale, franchise and licensing partners in the ordinary course of business. Income tax receivable represents refunds of certain tax payments along with net operating loss and credit carryback claims for which we expect to receive refunds within the next 12 months. Inventories, net Inventories are valued at the lower of cost or market on a weighted-average cost basis. The Company reduces the carrying value of inventory through a lower of cost or market adjustment, the impact of which is reflected in cost of sales, exclusive of depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Income (Loss). The lower of cost or market reserve is based on an analysis of historical experience, composition and aging of the inventory and management’s judgment regarding future demand and market conditions. Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical inventories are made each period that reduce the inventory value for lost or stolen items. The Company performs physical inventories on a periodic basis and adjusts the shrink reserve accordingly. See Note 4, “INVENTORIES, NET,” for further discussion. Other current assets Other current assets include prepaid rent, current store supplies, derivative contracts and other prepaids. Property and equipment, net Depreciation and amortization of property and equipment are computed for financial reporting purposes on a straight-line basis using the following service lives:
Leasehold improvements are amortized over either their respective lease terms or their service lives, whichever is shorter. The cost of assets sold or retired and the related accumulated depreciation or amortization are removed from the accounts with any resulting gain or loss included in net income. Maintenance and repairs are charged to expense as incurred. Major remodels and improvements that extend the service lives of the related assets are capitalized. Long-lived assets, primarily comprised of leasehold improvements, furniture, fixtures and equipment, are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable. These include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, other than temporary adverse market conditions and store closure or relocation decisions. On at least a quarterly basis, the Company reviews for indicators of impairment at the individual store level, the lowest level for which cash flows are identifiable. Stores that display an indicator of impairment are subjected to an impairment assessment. The Company’s impairment assessment requires management to make assumptions and judgments related, but not limited, to management’s expectations for future operations and projected cash flows. The key assumptions used in the Company’s undiscounted future cash flow models include sales, gross margin and, to a lesser extent, operating expenses. An impairment loss would be recognized when these undiscounted future cash flows are less than the carrying amount of the asset group. In the circumstance of impairment, the loss would be measured as the excess of the carrying amount of the asset group over its fair value. The key assumptions used in estimating the fair value of impaired assets may include projected cash flows and discount rate. See Note 5, “PROPERTY AND EQUIPMENT, NET,” for further discussion. The Company expenses all internal-use software costs incurred in the preliminary project stage and capitalizes certain direct costs associated with the development and purchase of internal-use software within property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding seven years. Income taxes Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using current enacted tax rates in effect for the years in which those temporary differences are expected to reverse. Inherent in the determination of the Company’s income tax liability and related deferred income tax balances are certain judgments and interpretations of enacted tax law and published guidance with respect to applicability to the Company’s operations. The Company is subject to audit by taxing authorities, usually several years after tax returns have been filed, and the taxing authorities may have differing interpretations of tax laws. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records tax expense or benefit that does not relate to ordinary income in the current fiscal year discretely in the period in which it occurs. Examples of such types of discrete items include, but are not limited to: changes in estimates of the outcome of tax matters related to prior years, assessments of valuation allowances, return-to-provision adjustments, tax-exempt income, the settlement of tax audits and changes in tax legislation and/or regulations. In the fourth quarter of Fiscal 2015, the Company restructured its international operations to support its omnichannel initiatives. As a result of the restructuring, the Company no longer believes that future net income as of the date of the restructuring will be indefinitely reinvested and as such is providing a deferred U.S. income tax liability for the additional taxes due upon a future repatriation. See Note 10, “INCOME TAXES,” for a discussion regarding the Company’s policies for uncertain tax positions. Foreign currency translation and transactions The functional currencies of the Company’s foreign subsidiaries are generally the respective local currencies in the countries in which they operate. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollars (the reporting currency) at the exchange rate prevailing at the balance sheet date. Equity accounts denominated in foreign currencies are translated into U.S. Dollars at historical exchange rates. Revenues and expenses denominated in foreign currencies are translated into U.S. Dollars at the monthly average exchange rate for the period. Gains and losses resulting from foreign currency transactions are included in the results of operations; whereas, translation adjustments and inter-company loans of a long-term investment nature are reported as an element of Other Comprehensive Income (Loss). Foreign currency transactions resulted in a gain of $0.4 million for Fiscal 2016, a loss of $1.5 million for Fiscal 2015 and a loss of $2.0 million for Fiscal 2014. Derivative instruments See Note 14, “DERIVATIVE INSTRUMENTS.” Stockholders’ equity At January 28, 2017 and January 30, 2016, there were 150.0 million shares of A&F’s Class A Common Stock, $0.01 par value, authorized, of which 67.8 million and 67.3 million were outstanding at January 28, 2017 and January 30, 2016, respectively, and 106.4 million shares of Class B Common Stock, $0.01 par value, authorized, of which none were outstanding at January 28, 2017 and January 30, 2016. Holders of Class A Common Stock generally have identical rights to holders of Class B Common Stock, except holders of Class A Common Stock are entitled to one vote per share while holders of Class B Common Stock are entitled to three votes per share on all matters submitted to a vote of stockholders. Revenue recognition The Company recognizes sales at the time the customer takes possession of the merchandise. Amounts relating to shipping and handling billed to customers in a sale transaction are classified as net sales and the related direct shipping and handling costs are classified as stores and distribution expense in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Sales are recorded net of an allowance for estimated returns, associate discounts, and promotions and other similar customer incentives. The Company estimates reserves for sales returns based on historical experience. The sales return reserve was $9.8 million, $8.9 million and $9.5 million at January 28, 2017, January 30, 2016 and January 31, 2015, respectively. The Company sells gift cards in its stores and through direct-to-consumer operations. The Company accounts for gift cards sold to customers by recognizing a liability at the time of sale. Gift cards sold to customers do not expire or lose value over periods of inactivity. The liability remains on the Company’s books until the Company recognizes income from gift cards. Income from gift cards is recognized at the earlier of redemption by the customer (recognized as net sales) or when the Company determines that the likelihood of redemption is remote, referred to as gift card breakage (recognized as other operating income). The Company determines the probability of the gift card being redeemed to be remote based on historical redemption patterns. The gift card liability was $29.7 million and $36.4 million at January 28, 2017 and January 30, 2016, respectively. The Company is not required by law to escheat the value of unredeemed gift cards to the jurisdictions in which it operates. The Company's revenue under franchise and license arrangements generally consists of royalties earned upon sale of merchandise by franchise and license partners to retail customers. Under wholesale arrangements, revenue is generally recognized at the time ownership passes to the partner. Tax amounts collected as part of sales transactions are not included in the Company's net sales. Cost of sales, exclusive of depreciation and amortization Cost of sales, exclusive of depreciation and amortization, is primarily comprised of cost incurred to ready inventory for sale, including product costs, freight, and import cost, as well as provisions for reserves for shrink and lower of cost or market. Gains and losses associated with foreign currency exchange forward contracts related to hedging of inventory purchases are also recognized in cost of sales, exclusive of depreciation and amortization when the inventory being hedged is sold. Stores and distribution expense Stores and distribution expense includes store payroll, store management, rent, utilities and other landlord expenses, depreciation and amortization, repairs and maintenance and other store support functions, as well as direct-to-consumer expense and distribution center (“DC”) expense. Shipping and handling costs, including costs incurred to store, move and prepare product for shipment, and costs incurred to physically move product to customers, associated with direct-to-consumer operations, were $125.4 million, $115.0 million and $108.1 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Handling costs, including costs incurred to store, move and prepare product for shipment to stores, were $41.5 million, $44.5 million and $52.2 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. These amounts are recorded in stores and distribution expense in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Costs incurred to physically move product to stores is recorded in cost of sales, exclusive of depreciation and amortization in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Marketing, general & administrative expense Marketing, general and administrative expense includes: photography and social media; store marketing; home office compensation, except for those departments included in stores and distribution expense; information technology; outside services such as legal and consulting; relocation; recruiting; samples; and travel expenses. Other operating income, net Other operating income, net included income of $2.2 million and $10.2 million related to insurance recoveries for Fiscal 2015 and Fiscal 2014, respectively; and income of $10.3 million, $4.7 million and $5.8 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively, related to gift card balances whose likelihood of redemption has been determined to be remote. Fiscal 2016 gift card breakage is inclusive of $4.8 million related to the initial recognition of international gift card breakage. For Fiscal 2016, the Company recognized a $12.3 million gain in other operating income, net in connection with a settlement of certain economic loss claims associated with the April 2010 Deepwater Horizon oil spill. Advertising costs Advertising costs are comprised of in-store photography, e-mail distribution and other digital direct advertising and other media advertising and are reported on the Consolidated Statements of Operations and Comprehensive Income (Loss). Advertising costs related specifically to direct-to-consumer operations are expensed as incurred as a component of stores and distribution expense. The production of in-store photography and signage are expensed when the marketing campaign commences as a component of marketing, general and administrative expense. All other advertising costs are expensed as incurred as a component of marketing, general and administrative expense. The Company recognized $110.1 million, $80.7 million and $84.6 million in advertising expense in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Leased facilities The Company leases property for its stores under operating leases. Lease agreements may contain construction allowances, rent escalation clauses and/or contingent rent provisions. Annual store rent is comprised of a fixed minimum amount and/or contingent rent based on a percentage of sales. For construction allowances, the Company records a deferred lease credit on the Consolidated Balance Sheets and amortizes the deferred lease credit as a reduction of rent expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) over the term of the lease. For scheduled rent escalation clauses during the lease term, the Company records minimum rental expense on a straight-line basis over the term of the lease on the Consolidated Statements of Operations and Comprehensive Income (Loss). The difference between rent expense and the amounts paid under the lease, less amounts attributable to the repayment of construction allowances recorded as deferred rent, is included in accrued expenses and other liabilities on the Consolidated Balance Sheets. The term over which the Company amortizes construction allowances and minimum rental expenses on a straight-line basis begins on the date of initial possession, which is generally when the Company enters the space and begins construction. Certain leases provide for contingent rents, which are determined as a percentage of gross sales. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheets, and the corresponding rent expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) on a ratable basis over the measurement period when it is determined that achieving the specified levels during the fiscal year is probable. In addition, most leases require payment of real estate taxes, insurance and certain common area maintenance costs in addition to future minimum lease payments. A summary of rent expense follows:
(1) Includes lease termination fees of $15.5 million, $3.3 million and $12.4 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Fiscal 2015 includes a benefit of $1.6 million related to better than expected lease exit terms associated with the closure of the Gilly Hicks stand-alone stores. Fiscal 2014 includes lease termination fees of $6.8 million related to the Gilly Hicks restructuring. At January 28, 2017, the Company was committed to non-cancelable leases with remaining terms of less than one year to 15 years. Excluded from the obligations below are portions of lease terms that are currently cancelable at the Company’s discretion without condition. While included in the obligations below, in many instances the Company has options to terminate certain leases if stated sales volume levels are not met or the Company ceases operations in a given country, which may be subject to lease termination policies. A summary of operating lease commitments, including leasehold financing obligations, under non-cancelable leases follows:
Leasehold financing obligations In certain lease arrangements, the Company is involved in the construction of a building and is deemed to be the owner of the construction project. In those instances, the Company records an asset for the amount of the total project costs, including the portion funded by the landlord, and an amount related to the value attributed to the pre-existing leased building in property and equipment, net, and a corresponding financing obligation in leasehold financing obligations, on the Consolidated Balance Sheets. Once construction is complete, if it is determined that the asset does not qualify for sale-leaseback accounting treatment, the Company continues to amortize the obligation over the lease term and depreciates the asset over its useful life. The Company allocates a portion of its rent obligation to the assets which are owned for accounting purposes as a reduction of the financing obligation and interest expense. As of January 28, 2017 and January 30, 2016, the Company had $46.4 million and $47.4 million, respectively, of long-term liabilities related to leasehold financing obligations. Total interest expense related to landlord financing obligations was $5.7 million, $5.3 million and $6.2 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Store pre-opening expenses Pre-opening expenses related to new store openings are expensed as incurred and are reflected as a component of “stores and distribution expense.” Design and development costs Costs to design and develop the Company’s merchandise are expensed as incurred and are reflected as a component of “marketing, general and administrative expense.” Net income per share attributable to A&F Net income per basic and diluted share attributable to A&F is computed based on the weighted-average number of outstanding shares of common stock. The following table presents weighted-average shares outstanding and anti-dilutive shares:
Share-based compensation See Note 13, “SHARE-BASED COMPENSATION.” Recent accounting pronouncements The following table provides a brief description of recent accounting pronouncements that could affect the Company’s financial statements:
* Early adoption is permitted. |
FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs to measure fair value are as follows:
The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The three levels of the hierarchy and the distribution within it of the Company’s assets and liabilities, which are measured at fair value on a recurring basis, were as follows:
The Level 2 assets and liabilities consist of trust-owned life insurance policies and derivative financial instruments, primarily foreign currency exchange forward contracts. The fair value of foreign currency exchange forward contracts is determined by using quoted market prices of the same or similar instruments, adjusted for counterparty risk. Fair value of borrowings: The Company’s borrowings under the Company’s credit facilities are carried at historical cost in the accompanying Consolidated Balance Sheets. For disclosure purposes, the Company estimated the fair value of borrowings outstanding based on market rates for similar types of debt, which are considered to be Level 2 inputs. The carrying amount and fair value of the Company’s term loan facility were as follows:
No borrowings were outstanding under the Company’s senior secured revolving credit facility as of January 28, 2017 or January 30, 2016. See Note 11, “BORROWINGS,” for further discussion of the Company’s credit facilities. |
INVENTORIES, NET |
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Inventories, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Text Block] | INVENTORIES, NET Inventories, net consisted of:
The inventory balance, net of reserves, included inventory in transit from vendors of $79.2 million and $71.7 million at January 28, 2017 and January 30, 2016, respectively. Inventory in transit is considered to be merchandise owned by the Company that has not yet been received at a Company distribution center. |
PROPERTY AND EQUIPMENT, NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of:
