INVESTOR PRESENTATION 2013 THIRD QUARTER

Transcription

1 INVESTOR PRESENTATION 203 THIRD QUARTER

2 SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 995 A&F cautions that any forwardlooking statements (as such term is defined in the Private Securities Litigation Reform Act of 995) contained in this presentation 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 forwardlooking statements. Except as may be required by applicable law, we assume no obligation to publicly update or revise our forwardlooking statements. The factors included in the disclosure under the heading FORWARDLOOKING STATEMENTS AND RISK FACTORS in ITEM A. RISK FACTORS of A&F s Annual Report on Form 0K for the fiscal year ended February 2, 203, in some cases have affected and in the future could affect the Company s financial performance and could cause actual results for the 203 fiscal year and beyond to differ materially from those expressed or implied in any of the forwardlooking statements included in this presentation or otherwise made by management. OTHER INFORMATION All dollar and share amounts are in thousands unless otherwise stated. Subtotals and totals may not foot due to rounding. Due to the fiftythird week in fiscal 202, third quarter and yeartodate comparable sales are compared to the thirteen and thirtynine week periods ended November 3, 202 The Company changed its method of accounting for inventory from the retail method to the cost method effective February 2, 203. Prior year figures have been restated to reflect the cost method of accounting for inventory.

3 Q3 ADJUSTED P&L SUMMARY UNAUDITED UNAUDITED (RESTATED) 203 () % OF NET SALES 202 % OF NET SALES NET SALES $,033, % $,69, % GROSS PROFIT 65, % 752, % OPERATING EXPENSE 600, % 620, % OTHER OPERATING INCOME, NET (9,85).0% (,54) 0.% OPERATING INCOME 60, % 33,345.4% INTEREST EXPENSE, NET, %,584 0.% INCOME BEFORE TAXES 58, % 3,76.3% TAX EXPENSE 8,299.8% 47,725 4.% NET INCOME 40, % 84, % NET INCOME PER SHARE BASIC DILUTED $0.53 $0.52 $.03 $.02 WEIGHTEDAVERAGE SHARES OUTSTANDING BASIC DILUTED 76,456 8,669 77,677 82,522 3 () The Q3 Adjusted P&L Summary for the current period is represented on a nongaap basis and excludes the charges set out on page 3. A reconciliation between GAAP and nongaap results is included as an appendix to the presentation. 2

4 IMPAIRMENT & OTHER CHARGES (PRETAX) 203 GILLY HICKS IMPAIRMENT & OTHER CHARGES Q Q2 Q3 YTD $44,708 $44,708 OTHER IMPAIRMENT CHARGES $43,57 $43,57 PROFIT IMPROVEMENT INITIATIVE CHARGES $2,575 $7,590 $0,65 TOTAL $2,575 $95,869 $98,444 3

5 Q3 COMPARABLE SALES Q3 YTD TOTAL COMPANY * 4% TOTAL COMPANY * 3% GEOGRAPHIC * US INTERNATIONAL 4% 5% GEOGRAPHIC * US INTERNATIONAL 3% 3% BRAND * ABERCROMBIE & FITCH ABERCROMBIE KIDS 3% 4% 6% BRAND * ABERCROMBIE & FITCH ABERCROMBIE KIDS % 4% 5% Q3 SALES MIX YTD SALES MIX INTERNATIONAL 34.7% INTERNATIONAL 35.9% US 65.3% US 64.% * Includes comparable store and DTC sales. 4

6 Q3 ADJUSTED P&L ANALYSIS SALES OPERATING OPERATING INCOME SALES () INCOME U.S. STORES (2) INTERNATIONAL STORES (2) DIRECT TO CONSUMER $56,788 $8,34 $709,56 $55, ,937 74, % 22.0% 76, % 65, % 30,88 58,34 99, % 63, % MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES (9,799) (23,38) STORE PREOPENING COSTS (3) (6,276) (0,730) ALL OTHER, NET (4) (36,542) (5,88) TOTAL $,033,293 $60,499 $,69,649 $33,345 () Operating Income excludes the charges set out on page 3. A reconciliation between GAAP and nongaap results is included as an appendix to the presentation. (2) Operating Income for U.S. Stores and International Stores is reported on an aggregate fourwall basis, and excludes preopening costs. Also includes third party selloff of excess merchandise. (3) Store PreOpening Costs include preopening rent, payroll, travel and other expenses. (4) All Other includes Store Management & Support, DC (including DC markdowns) and Other Expenses, net of Other Income. 5

7 Q3 ADJUSTED OPERATING EXPENSE THIRD QUARTER 203 () % OF NET SALES 202 % OF NET SALES BPS (4) STORE OCCUPANCY (2) ALL OTHER (3) STORES & DISTRIBUTION MARKETING, GENERAL & ADMINISTRATIVE $96,60 283, ,593 9, % 27.5% 46.5%.6% $89, , ,942 23,38 6.2% 26.3% 42.5% 0.5% TOTAL $600, % $620, % 50 () Operating expense excludes the charges set out on page 3. A reconciliation between GAAP and nongaap results is included as an appendix to the presentation. (2) Includes rent, other landlord charges, utilities, depreciation, and other occupancy expense. (3) Includes selling payroll, store management and support, other store expense, DTC, and distribution center costs. (4) Rounded based on reported percentages. 6

