Exhibit 99.1
ABERCROMBIE & FITCH CO. ACHIEVES RECORD U.S. BLACK FRIDAY WEEK REVENUES; REAFFIRMS FOURTH QUARTER OUTLOOK
New Albany, Ohio, January 13, 2020: Abercrombie & Fitch Co. (NYSE: ANF) today announced that it is reaffirming its previously issued outlook for the fourth quarter of fiscal 2019 as follows:
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• | Net sales to be in the range of flat to up 2%, reflecting an adverse impact from changes in foreign currency exchange rates of approximately $5 million. |
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• | Comparable sales to be in the range of flat to up 2%, against positive comparable sales of 3% last year. |
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• | Gross profit rate to be down approximately 150 basis points as compared to fiscal 2018 rate of 59.1%, reflecting a combined adverse impact of 70 basis points from changes in foreign currency exchange rates and anticipated China tariffs. |
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• | Operating expense, excluding other operating income, to be in the range of flat to up 2% from fiscal 2018 adjusted non-GAAP operating expense of $555 million. |
Fran Horowitz, Chief Executive Officer, said:
“We are pleased to reaffirm our fourth quarter outlook. We experienced record revenues in the U.S. over Black Friday week, which includes the Tuesday before Thanksgiving through Cyber Monday, with Hollister setting a new record and momentum at Abercrombie continuing to build, delivering its strongest topline in over five years. For the quarter, we expect Abercrombie comps to outperform Hollister and the U.S. to outperform international. We remain focused on executing to our key transformation initiatives and will provide an update on our progress when we report fourth quarter results.”
ICR Conference
Abercrombie & Fitch Co. management intends to further discuss the Company's business and outlook during a Fireside Chat at the 2020 ICR Conference on Monday, January 13, 2020 at 9:00 AM ET. A live audio webcast of the Fireside Chat will be available to the general public on the Investors section of the Company’s website at http://corporate.abercrombie.com. An online audio archive will be available for a period of 90 days following the presentation.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
A&F cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Press Release or made by management or spokespeople of A&F involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the company's control. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," and similar expressions may identify forward-looking statements. Except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements. The following factors, in addition to those disclosed in “ITEM 1A. RISK FACTORS” of A&F's Annual Report on Form 10-K for the fiscal year ended February 2, 2019 and in A&F's subsequently filed quarterly reports on Form 10-Q, in some cases have affected, and in the future could affect, the company's financial performance and could cause actual results for Fiscal 2019 and beyond to differ materially from those expressed or implied in any of the forward-looking statements included in this Press Release or otherwise made by management: 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; failure 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; fluctuations in foreign currency exchange rates could adversely impact our financial condition and results of operations; 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; the impact of war, acts of terrorism or civil unrest could have a material adverse effect on our operating results and financial condition; the expansion of our direct-to-consumer sales channels and omnichannel initiatives are significant components of our growth strategy, and the failure to successfully develop our position across all channels could have an adverse impact on our results of operations; our international growth strategy and ability to conduct business in international markets may be adversely affected by legal, regulatory, political and economic risks; failure to successfully
implement our strategic plans could have a negative impact on our growth and profitability; 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; our reliance on DCs makes us susceptible to disruptions or adverse conditions affecting our supply chain; changes in 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; we rely on the experience and skills of our senior executive officers and associates, the loss of whom could have a material adverse effect on our business; extreme weather conditions, including natural disasters, pandemic disease and other unexpected events, could negatively impact our facilities, systems and stores, as well as the facilities and systems of our vendors and manufacturers, which could result in an interruption to our business and adversely affect our operating results; fluctuations in our tax obligations and effective tax rate may result in volatility in our results of operations; our litigation exposure could have a material adverse effect on our financial condition and results of operations; failure to adequately protect our trademarks could have a negative impact on our brand image and limit our ability to penetrate new markets; changes in the regulatory or compliance landscape and compliance with changing regulations for accounting, corporate governance and public disclosure could adversely affect our business, results of operations and reported financial results; and, our Asset-Based Revolving Credit Agreement and our Term Loan Agreement include restrictive covenants that limit our flexibility in operating our business.
About Abercrombie & Fitch Co.
Abercrombie & Fitch Co. (NYSE: ANF) is a leading, global specialty retailer of apparel and accessories for Men, Women and Kids through three renowned brands. For over 125 years, the iconic Abercrombie & Fitch brand has outfitted innovators, explorers and entrepreneurs. Today, the brand reflects the updated attitude of the 21 to 24-year old customer, while remaining true to its heritage of creating expertly crafted products with an effortless, American style. The Hollister brand epitomizes the liberating and carefree spirit of the endless California summer for the teen market. abercrombie kids creates smart, playful apparel for children ages 5-14, celebrating the wide-eyed wonder of childhood.
The brands share a commitment to offering products of enduring quality and exceptional comfort that allow consumers around the world to express their own individuality and style. The Company operates over 850 stores under these brands across North America, Europe, Asia and the Middle East, as well as the e-commerce sites www.abercrombie.com and www.hollisterco.com.
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Investor Contact: | | Media Contact: |
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Pamela Quintiliano | | Ian Bailey |
Abercrombie & Fitch | | Abercrombie & Fitch |
(614) 283-6751 | | (614) 283-6192 |
Investor_Relations@anfcorp.com | | Public_Relations@anfcorp.com |