Abercrombie & Fitch Co. (NYSE: ANF) today announced results for
the third quarter ended October 28, 2023. These compare to
results for the third quarter ended October 29, 2022.
Descriptions of the use of non-GAAP financial measures and
reconciliations of GAAP and non-GAAP financial measures accompany
this release.
Fran Horowitz, Chief Executive Officer, said, “Our strong third
quarter results, with net sales and operating margin well-exceeding
our expectations, speak to the power of our playbook working
globally across our brand portfolio. Net sales growth of 20%
accelerated from the second quarter and was once again led by
Abercrombie brands with exceptional growth of 30%. At Hollister
brands, we had a solid back to school season, delivering 11% net
sales growth for the quarter as our assortment and brand evolution
is resonating with our teen customer. With strong product
acceptance and tightly-controlled inventories across brands, we
delivered gross profit rate expansion of 570 basis points to last
year in addition to global sales growth. Operationally, we made
investments in technology, marketing and our people while
delivering strong year-over-year operating leverage resulting in an
operating margin of 13.1% for the quarter.
Entering the important holiday season, our fiscal 2023
year-to-date results give us the confidence that we can continue to
deliver for our customers and drive profitable growth. As such, we
are increasing our full year outlook for both net sales growth and
operating margin. I’d like to thank our global team for their
unrelenting customer focus and unwavering commitment to our Always
Forward Plan.”
Details related to reported net income (loss) per diluted share
and adjusted net income per diluted share for the third quarter are
as follows:
|
|
2023 |
|
|
2022 |
|
GAAP |
|
$ |
1.83 |
|
$ |
(0.04 |
) |
Excluded items, net of tax
effect (1) |
|
|
— |
|
|
(0.05 |
) |
Adjusted non-GAAP |
|
$ |
1.83 |
|
$ |
0.01 |
|
Impact from changes in foreign
currency exchange rates (2) |
|
|
— |
|
|
(0.06 |
) |
Adjusted non-GAAP constant
currency |
|
$ |
1.83 |
|
$ |
(0.05 |
) |
(1) Excluded items consist of pre-tax
store asset impairment charges in the prior year. |
(2) The estimated impact from foreign
currency is calculated by applying current period exchange rates to
prior year results using a 26% tax rate. |
|
|
|
|
|
|
|
|
A summary of results for the third
quarter ended October 28, 2023 as compared to the third
quarter ended October 29, 2022:
- Net sales of $1.1 billion, up 20% as compared
to last year on a reported basis and up 19% on a constant currency
basis.
- Total company comparable
sales up 16%.
- Gross profit rate of 64.9%, up approximately
570 basis points as compared to last year. The year-over-year
improvement was primarily driven by a benefit of 250 basis points
from year-over-year AUR growth, approximately 200 basis points from
lower freight costs, and approximately 200 basis points in lower
levels of inventory write downs compared to last year. These
benefits were partially offset by 80 basis points from higher raw
material costs.
- Operating expense, excluding other operating
loss, net, up $42 million or 8% compared to last year, driven
by increases in incentive compensation, inflation, marketing and
technology expenses. Operating expense as a percentage of sales
decreased to 51.7% from 57.3% last year.
- Operating income of $138 million on a reported
basis as compared to operating income of $18 million and $21
million last year, on a reported and adjusted non-GAAP basis,
respectively.
- Net income per diluted share of $1.83 on a
reported basis as compared to net loss per diluted share last year
of $0.04 and net income per diluted share of $0.01 on a reported
and adjusted non-GAAP basis, respectively.