8 SHARE REPURCHASES FY 203 FY 202 SHARES REPURCHASED COST AVERAGE COST SHARES REPURCHASED COST AVERAGE COST FIRST QUARTER $6,305 $ ,300.0 $6,25 $48.85 SECOND QUARTER 2,033.0 $99,50 $48.94 THIRD QUARTER 3,025.2 $04,283 $34.47 FOURTH QUARTER,222.7 $56,66 $45.94 TOTAL 2,382.7 $5,806 $ ,547.9 $32,664 $

9 INTERNATIONAL STORE COUNT CUMULATIVE CANADA UK GERMANY ITALY SPAIN IRELAND SWEDEN HONG KONG BELGIUM FRANCE AUSTRIA CHINA S. KOREA NETHERLANDS POLAND AUSTRALIA JAPAN TOTAL YEAR END Q3 END

10 Q3 STORE OPENINGS BRAND CENTER CITY DATE PARLY 2 LE CHESNAY, FRANCE 8/30/3 LALAPORT YOKOHAMA YOKOHAMA, JAPAN 9/4/3 OUDE GRACHT UTRECHT, NETHERLANDS 9/28/3 A&F / KIDS SICILIA OUTLET VILLAGE AGIRA ENNON, ITALY 0/7/3 SICILIA OUTLET VILLAGE AGIRA ENNON, ITALY 0/7/3 BEAUGRENELLE PARIS, FRANCE 0/22/3 ALMA CHEONGDAMDONG RENNES, FRANCE 0/23/3 SEOUL, KOREA 0/3/3 A&F 9

11 203 GUIDANCE UPDATES PROJECTED LOW DOUBLE DIGIT DECREASE IN COMPARABLE SALES FOR THE FOURTH QUARTER SIGNIFICANT GROSS MARGIN RATE EROSION IN THE FOURTH QUARTER; GROSS MARGIN RATE APPROXIMATELY FLAT ON A FULL YEAR BASIS ADJUSTED NONGAAP EARNINGS PER DILUTED SHARE IN THE RANGE OF $.40 $.50 TAX RATE IN THE MID 30 S, INCLUDING $4.9 MILLION IN Q3 TAX BENEFITS RELATED TO CERTAIN DISCRETE TAX MATTERS * Guidance for the full year does not include charges related to the Company s restructuring plans for the Gilly Hicks brand, other impairment and store closure charges, charges related to the implementation of the Company s profit improvement initiative, or the effect of any additional share repurchases. 0

12 Q3 STORE COUNT ACTIVITY ALL BRANDS* START OF Q3 203 OPENINGS CLOSINGS END OF Q3 203 TOTAL U.S. CANADA EUROPE ASIA, (3) (3), A&F START OF Q3 203 OPENINGS CLOSINGS END OF Q abercrombie kids START OF Q3 203 OPENINGS CLOSINGS END OF Q CO. START OF Q3 203 OPENINGS CLOSINGS END OF Q (3) (3) * End of Q3 203 includes 28 Gilly Hicks stores, 20 in the U.S. and eight in Europe. * Asia includes Australia.

13 APPENDIX: RECONCILIATION OF NONGAAP FINANCIAL MEASURES (IN THOUSANDS) (UNAUDITED) GAAP ASSET IMPAIRMENT CHARGES () GILLY HICKS RESTRUCTURING (2) PROFIT IMPROVEMENT INITIATIVE (3) TAX IMPACT (4) ADJUSTED NONGAAP STORES AND DISTRIBUTION EXPENSE 564,935 (43,57) (40,32) (639) $480,593 MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES 3,326 (4,576) (6,95) $9,799 OPERATING (LOSS) INCOME (35,370) 43,57 44,708 7,590 $60,499 TAX (BENEFIT) EXPENSE (2,38) 39,680 $8,299 NET (LOSS) INCOME (5,644) $40,545 NET (LOSS) INCOME PER SHARE: BASIC DILUTED $(0.20) $(0.20) $0.53 $0.52 WEIGHTEDAVERAGE SHARES OUTSTANDING: BASIC DILUTED 76,456 76,456 76,456 77,677 3 () The storerelated asset impairment charges relate to stores whose asset carrying value exceeded the fair value. For the thirteen week period ended November 2, 203, the charge was primarily associated with 23 Abercrombie & Fitch, three abercrombie kids and 70 Hollister stores. (2) For the thirteen week period ended November 2, 203, the charges related to restructuring plans for Gilly Hicks include $37.9 million of asset impairment charges and $6.8 million of leaserelated and other charges. (3) For the thirteen week period ended November 2, 203, the charge related to the Company s profit improvement initiative include $7.6 million of consulting and other services, and severance charges. (4) Indicates the tax impact on the charges 2