ABERCROMBIE & FITCH CO. |
(Exact name of registrant as specified in its charter) |
Delaware | 1-12107 | 31-1469076 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification No.) |
6301 Fitch Path, New Albany, Ohio 43054 |
(Address of principal executive offices) (Zip Code) |
(614) 283-6500 |
(Registrant's telephone number, including area code) |
Not Applicable |
(Former name or former address, if changed since last report) |
Exhibit No. | Description | |
99.1 | News release issued by Abercrombie & Fitch Co. on August 24, 2017 | |
99.2 | Additional unaudited quarterly and fiscal year financial information | |
99.3 | Investor presentation of results for second quarter ended July 29, 2017 | |
99.4 | Transcript of conference call held by management of Abercrombie & Fitch Co. on August 24, 2017 |
ABERCROMBIE & FITCH CO. | |||
Dated: August 25, 2017 | By: | /s/ Joanne C. Crevoiserat | |
Joanne C. Crevoiserat | |||
Executive Vice President, Chief Operating Officer and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | News release issued by Abercrombie & Fitch Co. on August 24, 2017 | |
99.2 | Additional unaudited quarterly and fiscal year financial information | |
99.3 | Investor presentation of results for second quarter ended July 29, 2017 | |
99.4 | Transcript of conference call held by management of Abercrombie & Fitch Co. on August 24, 2017 |
Net Loss Per Diluted Share Summary | ||||
2017 (1) | 2016 (2) | |||
GAAP | $(0.23) | $(0.19) | ||
Excluded Items (3) | (0.07) | 0.06 | ||
Adjusted Non-GAAP | $(0.16) | $(0.25) |
Fiscal 2017 Comparable Sales Summary (1) | ||||||||||||||
Brand | Geography | |||||||||||||
First Quarter | Second Quarter | Year-to-Date | First Quarter | Second Quarter | Year-to-Date | |||||||||
Hollister | 3% | 5% | 4% | United States | (3)% | 0% | (2)% | |||||||
Abercrombie(2) | (10)% | (7)% | (8)% | International | (2)% | (1)% | (1)% | |||||||
Total Company | (3)% | (1)% | (2)% | Total Company | (3)% | (1)% | (2)% |
• | Comparable sales to be approximately flat, and flat to up slightly in the second half of the year |
• | Foreign currency to be a slight benefit to sales and operating income |
• | A gross profit rate down compared to last year's rate of 61.0%, and approximately flat in the second half of the year |
• | Operating expense to be down at least 3% compared to last year's adjusted non-GAAP operating expense of $2.025 billion |
• | A weighted average diluted share count of approximately 69 million shares, excluding the effect of potential share buybacks |
Investor Contact: | Media Contact: | |
Brian Logan | Ian Bailey | |
Abercrombie & Fitch | Abercrombie & Fitch | |
(614) 283-6877 | (614) 283-6192 | |
Investor_Relations@abercrombie.com | Public_Relations@abercrombie.com |
Abercrombie & Fitch Co. | |||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||
(in thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | ||||||||||||
July 29, 2017 | % of Net Sales | July 30, 2016 | % of Net Sales | ||||||||||
Net sales | $ | 779,321 | 100.0 | % | $ | 783,160 | 100.0 | % | |||||
Cost of sales, exclusive of depreciation and amortization | 318,426 | 40.9 | % | 306,053 | 39.1 | % | |||||||
Gross profit | 460,895 | 59.1 | % | 477,107 | 60.9 | % | |||||||
Stores and distribution expense | 369,295 | 47.4 | % | 382,917 | 48.9 | % | |||||||
Marketing, general and administrative expense | 109,353 | 14.0 | % | 111,719 | 14.3 | % | |||||||
Asset impairment | 6,135 | 0.8 | % | 6,356 | 0.8 | % | |||||||
Other operating income, net | (2,799 | ) | (0.4 | )% | (13,080 | ) | (1.7 | )% | |||||