Net sales by segment and brand
for the third quarter are as follows:
|
Net sales by segment: (1) |
2023 |
|
2022 |
|
1 YR % Change |
|
Comparablesales (2) |
|
Americas |
$ |
867,566 |
|
$ |
713,860 |
|
22% |
|
16% |
|
EMEA |
|
157,976 |
|
|
138,840 |
|
14% |
|
15% |
|
APAC |
|
30,889 |
|
|
27,384 |
|
13% |
|
32% |
|
Total
company |
$ |
1,056,431 |
|
$ |
880,084 |
|
20% |
|
16% |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
2023 |
|
2022 |
|
1 YR % Change |
|
Comparablesales (2) |
|
Net sales by
brand: |
|
|
|
|
|
|
|
|
Abercrombie (3) |
|
547,728 |
|
|
422,332 |
|
30% |
|
26% |
|
Hollister (4) |
$ |
508,703 |
|
$ |
457,752 |
|
11% |
|
7% |
|
Total
company |
$ |
1,056,431 |
|
$ |
880,084 |
|
20% |
|
16% |
|
|
(1) |
Net sales by
segment are presented by attributing revenues to an individual
country on the basis of the segment that fulfills the order. |
(2) |
Comparable sales
are calculated on a constant currency basis. Refer to “REPORTING
AND USE OF GAAP AND NON-GAAP MEASURES,” for further
discussion. |
(3) |
For purposes of
the above table, Abercrombie includes Abercrombie & Fitch and
abercrombie kids. |
(4) |
For purposes of
the above table, Hollister includes Hollister, Gilly Hicks and
Social Tourist. |
Financial Position and Liquidity |
As of October 28, 2023 the company had:
- Cash and equivalents of $649 million. This
compares to cash and equivalents of $518 million and $257 million
as of January 28, 2023 and October 29, 2022,
respectively.
- Inventories of $595 million, a decrease of 20%
compared to October 29, 2022.
- Long-term gross borrowings under the company’s
senior secured notes of $250 million (the “Senior Secured Notes”)
which mature in July 2025 and bear interest at a rate of 8.75%
per annum.
- Borrowing available under the senior-secured
asset-based revolving credit facility (the “ABL Facility”) of $360
million.
- Liquidity, comprised of cash and equivalents
and borrowing available under the ABL Facility, of approximately
$1.0 billion. This compares to liquidity of $866 million and $617
million as of January 28, 2023 and October 29, 2022,
respectively.
|
Cash Flow and Capital Allocation |
Details related to the company’s cash flows for
the year-to-date period ended October 28, 2023 are as
follows:
- Net cash provided by operating activities of
$350 million.
- Net cash used for investing activities of $128
million.
- Net cash used for financing activities of $87
million.
During the third quarter of 2023, the company spent
$51 million to purchase $50 million at par value of its
outstanding senior secured notes.
Depreciation and amortization was $106 million
for the year-to-date period ended October 28, 2023.
|
Fiscal 2023 Full Year Outlook |
The following outlook replaces all
previous full year guidance. For fiscal 2023, the company now
expects:
- Net sales growth of 12% to 14% from $3.7
billion in 2022. This is an increase to the previous outlook of
growth of around 10%. Also, fiscal 2023 includes a 53rd week for
reporting purposes, along with net store expansion. The 53rd week
is estimated to add approximately $45 million to total net
sales in the fourth quarter and full year of 2023.
- Operating margin to be around 10%. This range
improves from the previous outlook of in the range of 8% to 9%. The
current outlook includes a benefit of around 250 basis points from
full year 2022 levels on expected net improvement in freight and
raw material costs, and modest operating expense leverage with
sales growth expected to more than offset higher expenses from the
combination of inflation and increased investments for the 2025
Always Forward Plan initiatives, including an upgrade of our retail
merchandising ERP system.
- Effective tax rate to be in the low 30s. This
replaces the previous outlook of low-to-mid 30s. The current
outlook assumes the continued inability to realize benefits on
certain expected tax losses incurred outside of the U.S., although
to a lesser extent than previously projected, primarily due to
higher worldwide income levels.
- Capital expenditures of approximately $160
million.
|
Fiscal 2023 Fourth Quarter Outlook |
For the fourth quarter of fiscal 2023, the company expects:
- Net sales growth to be up low double-digits
compared to fiscal fourth quarter 2022 level of $1.2 billion.
Included in this outlook is the expected benefit of approximately
375 basis points from the 53rd financial reporting week.
- Operating margin to be in the in the range of
12% to 14% compared to an adjusted operating margin of 7.7% in Q4
2022. We expect the year-over-year improvement to be driven by a
higher gross profit rate on lower freight costs and higher
AURs.