Long-lived assets, primarily comprised of leasehold improvements, furniture, fixtures and equipment, are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable. These include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, other than temporary adverse market conditions and store closure or relocation decisions. On at least a quarterly basis, the Company reviews for indicators of impairment at the individual store level, the lowest level for which cash flows are identifiable. Stores that display an indicator of impairment are subjected to an impairment assessment. The Company’s impairment assessment requires management to make assumptions and judgments related, but not limited, to management’s expectations for future operations and projected cash flows. The key assumptions used in the Company’s undiscounted future cash flow models include sales, gross margin and, to a lesser extent, operating expenses. An impairment loss would be recognized when these undiscounted future cash flows are less than the carrying amount of the asset group. In the circumstance of impairment, the loss would be measured as the excess of the carrying amount of the asset group over its fair value. The key assumptions used in estimating the fair value of impaired assets may include projected cash flows and discount rate. Fair value of the Company’s store-related assets is determined at the individual store level, primarily using a discounted cash flow model that utilizes Level 3 inputs. The estimation of future cash flows from operating activities requires significant estimates of factors that include future sales, gross margin performance and operating expenses. In instances where the discounted cash flow analysis indicates a negative value at the store level, the market exit price based on historical experience, and other comparable market data where applicable, is used to determine the fair value by asset type. In Fiscal 2016, the Company incurred non-cash asset impairment charges of $7.9 million as it was determined that the carrying value of certain assets would not be recoverable and exceeded fair value. The asset impairment charges primarily related to the Company's abercrombie kids flagship store in London. In Fiscal 2015, the Company incurred non-cash asset impairment charges of $18.2 million as it was determined that the carrying value of certain assets would not be recoverable and exceeded fair value. The asset impairment charges primarily related to the Company’s Abercrombie & Fitch flagship store in Hong Kong. In Fiscal 2014, the Company incurred non-cash asset impairment charges of $45.0 million, excluding impairment charges incurred in connection with the Gilly Hicks restructuring, as it was determined that the carrying value of certain assets would not be recoverable and exceeded fair value. The asset impairment charges primarily related to the Company’s Abercrombie & Fitch flagship store locations in Tokyo, Japan and Seoul, Korea, as well as nine abercrombie kids stores and nine Hollister stores. Additionally, in connection with the Company’s plan to sell its corporate aircraft, the asset was classified as available-for-sale and the Company incurred charges of approximately $11.3 million to record the expected loss on the disposal of the asset. The fair value of the Company’s corporate aircraft was determined using a market approach utilizing Level 2 inputs. The Company had $35.6 million and $37.3 million of construction project assets in property and equipment, net at January 28, 2017 and January 30, 2016, respectively, related to the construction of buildings in certain lease arrangements where the Company is deemed to be the owner of the construction project. |
RABBI TRUST ASSETS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RABBI TRUST ASSETS | RABBI TRUST ASSETS Investments of Rabbi Trust assets consisted of the following:
The irrevocable rabbi trust (the “Rabbi Trust”) is intended to be used as a source of funds to match respective funding obligations to participants in the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan I, the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan II and the Supplemental Executive Retirement Plan. The Rabbi Trust assets primarily consist of trust-owned life insurance policies which are recorded at cash surrender value. The change in cash surrender value of the trust-owned life insurance policies held in the Rabbi Trust resulted in realized gains of $3.1 million, $3.1 million and $3.2 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively, recorded in interest expense, net on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Rabbi Trust assets are included in other assets on the Consolidated Balance Sheets and are restricted in their use as noted above. |
OTHER ASSETS |
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Other Assets, Noncurrent Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS | OTHER ASSETS Other assets consisted of:
Long-term supplies include, but are not limited to, hangers, frames, sign holders, security tags, back-room supplies and construction materials. Intellectual property primarily includes trademark assets associated with the Company’s international operations, consisting of finite-lived and indefinite-lived intangible assets of approximately $13.4 million and $13.7 million, respectively, as of January 28, 2017, and approximately $14.4 million and $13.7 million, respectively, as of January 30, 2016. The Company’s finite-lived intangible assets are amortized over a useful life of 10 to 20 years. Restricted cash includes various cash deposits with international banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements. Other includes prepaid leases and various other assets. |
ACCRUED EXPENSES |
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ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consisted of:
Accrued payroll and related costs include salaries, incentive compensation, benefits, withholdings and other payroll related costs. Other accrued expenses include expenses incurred but not yet paid related to outside services associated with store and home office operations. |
DEFERRED LEASE CREDITS |
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Deferred Lease Credits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEFERRED LEASE CREDITS | DEFERRED LEASE CREDITS Deferred lease credits are derived from payments received from landlords to wholly or partially offset store construction costs and are classified between current and long-term liabilities. The amounts, which are amortized over the respective terms of the related leases, consisted of the following:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Income (loss) before taxes was comprised of:
Domestic (loss) income above includes intercompany charges to foreign affiliates for management fees, cost-sharing, royalties and interest, but does not include a portion of foreign income that is currently includable on the U.S. federal income tax return. Income tax (benefit) expense consisted of:
Reconciliation between the statutory federal income tax rate and the effective tax rate is as follows:
The jurisdictional location of pre-tax income (loss) may represent a significant component of the Company’s effective tax rate as income tax rates outside the U.S. are generally lower than the U.S. statutory income tax rate. Furthermore, the impact of changes in the jurisdictional location of pre-tax income (loss) on the Company’s effective tax rate will be amplified on a percentage basis at lower levels of consolidated pre-tax income (loss) in absolute dollars. The taxation of non-U.S. operations line item in the table above excludes items related to the Company’s non-U.S. operations reported separately in the appropriate corresponding line items. For Fiscal 2016, the impact of taxation of non-U.S. operations on the Company's effective income tax rate was primarily related to the Company's Swiss and Hong Kong subsidiaries, along with the Company's Non-Controlling Interest (NCI). For Fiscal 2016, the Company’s Swiss subsidiary earned pre-tax income of $18.7 million with a jurisdictional effective tax rate of negative 11.0%. Hong Kong incurred pre-tax losses of $12.6 million with a jurisdictional effective tax rate of negative 4.5%. With respect to the NCI, the subsidiaries incurred pre-tax income of $3.8 million with no jurisdictional tax effect. For Fiscal 2015, the impact of taxation of non-U.S. operations on the Company’s effective income tax rate was primarily related to the Company’s subsidiaries in Australia, Switzerland and Hong Kong. For Fiscal 2015, the Company’s Australian subsidiary incurred pre-tax losses of $4.9 million, with no jurisdictional tax effect, related to the closure of the Company’s Australian operations. For Fiscal 2015, the Company’s Swiss subsidiary earned pre-tax income of $1.9 million with a jurisdictional effective tax rate of negative 745%. The Swiss jurisdictional effective tax rate included the impact of the Company’s omnichannel restructuring as well as the release of a valuation allowance. For Fiscal 2015, the Company’s subsidiary in Hong Kong incurred pre-tax losses of $6.8 million with a jurisdictional effective tax rate of 15.8%, slightly below the statutory tax rate of 16.5%. For Fiscal 2014, the impact of taxation of non-U.S. operations on the Company’s effective income tax rate was primarily related to the Company’s Australian and Swiss subsidiaries. For Fiscal 2014, the Company’s Australian subsidiary incurred pre-tax losses of $8.4 million with a jurisdictional effective tax rate of negative 5.6%. The Australian jurisdictional effective tax rate included the impact of the closure of the Company’s Australian operations. For Fiscal 2014, the Company’s Swiss subsidiary incurred pre-tax losses of $2.6 million with a jurisdictional effective tax rate of negative 218.4%. The Swiss jurisdictional effective tax rate included the impact of the establishment of a valuation allowance. The effect of temporary differences which gives rise to deferred income tax assets (liabilities) were as follows:
Accumulated other comprehensive loss is shown net of deferred tax assets and deferred tax liabilities, resulting in a deferred tax liability of $0.6 million and $1.7 million as of January 28, 2017 and January 30, 2016, respectively. Accordingly, these deferred taxes are not reflected in the table above. As of January 28, 2017, the Company had deferred tax assets related to foreign and state NOL carryforwards of $14.9 million and $1.2 million, respectively, that could be utilized to reduce future years’ tax liabilities. If not utilized, a portion of the foreign NOL carryovers will begin to expire in 2017 and a portion of state NOL will begin to expire in 2021. Some foreign NOL have an indefinite carryforward period. As of January 28, 2017, the Company had deferred tax assets related to foreign tax credit carryforwards of approximately $7 million that could be utilized to reduce future years’ tax liabilities. If not utilized, the credit carryforwards will begin to expire in 2027. The utilization of credit carryforwards may be limited in a given year. The Company believes it is more likely than not that NOLs, charitable contributions carryforwards and credit carryforwards would reduce future years’ tax liabilities in the U.S., various states and certain foreign jurisdictions less any associated valuation allowance. All valuation allowances have been reflected through the Consolidated Statements of Operations and Comprehensive Income (Loss). No other valuation allowances have been provided for deferred tax assets because management believes that it is more likely than not that the full amount of the net deferred tax assets will be realized in the future. While the Company does not expect material adjustments to the total amount of valuation allowances within the next 12 months, changes in assumptions may occur based on the information then currently available. In such case, the Company will record an adjustment in the period in which a determination is made. A reconciliation of the beginning and ending amounts of uncertain tax positions is as follows:
Tax benefits from uncertain tax positions are recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The amount recognized is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. The Company’s effective tax rate includes the impact of reserve provisions and changes to reserves on uncertain tax positions that are not more likely than not to be sustained upon examination as well as related interest and penalties. A number of years may elapse before a particular matter, for which the Company has established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes that its reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue would require use of the Company’s cash. Favorable resolution would be recognized as a reduction to the Company’s effective tax rate in the period of resolution. The amount of the above uncertain tax positions at January 28, 2017, January 30, 2016 and January 31, 2015, which would impact the Company’s effective tax rate if recognized, was $1.2 million, $2.5 million and $3.2 million, respectively. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense. During Fiscal 2016, the Company recognized a $0.2 million benefit related to net interest and penalties, compared to a $0.9 million benefit recognized during Fiscal 2015. Interest and penalties of $0.3 million were accrued at the end of Fiscal 2016, compared to $0.5 million accrued at the end of Fiscal 2015. The Internal Revenue Service (“IRS”) is currently conducting an examination of the Company’s U.S. federal income tax return for Fiscal 2016 as part of the IRS’ Compliance Assurance Process program. The IRS examinations for Fiscal 2015 and prior years have been completed and settled. State and foreign returns are generally subject to examination for a period of three to five years after the filing of the respective return. The Company has various state and foreign income tax returns in the process of examination, administrative appeals or litigation. The outcome of the examinations is not expected to have a material impact on the Company’s financial statements. The Company believes that some of these audits and negotiations will conclude within the next 12 months and that it is reasonably possible the amount of uncertain income tax positions, including interest, may change by an immaterial amount due to settlements of audits and expiration of statutes of limitations. The Company does not expect material adjustments to the total amount of uncertain tax positions within the next 12 months, but the outcome of tax matters is uncertain and unforeseen results can occur. As of January 28, 2017, a provision for U.S. income tax has not been recorded on approximately $126.6 million of unremitted income generated through the third quarter of Fiscal 2015 of non-U.S. subsidiaries that the Company has determined to be indefinitely reinvested outside the U.S. The potential U.S. deferred income tax liability if the foreign net income were to be repatriated in the future, net of any foreign income or withholding taxes previously paid, is approximately $25 million. The Company has recorded $5.6 million of deferred U.S. income taxes on $27.3 million of net income generated after October 31, 2015, which is not considered to be invested indefinitely. |
BORROWINGS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS | BORROWINGS Asset-Based Revolving Credit Facility On August 7, 2014, A&F, through its subsidiary Abercrombie & Fitch Management Co. (“A&F Management”) as the lead borrower (with A&F and certain other subsidiaries as borrowers or guarantors), entered into an asset-based revolving credit agreement. The agreement, as amended, provides for a senior secured revolving credit facility of up to $400 million (the “ABL Facility”), subject to a borrowing base, with a letter of credit sub-limit of $100 million and an accordion feature allowing A&F to increase the revolving commitment by up to $100 million subject to specified conditions. The ABL Facility is available for working capital, capital expenditures and other general corporate purposes. The ABL Facility will mature on August 7, 2019. Obligations under the ABL Facility are unconditionally guaranteed by A&F and certain of its subsidiaries. The ABL Facility is secured by a first-priority security interest in certain working capital of the borrowers and guarantors consisting of inventory, accounts receivable and certain other assets. The ABL Facility is also secured by a second-priority security interest in certain property and assets of the borrowers and guarantors, including certain fixed assets, intellectual property, stock of subsidiaries and certain after-acquired material real property. Amounts borrowed under the ABL Facility bear interest, at the Company’s option, at either an adjusted LIBOR rate plus a margin of 1.25% to 1.75% per annum, or an alternate base rate plus a margin of 0.25% to 0.75% per annum. The initial applicable margins with respect to LIBOR loans and base rate loans, including swing line loans, under the ABL Facility are 1.50% and 0.50% per annum, respectively, and are subject to adjustment each fiscal quarter based on average historical excess availability during the preceding quarter. The Company is also required to pay a fee of 0.25% per annum on undrawn commitments under the ABL Facility. Customary agency fees and letter of credit fees are also payable in respect of the ABL Facility. No borrowings were outstanding under the ABL Facility as of January 28, 2017. Term Loan Facility A&F, through its subsidiary A&F Management as the borrower (with A&F and certain other subsidiaries as guarantors), also entered into a term loan agreement on August 7, 2014, which, as amended, provides for a term loan facility of $300 million (the “Term Loan Facility” and, together with the ABL Facility, the “2014 Credit Facilities”). A portion of the proceeds of the Term Loan Facility was used to repay the outstanding balance of approximately $127.5 million under the Company’s 2012 Term Loan Agreement, to repay outstanding borrowings of approximately $60 million under the Company’s 2011 Credit Agreement and to pay fees and expenses associated with the transaction. The Term Loan Facility was issued at a 1.0% discount. In addition, the Company recorded deferred financing fees associated with the issuance of the 2014 Credit Facilities of $5.8 million in aggregate, of which $3.2 million was paid to lenders. The Company is amortizing the debt discount and deferred financing fees over the respective contractual terms of the 2014 Credit Facilities. The Company’s Term Loan debt is presented in the Consolidated Balance Sheets, net of the unamortized discount and fees paid to lenders. Net borrowings as of January 28, 2017 and January 30, 2016 were as follows:
