Abercrombie & Fitch Co. (NYSE: ANF) today announced results for
the third quarter ended October 30, 2021. These compare to
results for the third quarter ended October 31, 2020.
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,
“We were very pleased with our third quarter results. Total net
sales grew 10% year-over-year, or 5% from 2019 levels. Our largest
market, the U.S., experienced ongoing strength, growing 17% on a
one-year and 12% on a two-year basis. Digital net sales rose 8%
from last year, representing 46% of total third quarter sales.
Gross profit rate declined 30 basis points on a one-year and
increased 360 basis points on a two-year basis, benefiting from AUR
improvements, offset by elevated supply chain costs. Combined with
ongoing tight expense controls, we achieved an 8% operating margin,
representing our best third quarter operating margin and income
since 2012.”
“The start of the holiday season has been
promising. Customers have come out early to shop and have been
responding well to assortments. We continue to actively manage
through ongoing supply chain constraints, including production and
delivery delays and elevated costs, and are confident that we have
the product, marketing voice and omnichannel experience to surprise
and delight new and existing customers throughout the fourth
quarter.”
Details related to net income per diluted share
for the third quarter are as follows:
|
|
2021 |
|
2020 |
GAAP |
|
$ |
0.77 |
|
|
$ |
0.66 |
|
Excluded items, net of tax
effect (1) |
|
(0.09 |
) |
|
(0.09 |
) |
Adjusted non-GAAP |
|
$ |
0.86 |
|
|
$ |
0.76 |
|
Impact from changes in foreign
currency exchange rates (2) |
|
— |
|
|
(0.05 |
) |
Adjusted non-GAAP constant
currency |
|
$ |
0.86 |
|
|
$ |
0.71 |
|
(1) Excluded items consist of
pre-tax store asset impairment charges and the tax effect of
pre-tax excluded items.
(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 30, 2021 as compared to the third
quarter ended October 31, 2020:
- Net
sales of $905 million, up 10% as compared to last year and
up 5% as compared to pre-COVID 2019 third quarter net sales.
- Digital net
sales of $413 million increased 8% as compared to last
year and increased 55% as compared to pre-COVID 2019 third quarter
digital net sales.
- Gross
profit rate of 63.7%, down approximately 30 basis points
as compared to last year and up approximately 360 basis points as
compared to 2019. The year-over-year decline is driven by
approximately 300 basis points of higher average unit cost from
freight inflation and efforts to offset supply chain issues, almost
fully offset by higher average unit retail on lower
promotions.
- Operating
expense, excluding other operating income, net, was up 8%
compared to last year and remained flat as compared to 2019. The
year-over-year increase reflects an increase in marketing expenses
and payroll and a decrease in store occupancy. Operating expense as
a percentage of sales decreased to 55.8% from 56.8% last year and
from 58.4% as compared to 2019.
- Operating
income of $73 million and $79 million on a reported and
adjusted non-GAAP basis, respectively, as compared to operating
income of $59 million and $65 million last year, on a reported and
adjusted non-GAAP basis, respectively.
- Net income
per diluted share of $0.77 and $0.86 on a reported and
adjusted non-GAAP basis, respectively, as compared to net income
per diluted share last year of $0.66 and $0.76 on a reported and
adjusted non-GAAP basis, respectively.
Net sales by brand and region
for the third quarter are as follows:
(in thousands) |
2021 |
|
2020 |
|
2019 |
|
1 YR % Change |
|
2 YR % Change |
Net sales by
brand: |
|
|
|
|
|
|
|
|
|
Hollister (1) |
$ |
522,311 |
|
|
$ |
476,665 |
|
|
$ |
514,772 |
|
|
10% |
|
1% |
Abercrombie (2) |
382,849 |
|
|
342,988 |
|
|
348,700 |
|
|
12% |
|
10% |
Total
company |
$ |
905,160 |
|
|
$ |
819,653 |
|
|
$ |
863,472 |
|
|
10% |
|
5% |
|
|
|
|
|
|
|
|
|
|
Net sales by
region: (3) |
2021 |
|
2020 |
|
2019 |
|
1 YR % Change |
|
2 YR % Change |
United States |
$ |
654,858 |
|
|
$ |
557,814 |
|
|
$ |
583,593 |
|
|
17% |
|
12% |
EMEA |
179,156 |
|
|
190,214 |
|
|
191,977 |
|
|
(6)% |
|
(7)% |
APAC |
38,215 |
|
|
43,618 |
|
|
55,910 |
|
|
(12)% |
|
(32)% |
Other (4) |
32,931 |
|
|
28,007 |
|
|
31,992 |
|
|
18% |
|
3% |
International |
$ |
250,302 |
|
|
$ |
261,839 |
|
|
$ |
279,879 |
|
|
(4)% |
|
(11)% |
Total
company |
$ |
905,160 |
|
|
$ |
819,653 |
|
|
$ |
863,472 |
|
|
10% |
|
5% |
(1) Hollister includes the
Hollister, Gilly Hicks and Social Tourist brands.