- Effective tax rate to be around 30%. This
outlook assumes the continued inability to realize benefits on
certain expected tax losses incurred outside of the U.S.
Today at 8:30 a.m. ET, the company will conduct a
conference call and provide additional details around its quarterly
results and its outlook for the fourth quarter. To access the call
by phone, participants will need to register at the following URL
address to obtain a dial-in number and passcode:
https://register.vevent.com/register/BI0fd2694520844d219673d960d66d5409
A presentation of third quarter results will be
available in the “Investors” section at corporate.abercrombie.com
at approximately 7:30 a.m. ET, today. Important information may be
disseminated initially or exclusively via the website; investors
should consult the site to access this information.
|
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995 |
This Press Release and related statements by
management or spokespeople of Abercrombie & Fitch Co. (A&F)
contain forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995). These
statements, including, without limitation, statements regarding our
fourth quarter and annual fiscal 2023 results, relate to our
current assumptions, projections and expectations about our
business and future events. Any such forward-looking statements
involve risks and uncertainties and are subject to change based on
various important factors, many of which may be beyond the
company’s control. 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. Words such as
“estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,”
“intend,” “should,” “are confident,” “will,” “could,” “outlook,”
and similar expressions may identify forward-looking statements.
Except as may be required by applicable law, we assume no
obligation to publicly update or revise any forward-looking
statements, including any financial targets or estimates, whether
as a result of new information, future events, or otherwise.
Factors that may cause results to differ from those expressed in
our forward-looking statements include, but are not limited to, the
factors disclosed in Part I, Item 1A. “Risk Factors” of the
company’s Annual Report on Form 10-K for the fiscal year
ended January 28, 2023, and otherwise in our reports and
filings with the Securities and Exchange Commission, as well as the
following factors: risks related to 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; risks related to the
impacts of inflation on consumer spending generally and on our
operating results, financial condition, and expense management;
risks related to geopolitical conflict, armed conflict, the
conflicts between Russia and Ukraine or Israel and Hamas, acts of
terrorism, mass casualty events, social unrest, civil disturbance
or disobedience; risks related to our failure to engage our
customers, anticipate customer demand and changing fashion trends,
and manage our inventory; risks related to our failure to operate
effectively in a highly competitive and constantly evolving
industry; risks related to our ability to execute on our strategic
and growth initiatives, including those outlined in our Always
Forward Plan; risks related to fluctuations in foreign currency
exchange rates; risks related to fluctuations in our tax
obligations and effective tax rate, including as a result of
earnings and losses generated from our international operations,
may result in volatility in our results of operations; risks and
uncertainty related to adverse public health developments, such as
the COVID‐19 pandemic; risks associated with climate change and
other corporate responsibility issues; risks related to
reputational harm to the company, its officers, and directors;
risks related to actual or threatened litigation; risks related to
cybersecurity threats and privacy or data security breaches; and
the potential loss or disruption to our information systems.
This document includes certain adjusted non-GAAP
financial measures where management believes it to be helpful in
understanding the company’s results of operations or financial
position. Additional details about non-GAAP financial measures and
a reconciliation of GAAP financial measures to non-GAAP financial
measures can be found in the “Reporting and Use of GAAP and
Non-GAAP Measures” section. Sub-totals and totals may not foot due
to rounding. Net income (loss) and net income (loss) per share
financial measures included herein are attributable to Abercrombie
& Fitch Co., excluding net income attributable to
noncontrolling interests.
Unless otherwise noted, as used in this document,
“Abercrombie brands” refers to Abercrombie & Fitch and
abercrombie kids and “Hollister brands” refers to Hollister, Gilly
Hicks, and Social Tourist. Additionally, references to “Americas”
includes North America and South America, “EMEA” includes Europe,
the Middle East and Africa and “APAC” includes the Asia-Pacific
region, including Asia and Oceania.
|
About Abercrombie & Fitch Co. |
Abercrombie & Fitch Co. (NYSE: ANF) is a
leading, global, omnichannel specialty retailer of apparel and
accessories for men, women and kids. The iconic Abercrombie &
Fitch brand was born in 1892 and aims to make every day feel as
exceptional as the start of a long weekend. abercrombie kids sees
the world through kids’ eyes, where play is life and every day is
an opportunity to be anything and better anything. The Hollister
brand believes in liberating the spirit of an endless summer inside
everyone and making teens feel celebrated and comfortable in their
own skin. Gilly Hicks, offering active lifestyle products, is
designed to create happiness through movement. Social Tourist, the
creative vision of Hollister and social media personalities, Dixie
and Charli D’Amelio, offers trend forward apparel that allows teens
to experiment with their style, while exploring the duality of who
they are both on social media and in real life.