The Term Loan Facility will mature on August 7, 2021 and amortizes at a rate equal to 0.25% of the original principal amount per quarter, beginning with the fourth quarter of Fiscal 2014. The Company made a repayment of $25 million in January 2017, in prepayment of its scheduled Fiscal 2017 through Fiscal 2021 amortization and a portion of the amount of principal due at maturity. The Term Loan Facility is subject to (a) beginning in 2016, an annual mandatory prepayment in an amount equal to 0% to 50% of the Company’s excess cash flows in the preceding fiscal year, depending on the Company’s leverage ratio and (b) certain other mandatory prepayments upon receipt by the Company of proceeds of certain debt issuances, asset sales and casualty events, subject to certain exceptions specified therein, including reinvestment rights, less any voluntary payments made. The final principal installment of $268.3 million on the Term Loan Facility will be due in Fiscal 2021. All obligations under the Term Loan Facility are unconditionally guaranteed by A&F and certain of its subsidiaries. The Term Loan Facility is secured by a first-priority security interest in certain property and assets of the borrowers and guarantors, including certain fixed assets, intellectual property, stock of subsidiaries and certain after-acquired material real property. The Term Loan Facility is also secured by a second-priority security interest in certain working capital of the borrowers and guarantors consisting of inventory, accounts receivable and certain other assets, with certain exceptions. At the Company’s option, borrowings under the Term Loan Facility will bear interest at either (a) an adjusted LIBOR rate no lower than 1.00% plus a margin of 3.75% per annum or (b) an alternate base rate plus a margin of 2.75% per annum. Customary agency fees are also payable in respect of the Term Loan Facility. The interest rate on borrowings under the Term Loan Facility was 4.75% as of January 28, 2017. Representations, Warranties and Covenants The 2014 Credit Facilities contain various representations, warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of A&F and its subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with respect to capital stock, make prepayments on other indebtedness, engage in mergers, dispose of certain assets or change the nature of their business. In addition, excess availability equal to the greater of 10% of the loan cap or $30 million must be maintained under the ABL Facility. The 2014 Credit Facilities do not otherwise contain financial maintenance covenants. The Company was in compliance with the covenants under the 2014 Credit Facilities as of January 28, 2017. |
OTHER LIABILITIES |
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LIABILITIES | OTHER LIABILITIES Other liabilities consisted of:
Deferred compensation includes the Supplemental Executive Retirement Plan (the “SERP”), the Abercrombie & Fitch Co. Savings and Retirement Plan and the Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan, all further discussed in Note 16, “SAVINGS AND RETIREMENT PLANS,” as well as deferred Board of Directors compensation and other accrued retirement benefits. |
SHARE-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Financial Statement Impact The Company recognized share-based compensation expense of $22.1 million, $28.4 million and $23.0 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. The Company also recognized tax benefits related to share-based compensation of $8.3 million, $10.6 million and $8.6 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. The fair value of share-based compensation awards is recognized as compensation expense primarily on a straight-line basis over the awards’ requisite service period, net of estimated forfeitures, with the exception of performance share awards. Performance share award expense is primarily recognized in the performance period of the awards’ requisite service period. For awards that are expected to result in a tax deduction, a deferred tax asset is recorded in the period in which share-based compensation expense is recognized. A current tax deduction arises upon the vesting of restricted stock units and performance share awards or the exercise of stock options and stock appreciation rights and is principally measured at the award’s intrinsic value. If the tax deduction is greater than the recorded deferred tax asset, the tax benefit associated with any excess deduction is considered an excess tax benefit and is recognized as additional paid-in capital. If the tax deduction is less than the recorded deferred tax asset, the resulting difference, or shortfall, is first charged to additional paid-in capital, to the extent of the windfall pool of excess tax benefits, with any remainder recognized as tax expense. See Note 2, “SUMMARY OF SIGNIFICANT ACCOUTING POLICIES - Recent accounting pronouncements,” of the Notes to the Consolidated Financial Statements for recent accounting pronouncements, including the expected date of adoption and anticipated effect on our Consolidated Financial Statements, related to changes in the financial reporting of stock compensation. The Company adjusts share-based compensation expense on a quarterly basis for actual forfeitures and for changes to the estimate of expected award forfeitures. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed. The effect of adjustments for forfeitures was $3.4 million, $5.6 million and $2.6 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. The Company issues shares of Common Stock from treasury stock upon exercise of stock options and stock appreciation rights and vesting of restricted stock units, including those converted from performance share awards. As of January 28, 2017, the Company had sufficient treasury stock available to settle stock options, stock appreciation rights, restricted stock units and performance share awards outstanding. Settlement of stock awards in Common Stock also requires that the Company have sufficient shares available in stockholder-approved plans at the applicable time. In the event, at each reporting date as of which share-based compensation awards remain outstanding, there are not sufficient shares of Common Stock available to be issued under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Directors (the “2016 Directors LTIP”) and the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates (the “2016 Associates LTIP”), or under a successor or replacement plan, the Company may be required to designate some portion of the outstanding awards to be settled in cash, which would result in liability classification of such awards. The fair value of liability-classified awards is re-measured each reporting date until such awards no longer remain outstanding or until sufficient shares of Common Stock become available to be issued under the existing plans or under a successor or replacement plan. As long as the awards are required to be classified as a liability, the change in fair value would be recognized in current period expense based on the requisite service period rendered. Plans As of January 28, 2017, the Company had two primary share-based compensation plans: (i) the 2016 Directors LTIP, with 350,000 shares of the Company's Common Stock authorized for issuance, under which the Company is authorized to grant stock options, stock appreciation rights, restricted stock, restricted stock units and deferred stock awards to non-associate members of the Company's Board of Directors; and (ii) the 2016 Associates LTIP, with 3,500,000 shares of the Company's Common Stock authorized for issuance, under which the Company is authorized to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance share awards to associates of the Company. The Company also has six other share-based compensation plans under which it granted stock options, stock appreciation rights, restricted stock units and performance share awards to associates of the Company and stock options and restricted stock units to non-associate members of the Company’s Board of Directors in prior years. The 2016 Directors LTIP, a stockholder-approved plan, permits the Company to annually grant awards to non-associate directors, subject to the following limits:
Under the 2016 Directors LTIP, restricted stock units are subject to a minimum vesting period ending no sooner than the early of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders held after the grant date. The 2016 Associates LTIP, a stockholder-approved plan, permits the Company to annually grant one or more types of awards covering up to an aggregate of 1.0 million of underlying shares of the Company’s Common Stock to any associate of the Company. Under the 2016 Associates LTIP, for restricted stock units that have performance-based vesting, performance must be measured over a period of at least one year and restricted stock units that do not have performance-based vesting, vesting in full may not occur more quickly than in pro-rata installments over a period of three years from the date of the grant, with the first installment vesting no sooner than the first anniversary of the date of the grant. Under the 2016 Directors LTIP, any stock options or stock appreciation rights granted must have a minimum vesting period ending no sooner than the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of the stockholders held after the grant date and must have a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Directors LTIP. Under the 2016 Associates LTIP, any stock options or stock appreciation rights granted must have a minimum vesting period of one year and a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Associates LTIP. Each of the 2016 Directors LTIP and the 2016 Associates LTIP provide for accelerated vesting of awards if there is a change of control and certain other conditions specified in each plan are met. Stock Options The following table summarizes stock option activity for Fiscal 2016:
The Company did not grant any stock options during Fiscal 2016, Fiscal 2015 and Fiscal 2014. The total intrinsic value of stock options exercised was insignificant during Fiscal 2016, Fiscal 2015 and Fiscal 2014. As of January 28, 2017, there was no unrecognized compensation cost related to currently outstanding stock options. Stock Appreciation Rights The following table summarizes stock appreciation rights activity for Fiscal 2016:
The Company estimates the fair value of stock appreciation rights using the Black-Scholes option-pricing model, which requires the Company to estimate the expected term of the stock appreciation rights and expected future stock price volatility over the expected term. Estimates of expected terms, which represent the expected periods of time the Company believes stock appreciation rights will be outstanding, are based on historical experience. Estimates of expected future stock price volatility are based on the volatility of the Company’s Common Stock price for the most recent historical period equal to the expected term of the stock appreciation right, as appropriate. The Company calculates the volatility as the annualized standard deviation of the differences in the natural logarithms of the weekly stock closing price, adjusted for stock splits and dividends. No stock appreciation rights were granted in Fiscal 2016. The weighted-average assumptions used in the Black-Scholes option-pricing model for stock appreciation rights granted during Fiscal 2015 and Fiscal 2014 were as follows:
Compensation expense for stock appreciation rights is recognized on a straight-line basis over the awards’ requisite service period, net of forfeitures. As of January 28, 2017, there was $2.5 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock appreciation rights. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 13 months. The total intrinsic value of stock appreciation rights exercised during Fiscal 2016, Fiscal 2015 and Fiscal 2014 was $0.1 million, $4.3 million and $1.5 million, respectively. The grant date fair value of stock appreciation rights that vested during Fiscal 2016, Fiscal 2015 and Fiscal 2014 was $4.3 million, $4.9 million and $7.4 million, respectively. Restricted Stock Units The following table summarizes activity for restricted stock units for Fiscal 2016:
Fair value of both service-based and performance-based restricted stock units is calculated using the market price of the underlying common stock on the date of grant reduced for anticipated dividend payments on unvested shares. In determining fair value, the Company does not take into account performance-based vesting requirements. Performance-based vesting requirements are taken into account in determining the number of awards expected to vest. For market-based restricted stock units, fair value is calculated using a Monte Carlo simulation with the number of shares that ultimately vest dependent on the Company’s total stockholder return measured against the total stockholder return of a select group of peer companies over a three-year period. For an award with performance-based or market-based vesting requirements, the number of shares that ultimately vest can vary from 0% to 200% of target depending on the level of achievement of performance criteria. Unvested shares related to restricted stock units with performance-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Service-based restricted stock units are expensed on a straight-line basis over the total requisite service period, net of forfeitures. Performance-based restricted stock units subject to graded vesting are expensed on an accelerated attribution basis, net of forfeitures. Market-based restricted stock units without graded vesting features are expensed on a straight-line basis over the requisite service period, net of forfeitures. As of January 28, 2017, there was $24.7 million and $2.2 million of total unrecognized compensation cost, net of estimated forfeitures, related to service-based and market-based restricted stock units, respectively. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 16 months and 15 months for service-based and market-based restricted stock units, respectively. Additional information pertaining to restricted stock units for Fiscal 2016, Fiscal 2015 and Fiscal 2014 follows:
The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during Fiscal 2016 and Fiscal 2015 were as follows:
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DERIVATIVE INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes. In order to qualify for hedge accounting treatment, a derivative instrument must be considered highly effective at offsetting changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge effectiveness will be assessed prospectively and retrospectively. The extent to which a hedging instrument has been, and is expected to continue to be, effective at offsetting changes in fair value or cash flows is assessed and documented at least quarterly. Any hedge ineffectiveness is reported in current period earnings and hedge accounting is discontinued if it is determined that the derivative instrument is not highly effective. For derivative instruments that either do not qualify for hedge accounting or are not designated as hedges, all changes in the fair value of the derivative instrument are recognized in earnings. For qualifying cash flow hedges, the effective portion of the change in the fair value of the derivative instrument is recorded as a component of other comprehensive income (loss) (“OCI”) and recognized in earnings when the hedged cash flows affect earnings. The ineffective portion of the derivative instrument gain or loss is recognized in current period earnings. The effectiveness of the hedge is assessed based on changes in the fair value attributable to changes in spot prices. The changes in the fair value of the derivative instrument related to the changes in the difference between the spot price and the forward price are excluded from the assessment of hedge effectiveness and are also recognized in current period earnings. If the cash flow hedge relationship is terminated, the derivative instrument gains or losses that are deferred in OCI will be recognized in earnings when the hedged cash flows occur. However, for cash flow hedges that are terminated because the forecasted transaction is not expected to occur in the original specified time period, or a two-month period thereafter, the derivative instrument gains or losses are immediately recognized in earnings. The Company uses derivative instruments, primarily forward contracts designated as cash flow hedges, to hedge the foreign currency exposure associated with forecasted foreign-currency-denominated intercompany inventory sales to foreign subsidiaries and the related settlement of the foreign-currency-denominated intercompany receivables. Fluctuations in exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. Dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These forward contracts typically have a maximum term of twelve months. The sale of the inventory to the Company’s customers will result in the reclassification of related derivative gains and losses that are reported in accumulated other comprehensive loss (“AOCL”). Substantially all of the unrealized gains or losses related to designated cash flow hedges as of January 28, 2017 will be recognized in cost of sales, exclusive of depreciation and amortization over the next twelve months. The Company presents its derivative assets and derivative liabilities at their gross fair values on the Consolidated Balance Sheets. However, the Company's master netting and other similar arrangements allow net settlements under certain conditions. As of January 28, 2017, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany inventory sales, the resulting settlement of the foreign-currency-denominated intercompany accounts receivable, or both:
The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net monetary assets/liabilities. Examples of monetary assets/liabilities include cash balances, receivables and payables. Fluctuations in exchange rates result in transaction gains/(losses) being recorded in earnings as U.S. GAAP requires that monetary assets/liabilities be remeasured at the spot exchange rate at quarter-end or upon settlement. The Company has chosen not to apply hedge accounting to these instruments because there are no differences in the timing of gain or loss recognition on the hedging instruments and the hedged items. As of January 28, 2017, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge foreign currency denominated net monetary assets/liabilities:
The location and amounts of derivative fair values on the Consolidated Balance Sheets as of January 28, 2017 and January 30, 2016 were as follows:
Refer to Note 3, “FAIR VALUE,” for further discussion of the determination of the fair value of derivative instruments. The location and amounts of derivative gains and losses for Fiscal 2016 and Fiscal 2015 on the Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:
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ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The activity in accumulated other comprehensive loss for Fiscal 2016 was as follows:
The activity in accumulated other comprehensive loss for Fiscal 2015 was as follows:
The activity in accumulated other comprehensive loss for Fiscal 2014 was as follows:
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SAVINGS AND RETIREMENT PLANS |
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Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | SAVINGS AND RETIREMENT PLANS The Company maintains the Abercrombie & Fitch Co. Savings & Retirement Plan, a qualified plan. All U.S. associates are eligible to participate in this plan if they are at least 21 years of age. In addition, the Company maintains the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement, composed of two sub-plans (Plan I and Plan II). Plan I contains contributions made through December 31, 2004, while Plan II contains contributions made on and after January 1, 2005. Participation in these plans is based on service and compensation. The Company’s contributions are based on a percentage of associates’ eligible annual compensation. The cost of the Company’s contributions to these plans was $11.1 million, $15.4 million and $13.8 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. |
SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING The Company has two operating segments: Abercrombie, which includes the Company’s Abercrombie & Fitch and abercrombie kids brands; and Hollister. These operating segments have similar economic characteristics, classes of consumers, products, and production and distribution methods, and have been aggregated into one reportable segment. The following table provides the Company’s net sales by operating segment for Fiscal 2016, Fiscal 2015 and Fiscal 2014.