Operating loss | (21,089 | ) | (2.7 | )% | (10,805 | ) | (1.4 | )% | |||||
Interest expense, net | 4,089 | 0.5 | % | 4,741 | 0.6 | % | |||||||
Loss before taxes | (25,178 | ) | (3.2 | )% | (15,546 | ) | (2.0 | )% | |||||
Tax benefit | (10,563 | ) | (1.4 | )% | (3,515 | ) | (0.4 | )% | |||||
Net loss | (14,615 | ) | (1.9 | )% | (12,031 | ) | (1.5 | )% | |||||
Less: Net income attributable to noncontrolling interests | 876 | 0.1 | % | 1,098 | 0.1 | % | |||||||
Net loss attributable to Abercrombie & Fitch Co. | $ | (15,491 | ) | (2.0 | )% | $ | (13,129 | ) | (1.7 | )% | |||
Net loss per share attributable to Abercrombie & Fitch Co.: | |||||||||||||
Basic | $ | (0.23 | ) | $ | (0.19 | ) | |||||||
Diluted | $ | (0.23 | ) | $ | (0.19 | ) | |||||||
Weighted-average shares outstanding: | |||||||||||||
Basic | 68,456 | 67,944 | |||||||||||
Diluted | 68,456 | 67,944 |
Abercrombie & Fitch Co. | |||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||
(in thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Twenty-six Weeks Ended | Twenty-six Weeks Ended | ||||||||||||
July 29, 2017 | % of Net Sales | July 30, 2016 | % of Net Sales | ||||||||||
Net sales | $ | 1,440,420 | 100.0 | % | $ | 1,468,643 | 100.0 | % | |||||
Cost of sales, exclusive of depreciation and amortization | 580,600 | 40.3 | % | 565,815 | 38.5 | % | |||||||
Gross profit | 859,820 | 59.7 | % | 902,828 | 61.5 | % | |||||||
Stores and distribution expense | 729,224 | 50.6 | % | 752,035 | 51.2 | % | |||||||
Marketing, general and administrative expense | 219,246 | 15.2 | % | 226,166 | 15.4 | % | |||||||
Asset impairment | 6,865 | 0.5 | % | 6,356 | 0.4 | % | |||||||
Other operating income, net | (4,485 | ) | (0.3 | )% | (16,013 | ) | (1.1 | )% | |||||
Operating loss | (91,030 | ) | (6.3 | )% | (65,716 | ) | (4.5 | )% | |||||
Interest expense, net | 8,209 | 0.6 | % | 9,247 | 0.6 | % | |||||||
Loss before taxes | (99,239 | ) | (6.9 | )% | (74,963 | ) | (5.1 | )% | |||||
Tax benefit | (23,615 | ) | (1.6 | )% | (24,302 | ) | (1.7 | )% | |||||
Net loss | (75,624 | ) | (5.3 | )% | (50,661 | ) | (3.4 | )% | |||||
Less: Net income attributable to noncontrolling interests | 1,567 | 0.1 | % | 2,055 | 0.1 | % | |||||||
Net loss attributable to Abercrombie & Fitch Co. | $ | (77,191 | ) | (5.4 | )% | $ | (52,716 | ) | (3.6 | )% | |||
Net loss per share attributable to Abercrombie & Fitch Co.: | |||||||||||||
Basic | $ | (1.13 | ) | $ | (0.78 | ) | |||||||
Diluted | $ | (1.13 | ) | $ | (0.78 | ) | |||||||
Weighted-average shares outstanding: | |||||||||||||
Basic | 68,264 | 67,785 | |||||||||||
Diluted | 68,264 | 67,785 |
Abercrombie & Fitch Co. | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(in thousands) | |||||||||||
(Unaudited) | |||||||||||
July 29, 2017 | January 28, 2017 | July 30, 2016 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and equivalents | $ | 421,903 | $ | 547,189 | $ | 455,606 | |||||
Receivables | 110,590 | 93,384 | 79,012 | ||||||||
Inventories, net | 471,037 | 399,795 | 453,175 | ||||||||
Other current assets | 72,215 | 98,932 | 108,878 | ||||||||
Total current assets | 1,075,745 | 1,139,300 | 1,096,671 | ||||||||
Property and equipment, net | 793,374 | 824,738 | 850,114 | ||||||||
Other assets | 358,794 | 331,719 | 385,605 | ||||||||
TOTAL ASSETS | $ | 2,227,913 | $ | 2,295,757 | $ | 2,332,390 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 208,432 | $ | 187,017 | $ | 180,834 | |||||
Accrued expenses | 267,745 | 273,044 | 279,918 | ||||||||
Short-term portion of deferred lease credits | 19,723 | 20,076 | 21,962 | ||||||||
Income taxes payable | 2,880 | 5,863 | 15,162 | ||||||||
