NEW ALBANY, Ohio, May 18 /PRNewswire-FirstCall/ -- Abercrombie
& Fitch Co. (NYSE: ANF) today reported unaudited results which
reflected a net loss of $11.8 million
and a net loss per basic and diluted share of $0.13 for the thirteen weeks ended May 1, 2010, compared to a net loss of
$59.2 million and a net loss per
basic and diluted share of $0.68 for
the thirteen weeks ended May 2, 2009.
Net loss for the thirteen weeks ended May 2, 2009 included a net loss per basic and
diluted share of $0.41 from
discontinued operations.
First Quarter Sales Highlights
- Total Company net sales, including direct-to-consumer net
sales, increased 14% to $687.8
million
- Total Company domestic net sales, including direct-to-consumer
net sales, increased 5% to $568.8
million
- Total Company international net sales, including
direct-to-consumer net sales, increased 102% to $119.0 million
- Comparable store sales increased 1%
- Total Company direct-to-consumer net merchandise sales
increased 42% to $68.8 million
- Abercrombie & Fitch net sales of $303.7 million; Abercrombie & Fitch
comparable store sales increased 3%
- abercrombie kids net sales of $78.7
million; abercrombie kids comparable store sales increased
6%
- Hollister Co. net sales of $298.2
million; Hollister Co. comparable store sales decreased
2%
Mike Jeffries, Chief Executive
Officer and Chairman of the Board of Abercrombie & Fitch Co.,
said:
“We are pleased with our overall reported sales growth of 14%
for the quarter. We continue to be very focused on achieving
sustainable, profitable growth in both our domestic and
international businesses.”
First Quarter Financial Results
Net sales for the thirteen weeks ended May 1, 2010 increased 14% to $687.8 million from $601.7
million for the thirteen weeks ended May 2, 2009. Total Company direct-to-consumer net
merchandise sales increased 42% to $68.8
million for the thirteen week period ended May 1, 2010. Total Company first quarter
comparable store sales increased 1%.
The gross profit rate for the first quarter was 62.7%, 70 basis
points lower than last year’s first quarter gross profit rate. The
decrease in gross profit rate was primarily driven by a 10%
decrease in average unit retail. Adjusted for selling mix,
the reduction in average unit retail was somewhat greater.
Stores and distribution expense, as a percentage of net sales,
decreased to 51.5% from 54.9% for the first quarter. The
decrease in the stores and distribution expense rate was primarily
driven by lower store occupancy costs as a percentage of net sales.
Marketing, general and administrative expense for the first
quarter was $96.6 million, a 12%
increase compared to $86.3 million
during the same period last year. The increase in marketing,
general and administrative expense was primarily due to higher net
legal expenses, incentive compensation and marketing expenses.
The tax rate for continuing operations for the first quarter was
a benefit of 39.5% compared to a benefit of 28.9% during the same
period last year. The tax rate associated with the loss from
continuing operations for the first quarter of Fiscal 2010 included
a modest net benefit from both the settlement of tax audits and the
net release of valuation allowances.
The Company ended the first quarter of Fiscal 2010 with
$600.4 million in cash and cash
equivalents, borrowings under the credit agreement of $49 million and outstanding letters of credit of
$45.6 million compared to
$463.7 million in cash and cash
equivalent, borrowings under the credit agreement of $100.0 million and outstanding letters of credit
of $43 million at the comparable
point last year.
2010 Outlook
In Fiscal 2010, the Company expects to open Abercrombie &
Fitch flagship stores in Copenhagen,
Denmark and Fukuoka, Japan
and a Hollister Epic store on Fifth Avenue in New York.
The Company now has confirmed plans to open approximately 25
international mall-based Hollister stores in Fiscal 2010 as well as
one Abercrombie & Fitch store in Canada. In addition, the Company now has
confirmed plans to open its first international Gilly Hicks store in the United Kingdom in the fourth quarter of Fiscal
2010.
Domestically, the Company expects to open three Abercrombie
& Fitch stores, two abercrombie kids stores, three Hollister
stores, two Gilly Hicks stores and
five outlet stores.