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.
Abercrombie & Fitch Co. operates approximately 760 stores under
these brands across North America, Europe, Asia and the Middle
East, as well as the e-commerce sites www.abercrombie.com,
www.abercrombiekids.com, www.hollisterco.com, www.gillyhicks.com
and www.socialtourist.com.
Investor Contact: |
|
Media Contact: |
|
|
|
Mo Gupta |
|
Kate Wagner |
Abercrombie & Fitch
Co. |
|
Abercrombie & Fitch
Co. |
(614) 283-6751 |
|
(614) 283-6192 |
Investor_Relations@anfcorp.com |
|
Public_Relations@anfcorp.com |
Abercrombie & Fitch Co. |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
Thirteen Weeks Ended |
|
October 28, 2023 |
|
% of Net Sales |
|
October 29, 2022 |
|
% of Net Sales |
Net sales |
$ |
1,056,431 |
|
100.0 |
% |
|
$ |
880,084 |
|
|
100.0 |
% |
Cost of sales, exclusive of
depreciation and amortization |
|
370,762 |
|
35.1 |
% |
|
|
359,268 |
|
|
40.8 |
% |
Gross profit |
|
685,669 |
|
64.9 |
% |
|
|
520,816 |
|
|
59.2 |
% |
Stores and distribution
expense |
|
383,883 |
|
36.3 |
% |
|
|
367,333 |
|
|
41.7 |
% |
Marketing, general and
administrative expense |
|
162,510 |
|
15.4 |
% |
|
|
133,201 |
|
|
15.1 |
% |
Asset impairment |
|
— |
|
— |
% |
|
|
3,744 |
|
|
0.4 |
% |
Other operating loss (income),
net |
|
1,256 |
|
0.1 |
% |
|
|
(1,005 |
) |
|
(0.1) % |
Operating income |
|
138,020 |
|
13.1 |
% |
|
|
17,543 |
|
|
2.0 |
% |
Interest expense, net |
|
671 |
|
0.1 |
% |
|
|
7,295 |
|
|
0.8 |
% |
Income before income
taxes |
|
137,349 |
|
13.0 |
% |
|
|
10,248 |
|
|
1.2 |
% |
Income tax expense |
|
39,617 |
|
3.8 |
% |
|
|
10,966 |
|
|
1.2 |
% |
Net income (loss) |
|
97,732 |
|
9.3 |
% |
|
|
(718 |
) |
|
(0.1) % |
Less: Net income attributable
to noncontrolling interests |
|
1,521 |
|
0.1 |
% |
|
|
1,496 |
|
|
0.2 |
% |
Net income (loss) attributable
to A&F |
$ |
96,211 |
|
9.1 |
% |
|
$ |
(2,214 |
) |
|
(0.3) % |
|
|
|
|
|
|
|
|
Net income (loss) per share
attributable to A&F |
|
|
|
|
|
|
|
Basic |
$ |
1.91 |
|
|
|
$ |
(0.04 |
) |
|
|
Diluted |
$ |
1.83 |
|
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
50,504 |
|
|
|
|
49,486 |
|
|
|
Diluted |
|
52,624 |
|
|
|
|
49,486 |
|
|
|
Abercrombie & Fitch Co. |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
October 28, 2023 |
|
% of Net Sales |
|
October 29, 2022 |
|
% of Net Sales |
Net sales |
$ |
2,827,770 |
|
|
100.0 |
% |
|
$ |
2,497,937 |
|
|
100.0 |
% |
Cost of sales, exclusive of
depreciation and amortization |
|
1,047,927 |
|
|
37.1 |
% |
|
|
1,061,684 |
|
|
42.5 |
% |
Gross profit |
|
1,779,843 |
|
|
62.9 |
% |
|
|
1,436,253 |
|
|
57.5 |
% |
Stores and distribution
expense |
|
1,068,226 |
|
|
37.8 |
% |
|
|
1,045,667 |
|
|
41.9 |
% |
Marketing, general and
administrative expense |
|
449,643 |
|
|
15.9 |
% |
|
|
379,518 |
|
|
15.2 |
% |
Asset impairment |
|
4,436 |
|
|
0.2 |