Short-term portion of borrowings, net | — | — | 1,468 | ||||||||
Total current liabilities | 498,780 | 486,000 | 499,344 | ||||||||
Long-term liabilities: | |||||||||||
Long-term portion of deferred lease credits | $ | 78,063 | $ | 76,321 | $ | 79,877 | |||||
Long-term portion of borrowings, net | 263,714 | 262,992 | 285,528 | ||||||||
Leasehold financing obligations | 49,186 | 46,397 | 50,132 | ||||||||
Other liabilities | 171,852 | 172,008 | 185,285 | ||||||||
Total long-term liabilities | 562,815 | 557,718 | 600,822 | ||||||||
Total Abercrombie & Fitch Co. stockholders' equity | 1,157,068 | 1,243,435 | 1,225,944 | ||||||||
Noncontrolling interests | 9,250 | 8,604 | 6,280 | ||||||||
Total stockholders' equity | 1,166,318 | 1,252,039 | 1,232,224 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,227,913 | $ | 2,295,757 | $ | 2,332,390 |
Abercrombie & Fitch Co. | |||||||||||
Schedule of Non-GAAP Financial Measures | |||||||||||
Thirteen Weeks Ended July 29, 2017 | |||||||||||
(in thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
GAAP (1) | Excluded Items | Adjusted Non-GAAP | |||||||||
Asset impairment (2) | $ | 6,135 | $ | 6,135 | $ | — | |||||
Operating loss | (21,089 | ) | (6,135 | ) | (14,954 | ) | |||||
Loss before taxes | (25,178 | ) | (6,135 | ) | (19,043 | ) | |||||
Tax benefit (3) | (10,563 | ) | (1,610 | ) | (8,953 | ) | |||||
Net loss attributable to Abercrombie & Fitch Co. | $ | (15,491 | ) | $ | (4,525 | ) | $ | (10,966 | ) | ||
Net loss per diluted share attributable to Abercrombie & Fitch Co. | $ | (0.23 | ) | $ | (0.07 | ) | $ | (0.16 | ) | ||
Diluted weighted-average shares outstanding: | 68,456 | 68,456 |
Abercrombie & Fitch Co. | |||||||||||
Schedule of Non-GAAP Financial Measures | |||||||||||
Thirteen Weeks Ended July 30, 2016 | |||||||||||
(in thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
GAAP (1) | Excluded Items | Adjusted Non-GAAP | |||||||||
Asset impairment (2) | $ | 6,356 | $ | 6,356 | $ | — | |||||
Other operating income, net (3) | (13,080 | ) | (12,282 | ) | (798 | ) | |||||
Operating loss | (10,805 | ) | 5,926 | (16,731 | ) | ||||||
Loss before taxes | (15,546 | ) | 5,926 | (21,472 | ) | ||||||
Tax benefit (4) | (3,515 | ) | 2,247 | (5,762 | ) | ||||||
Net loss attributable to Abercrombie & Fitch Co. | $ | (13,129 | ) | $ | 3,679 | $ | (16,808 | ) | |||
Net loss per diluted share attributable to Abercrombie & Fitch Co. | $ | (0.19 | ) | $ | 0.06 | $ | (0.25 | ) | |||
Diluted weighted-average shares outstanding: | 67,944 | 67,944 |
Abercrombie & Fitch Co. | |||||||||||
Schedule of Non-GAAP Financial Measures | |||||||||||
Twenty-six Weeks Ended July 29, 2017 | |||||||||||
(in thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
GAAP (1) | Excluded Items | Adjusted Non-GAAP | |||||||||
Asset impairment (2) | $ | 6,865 | $ | 6,135 | $ | 730 | |||||
Operating loss | (91,030 | ) | (6,135 | ) | (84,895 | ) | |||||
Loss before taxes | (99,239 | ) | (6,135 | ) | (93,104 | ) | |||||
Tax benefit (3) | (23,615 | ) | (1,610 | ) | (22,005 | ) | |||||
Net loss attributable to Abercrombie & Fitch Co. | $ | (77,191 | ) | $ | (4,525 | ) | $ | (72,666 | ) | ||
Net loss per diluted share attributable to Abercrombie & Fitch Co. | $ | (1.13 | ) | $ | (0.07 | ) | $ | (1.06 | ) | ||
Diluted weighted-average shares outstanding: | 68,264 | 68,264 |
Abercrombie & Fitch Co. | |||||||||||
Schedule of Non-GAAP Financial Measures | |||||||||||
Twenty-six Weeks Ended July 30, 2016 | |||||||||||
(in thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
GAAP (1) | Excluded Items | Adjusted Non-GAAP | |||||||||