Based on current new store plans and other planned expenditures,
the Company now expects total capital expenditures to be in the
range of $200 million to $225
million, including $165 million to
$190 million related to new stores, store refreshes and
remodels, and approximately $35
million related to information technology, distribution
center and other home office projects.
Other Developments
The Board of Directors declared a quarterly cash dividend of
$0.175 per share on the Class A
Common Stock of Abercrombie & Fitch Co. payable on June 15, 2010 to shareholders of record at the
close of business on May 28,
2010.
The Company announced plans to open an Abercrombie & Fitch
flagship store in Madrid, Spain in
Fiscal 2011.
At the end of April Fiscal
2010, the Company operated a total of 1,100 stores. The
Company operated 341 Abercrombie & Fitch stores, 205
abercrombie kids stores, 507 Hollister Co. stores and 16 Gilly
Hicks stores domestically. The Company also operated six
Abercrombie & Fitch stores, four abercrombie kids stores and 21
Hollister Co. stores internationally. The Company operates
e-commerce websites at www.abercrombie.com,
www.abercrombiekids.com, www.hollisterco.com and
www.gillyhicks.com.
Today at 8:30 AM, Eastern Time,
the Company will conduct a conference call. Management will
discuss the Company’s performance and its plans for the future and
will accept questions from participants. To listen to the live
conference call, dial (888) 204-4317 or internationally at (913)
981-5589. To listen via the Internet, go to www.abercrombie.com,
select the Investors page and scroll through the Calendar of
Events. Replays of the call will be available shortly after
its completion. The audio replay can be accessed for two
weeks following the reporting date by calling (888) 203-1112 or
internationally at (719) 457-0820 followed by the conference ID
number 6042496; or for 12 months by visiting the
Company's website at www.abercrombie.com.
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 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. The
following factors, in addition to those included in the disclosure
under the heading " FORWARD-LOOKING STATEMENTS AND RISK FACTORS" in
"ITEM 1A. RISK FACTORS" of A&F's Annual Report on Form 10-K for
the fiscal year ended January 30,
2010, in some cases have affected and in the future could
affect the Company's financial performance and could cause actual
results for the 2010 fiscal year 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: current general and financial economic conditions;
changes in consumer spending patterns and consumer preferences; the
effects of political and economic events and conditions
domestically and in foreign jurisdictions in which the Company
operates, including, but not limited to, acts of terrorism or war;
the impact of competition and pricing; changes in weather patterns;
availability and market prices of key raw materials; ability to
source product from its global supplier base; political stability;
currency and exchange risks and changes in existing or potential
duties, tariffs or quotas; availability of suitable store locations
at appropriate terms; ability to develop new merchandise; ability
to hire, train and retain associates; estimates of expenses which
the Company may incur in connection with the closure of the Ruehl
stores and related direct-to-consumer operations; and the outcome
of pending litigation or other adversarial proceedings. Future
economic and industry trends that could potentially impact revenue
and profitability are difficult to predict. Therefore, there
can be no assurance that the forward-looking statements included in
this Press Release will prove to be accurate. In light of the
significant uncertainties in the forward-looking statements
included herein, the inclusion of such information should not be
regarded as a representation by the Company, or any other person,
that the objectives of the Company will be achieved. The
forward-looking statements herein are based on information
presently available to the management of the Company. Except
as may be required by applicable law, the Company assumes no
obligation to publicly update or revise its forward-looking
statements even if experience or future changes make it clear that
any projected results expressed or implied therein will not be
realized.
Abercrombie &
Fitch Co.