The following table provides the Company’s net sales by geographic area for Fiscal 2016, Fiscal 2015 and Fiscal 2014.
The following table provides the Company’s long-lived assets by geographic area for Fiscal 2016, Fiscal 2015 and Fiscal 2014.
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CONTINGENCIES |
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Contingencies [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | CONTINGENCIES The Company is a defendant in lawsuits and other adversarial proceedings arising in the ordinary course of business. Legal costs incurred in connection with the resolution of claims and lawsuits are generally expensed as incurred, and the Company establishes reserves for the outcome of litigation where losses are deemed probable and reasonably estimable. The Company’s assessment of the current exposure could change in the event of the discovery of additional facts. As of January 28, 2017, the Company had accrued charges of approximately $6 million for certain legal contingencies. In addition, there are certain claims and legal proceedings pending against the Company for which accruals have not been established. Actual liabilities may exceed the amounts reserved, and there can be no assurance that final resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. For Fiscal 2016, the Company recognized a $12.3 million gain in other operating income, net in connection with a settlement of certain economic loss claims associated with the April 2010 Deepwater Horizon oil spill. |
QUARTERLY FINANCIAL DATA (UNAUDITED) |
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QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized unaudited quarterly financial results for Fiscal 2016 and Fiscal 2015 are presented below. See “RESULTS OF OPERATIONS,” in “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” of this Annual Report on Form 10-K for information regarding items included below that could affect comparability between quarter results.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of consolidation | Principles of consolidation The accompanying Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its assets, liabilities, results of operations and cash flows. The Company has interests in a United Arab Emirates business venture and in a Kuwait business venture with Majid al Futtaim Fashion L.L.C. (“MAF”), each of which meets the definition of a variable interest entity (“VIE”). The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with MAF’s portion of net income presented as net income attributable to noncontrolling interests (“NCI”) in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) and MAF’s portion of equity presented as NCI in the Consolidated Balance Sheets. |
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Fiscal Year | Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. All references herein to “Fiscal 2016” represent the fifty-two week fiscal year ended January 28, 2017; to “Fiscal 2015” represent the fifty-two week fiscal year ended January 30, 2016; and to “Fiscal 2014” represent the fifty-two week fiscal year ended January 31, 2015. In addition, all references herein to “Fiscal 2017” represent the fifty-three week fiscal year that will end on February 3, 2018. |
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Use of estimates | Use of estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. |
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Cash and equivalents | Cash and equivalents Cash and equivalents include amounts on deposit with financial institutions, United States treasury bills and other investments, primarily held in money market accounts, with original maturities of less than three months. |
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Restricted cash | Restricted cash Any cash that is legally restricted from use is recorded in Other Assets on the Consolidated Balance Sheets. The restricted cash balance was $20.4 million and $20.6 million on January 28, 2017 and January 30, 2016, respectively. Restricted cash includes various cash deposits with international banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements. |
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Receivables | Receivables Receivables primarily include credit card receivables, construction allowances, value added tax (“VAT”) receivables, trade receivables, income tax receivables and other tax credits or refunds. As part of the normal course of business, the Company has approximately three to four days of proceeds from sales transactions outstanding with its third-party credit card vendors at any point. The Company classifies these outstanding balances as credit card receivables. Construction allowances are recorded for certain store lease agreements for improvements completed by the Company. VAT receivables are payments the Company has made on purchases of goods that will be recovered as those goods are sold. Trade receivables are amounts billed by the Company to wholesale, franchise and licensing partners in the ordinary course of business. Income tax receivable represents refunds of certain tax payments along with net operating loss and credit carryback claims for which we expect to receive refunds within the next 12 months. |
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Inventories, net | Inventories, net Inventories are valued at the lower of cost or market on a weighted-average cost basis. The Company reduces the carrying value of inventory through a lower of cost or market adjustment, the impact of which is reflected in cost of sales, exclusive of depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Income (Loss). The lower of cost or market reserve is based on an analysis of historical experience, composition and aging of the inventory and management’s judgment regarding future demand and market conditions. Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical inventories are made each period that reduce the inventory value for lost or stolen items. The Company performs physical inventories on a periodic basis and adjusts the shrink reserve accordingly. See Note 4, “INVENTORIES, NET,” for further discussion. |
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Other current assets | Other current assets Other current assets include prepaid rent, current store supplies, derivative contracts and other prepaids. |
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Property and equipment | Property and equipment, net Depreciation and amortization of property and equipment are computed for financial reporting purposes on a straight-line basis using the following service lives:
Leasehold improvements are amortized over either their respective lease terms or their service lives, whichever is shorter. The cost of assets sold or retired and the related accumulated depreciation or amortization are removed from the accounts with any resulting gain or loss included in net income. Maintenance and repairs are charged to expense as incurred. Major remodels and improvements that extend the service lives of the related assets are capitalized. Long-lived assets, primarily comprised of leasehold improvements, furniture, fixtures and equipment, are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable. These include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, other than temporary adverse market conditions and store closure or relocation decisions. On at least a quarterly basis, the Company reviews for indicators of impairment at the individual store level, the lowest level for which cash flows are identifiable. Stores that display an indicator of impairment are subjected to an impairment assessment. The Company’s impairment assessment requires management to make assumptions and judgments related, but not limited, to management’s expectations for future operations and projected cash flows. The key assumptions used in the Company’s undiscounted future cash flow models include sales, gross margin and, to a lesser extent, operating expenses. An impairment loss would be recognized when these undiscounted future cash flows are less than the carrying amount of the asset group. In the circumstance of impairment, the loss would be measured as the excess of the carrying amount of the asset group over its fair value. The key assumptions used in estimating the fair value of impaired assets may include projected cash flows and discount rate. See Note 5, “PROPERTY AND EQUIPMENT, NET,” for further discussion. The Company expenses all internal-use software costs incurred in the preliminary project stage and capitalizes certain direct costs associated with the development and purchase of internal-use software within property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding seven years. |
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Income taxes | Income taxes Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using current enacted tax rates in effect for the years in which those temporary differences are expected to reverse. Inherent in the determination of the Company’s income tax liability and related deferred income tax balances are certain judgments and interpretations of enacted tax law and published guidance with respect to applicability to the Company’s operations. The Company is subject to audit by taxing authorities, usually several years after tax returns have been filed, and the taxing authorities may have differing interpretations of tax laws. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records tax expense or benefit that does not relate to ordinary income in the current fiscal year discretely in the period in which it occurs. Examples of such types of discrete items include, but are not limited to: changes in estimates of the outcome of tax matters related to prior years, assessments of valuation allowances, return-to-provision adjustments, tax-exempt income, the settlement of tax audits and changes in tax legislation and/or regulations. In the fourth quarter of Fiscal 2015, the Company restructured its international operations to support its omnichannel initiatives. As a result of the restructuring, the Company no longer believes that future net income as of the date of the restructuring will be indefinitely reinvested and as such is providing a deferred U.S. income tax liability for the additional taxes due upon a future repatriation. See Note 10, “INCOME TAXES,” for a discussion regarding the Company’s policies for uncertain tax positions. |
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Foreign currency translation and transactions | Foreign currency translation and transactions The functional currencies of the Company’s foreign subsidiaries are generally the respective local currencies in the countries in which they operate. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollars (the reporting currency) at the exchange rate prevailing at the balance sheet date. Equity accounts denominated in foreign currencies are translated into U.S. Dollars at historical exchange rates. Revenues and expenses denominated in foreign currencies are translated into U.S. Dollars at the monthly average exchange rate for the period. Gains and losses resulting from foreign currency transactions are included in the results of operations; whereas, translation adjustments and inter-company loans of a long-term investment nature are reported as an element of Other Comprehensive Income (Loss). Foreign currency transactions resulted in a gain of $0.4 million for Fiscal 2016, a loss of $1.5 million for Fiscal 2015 and a loss of $2.0 million for Fiscal 2014 |
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Derivative instruments | DERIVATIVE INSTRUMENTS The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes. In order to qualify for hedge accounting treatment, a derivative instrument must be considered highly effective at offsetting changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge effectiveness will be assessed prospectively and retrospectively. The extent to which a hedging instrument has been, and is expected to continue to be, effective at offsetting changes in fair value or cash flows is assessed and documented at least quarterly. Any hedge ineffectiveness is reported in current period earnings and hedge accounting is discontinued if it is determined that the derivative instrument is not highly effective. For derivative instruments that either do not qualify for hedge accounting or are not designated as hedges, all changes in the fair value of the derivative instrument are recognized in earnings. For qualifying cash flow hedges, the effective portion of the change in the fair value of the derivative instrument is recorded as a component of other comprehensive income (loss) (“OCI”) and recognized in earnings when the hedged cash flows affect earnings. The ineffective portion of the derivative instrument gain or loss is recognized in current period earnings. The effectiveness of the hedge is assessed based on changes in the fair value attributable to changes in spot prices. The changes in the fair value of the derivative instrument related to the changes in the difference between the spot price and the forward price are excluded from the assessment of hedge effectiveness and are also recognized in current period earnings. If the cash flow hedge relationship is terminated, the derivative instrument gains or losses that are deferred in OCI will be recognized in earnings when the hedged cash flows occur. However, for cash flow hedges that are terminated because the forecasted transaction is not expected to occur in the original specified time period, or a two-month period thereafter, the derivative instrument gains or losses are immediately recognized in earnings. The Company uses derivative instruments, primarily forward contracts designated as cash flow hedges, to hedge the foreign currency exposure associated with forecasted foreign-currency-denominated intercompany inventory sales to foreign subsidiaries and the related settlement of the foreign-currency-denominated intercompany receivables. Fluctuations in exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. Dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These forward contracts typically have a maximum term of twelve months. The sale of the inventory to the Company’s customers will result in the reclassification of related derivative gains and losses that are reported in accumulated other comprehensive loss (“AOCL”). Substantially all of the unrealized gains or losses related to designated cash flow hedges as of January 28, 2017 will be recognized in cost of sales, exclusive of depreciation and amortization over the next twelve months. |
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Stockholders' equity | Stockholders’ equity At January 28, 2017 and January 30, 2016, there were 150.0 million shares of A&F’s Class A Common Stock, $0.01 par value, authorized, of which 67.8 million and 67.3 million were outstanding at January 28, 2017 and January 30, 2016, respectively, and 106.4 million shares of Class B Common Stock, $0.01 par value, authorized, of which none were outstanding at January 28, 2017 and January 30, 2016. Holders of Class A Common Stock generally have identical rights to holders of Class B Common Stock, except holders of Class A Common Stock are entitled to one vote per share while holders of Class B Common Stock are entitled to three votes per share on all matters submitted to a vote of stockholders. |
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Revenue recognition | Revenue recognition The Company recognizes sales at the time the customer takes possession of the merchandise. Amounts relating to shipping and handling billed to customers in a sale transaction are classified as net sales and the related direct shipping and handling costs are classified as stores and distribution expense in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Sales are recorded net of an allowance for estimated returns, associate discounts, and promotions and other similar customer incentives. The Company estimates reserves for sales returns based on historical experience. The sales return reserve was $9.8 million, $8.9 million and $9.5 million at January 28, 2017, January 30, 2016 and January 31, 2015, respectively. The Company sells gift cards in its stores and through direct-to-consumer operations. The Company accounts for gift cards sold to customers by recognizing a liability at the time of sale. Gift cards sold to customers do not expire or lose value over periods of inactivity. The liability remains on the Company’s books until the Company recognizes income from gift cards. Income from gift cards is recognized at the earlier of redemption by the customer (recognized as net sales) or when the Company determines that the likelihood of redemption is remote, referred to as gift card breakage (recognized as other operating income). The Company determines the probability of the gift card being redeemed to be remote based on historical redemption patterns. The gift card liability was $29.7 million and $36.4 million at January 28, 2017 and January 30, 2016, respectively. The Company is not required by law to escheat the value of unredeemed gift cards to the jurisdictions in which it operates. The Company's revenue under franchise and license arrangements generally consists of royalties earned upon sale of merchandise by franchise and license partners to retail customers. Under wholesale arrangements, revenue is generally recognized at the time ownership passes to the partner. Tax amounts collected as part of sales transactions are not included in the Company's net sales. |
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Cost of sales, exclusive of depreciation and amortization | Cost of sales, exclusive of depreciation and amortization Cost of sales, exclusive of depreciation and amortization, is primarily comprised of cost incurred to ready inventory for sale, including product costs, freight, and import cost, as well as provisions for reserves for shrink and lower of cost or market. Gains and losses associated with foreign currency exchange forward contracts related to hedging of inventory purchases are also recognized in cost of sales, exclusive of depreciation and amortization when the inventory being hedged is sold. |
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Stores and distribution expense | Stores and distribution expense Stores and distribution expense includes store payroll, store management, rent, utilities and other landlord expenses, depreciation and amortization, repairs and maintenance and other store support functions, as well as direct-to-consumer expense and distribution center (“DC”) expense. Shipping and handling costs, including costs incurred to store, move and prepare product for shipment, and costs incurred to physically move product to customers, associated with direct-to-consumer operations, were $125.4 million, $115.0 million and $108.1 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Handling costs, including costs incurred to store, move and prepare product for shipment to stores, were $41.5 million, $44.5 million and $52.2 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. These amounts are recorded in stores and distribution expense in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Costs incurred to physically move product to stores is recorded in cost of sales, exclusive of depreciation and amortization in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). |
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Marketing, general & administrative expense | Marketing, general & administrative expense Marketing, general and administrative expense includes: photography and social media; store marketing; home office compensation, except for those departments included in stores and distribution expense; information technology; outside services such as legal and consulting; relocation; recruiting; samples; and travel expenses. |