% |
|
|
9,336 |
|
|
0.4 |
% |
Other operating income,
net |
|
(4,332 |
) |
|
(0.2 |
)% |
|
|
(3,894 |
) |
|
(0.2 |
)% |
Operating income |
|
261,870 |
|
|
9.3 |
% |
|
|
5,626 |
|
|
0.2 |
% |
Interest expense, net |
|
5,211 |
|
|
0.2 |
% |
|
|
21,519 |
|
|
0.9 |
% |
Income (loss) before income
taxes |
|
256,659 |
|
|
9.1 |
% |
|
|
(15,893 |
) |
|
(0.6 |
)% |
Income tax expense |
|
82,349 |
|
|
2.9 |
% |
|
|
14,413 |
|
|
0.6 |
% |
Net income (loss) |
|
174,310 |
|
|
6.2 |
% |
|
|
(30,306 |
) |
|
(1.2 |
)% |
Less: Net income attributable
to noncontrolling interests |
|
4,634 |
|
|
0.2 |
% |
|
|
5,211 |
|
|
0.2 |
% |
Net income (loss) attributable
to A&F. |
$ |
169,676 |
|
|
6.0 |
% |
|
$ |
(35,517 |
) |
|
(1.4 |
)% |
|
|
|
|
|
|
|
|
Net income (loss) per share
attributable to A&F |
|
|
|
|
|
|
|
Basic |
$ |
3.38 |
|
|
|
|
$ |
(0.70 |
) |
|
|
Diluted |
$ |
3.25 |
|
|
|
|
$ |
(0.70 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
50,138 |
|
|
|
|
|
50,673 |
|
|
|
Diluted |
|
52,154 |
|
|
|
|
|
50,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting and Use of GAAP and Non-GAAP
Measures
The company believes that each of the non-GAAP
financial measures presented are useful to investors as they
provide a measure of the company’s operating performance excluding
the effect of certain items which the company believes do not
reflect its future operating outlook, such as asset impairment
charges, therefore supplementing investors’ understanding of
comparability of operations across periods. Management used these
non-GAAP financial measures during the periods presented to assess
the company’s performance and to develop expectations for future
operating performance. Non-GAAP financial measures should be used
supplemental to, and not as an alternative to, the company’s GAAP
financial results, and may not be calculated in the same manner as
similar measures presented by other companies.
In addition, the company provides comparable sales,
defined as the percentage year-over-year change in the aggregate
of: (1) 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 foreign currency rate fluctuation, and
(2) digital net sales with prior year’s net sales converted at the
current year’s foreign currency exchange rate to remove the impact
of foreign currency rate fluctuation.
The company also provides certain financial
information on a constant currency basis to enhance investors’
understanding of underlying business trends and operating
performance, by removing the impact of foreign currency exchange
rate fluctuations. The effect from foreign currency, calculated on
a constant currency basis, is determined by applying current year
average exchange rates to prior year results and is net of the
year-over-year impact from hedging. The per diluted share effect
from foreign currency is calculated using a 26% tax rate.