(2) Abercrombie includes the
Abercrombie & Fitch and abercrombie kids brands.
(3) Net sales by geographic
area are presented by attributing revenues to an individual country
on the basis of the country in which the merchandise was sold for
in-store purchases and on the basis of the shipping location
provided by customers for digital orders.
(4) Other includes all sales
that do not fall within the United States, EMEA, or APAC
regions.
Financial Position and Liquidity |
As of October 30, 2021 the company had:
- Cash and
equivalents of $0.9 billion. This compares to cash and
equivalents of $1.1 billion and $0.8 billion as of January 30,
2021 and October 31, 2020, respectively.
-
Inventories of $544 million, steady compared to
October 31, 2020.
- Long-term
gross borrowings under the company’s senior secured notes
of $308 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 $271 million.
-
Liquidity, comprised of cash and equivalents and
borrowing available under the ABL Facility, of approximately $1.1
billion. This compares to liquidity of $1.3 billion and $1.2
billion as of January 30, 2021 and October 31, 2020,
respectively.
Cash Flow and Capital Allocation |
Details related to the company’s cash flows for
the year-to-date period ended October 30, 2021 are as
follows:
- Net cash
provided by operating activities of $131 million.
- Net cash
used for investing activities of $62 million.
- Net cash
used for financing activities of $304 million.
The company repurchased approximately 2.7
million shares during the third quarter and has returned $235
million to shareholders during the year-to-date period ended
October 30, 2021 through share repurchases. The company’s
Board of Directors approved a new share repurchase program of up to
$500 million of outstanding common stock, replacing the February
2021 share repurchase program of 10 million shares, which had
approximately 3.9 million shares remaining. The timing and actual
number of common shares to be repurchased will depend upon market
conditions, eligibility to trade, and other factors.
During the second quarter of fiscal 2021, the
company spent $47 million to purchase $42.3 million at par value of
its senior secured notes. During the first quarter of fiscal 2021,
the company paid $64 million to settle all remaining obligations
related to the SoHo Hollister flagship store in New York City,
which reduced the company’s operating lease liabilities by $65
million and eliminated future interest expense related to this
obligation.
Depreciation and amortization was $108 million
for the year-to-date period ended October 30, 2021.
Today at 8:30 AM, ET, the company will conduct a
conference call and provide additional details around its quarterly
results and its outlook for the fourth quarter. To listen to the
conference call, dial (800) 458-4121 or go to
corporate.abercrombie.com. The international call-in number is
(323) 794-2093. This call will be recorded and made available by
dialing the replay number (888) 203-1112 or the international
number (719) 457-0820 followed by the conference ID number 1289887
or through corporate.abercrombie.com. A presentation of third
quarter results will be available in the “Investors” section at
corporate.abercrombie.com at approximately 7:30 AM, ET, today.
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,” “should,” “are confident,” 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 January 30, 2021, in some cases have
affected, and in the future could affect, A&F’s financial
performance and could cause actual results for fiscal 2021 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: COVID‐19 has and may continue to
materially adversely impact and cause disruption to our business;
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 impact on our business; failure to
engage our customers, anticipate customer demand and changing
fashion trends, and manage our inventory commensurately could have
a material adverse impact on our business; our failure to operate
effectively in a highly competitive and constantly evolving
industry could have a material adverse impact on our business;
fluctuations in foreign currency exchange rates could have a
material adverse impact on our business; 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, mass casualty
events, social unrest, civil disturbance or disobedience could have
a material adverse impact on our business; the impact of extreme
weather, infectious disease outbreaks, including COVID-19, and
other unexpected events could result in an interruption to our
business, as well as to the operations of our third-party partners,
and have a material adverse impact on our business; failure to
successfully develop an omnichannel shopping experience, a
significant component of our growth strategy, or failure to
successfully invest in customer, digital and omnichannel
initiatives could have a material adverse impact on our business;
our failure to optimize our global store network could have a
material adverse impact on our business; our failure to execute our
international growth strategy successfully and inability to conduct
business in international markets as a result of legal, tax,
regulatory, political and economic risks could have a material
adverse impact on our business; our failure to appropriately
address emerging environmental, social and governance matters could
have a material adverse impact on our reputation and, as a result,
our business; failure to protect our reputation could have a
material adverse impact on our business; if our information
technology systems are disrupted or cease to operate effectively,
it could have a material adverse impact on our business; we may be
exposed to risks and costs associated with cyber-attacks, data
protection, credit card fraud and identity theft that could have a
material adverse impact on our business; our reliance on our
distribution centers makes us susceptible to disruptions or adverse
conditions affecting our supply chain; changes in the cost,
availability and quality of raw materials, labor, transportation,
and trade relations could have a material adverse impact on our
business; 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 have a
material adverse impact on our business; we rely on the experience
and skills of our executive officers and associates, and the
failure to attract or retain this talent, effectively manage
succession, and establish a diverse workforce could have a material
adverse impact on our business; in the past, we have identified a
material weakness in our internal control over financial reporting
and may identify additional material weaknesses in the future. If
we fail to establish and maintain effective internal control over
financial reporting, our ability to accurately and timely report
our financial results could be adversely affected; fluctuations in
our tax obligations and effective tax rate may result in volatility
in our results of operations could have a material adverse impact
on our business; our litigation exposure, or any securities
litigation and shareholder activism, could have a material adverse
impact on our business; failure to adequately protect our
trademarks could have a negative impact on our brand image and
limit our ability to penetrate new markets which could have a
material adverse impact on our business; changes in the regulatory
or compliance landscape could have a material adverse impact on our
business; and the agreements related to our senior secured
asset-based revolving credit facility and our senior secured notes
include restrictive covenants that limit our flexibility in
operating our business and our inability to obtain credit on
reasonable terms in the future could have an adverse impact on our
business.