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Other operating income, net | Other operating income, net Other operating income, net included income of $2.2 million and $10.2 million related to insurance recoveries for Fiscal 2015 and Fiscal 2014, respectively; and income of $10.3 million, $4.7 million and $5.8 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively, related to gift card balances whose likelihood of redemption has been determined to be remote. Fiscal 2016 gift card breakage is inclusive of $4.8 million related to the initial recognition of international gift card breakage. For Fiscal 2016, the Company recognized a $12.3 million gain in other operating income, net in connection with a settlement of certain economic loss claims associated with the April 2010 Deepwater Horizon oil spill. |
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Advertising costs | Advertising costs Advertising costs are comprised of in-store photography, e-mail distribution and other digital direct advertising and other media advertising and are reported on the Consolidated Statements of Operations and Comprehensive Income (Loss). Advertising costs related specifically to direct-to-consumer operations are expensed as incurred as a component of stores and distribution expense. The production of in-store photography and signage are expensed when the marketing campaign commences as a component of marketing, general and administrative expense. All other advertising costs are expensed as incurred as a component of marketing, general and administrative expense. The Company recognized $110.1 million, $80.7 million and $84.6 million in advertising expense in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. |
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Leased facilities | Leased facilities The Company leases property for its stores under operating leases. Lease agreements may contain construction allowances, rent escalation clauses and/or contingent rent provisions. Annual store rent is comprised of a fixed minimum amount and/or contingent rent based on a percentage of sales. For construction allowances, the Company records a deferred lease credit on the Consolidated Balance Sheets and amortizes the deferred lease credit as a reduction of rent expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) over the term of the lease. For scheduled rent escalation clauses during the lease term, the Company records minimum rental expense on a straight-line basis over the term of the lease on the Consolidated Statements of Operations and Comprehensive Income (Loss). The difference between rent expense and the amounts paid under the lease, less amounts attributable to the repayment of construction allowances recorded as deferred rent, is included in accrued expenses and other liabilities on the Consolidated Balance Sheets. The term over which the Company amortizes construction allowances and minimum rental expenses on a straight-line basis begins on the date of initial possession, which is generally when the Company enters the space and begins construction. Certain leases provide for contingent rents, which are determined as a percentage of gross sales. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheets, and the corresponding rent expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) on a ratable basis over the measurement period when it is determined that achieving the specified levels during the fiscal year is probable. In addition, most leases require payment of real estate taxes, insurance and certain common area maintenance costs in addition to future minimum lease payments. A summary of rent expense follows:
(1) Includes lease termination fees of $15.5 million, $3.3 million and $12.4 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Fiscal 2015 includes a benefit of $1.6 million related to better than expected lease exit terms associated with the closure of the Gilly Hicks stand-alone stores. Fiscal 2014 includes lease termination fees of $6.8 million related to the Gilly Hicks restructuring. At January 28, 2017, the Company was committed to non-cancelable leases with remaining terms of less than one year to 15 years. Excluded from the obligations below are portions of lease terms that are currently cancelable at the Company’s discretion without condition. While included in the obligations below, in many instances the Company has options to terminate certain leases if stated sales volume levels are not met or the Company ceases operations in a given country, which may be subject to lease termination policies. A summary of operating lease commitments, including leasehold financing obligations, under non-cancelable leases follows:
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Leasehold financing obligations | Leasehold financing obligations In certain lease arrangements, the Company is involved in the construction of a building and is deemed to be the owner of the construction project. In those instances, the Company records an asset for the amount of the total project costs, including the portion funded by the landlord, and an amount related to the value attributed to the pre-existing leased building in property and equipment, net, and a corresponding financing obligation in leasehold financing obligations, on the Consolidated Balance Sheets. Once construction is complete, if it is determined that the asset does not qualify for sale-leaseback accounting treatment, the Company continues to amortize the obligation over the lease term and depreciates the asset over its useful life. The Company allocates a portion of its rent obligation to the assets which are owned for accounting purposes as a reduction of the financing obligation and interest expense. As of January 28, 2017 and January 30, 2016, the Company had $46.4 million and $47.4 million, respectively, of long-term liabilities related to leasehold financing obligations. Total interest expense related to landlord financing obligations was $5.7 million, $5.3 million and $6.2 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. |
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Store pre-opening expenses | Store pre-opening expenses Pre-opening expenses related to new store openings are expensed as incurred and are reflected as a component of “stores and distribution expense. |
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Design and development costs | Design and development costs Costs to design and develop the Company’s merchandise are expensed as incurred and are reflected as a component of “marketing, general and administrative expense.” |
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Net income per share | Net income per share attributable to A&F Net income per basic and diluted share attributable to A&F is computed based on the weighted-average number of outstanding shares of common stock. The following table presents weighted-average shares outstanding and anti-dilutive shares:
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Share-based compensation | The fair value of share-based compensation awards is recognized as compensation expense primarily on a straight-line basis over the awards’ requisite service period, net of estimated forfeitures, with the exception of performance share awards. Performance share award expense is primarily recognized in the performance period of the awards’ requisite service period. For awards that are expected to result in a tax deduction, a deferred tax asset is recorded in the period in which share-based compensation expense is recognized. A current tax deduction arises upon the vesting of restricted stock units and performance share awards or the exercise of stock options and stock appreciation rights and is principally measured at the award’s intrinsic value. If the tax deduction is greater than the recorded deferred tax asset, the tax benefit associated with any excess deduction is considered an excess tax benefit and is recognized as additional paid-in capital. If the tax deduction is less than the recorded deferred tax asset, the resulting difference, or shortfall, is first charged to additional paid-in capital, to the extent of the windfall pool of excess tax benefits, with any remainder recognized as tax expense. See Note 2, “SUMMARY OF SIGNIFICANT ACCOUTING POLICIES - Recent accounting pronouncements,” of the Notes to the Consolidated Financial Statements for recent accounting pronouncements, including the expected date of adoption and anticipated effect on our Consolidated Financial Statements, related to changes in the financial reporting of stock compensation. The Company adjusts share-based compensation expense on a quarterly basis for actual forfeitures and for changes to the estimate of expected award forfeitures. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed. The effect of adjustments for forfeitures was $3.4 million, $5.6 million and $2.6 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. The Company issues shares of Common Stock from treasury stock upon exercise of stock options and stock appreciation rights and vesting of restricted stock units, including those converted from performance share awards. As of January 28, 2017, the Company had sufficient treasury stock available to settle stock options, stock appreciation rights, restricted stock units and performance share awards outstanding. Settlement of stock awards in Common Stock also requires that the Company have sufficient shares available in stockholder-approved plans at the applicable time. In the event, at each reporting date as of which share-based compensation awards remain outstanding, there are not sufficient shares of Common Stock available to be issued under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Directors (the “2016 Directors LTIP”) and the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates (the “2016 Associates LTIP”), or under a successor or replacement plan, the Company may be required to designate some portion of the outstanding awards to be settled in cash, which would result in liability classification of such awards. The fair value of liability-classified awards is re-measured each reporting date until such awards no longer remain outstanding or until sufficient shares of Common Stock become available to be issued under the existing plans or under a successor or replacement plan. As long as the awards are required to be classified as a liability, the change in fair value would be recognized in current period expense based on the requisite service period rendered. Plans As of January 28, 2017, the Company had two primary share-based compensation plans: (i) the 2016 Directors LTIP, with 350,000 shares of the Company's Common Stock authorized for issuance, under which the Company is authorized to grant stock options, stock appreciation rights, restricted stock, restricted stock units and deferred stock awards to non-associate members of the Company's Board of Directors; and (ii) the 2016 Associates LTIP, with 3,500,000 shares of the Company's Common Stock authorized for issuance, under which the Company is authorized to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance share awards to associates of the Company. The Company also has six other share-based compensation plans under which it granted stock options, stock appreciation rights, restricted stock units and performance share awards to associates of the Company and stock options and restricted stock units to non-associate members of the Company’s Board of Directors in prior years. The 2016 Directors LTIP, a stockholder-approved plan, permits the Company to annually grant awards to non-associate directors, subject to the following limits:
Under the 2016 Directors LTIP, restricted stock units are subject to a minimum vesting period ending no sooner than the early of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders held after the grant date. The 2016 Associates LTIP, a stockholder-approved plan, permits the Company to annually grant one or more types of awards covering up to an aggregate of 1.0 million of underlying shares of the Company’s Common Stock to any associate of the Company. Under the 2016 Associates LTIP, for restricted stock units that have performance-based vesting, performance must be measured over a period of at least one year and restricted stock units that do not have performance-based vesting, vesting in full may not occur more quickly than in pro-rata installments over a period of three years from the date of the grant, with the first installment vesting no sooner than the first anniversary of the date of the grant. Under the 2016 Directors LTIP, any stock options or stock appreciation rights granted must have a minimum vesting period ending no sooner than the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of the stockholders held after the grant date and must have a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Directors LTIP. Under the 2016 Associates LTIP, any stock options or stock appreciation rights granted must have a minimum vesting period of one year and a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Associates LTIP. Each of the 2016 Directors LTIP and the 2016 Associates LTIP provide for accelerated vesting of awards if there is a change of control and certain other conditions specified in each plan are met. |
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Recent accounting pronouncements | Recent accounting pronouncements The following table provides a brief description of recent accounting pronouncements that could affect the Company’s financial statements:
* Early adoption is permitted. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rent Expense | A summary of rent expense follows:
(1) Includes lease termination fees of $15.5 million, $3.3 million and $12.4 million for Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Fiscal 2015 includes a benefit of $1.6 million related to better than expected lease exit terms associated with the closure of the Gilly Hicks stand-alone stores. Fiscal 2014 includes lease termination fees of $6.8 million related to the Gilly Hicks restructuring. |
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Schedule of Operating Lease Commitments Under Non-Cancelable Leases | A summary of operating lease commitments, including leasehold financing obligations, under non-cancelable leases follows:
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Schedule of Weighted Average Number of Shares | The following table presents weighted-average shares outstanding and anti-dilutive shares:
|
FAIR VALUE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Company's Assets and Liabilities measured at Fair Value | The three levels of the hierarchy and the distribution within it of the Company’s assets and liabilities, which are measured at fair value on a recurring basis, were as follows:
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Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] | The carrying amount and fair value of the Company’s term loan facility were as follows:
|
INVENTORIES, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current [Table Text Block] | Inventories, net consisted of:
|
PROPERTY AND EQUIPMENT, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment, Net | Property and equipment, net consisted of:
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RABBI TRUST ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Rabbi Trust Assets | Investments of Rabbi Trust assets consisted of the following:
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OTHER ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, Noncurrent Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consisted of:
|
ACCRUED EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses consisted of:
|
DEFERRED LEASE CREDITS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Lease Credits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Lease Credits | The amounts, which are amortized over the respective terms of the related leases, consisted of the following:
|
INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) before taxes was comprised of:
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Schedule of Components of Income Tax Expense (Benefit) | Income tax (benefit) expense consisted of:
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Schedule of Effective Income Tax Rate Reconciliation | Reconciliation between the statutory federal income tax rate and the effective tax rate is as follows:
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Schedule of Deferred Tax Assets and Liabilities | The effect of temporary differences which gives rise to deferred income tax assets (liabilities) were as follows:
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Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible | A reconciliation of the beginning and ending amounts of uncertain tax positions is as follows:
|
BORROWINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Borrowings | Net borrowings as of January 28, 2017 and January 30, 2016 were as follows:
|
OTHER LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Liabilities | Other liabilities consisted of:
|
SHARE-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | The following table summarizes stock option activity for Fiscal 2016:
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Schedule of Stock Appreciation Rights Activity | The following table summarizes stock appreciation rights activity for Fiscal 2016:
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Schedule of Weighted-Average Estimated Fair Value and Assumptions of Stock Appreciation Rights | The weighted-average assumptions used in the Black-Scholes option-pricing model for stock appreciation rights granted during Fiscal 2015 and Fiscal 2014 were as follows:
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Schedule of Restricted Stock Unit Activity | The following table summarizes activity for restricted stock units for Fiscal 2016:
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Market-based Restricted Stock Units (RSUs) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted-Average Estimated Fair Value and Assumptions of Market-based Restricted Stock Units | The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during Fiscal 2016 and Fiscal 2015 were as follows:
|
DERIVATIVE INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Foreign Exchange Forward Contracts | As of January 28, 2017, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany inventory sales, the resulting settlement of the foreign-currency-denominated intercompany accounts receivable, or both:
As of January 28, 2017, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge foreign currency denominated net monetary assets/liabilities:
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Schedule of Locations and Amounts of Derivative Fair Values on the Consolidated Balance Sheets | The location and amounts of derivative fair values on the Consolidated Balance Sheets as of January 28, 2017 and January 30, 2016 were as follows:
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Schedule of Locations and Amounts of Derivative Gains (Losses) on the Consolidated Statements of Operations and Comprehensive Income | The location and amounts of derivative gains and losses for Fiscal 2016 and Fiscal 2015 on the Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive (Loss) Income | The activity in accumulated other comprehensive loss for Fiscal 2016 was as follows:
|
The activity in accumulated other comprehensive loss for Fiscal 2015 was as follows:
|
The activity in accumulated other comprehensive loss for Fiscal 2014 was as follows:
|
SEGMENT REPORTING Reconciliation of Long-lived assets to Consolidated (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting, Asset Reconciling Item [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | The following table provides the Company’s long-lived assets by geographic area for Fiscal 2016, Fiscal 2015 and Fiscal 2014.