|
Abercrombie & Fitch Co. |
Schedule of Non-GAAP Financial Measures |
Thirty-Nine Weeks Ended October 28, 2023 |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
GAAP (1) |
|
Excluded items |
|
Adjusted non-GAAP |
|
Asset impairment (2) |
$ |
4,436 |
|
|
4,436 |
|
|
$ |
— |
|
Operating income |
|
261,870 |
|
|
(4,436 |
) |
|
|
266,306 |
|
Income before income
taxes |
|
256,659 |
|
|
(4,436 |
) |
|
|
261,095 |
|
Income tax expense (3) |
|
82,349 |
|
|
(1,207 |
) |
|
|
83,556 |
|
Net income attributable to
A&F |
$ |
169,676 |
|
$ |
(3,229 |
) |
|
$ |
172,905 |
|
|
|
|
|
|
|
|
Net income per diluted share
attributable to A&F |
$ |
3.25 |
|
$ |
(0.06 |
) |
|
$ |
3.32 |
|
Diluted weighted-average
shares outstanding: |
|
52,154 |
|
|
|
|
52,154 |
|
|
(1) |
“GAAP” refers to
accounting principles generally accepted in the United States of
America. |
(2) |
Excluded items
consist of pre-tax store impairment charges of $4.4 million. |
(3) |
The tax effect of
excluded items is the difference between the tax provision
calculated on a GAAP basis and an adjusted non-GAAP basis. |
|
|
Abercrombie & Fitch Co. |
Schedule of Non-GAAP Financial Measures |
Thirty-Nine Weeks Ended October 29, 2022 |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
GAAP (1) |
|
Excluded items |
|
Adjusted non-GAAP |
|
Asset impairment (2) |
$ |
9,336 |
|
|
$ |
9,336 |
|
|
$ |
— |
|
|
Operating income |
|
5,626 |
|
|
|
(9,336 |
) |
|
|
14,962 |
|
|
Loss before income taxes |
|
(15,893 |
) |
|
|
(9,336 |
) |
|
|
(6,557 |
) |
|
Income tax expense (3) |
|
14,413 |
|
|
|
(2,505 |
) |
|
|
16,918 |
|
|
Net loss attributable to
A&F |
$ |
(35,517 |
) |
|
$ |
(6,831 |
) |
|
$ |
(28,686 |
) |
|
|
|
|
|
|
|
|
Net loss per diluted share
attributable to A&F |
$ |
(0.70 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.57 |
) |
|
Diluted weighted-average
shares outstanding: |
|
50,673 |
|
|
|
|
|
50,673 |
|
|
|
(1) |
“GAAP” refers to
accounting principles generally accepted in the United States of
America. |
(2) |
Excluded items
consist of pre-tax store and other asset impairment charges of $9.3
million. |
(3) |
The tax effect of
excluded items is the difference between the tax provision
calculated on a GAAP basis and an adjusted non-GAAP basis. |
|
|
Abercrombie & Fitch Co. |
Reconciliation of Constant Currency Financial
Measures |
Thirteen Weeks Ended October 28, 2023 and
October 29, 2022 |
(in thousands, except percentage and basis point changes
and per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
% Change |
|
Net
sales |
|
|
|
|
|
|
GAAP (1) |
$ |
1,056,431 |
|
$ |
880,084 |
|
|
|
20 |
% |
|
Impact from changes in foreign currency exchange rates (2) |
|
— |
|
|
6,937 |
|
|
|
(1 |
)% |
|
Net sales on a constant currency basis |
$ |
1,056,431 |
|
$ |
887,021 |
|
|
|
19 |
% |
|
|
|
|
|
|
|
|
Gross
profit |
2023 |
|
|
2022 |
|
|
BPS Change (3) |
|
GAAP (1) |
$ |
685,669 |
|
$ |
520,816 |
|
|
|
570 |
|
|
Impact from changes in foreign currency exchange rates (2) |
|
— |
|
|
2,906 |
|
|
|
20 |
|
|
Gross profit on a constant currency basis |
$ |
685,669 |
|
$ |
523,722 |
|
|
|
590 |
|
|
|
|
|
|
|
|
|
Operating
income |
2023 |
|
|
2022 |
|
|
BPS Change (3) |
|
GAAP (1) |
$ |
138,020 |
|
$ |
17,543 |
|
|
|
1,110 |
|
|
Excluded items (4) |
|
— |