Asset impairment (2) | $ | 6,356 | $ | 6,356 | $ | — | |||||
Other operating income, net (3) | (16,013 | ) | (12,282 | ) | (3,731 | ) | |||||
Operating loss | (65,716 | ) | 5,926 | (71,642 | ) | ||||||
Loss before taxes | (74,963 | ) | 5,926 | (80,889 | ) | ||||||
Tax benefit (4) | (24,302 | ) | 2,247 | (26,549 | ) | ||||||
Net loss attributable to Abercrombie & Fitch Co. | $ | (52,716 | ) | $ | 3,679 | $ | (56,395 | ) | |||
Net loss per diluted share attributable to Abercrombie & Fitch Co. | $ | (0.78 | ) | $ | 0.05 | $ | (0.83 | ) | |||
Diluted weighted-average shares outstanding: | 67,785 | 67,785 |
Thirteen Weeks Ended July 29, 2017 | |||||||||||||||||
Hollister(1) | Abercrombie(2) | Total | |||||||||||||||
United States | International | United States | International | United States | International | ||||||||||||
April 29, 2017 | 397 | 145 | 308 | 43 | 705 | 188 | |||||||||||
New | — | — | — | — | — | — | |||||||||||
Closed | — | — | (2 | ) | — | (2 | ) | — | |||||||||
July 29, 2017 | 397 | 145 | 306 | 43 | 703 | 188 |
Twenty-six Weeks Ended July 29, 2017 | |||||||||||||||||
Hollister(1) | Abercrombie(2) | Total | |||||||||||||||
United States | International | United States | International | United States | International | ||||||||||||
January 28, 2017 | 398 | 145 | 311 | 44 | 709 | 189 | |||||||||||
New | 1 | — | 2 | — | 3 | — | |||||||||||
Closed | (2 | ) | — | (7 | ) | (1 | ) | (9 | ) | (1 | ) | ||||||
July 29, 2017 | 397 | 145 | 306 | 43 | 703 | 188 |
(1) | Excludes five international franchise stores as of July 29, 2017 and April 29, 2017 and three international franchise stores as of January 28, 2017. |
(2) | Includes Abercrombie & Fitch and abercrombie kids brands. Excludes three international franchise stores as of July 29, 2017 and April 29, 2017 and one international franchise store as of January 28, 2017. |
Abercrombie & Fitch Co. | |||||||||||||||||||||||||||||||||||||||||||
Financial Information | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, except per share data and store data) | |||||||||||||||||||||||||||||||||||||||||||
Fiscal 2016 | Fiscal 2017 | ||||||||||||||||||||||||||||||||||||||||||
2013 | 2014 | 2015 | Q1 | Q2 | Q3 | Q4 | 2016 | Q1 | Q2 | YTD | |||||||||||||||||||||||||||||||||
Net sales | $ | 4,116,897 | $ | 3,744,030 | $ | 3,518,680 | $ | 685,483 | $ | 783,160 | $ | 821,734 | $ | 1,036,363 | $ | 3,326,740 | $ | 661,099 | $ | 779,321 | $ | 1,440,420 | |||||||||||||||||||||
Cost of sales, exclusive of depreciation and amortization | 1,541,462 | 1,430,460 | 1,361,137 | 259,762 | 306,053 | 310,995 | 421,362 | 1,298,172 | 262,174 | 318,426 | 580,600 | ||||||||||||||||||||||||||||||||
Gross profit | 2,575,435 | 2,313,570 | 2,157,543 | 425,721 | 477,107 | 510,739 | 615,001 | 2,028,568 | 398,925 | 460,895 | 859,820 | ||||||||||||||||||||||||||||||||
Stores and distribution expense | 1,907,687 | 1,703,051 | 1,604,214 | 369,118 | 382,917 | 386,609 | 439,816 | 1,578,460 | 359,929 | 369,295 | 729,224 | ||||||||||||||||||||||||||||||||
Marketing, general and administrative expense | 481,784 | 458,820 | 470,321 | 114,447 | 111,719 | 105,307 | 121,729 | 453,202 | 109,893 | 109,353 | 219,246 | ||||||||||||||||||||||||||||||||
Restructuring charge (benefit) | 81,500 | 8,431 | (1,598 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Asset impairment | 46,715 | 44,988 | 18,209 | — | 6,356 | — | 1,574 | 7,930 | 730 | 6,135 | 6,865 | ||||||||||||||||||||||||||||||||
Other operating (income) expense, net | (23,074 | ) | (15,239 | ) | (6,441 | ) | (2,933 | ) | (13,080 | ) | (822 | ) | (9,377 | ) | (26,212 | ) | (1,686 | ) | (2,799 | ) | (4,485 | ) | |||||||||||||||||||||