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SEGMENT REPORTING Reconciliation of Revenue from External Customers to Consolidated (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Sales by Brand [Table Text Block] | The following table provides the Company’s net sales by operating segment for Fiscal 2016, Fiscal 2015 and Fiscal 2014.
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Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | The following table provides the Company’s net sales by geographic area for Fiscal 2016, Fiscal 2015 and Fiscal 2014.
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QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Summarized unaudited quarterly financial results for Fiscal 2016 and Fiscal 2015 are presented below. See “RESULTS OF OPERATIONS,” in “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” of this Annual Report on Form 10-K for information regarding items included below that could affect comparability between quarter results.
|
FAIR VALUE (Schedule of Assets and Liabilities by Fair Value by Hierarchy) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
ASSETS: | ||
Trust-owned life insurance policies (at cash surrender value) | $ 99,655 | |
Money market funds | 94,026 | $ 311,349 |
Derivative financial instruments | 6,041 | 4,166 |
Total assets measured at fair value | 199,722 | 315,515 |
LIABILITIES: | ||
Derivative financial instruments | 492 | |
Total liabilities measured at fair value | 492 | |
Level 1 [Member] | ||
ASSETS: | ||
Trust-owned life insurance policies (at cash surrender value) | 0 | |
Money market funds | 94,026 | 311,349 |
Derivative financial instruments | 0 | 0 |
Total assets measured at fair value | 94,026 | 311,349 |
LIABILITIES: | ||
Derivative financial instruments | 0 | |
Total liabilities measured at fair value | 0 | |
Level 2 [Member] | ||
ASSETS: | ||
Trust-owned life insurance policies (at cash surrender value) | 99,655 | |
Money market funds | 0 | 0 |
Derivative financial instruments | 6,041 | 4,166 |
Total assets measured at fair value | 105,696 | 4,166 |
LIABILITIES: | ||
Derivative financial instruments | 492 | |
Total liabilities measured at fair value | 492 | |
Level 3 [Member] | ||
ASSETS: | ||
Trust-owned life insurance policies (at cash surrender value) | 0 | |
Money market funds | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets measured at fair value | 0 | $ 0 |
LIABILITIES: | ||
Derivative financial instruments | 0 | |
Total liabilities measured at fair value | $ 0 |
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gross borrowings outstanding, carrying amount | $ 268,250 | $ 293,250 |
Gross borrowings outstanding, fair value | $ 260,551 | $ 284,453 |
INVENTORIES, NET (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Inventory [Line Items] | ||
Inventories | $ 425,807 | $ 466,918 |
Less: Lower of cost or market reserve | (18,402) | (19,616) |
Less: Shrink reserve | (7,610) | (10,601) |
Inventories, net | 399,795 | 436,701 |
Other Inventory, in Transit, Gross | $ 79,200 | $ 71,700 |
PROPERTY AND EQUIPMENT, NET (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017
USD ($)
store
|
Jan. 30, 2016
USD ($)
store
|
Jan. 31, 2015
USD ($)
store
|
|
Property and equipment, net | |||
Land | $ 36,875 | $ 37,451 | |
Buildings | 282,564 | 287,081 | |
Furniture, fixtures and equipment | 691,918 | 682,013 | |
Information technology | 480,352 | 479,269 | |
Leasehold improvements | 1,224,398 | 1,283,613 | |
Construction in progress | 54,080 | 19,875 | |
Other | 1,952 | 3,135 | |
Total | 2,772,139 | 2,792,437 | |
Less: Accumulated depreciation and amortization | (1,947,401) | (1,898,259) | |
Property and equipment, net | 824,738 | 894,178 | |
Property and Equipment, Net (Textuals) [Abstract] | |||
Asset impairment | $ 7,930 | $ 18,209 | $ 44,988 |
Abercrombie & Fitch [Member] | |||
Property and Equipment, Net (Textuals) [Abstract] | |||
Store-related asset impairment charges, number of stores | store | 1 | 2 | |
Abercrombie Kids [Member] | |||
Property and Equipment, Net (Textuals) [Abstract] | |||
Store-related asset impairment charges, number of stores | store | 1 | 9 | |
Hollister [Member] | |||
Property and Equipment, Net (Textuals) [Abstract] | |||
Store-related asset impairment charges, number of stores | store | 9 | ||
Corporate Aircraft [Member] | |||
Property and Equipment, Net (Textuals) [Abstract] | |||
Asset impairment | $ 11,300 | ||
Construction Project Assets [Member] | |||
Property and equipment, net | |||
Total | $ 35,600 | $ 37,300 |
RABBI TRUST ASSETS (Schedule of Investments) (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Rabbi Trust assets: | ||
Rabbi Trust | $ 99,675 | $ 96,590 |
Trust-owned life insurance policies (at cash surrender value) | ||
Rabbi Trust assets: | ||
Rabbi Trust assets | 99,655 | 96,567 |
Money market funds | ||
Rabbi Trust assets: | ||
Rabbi Trust assets | $ 20 | $ 23 |
RABBI TRUST ASSETS (Textual) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Investments, Debt and Equity Securities [Abstract] | |||
Realized gains resulting from change in cash surrender value of insurance policies | $ 3.1 | $ 3.1 | $ 3.2 |
OTHER ASSETS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Other Assets, Noncurrent Disclosure [Abstract] | ||
Rabbi Trust | $ 99,675 | $ 96,590 |
Deferred tax assets | 91,141 | 89,677 |
Long-term deposits | 40,451 | 64,098 |
Intellectual property | 27,092 | 28,057 |
Long-term supplies | 22,050 | 25,475 |
Restricted cash | 20,443 | 20,581 |
Prepaid income tax on intercompany items | 6,400 | 7,344 |
Other | 24,467 | 28,059 |
Other assets | 331,719 | 359,881 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Net | 13,400 | 14,400 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 13,700 | $ 13,700 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 20 years |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued payroll and related costs | $ 37,235 | $ 60,464 |
Construction in progress | 36,853 | 43,129 |
Accrued taxes | 34,077 | 37,203 |
Gift card liability | 29,685 | 36,384 |
Accrued rent | 29,410 | 24,739 |
Other | 105,784 | 119,318 |
Accrued expenses | $ 273,044 | $ 321,237 |
DEFERRED LEASE CREDITS (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Amortized amounts over the life of related leases | ||
Deferred lease credits | $ 442,788 | $ 472,279 |
Amortized deferred lease credits | (346,391) | (359,720) |
Total deferred lease credits, net | 96,397 | 112,559 |
Less: short-term portion of deferred lease credits | (20,076) | (23,303) |
Long-term portion of deferred lease credits | $ 76,321 | $ 89,256 |
INCOME TAXES (Textual) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|
Income Tax Disclosure [Abstract] | ||||
Deferred Tax Liabilities Accumulated Other Comprehensive Income | $ 600 | $ 1,700 | ||
Unremitted earnings of subsidiaries operating outside of the U.S. | $ 5,609 | $ 4,390 | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
U.S. Federal income tax rate | 35.00% | 35.00% | 35.00% | |
Undistributed Earnings of Foreign Subsidiaries - Not Indefinitely Invested | $ 27,300 | |||
Uncertain tax positions | 1,239 | $ 2,455 | $ 3,212 | $ 4,182 |
Tax benefit related to net interest and penalties recognized | 200 | 900 | ||
Interest and penalties accrued | $ 300 | $ 500 | ||
State and foreign returns subject to examination, minimum (in years) | 3 years | |||
State and foreign returns subject to examination, maximum (in years) | 5 years | |||
Undistributed Earnings of Foreign Subsidiaries | $ 126,600 | |||
Effective Income Tax Rate Reconciliation, Percent | 321.90% | 29.40% | 47.70% | |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | $ 3,800 | |||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 26,812 | $ 14,248 | ||
Foreign Tax Authority [Member] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 14,900 | |||
State and Local Jurisdiction [Member] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 1,200 | |||
Foreign Tax Credit Carryover [Member] [Domain] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 7,000 | |||
AUSTRALIA | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income (Loss) from Subsidiaries, Net of Tax | 4,900 | $ 8,400 | ||
Effective Income Tax Rate Reconciliation, Percent | 5.60% | |||
SWITZERLAND | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income (Loss) from Subsidiaries, Net of Tax | $ 18,700 | $ 1,900 | $ 2,600 | |
Effective Income Tax Rate Reconciliation, Percent | 11.00% | 745.00% | 218.40% | |
HONG KONG | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income (Loss) from Subsidiaries, Net of Tax | $ 12,600 | $ 6,800 | ||
U.S. Federal income tax rate | 16.50% | |||
Effective Income Tax Rate Reconciliation, Percent | 4.50% | 15.80% |
INCOME TAXES (Earnings from Continuing Operations before taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ (52,041) | $ 8,412 | $ 100,115 |
Foreign | 48,563 | 46,178 | (961) |
(Loss) income before taxes | $ (3,478) | $ 54,590 | $ 99,154 |
INCOME TAXES (Provisions for Income Taxes from Continuing Operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Current: | |||
Federal | $ (18,888) | $ (3,124) | $ 21,287 |
State | (74) | (434) | 1,944 |
Foreign | 15,633 | 12,120 | 28,614 |
Total current income tax | (3,329) | 8,562 | 51,845 |
Deferred: | |||
Federal | (5,787) | 9,224 | 8,971 |
State | (346) | 3,297 | 1,783 |
Foreign | (1,734) | (5,052) | (15,266) |
Total deferred income tax | (7,867) | 7,469 | (4,512) |
Income tax (benefit) expense | $ (11,196) | $ 16,031 | $ 47,333 |
INCOME TAXES (Reconciliation of Federal Income Tax Rate) (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
U.S. Federal income tax rate | 35.00% | 35.00% | 35.00% |
State income tax, net of U.S. federal income tax effect | 5.00% | 4.60% | 4.30% |
Foreign taxation of non-U.S. operations | 248.90% | (10.20%) | 5.40% |
U.S. taxation of non-U.S. operations(2) | (212.60%) | 20.00% | 0.00% |
Net change in valuation allowances | (16.50%) | (8.70%) | 6.60% |
Audit and other adjustments to prior years’ accruals | (0.10%) | (8.70%) | (1.30%) |
Statutory tax rate and law changes | 94.30% | 4.20% | 0.20% |
Permanent items | 122.30% | (4.60%) | (1.10%) |
Credit items | 43.80% | (2.30%) | (1.20%) |
Other items, net | 1.80% | 0.10% | (0.20%) |
Total | 321.90% | 29.40% | 47.70% |
INCOME TAXES (Deferred Income Tax Assets (Liabilities)) (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Deferred tax assets: | ||
Deferred compensation | $ 54,552 | $ 62,679 |
Accrued expenses and reserves | 13,168 | 19,862 |
Rent | 33,917 | 36,929 |
Net operating losses (NOL), tax credit and other carryforwards | 26,812 | 14,248 |
Investments in subsidiaries | 8,791 | 2,895 |
Other | 3,030 | 619 |
Valuation allowances | (2,429) | (1,643) |
Total deferred tax assets | 137,841 | 135,589 |
Deferred tax liabilities: | ||
Property, equipment and intangibles | (20,177) | (20,708) |
Inventory | (11,955) | (9,480) |
Store supplies | (4,892) | (6,054) |
Prepaid expenses | (3,262) | (3,653) |
Undistributed net income of non-U.S. subsidiaries | (5,609) | (4,390) |
Other | (950) | (1,011) |
Total deferred tax liabilities | (46,845) | (45,296) |
Net deferred income tax assets | $ 90,996 | $ 90,293 |
INCOME TAXES (Roll Forward of Uncertain Tax Positions) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Uncertain tax positions, beginning of the year | $ 2,455 | $ 3,212 | $ 4,182 |
Gross addition for tax positions of the current year | 67 | 13 | 152 |
Gross addition for tax positions of prior years | 19 | 598 | 33 |
Reductions of tax positions of prior years for: | |||
Lapses of applicable statutes of limitations | (1,211) | (986) | (348) |
Settlements during the period | (40) | (64) | (4) |
Changes in judgment/ excess reserve | (51) | (318) | (803) |
Uncertain tax positions, end of year | $ 1,239 | $ 2,455 | $ 3,212 |
INCOME TAXES (Deferred Tax Assets, Net operating losses (NOL) and credit carryforwards) (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Tax Credit Carryforward [Line Items] | ||
Undistributed Earnings of Foreign Subsidiaries | $ 126,600 | |
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 25,000 | |
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 26,812 | $ 14,248 |
Deferred Tax Liabilities, Undistributed Foreign Earnings | 5,609 | $ 4,390 |