|
|
(3,744 |
) |
|
|
40 |
|
|
Adjusted non-GAAP |
$ |
138,020 |
|
$ |
21,287 |
|
|
|
1,070 |
|
|
Impact from changes in foreign currency exchange rates (2) |
|
— |
|
|
(4,230 |
) |
|
|
50 |
|
|
Adjusted non-GAAP constant currency basis |
$ |
138,020 |
|
$ |
17,057 |
|
|
|
1,120 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to A&F |
2023 |
|
|
2022 |
|
|
$ Change |
|
GAAP (1) |
$ |
1.83 |
|
$ |
(0.04 |
) |
|
$ |
1.87 |
|
|
Excluded items, net of tax (4) |
|
— |
|
|
(0.05 |
) |
|
|
0.05 |
|
|
Adjusted non-GAAP |
$ |
1.83 |
|
$ |
0.01 |
|
|
$ |
1.82 |
|
|
Impact from changes in foreign currency exchange rates (2) |
|
— |
|
|
(0.06 |
) |
|
|
0.06 |
|
|
Adjusted non-GAAP constant currency basis |
$ |
1.83 |
|
$ |
(0.05 |
) |
|
$ |
1.88 |
|
|
|
(1) |
“GAAP” refers to
accounting principles generally accepted in the United States of
America. |
(2) |
The estimated
impact from foreign currency is determined by applying current
period exchange rates to prior year results and is net of the
year-over-year impact from hedging. The per diluted share estimated
impact from foreign currency is calculated using a 26% tax
rate. |
(3) |
The
estimated basis point change has been rounded based on the
percentage change. |
(4) |
Excluded items
consist of $3.7 million pre-tax store and other asset impairment
charges for the prior year. |
|
|
Abercrombie & Fitch Co. |
Reconciliation of Constant Currency Net Sales by Geography
and Brand |
Thirteen Weeks Ended October 28, 2023 and
October 29, 2022 |
(in thousands, except percentage changes) |
(Unaudited) |
|
|
2023 |
|
2022 |
|
GAAP % Change |
Non-GAAP Constant Currency Basis% Change |
|
|
GAAP |
GAAP |
Impact FromChanges InForeign CurrencyExchanges Rates (1) |
Non-GAAP Constant Currency Basis |
|
Net sales by segment:
(2) |
|
|
|
|
|
|
|
|
|
Americas |
$ |
867,566 |
|
$ |
713,860 |
$ |
(545 |
) |
$ |
713,315 |
|
22 |
% |
22 |
% |
|
EMEA |
|
157,976 |
|
|
138,840 |
|
8,345 |
|
|
147,185 |
|
14 |
% |
7 |
% |
|
APAC |
|
30,889 |
|
|
27,384 |
|
(863 |
) |
|
26,521 |
|
13 |
% |
16 |
% |
|
Total
company |
$ |
1,056,431 |
|
$ |
880,084 |
$ |
6,937 |
|
$ |
887,021 |
|
20 |
% |
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
GAAP % Change |
Non-GAAP Constant Currency Basis% Change |
|
|
GAAP |
GAAP |
Impact FromChanges InForeign CurrencyExchanges Rates (1) |
Non-GAAP Constant Currency Basis |
|
Net sales by
brand: |
|
|
|
|
|
|
|
|
|
Abercrombie (3) |
|
547,728 |
|
|
422,332 |
|
1,393 |
|
|
423,725 |
|
30 |
% |
29 |
% |
|
Hollister (4) |
$ |
508,703 |
|
$ |
457,752 |
$ |
5,544 |
|
$ |
463,296 |
|
11 |
% |
10 |
% |
|
Total
company |
$ |
1,056,431 |
|
$ |
880,084 |
$ |
6,937 |
|
$ |
887,021 |
|
20 |
% |
19 |
% |
|
|
(1) |
The estimated
impact from foreign currency is determined by applying current
period exchange rates to prior year results and is net of the
year-over-year impact from hedging. |
(2) |
Net sales by
segment are presented by attributing revenues to an individual
country on the basis of the segment that fulfills the order. |
(3) |
For purposes of
the above table, Abercrombie includes Abercrombie & Fitch and
abercrombie kids. |
(4) |
For purposes of
the above table, Hollister includes Hollister, Gilly Hicks and
Social Tourist. |
|
|