Condensed
Consolidated Statements of Income
(Unaudited)
Thirteen Weeks
Ended May 1, 2010 and Thirteen Weeks Ended May 2,
2009
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
ACTUAL
|
|
ACTUAL
|
|
|
|
2010
|
|
% of Net Sales
|
|
2009
|
|
% of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
687,804
|
|
100.0%
|
|
$
601,729
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
256,388
|
|
37.3%
|
|
220,277
|
|
36.6%
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
431,416
|
|
62.7%
|
|
381,453
|
|
63.4%
|
|
|
|
|
|
|
|
|
|
|
|
Total Stores and Distribution
Expense
|
354,410
|
|
51.5%
|
|
330,310
|
|
54.9%
|
|
|
|
|
|
|
|
|
|
|
|
Total Marketing, General and
Administrative Expense
|
96,632
|
|
14.0%
|
|
86,345
|
|
14.3%
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating Income, Net
|
(914)
|
|
-0.1%
|
|
(1,324)
|
|
-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
(18,712)
|
|
-2.7%
|
|
(33,878)
|
|
-5.6%
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense (Income),
Net
|
825
|
|
0.1%
|
|
(1,374)
|
|
-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Continuing Operation Before
Taxes
|
(19,537)
|
|
-2.8%
|
|
(32,504)
|
|
-5.4%
|
|
|
|
|
|
|
|
|
|
|
|
Tax Benefit for Continuing
Operations
|
(7,709)
|
|
-1.1%
|
|
(9,400)
|
|
-1.6%
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss from Continuing
Operations
|
(11,828)
|
|
-1.7%
|
|
(23,104)
|
|
-3.8%
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss from Discontinued Operations
(net of taxes)
|
-
|
|
0.0%
|
|
(36,135)
|
|
-6.0%
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
(11,828)
|
|
-1.7%
|
|
$
(59,239)
|
|
-9.8%
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share from Continuing
Operations:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.13)
|
|
|
|
$
(0.26)
|
|
|
|
Diluted
|
|
$
(0.13)
|
|
|
|
$
(0.26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share from Discontinued
Operations:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
-
|
|
|
|
$
(0.41)
|
|
|
|
Diluted
|
|
$
-
|
|
|
|
$
(0.41)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Loss Per Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.13)
|
|
|
|
$
(0.68)
|
|
|
|
Diluted
|
|
$
(0.13)
|
|
|
|
$
(0.68)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares
Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
88,095
|
|
|
|
87,697
|
|
|
|
Diluted
|
|
88,095
|
|
|
|
87,697
|
|
|
|
|
|
|
|
|
|
|
|
|
Abercrombie &
Fitch Co.
Condensed Consolidated Balance
Sheets
(in
thousands)
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
May 1,
2010
|
|
January 30,
2010
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and Equivalents
|
$
600,452
|
|
$
680,113
|
|
|
Marketable Securities
|
32,356
|
|
32,356
|
|
|
Receivables
|
91,811
|
|
90,865
|
|
|
Inventories
|
316,447
|
|
310,645
|
|
|
Deferred Income Taxes
|
57,145
|
|
44,570
|
|
|
Other Current Assets
|
86,825
|
|
77,297
|
|
|
|
|
|
|
|
Total Current Assets
|
1,185,036
|
|
1,235,846
|
|
|
|
|
|
|
|
Property and Equipment, Net
|
1,209,345
|
|
1,244,019
|
|
|
|
|
|
|
|
Non-Current Marketable
Securities
|
140,260
|
|
141,794
|
|
|
|
|
|
|
|
Other Assets
|
203,955
|
|
200,207
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
$
2,738,596
|
|
$
2,821,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Accounts Payable and Outstanding
Checks
|
$
148,439
|
|
$
150,134
|
|
|
Accrued Expenses
|
210,289
|
|
246,289
|
|
|
Deferred Lease Credits
|
42,986
|
|
43,597
|
|
|
Income Taxes Payable
|
14,079
|
|
9,352
|
|
|
|
|
|
|
|
Total Current Liabilities
|
415,793
|
|
449,372
|
|
|
|
|
|
|
|
Long-Term Liabilities
|
|
|
|
|
|
Deferred Income Taxes
|
46,253
|
|
47,142
|
|
|
Deferred Lease Credits
|
201,682
|
|
212,052
|
|
|
Long-term Debt
|
70,603
|
|
71,213
|
|
|
Other Liabilities
|
203,712
|
|
214,170
|
|
|
|
|
|
|
|
Total Long-Term Liabilities
|
522,250
|
|
544,577
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
1,800,553
|
|
1,827,917
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
$
2,738,596
|
|
$
2,821,866
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Abercrombie & Fitch