Foreign Tax Authority [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 14,900 | |
State and Local Jurisdiction [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | $ 1,200 |
BORROWINGS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Aug. 07, 2014 |
|
Long-Term Borrowings [Line Items] | |||
Maximum borrowing capacity | $ 100,000 | ||
Deferred financing fees | $ 5,800 | ||
Borrowings, gross at carrying amount | 268,250 | $ 293,250 | |
Unamortized fees paid to lenders | (3,200) | ||
Short-term portion of borrowings, net of discount and fees | 0 | 0 | |
Long-term portion of borrowings, net | 262,992 | 286,235 | |
Schedule of Future Payments of the Term Loan Facility | |||
Fiscal 2020 | $ 268,300 | ||
Minimum [Member] | |||
Long-Term Borrowings [Line Items] | |||
Term Loan Facility, mandatory prepayment terms - percentage of excess cash flows | 0.00% | ||
Maximum [Member] | |||
Long-Term Borrowings [Line Items] | |||
Term Loan Facility, mandatory prepayment terms - percentage of excess cash flows | 50.00% | ||
London Interbank Offered Rate (LIBOR) Minimum ABL Facility [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
London Interbank Offered Rate (LIBOR) Maximum ABL Facility [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
London Interbank Offered Rate (LIBOR) Initial Applicable Margin ABL Facility [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
Base Rate Initial Applicable Margin ABL Facility [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
London Interbank Offered Rate (LIBOR) Term Loan Facility [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Schedule of Future Payments of the Term Loan Facility | |||
Debt Instrument, Interest Rate Terms | 0.01 | ||
Base Rate Term Loan Facility [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 2.75% | ||
Term Loan Facility [Member] [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Maximum borrowing capacity | $ 300,000 | ||
Maturity date | Aug. 07, 2021 | ||
Term Loan Facility, quarterly repayments as percent of original principal | 0.25% | ||
Interest rate on borrowings | 4.75% | ||
Fair Value Inputs, Discount Rate | 1.00% | ||
Borrowings, gross at carrying amount | $ 268,250 | 293,250 | |
Unamortized discount | (1,764) | (1,929) | |
Unamortized fees paid to lenders | (3,494) | (5,086) | |
Borrowings, net | 262,992 | 286,235 | |
Long-term portion of borrowings, net | 262,992 | 286,235 | |
ABL Facility [Member] [Domain] | |||
Long-Term Borrowings [Line Items] | |||
Maximum borrowing capacity | $ 400,000 | ||
Maturity date | Aug. 07, 2019 | ||
ABL Facility, unused capacity, commitment fee percentage | 0.25% | ||
Schedule of Future Payments of the Term Loan Facility | |||
ABL Facility, covenant terms, minimum percentage of loan cap amount | 10.00% | ||
ABL Facility, covenant terms, minimum remaining borrowing capacity | $ 30,000 | ||
Term Loan Agreement [Member] | |||
Long-Term Borrowings [Line Items] | |||
Credit facility, amount outstanding | 127,500 | ||
Amended and Restated Credit Agreement [Member] | |||
Long-Term Borrowings [Line Items] | |||
Credit facility, amount outstanding | $ 0 | $ 0 | $ 60,000 |
Base Rate Minimum ABL Facility | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 0.25% | ||
Base Rate Maximum ABL Facility | |||
Long-Term Borrowings [Line Items] | |||
Basis spread on variable rate | 0.75% |
OTHER LIABILITIES (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued straight-line rent | $ 82,241 | $ 90,445 |
Deferred compensation | 44,531 | 48,058 |
Other | 45,236 | 41,180 |
Other liabilities | $ 172,008 | $ 179,683 |
SHARE-BASED COMPENSATION (Textual) (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017
USD ($)
share_based_compensation_plan
shares
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 22,120,000 | $ 28,359,000 | $ 23,027,000 |
Tax benefits related to share-based compensation | 8,300,000 | 10,600,000 | 8,600,000 |
Effects of adjustments for forfeitures | $ 3,400,000 | 5,600,000 | 2,600,000 |
Number of primary share based compensation plans | share_based_compensation_plan | 2 | ||
Number of other share based compensation plans | share_based_compensation_plan | 6 | ||
Vesting period | 3 years | ||
Term of award | 10 years | ||
LTIP Directors 2016 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Market Value Authorized | $ 300,000 | ||
Non-Executive Chairman [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Market Value Authorized | 500,000 | ||
Non Associate Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Market Value Authorized | $ 2,500,000 | ||
LTIP Associates 2016 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares approved for grant | shares | 1,000,000 | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of award exercised | 0 | ||
Grant date fair value of stock options vested during period | 0 | ||
Stock Appreciation Rights (SARs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of award exercised | $ 100,000 | 4,300,000 | 1,500,000 |
Total unrecognized compensation cost, net of estimated forfeitures | $ 2,500,000 | ||
Unrecognized compensation cost, weighted-average period of recognition | 13 months | ||
Grant date fair value of award other than options vested during period | $ 4,300,000 | 4,900,000 | 7,400,000 |
Service-based Restricted Stock Unit (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation cost, net of estimated forfeitures | $ 24,700,000 | ||
Unrecognized compensation cost, weighted-average period of recognition | 16 months | ||
Grant date fair value of award other than options vested during period | $ 20,314,000 | 23,608,000 | 17,078,000 |
Total fair value of restricted stocks | 29,047,000 | 23,101,000 | 33,075,000 |
Performance-based Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date fair value of award other than options vested during period | 1,178,000 | 1,861,000 | 515,000 |
Total fair value of restricted stocks | 3,334,000 | 2,278,000 | 4,709,000 |
Market-based Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation cost, net of estimated forfeitures | $ 2,200,000 | ||
Unrecognized compensation cost, weighted-average period of recognition | 15 months | ||
Grant date fair value of award other than options vested during period | $ 0 | 0 | 0 |
Total fair value of restricted stocks | $ 4,023,000 | $ 2,158,000 | $ 3,756,000 |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 10 years |
SHARE-BASED COMPENSATION (Stock Option Activity) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 31, 2015 |
|
Number of Underlying Shares Outstanding [Roll Forward] | ||
Number of Underlying Shares, Outstanding, Beginning Balance (in shares) | 271,000 | |
Number of Underlying Shares, Exercised (in shares) | (2,000) | |
Number of Underlying Shares, Forfeited or expired (in shares) | (79,200) | |
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 189,800 | |
Weighted Average Exercise Price [Roll Forward] | ||
Weighted-Average Exercise Price, Outstanding, Beginning Balance (in dollars per share) | $ 63.05 | |
Weighted-Average Exercise Price, Exercised (in dollars per share) | 22.87 | |
Weighted-Average Exercise Price, Forfeited or expired (in dollars per share) | 31.53 | |
Weighted-Average Exercise Price, Outstanding, Ending Balance (in dollars per share) | $ 76.62 | |
Aggregate Intrinsic Value, Outstanding | $ 0 | |
Weighted- Average Remaining Contractual Life, Outstanding | 8 months 12 days | |
Number of Underlying Shares, Stock options exercisable (in shares) | 189,900 | |
Weighted-Average Exercise Price, Stock options exercisable (in dollars per share) | $ 76.62 | |
Aggregate Intrinsic Value, Stock options exercisable | $ 0 | |
Weighted-Average Remaining Contractual Life, Stock options exercisable | 8 months 12 days | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 |
SHARE-BASED COMPENSATION (SARs Assumptions) (Details) - Stock Appreciation Rights (SARs) [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
The weighted-average fair value and assumptions (stock appreciation rights) | |||
Fair value (in dollars per share) | $ 0.00 | ||
Other Executive Officers [Member] | |||
The weighted-average fair value and assumptions (stock appreciation rights) | |||
Grant date market price (in dollars per share) | $ 22.46 | $ 35.08 | |
Exercise price (in dollars per share) | 22.46 | 35.49 | |
Fair value (in dollars per share) | $ 9.11 | $ 12.85 | |
Assumptions: | |||
Price volatility | 49.00% | 49.00% | |
Expected term (years) | 6 years 1 month | 4 years 11 months | |
Risk-free interest rate | 1.50% | 1.60% | |
Dividend yield | 1.70% | 2.00% | |
All Other Associates [Member] | |||
The weighted-average fair value and assumptions (stock appreciation rights) | |||
Grant date market price (in dollars per share) | $ 22.42 | $ 37.05 | |
Exercise price (in dollars per share) | 22.42 | 37.22 | |
Fair value (in dollars per share) | $ 8.00 | $ 12.92 | |
Assumptions: | |||
Price volatility | 49.00% | 50.00% | |
Expected term (years) | 4 years 4 months | 4 years 1 month | |
Risk-free interest rate | 4.20% | 1.40% | |
Dividend yield | 1.70% | 1.90% |
SHARE-BASED COMPENSATION (SARS Activity) (Details) - Stock Appreciation Rights (SARs) [Member] - USD ($) |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Number of Underlying Shares Outstanding [Roll Forward] | ||
Number of Underlying Shares, Outstanding (in shares) | 4,079,050 | 5,301,115 |
Number of Underlying Shares, Granted (in shares) | 0 | |
Number of Underlying Shares, Exercised (in shares) | (10,483) | |
Number of Underlying Shares, Forfeited or expired (in shares) | (1,211,582) | |
Weighted-Average Exercise Price [Roll Forward] | ||
Weighted-Average Exercise Price, Outstanding (in dollars per share) | $ 47.49 | $ 45.02 |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | 0.00 | |
Weighted-Average Exercise Price, Exercised (in dollars per share) | 22.45 | |
Weighted-Average Exercise Price, Forfeited or exercised (in dollars per share) | $ 37.19 | |
Aggregate Intrinsic Value, Outstanding | $ 0 | |
Weighted-Average Remaining Contractual Life, Outstanding | 2 years 7 months 6 days | |
Number of Underlying Shares, Stock appreciation rights exercisable (in shares) | 3,532,119 | |
Weighted-Average Exercise Price, Stock appreciation rights exercisable (in dollars per share) | $ 50.62 | |
Aggregate Intrinsic Value, Stock appreciation rights exercisable | $ 0 | |
Weighted- Average Remaining Contractual Life, Stock appreciation rights exercisable | 1 year 10 months 24 days | |
Number of Underlying Shares, Stock appreciation rights expected to become exercisable (in shares) | 436,030 | |
Weighted-Average Exercise Price, Stock appreciation rights expected to become exercisable (in dollars per share) | $ 27.72 | |
Aggregate Intrinsic Value, Stock appreciation rights expected to become exercisable | $ 0 | |
Weighted-Average Remaining Contractual Life, Stock appreciation rights expected to become exercisable | 7 years 8 months 12 days |
SHARE-BASED COMPENSATION (Restricted Stock Unit Activity) (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Target percentage of equity awards earned | 100.00% | |
Market-based Restricted Stock Units (RSUs) [Member] | ||
Number of Underlying Shares Outstanding [Roll Forward] | ||
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 184,892 | 117,711 |
Number of Underlying Shares, Granted (in shares) | 129,734 | |
Number of Underlying Shares, Change due to performance criteria achievement (in shares) | 0 | |
Number of Underlying Shares, Vested (in shares) | 0 | |
Number of Underlying Shares, Forfeited (in shares) | (62,553) | |
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 31.01 | |
Weighted-Average Grant Date Fair Value, Change due to performance achievement criteria (in dollars per share) | 0.00 | |
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | 0.00 | |
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | 31.91 | |
Weighted-Average Grant Date Fair Value, Unvested, Outstanding (in dollars per share) | $ 26.89 | $ 25.00 |
Service-based Restricted Stock Unit (RSUs) [Member] | ||
Number of Underlying Shares Outstanding [Roll Forward] | ||
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 1,915,461 | 1,671,597 |
Number of Underlying Shares, Granted (in shares) | 1,182,198 | |
Number of Underlying Shares, Change due to performance criteria achievement (in shares) | 0 | |