Operating income (loss) | 80,823 | 113,519 | 72,838 | (54,911 | ) | (10,805 | ) | 19,645 | 61,259 | 15,188 | (69,941 | ) | (21,089 | ) | (91,030 | ) | |||||||||||||||||||||||||||
Interest expense, net | 7,546 | 14,365 | 18,248 | 4,506 | 4,741 | 4,609 | 4,810 | 18,666 | 4,120 | 4,089 | 8,209 | ||||||||||||||||||||||||||||||||
Income (loss) before taxes | 73,277 | 99,154 | 54,590 | (59,417 | ) | (15,546 | ) | 15,036 | 56,449 | (3,478 | ) | (74,061 | ) | (25,178 | ) | (99,239 | ) | ||||||||||||||||||||||||||
Tax expense (benefit) | 18,649 | 47,333 | 16,031 | (20,787 | ) | (3,515 | ) | 6,762 | 6,344 | (11,196 | ) | (13,052 | ) | (10,563 | ) | (23,615 | ) | ||||||||||||||||||||||||||
Net income (loss) | 54,628 | 51,821 | 38,559 | (38,630 | ) | (12,031 | ) | 8,274 | 50,105 | 7,718 | (61,009 | ) | (14,615 | ) | (75,624 | ) | |||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 2,983 | 957 | 1,098 | 393 | 1,314 | 3,762 | 691 | 876 | 1,567 | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to Abercrombie & Fitch Co. | $ | 54,628 | $ | 51,821 | $ | 35,576 | $ | (39,587 | ) | $ | (13,129 | ) | $ | 7,881 | $ | 48,791 | $ | 3,956 | $ | (61,700 | ) | $ | (15,491 | ) | $ | (77,191 | ) |
Fiscal 2016 | Fiscal 2017 | ||||||||||||||||||||||||||||||||||||||||||
2013 | 2014 | 2015 | Q1 | Q2 | Q3 | Q4 | 2016 | Q1 | Q2 | YTD | |||||||||||||||||||||||||||||||||
Net income (loss) per share attributable to Abercrombie & Fitch Co.: | |||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.71 | $ | 0.72 | $ | 0.52 | $ | (0.59 | ) | $ | (0.19 | ) | $ | 0.12 | $ | 0.72 | $ | 0.06 | $ | (0.91 | ) | $ | (0.23 | ) | $ | (1.13 | ) | ||||||||||||||||
Diluted | $ | 0.69 | $ | 0.71 | $ | 0.51 | $ | (0.59 | ) | $ | (0.19 | ) | $ | 0.12 | $ | 0.71 | $ | 0.06 | $ | (0.91 | ) | $ | (0.23 | ) | $ | (1.13 | ) | ||||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||||||||||||||||||||||||
Basic | 77,157 | 71,785 | 68,880 | 67,625 | 67,944 | 67,975 | 67,970 | 67,878 | 68,073 | 68,456 | 68,264 | ||||||||||||||||||||||||||||||||
Diluted | 78,666 | 72,937 | 69,417 | 67,625 | 67,944 | 68,277 | 68,299 | 68,284 | 68,073 | 68,456 | 68,264 | ||||||||||||||||||||||||||||||||
Hollister comparable sales | (14 | )% | (10 | )% | — | % | — | % | (2 | )% | — | % | 1 | % | 0 | % | 3 | % | 5 | % | 4 | % | |||||||||||||||||||||
Abercrombie comparable sales (1) | (5 | )% | (6 | )% | (8 | )% | (7 | )% | (14 | )% | (13 | )% | (11 | )% | (10 | )% | (7 | )% | (8 | )% | |||||||||||||||||||||||
Comparable sales (2) | (11 | )% | (8 | )% | (3 | )% | (4 | )% | (4 | )% | (6 | )% | (5 | )% | (5 | )% | (3 | )% | (1 | )% | (2 | )% | |||||||||||||||||||||
Shares outstanding | 76,402 | 69,352 | 67,348 | 67,605 | 67,666 | 67,683 | 67,758 | 67,758 | 68,012 | 68,092 | 68,092 | ||||||||||||||||||||||||||||||||
Number of stores - end of period (3) | 1,006 | 969 | 932 | 925 | 926 | 930 | 898 | 898 | 893 | 891 | 891 | ||||||||||||||||||||||||||||||||
Gross square feet - end of period | 7,736 | 7,517 | 7,292 | 7,209 | 7,209 | 7,219 | 7,007 | 7,007 | 6,939 | 6,908 | 6,908 | ||||||||||||||||||||||||||||||||
(1) Abercrombie includes the Company's Abercrombie & Fitch and abercrombie kids brands. | |||||||||||||||||||||||||||||||||||||||||||
(2) Comparable sales are calculated on a constant currency basis. | |||||||||||||||||||||||||||||||||||||||||||
(3) Prior period store counts have been restated to count multi-brand outlet stores as a single store. |
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