Abercrombie & Fitch Co. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
October 28, 2023 |
|
January 28, 2023 |
|
October 29, 2022 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and equivalents |
$ |
649,489 |
|
$ |
517,602 |
|
$ |
257,332 |
Receivables |
|
96,762 |
|
|
104,506 |
|
|
108,468 |
Inventories |
|
595,067 |
|
|
505,621 |
|
|
741,963 |
Other current assets |
|
100,085 |
|
|
100,289 |
|
|
112,602 |
Total current assets |
|
1,441,403 |
|
|
1,228,018 |
|
|
1,220,365 |
Property and equipment,
net |
|
546,935 |
|
|
551,585 |
|
|
542,138 |
Operating lease right-of-use
assets |
|
682,559 |
|
|
723,550 |
|
|
713,166 |
Other assets |
|
226,749 |
|
|
209,947 |
|
|
218,325 |
Total assets |
$ |
2,897,646 |
|
$ |
2,713,100 |
|
$ |
2,693,994 |
|
|
|
|
|
|
Liabilities and stockholders’
equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
373,930 |
|
$ |
258,895 |
|
$ |
322,128 |
Accrued expenses |
|
402,572 |
|
|
413,303 |
|
|
378,366 |
Short-term portion of operating lease liabilities |
|
195,025 |
|
|
213,979 |
|
|
211,304 |
Income taxes payable |
|
55,615 |
|
|
16,023 |
|
|
23,694 |
Total current liabilities |
|
1,027,142 |
|
|
902,200 |
|
|
935,492 |
Long-term liabilities: |
|
|
|
|
|
Long-term portion of operating lease liabilities |
$ |
658,923 |
|
$ |
713,361 |
|
$ |
708,512 |
Long-term borrowings, net |
|
248,033 |
|
|
296,852 |
|
|
296,532 |
Other liabilities |
|
87,435 |
|
|
94,118 |
|
|
97,393 |
Total long-term
liabilities |
|
994,391 |
|
|
1,104,331 |
|
|
1,102,437 |
Total Abercrombie & Fitch Co. stockholders’ equity |
|
866,108 |
|
|
694,841 |
|
|
646,231 |
Noncontrolling interests |
|
10,005 |
|
|
11,728 |
|
|
9,834 |
Total stockholders’
equity |
|
876,113 |
|
|
706,569 |
|
|
656,065 |
Total liabilities and
stockholders’ equity |
$ |
2,897,646 |
|
$ |
2,713,100 |
|
$ |
2,693,994 |
|
|
|
|
|
|
|
|
|
Abercrombie & Fitch Co. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
October 28, 2023 |
|
October 29, 2022 |
Operating
activities |
|
|
|
Net cash provided by (used for) operating activities |
$ |
350,142 |
|
|
$ |
(301,194 |
) |
|
|
|
|
Investing
activities |
|
|
|
Purchases of property and equipment |
$ |
(128,601 |
) |
|
$ |
(120,282 |
) |
Proceeds from sale of property and equipment |
|
615 |
|
|
|
11,891 |
|
Withdrawal of funds from Rabbi Trust assets |
|
— |
|
|
|
12,000 |
|
Net cash used for investing
activities |
$ |
(127,986 |
) |
|
$ |
(96,391 |
) |
|
|
|
|
Financing
activities |
|
|
|
Purchase of senior secured notes |
|
(50,933 |
) |
|
|
(7,862 |
) |
Payment of debt modification costs and fees |
|
(180 |
) |
|
|
(181 |
) |
Purchases of common stock |
|
— |
|
|
|
(125,775 |
) |
Other financing activities |
|
(35,993 |
) |
|
|
(21,088 |
) |
Net cash used for financing
activities |
$ |
(87,106 |
) |
|
$ |
(154,906 |
) |
|
|
|
|
Effect of foreign currency
exchange rates on cash |
$ |
(4,491 |
) |
|
$ |
(14,871 |
) |
Net increase (decrease) in
cash and equivalents, and restricted cash and equivalents |
$ |
130,559 |
|
|
$ |
(567,362 |
) |
Cash and equivalents, and
restricted cash and equivalents, beginning of period |
$ |
527,569 |
|
|
$ |
834,368 |
|
Cash and equivalents, and
restricted cash and equivalents, end of period |
$ |
658,128 |
|
|
$ |
267,006 |
|
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