Number of Underlying Shares, Vested (in shares) | (678,033) | |
Number of Underlying Shares, Forfeited (in shares) | (260,301) | |
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 24.57 | |
Weighted-Average Grant Date Fair Value, Change due to performance achievement criteria (in dollars per share) | 0.00 | |
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | 29.96 | |
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | 26.81 | |
Weighted-Average Grant Date Fair Value, Unvested, Outstanding (in dollars per share) | $ 25.47 | $ 28.13 |
Performance-based Restricted Stock Units (RSUs) [Member] | ||
Number of Underlying Shares Outstanding [Roll Forward] | ||
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 203,923 | 185,500 |
Number of Underlying Shares, Granted (in shares) | 129,725 | |
Number of Underlying Shares, Change due to performance criteria achievement (in shares) | 0 | |
Number of Underlying Shares, Vested (in shares) | (32,625) | |
Number of Underlying Shares, Forfeited (in shares) | (78,677) | |
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 25.70 | |
Weighted-Average Grant Date Fair Value, Change due to performance achievement criteria (in dollars per share) | 0.00 | |
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | 36.12 | |
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | 24.22 | |
Weighted-Average Grant Date Fair Value, Unvested, Outstanding (in dollars per share) | $ 22.53 | $ 23.42 |
Minimum [Member] | Market-based Restricted Stock Units (RSUs) [Member] | ||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Target percentage of equity awards earned | 0.00% | |
Minimum [Member] | Performance-based Restricted Stock Units (RSUs) [Member] | ||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Target percentage of equity awards earned | 0.00% | |
Maximum [Member] | Market-based Restricted Stock Units (RSUs) [Member] | ||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Target percentage of equity awards earned | 200.00% | |
Maximum [Member] | Performance-based Restricted Stock Units (RSUs) [Member] | ||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Target percentage of equity awards earned | 200.00% | |
Market Vesting Conditions [Member] | Market-based Restricted Stock Units (RSUs) [Member] | ||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 31.01 | $ 19.04 |
SHARE-BASED COMPENSATION (RSUs Assumptions) (Details) - Market-based Restricted Stock Units (RSUs) [Member] |
12 Months Ended | |
---|---|---|
Jan. 28, 2017
$ / shares
|
Jan. 30, 2016
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value (in dollars per share) | $ 31.01 | |
Market Vesting Conditions [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant date market price (in dollars per share) | 28.06 | $ 22.46 |
Fair value (in dollars per share) | $ 31.01 | $ 19.04 |
Price volatility | 45.00% | 45.00% |
Expected term (years) | 2 years 8 months 12 days | 2 years 9 months |
Risk-free interest rate | 1.00% | 0.90% |
Dividend yield | 3.00% | 3.50% |
Average volatility of peer companies | 34.50% | 34.00% |
Average correlation coefficient of peer companies | 0.3415 | 0.3288 |
DERIVATIVE INSTRUMENTS (Textual) (Details) |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
Derivatives (Textuals) [Abstract] | |
Additional time period in which forecasted transaction is not expected to occur | 2 months |
Maximum Remaining Maturity of Foreign Currency Derivatives | 12 months |
DERIVATIVE INSTRUMENTS (Outstanding Foreign Exchange Forward Contracts) (Details) - Cash Flow Hedging [Member] - Forward Contracts [Member] $ in Thousands |
Jan. 28, 2017
USD ($)
|
|||||
---|---|---|---|---|---|---|
Assets and Liabilities [Member] | Euro Member Countries, Euro | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 18,813 | [1] | ||||
Assets and Liabilities [Member] | Japan, Yen | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 1,767 | [2] | ||||
Assets and Liabilities [Member] | British Pound [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 1,249 | [2] | ||||
Assets and Liabilities [Member] | Sweden, Kronor | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 1,020 | |||||
Inter-company Inventory and Accounts Receivables [Member] | Euro Member Countries, Euro | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 77,247 | [1] | ||||
Inter-company Inventory and Accounts Receivables [Member] | Japan, Yen | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 10,492 | [1] | ||||
Inter-company Inventory and Accounts Receivables [Member] | British Pound [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | 25,751 | [1] | ||||
Inter-company Inventory and Accounts Receivables [Member] | Canadian Dollar [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative, Notional Amount | $ 14,380 | [1] | ||||
|
DERIVATIVE INSTRUMENTS (Location and Amounts of Derivative Fair Values - Balance Sheet) (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Asset Derivatives | $ 6,042 | $ 4,166 |
Liability Derivatives | 492 | 0 |
Foreign Exchange Forward Contracts [Member] | Other Current Assets [Member] | Designated as Hedging Instrument [Member] | ||
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Asset Derivatives | 5,920 | 4,097 |
Foreign Exchange Forward Contracts [Member] | Other Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Asset Derivatives | 122 | 69 |
Foreign Exchange Forward Contracts [Member] | Other Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Liability Derivatives | 486 | 0 |
Foreign Exchange Forward Contracts [Member] | Other Liabilities [Member] | Not Designated as Hedging Instrument [Member] | ||
The location and amounts of derivative fair values on the Condensed Consolidated Balance Sheets | ||
Liability Derivatives | $ 6 | $ 0 |
DERIVATIVE INSTRUMENTS (Location and Amounts of Derivative Fair Values - Statements of Operations and Comprehensive Income) (Details) - Foreign Exchange Forward Contracts [Member] - USD ($) $ in Thousands |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
||||||||
Cash Flow Hedging [Member] | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative Contracts (Effective Portion) | [1] | $ 7,078 | $ 7,204 | ||||||
Other Operating Income, Net | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gain/(Loss) | 627 | 751 | |||||||
Other Operating Income, Net | Cash Flow Hedging [Member] | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain (Loss) Recognized in Earnings on Derivative Contracts (Ineffective Portion and Amount Excluded from Effectiveness Testing) | [2] | 1,873 | 242 | ||||||
Cost of Goods Sold | Cash Flow Hedging [Member] | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion) | [3] | $ 6,195 | $ 15,596 | ||||||
|
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
||||||||||
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||||||||
Beginning balance | $ (114,619) | $ (83,580) | $ (20,917) | |||||||||
Other comprehensive (loss) income before reclassifications | (13) | (15,419) | (60,319) | |||||||||
Reclassified from accumulated other comprehensive loss(1) | (6,195) | [1] | (15,596) | [2] | (440) | [3] | ||||||
Tax effect | (475) | (24) | (1,904) | |||||||||
Other comprehensive loss | (6,683) | (31,039) | (62,663) | |||||||||
Ending balance | (121,302) | (114,619) | (83,580) | |||||||||
Derivative Financial Instruments | ||||||||||||
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||||||||
Beginning balance | 4,577 | 13,100 | (2,166) | |||||||||
Other comprehensive (loss) income before reclassifications | 7,078 | 7,204 | 16,572 | |||||||||
Reclassified from accumulated other comprehensive loss(1) | (6,195) | [1] | (15,596) | [2] | (440) | [3] | ||||||
Tax effect | (635) | (131) | (866) | |||||||||
Other comprehensive loss | 248 | (8,523) | 15,266 | |||||||||
Ending balance | 4,825 | 4,577 | 13,100 | |||||||||
Foreign Currency Translation | ||||||||||||
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||||||||
Beginning balance | (119,196) | (96,680) | (18,751) | |||||||||
Other comprehensive (loss) income before reclassifications | (7,091) | (22,623) | (76,891) | |||||||||
Reclassified from accumulated other comprehensive loss(1) | 0 | [1] | 0 | [2] | 0 | [3] | ||||||
Tax effect | 160 | 107 | (1,038) | |||||||||
Other comprehensive loss | (6,931) | (22,516) | (77,929) | |||||||||
Ending balance | $ (126,127) | $ (119,196) | $ (96,680) | |||||||||
|
SAVINGS AND RETIREMENT PLANS (Details) - Supplemental Employee Retirement Plan [Member] $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017
USD ($)
yr
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||
Retirement benefits, participant age requirement | yr | 21 | ||
Defined Benefit Plan, Contributions by Employer | $ | $ 11.1 | $ 15.4 | $ 13.8 |
SEGMENT REPORTING (Segment Information, by Segment) (Details) |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 1 |
SEGMENT REPORTING (Net Sales and Long-lived Assets) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Net Sales | $ 1,036,363 | $ 821,734 | $ 783,160 | $ 685,483 | $ 1,112,930 | $ 878,572 | $ 817,756 | $ 709,422 | $ 3,326,740 | $ 3,518,680 | $ 3,744,030 |
United States | |||||||||||
Net Sales | 2,123,808 | 2,282,040 | 2,408,427 | ||||||||
Europe [Member] | |||||||||||
Net Sales | 768,630 | 832,923 | 959,981 | ||||||||
Other | |||||||||||
Net Sales | $ 434,302 | $ 403,717 | $ 375,622 |
SEGMENT REPORTING (Net Sales by Brand) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Schedule of Revenue by Brand [Line Items] | |||||||||||
Net Sales | $ 1,036,363 | $ 821,734 | $ 783,160 | $ 685,483 | $ 1,112,930 | $ 878,572 | $ 817,756 | $ 709,422 | $ 3,326,740 | $ 3,518,680 | $ 3,744,030 |
Abercrombie [Member] | |||||||||||
Schedule of Revenue by Brand [Line Items] | |||||||||||
Net Sales | 1,487,024 | 1,640,992 | 1,771,299 | ||||||||
Hollister [Member] | |||||||||||
Schedule of Revenue by Brand [Line Items] | |||||||||||
Net Sales | 1,839,716 | 1,877,688 | 1,947,869 | ||||||||
Gilly Hicks [Member] | |||||||||||
Schedule of Revenue by Brand [Line Items] | |||||||||||
Net Sales | $ 0 | $ 0 | $ 24,862 |
SEGMENT REPORTING Long-lived assets (Details) - USD ($) $ in Thousands |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-Lived Assets | $ 851,830 | $ 922,235 | $ 994,944 |
United States | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-Lived Assets | 543,923 | 548,983 | 556,967 |
Europe [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-Lived Assets | 215,124 | 263,977 | 332,435 |
Other | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-Lived Assets | $ 92,783 | $ 109,275 | $ 105,542 |
CONTINGENCIES Contingencies (Details) $ in Millions |
12 Months Ended |
---|---|
Jan. 28, 2017
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingency Accrual | $ 6.0 |
Proceeds from Legal Settlements | $ 12.3 |
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||
Net sales | $ 1,036,363 | $ 821,734 | $ 783,160 | $ 685,483 | $ 1,112,930 | $ 878,572 | $ 817,756 | $ 709,422 | $ 3,326,740 | $ 3,518,680 | $ 3,744,030 | ||||||||||||||
Gross profit | 615,001 | 510,739 | 477,107 | 425,721 | 676,345 | 559,787 | 509,862 | 411,549 | 2,028,568 | 2,157,543 | 2,313,570 | ||||||||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 50,105 | 8,274 | (12,031) | [1] | (38,630) | [2] | 58,908 | 42,285 | 612 | (63,246) | 7,718 | 38,559 | 51,821 | ||||||||||||
Net income (loss) attributable to A&F | $ 48,791 | $ 7,881 | $ (13,129) | [1] | $ (39,587) | [2] | $ 57,741 | $ 41,891 | $ (810) | $ (63,246) | $ 3,956 | $ 35,576 | $ 51,821 | ||||||||||||
Net income (loss) per diluted share attributable to A&F | $ 0.71 | [3] | $ 0.12 | [3] | $ (0.19) | [1],[3] | $ (0.59) | [2],[3] | $ 0.85 | [3] | $ 0.60 | [3] | $ (0.01) | [3] | $ (0.91) | [3] | $ 0.06 | $ 0.51 | $ 0.71 | ||||||
Schedule of Items Affecting Comparability [Line Items] | |||||||||||||||||||||||||
Charges related to asset impairment, lease terminations and store closures, the restructuring of the Gilly Hicks Brand, the Company's profit improvement initiative and certain corporate governance matters | $ 6,500 | $ 3,700 | $ 16,000 | $ 9,000 | $ 9,400 | $ 26,100 | |||||||||||||||||||
Increase (decrease) in net income related to correction of errors | $ (1,900) | $ 1,200 | $ (2,600) | ||||||||||||||||||||||
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