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 through five renowned brands.
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
intimates, loungewear and sleepwear, is designed to give all Gen Z
customers their daily dose of happy. 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 730
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: |
|
|
|
Pamela Quintiliano |
|
Mackenzie Gusweiler |
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 30, 2021 |
|
% of Net Sales |
|
October 31, 2020 |
|
% of Net Sales |
Net sales |
$ |
905,160 |
|
|
100.0 |
% |
|
$ |
819,653 |
|
|
100.0 |
% |
Cost of sales, exclusive of
depreciation and amortization |
328,916 |
|
|
36.3 |
% |
|
295,220 |
|
|
36.0 |
% |
Gross profit |
576,244 |
|
|
63.7 |
% |
|
524,433 |
|
|
64.0 |
% |
Stores and distribution
expense |
351,804 |
|
|
38.9 |
% |
|
346,263 |
|
|
42.2 |
% |
Marketing, general and
administrative expense |
146,269 |
|
|
16.2 |
% |
|
121,000 |
|
|
14.8 |
% |
Flagship store exit benefits
(costs) |
11 |
|
|
0.0 |
% |
|
(8,063 |
) |
|
(1.0 |
)% |
Asset impairment, exclusive of
flagship store exit charges |
6,749 |
|
|
0.7 |
% |
|
6,329 |
|
|
0.8 |
% |
Other operating (income)
expense, net |
(1,320 |
) |
|
(0.1 |
)% |
|
288 |
|
|
0.0 |
% |
Operating income |
72,731 |
|
|
8.0 |
% |
|
58,616 |
|
|
7.2 |
% |
Interest expense, net |
7,270 |
|
|
0.8 |
% |
|
8,808 |
|
|
1.1 |
% |
Income before income
taxes |
65,461 |
|
|
7.2 |
% |
|
49,808 |
|
|
6.1 |
% |
Income tax expense |
16,383 |
|
|
1.8 |
% |
|
5,779 |
|
|
0.7 |
% |
Net income |
49,078 |
|
|
5.4 |
% |
|
44,029 |
|
|
5.4 |
% |
Less: Net income attributable
to noncontrolling interests |
1,845 |
|
|
0.2 |
% |
|
1,758 |
|
|
0.2 |
% |
Net income attributable to
Abercrombie & Fitch Co. |
$ |
47,233 |
|
|
5.2 |
% |
|
$ |
42,271 |
|
|
5.2 |
% |
|
|
|
|
|
|
|
|
Net income per share
attributable to Abercrombie & Fitch Co.: |
|
|
|
|
|
|
|
Basic |
$ |
0.80 |
|
|
|
|
$ |
0.68 |
|
|
|
Diluted |
$ |
0.77 |
|
|
|
|
$ |
0.66 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
58,796 |
|
|
|
|
62,558 |
|
|
|
Diluted |
61,465 |
|
|
|
|
63,877 |
|
|
|
|
|
|
|
|
|
|
|
Abercrombie & Fitch Co. |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Thirty-nine Weeks Ended |
|
Thirty-nine Weeks Ended |
|
October 30, 2021 |
|
% of Net Sales |
|
October 31, 2020 |
|
% of Net Sales |
Net sales |
$ |
2,551,415 |
|
|
100.0 |
% |
|
$ |
2,003,340 |
|
|
100.0 |
% |
Cost of sales, exclusive of
depreciation and amortization |
916,552 |
|
|
35.9 |
% |
|
791,154 |
|
|
39.5 |
% |
Gross profit |
1,634,863 |
|
|
64.1 |
% |
|
1,212,186 |
|
|
60.5 |
% |
Stores and distribution
expense |
994,347 |
|
|
39.0 |
% |
|
978,757 |
|
|
48.9 |
% |
Marketing, general and
administrative expense |
391,129 |
|
|
15.3 |
% |
|
326,509 |
|
|
16.3 |
% |
Flagship store exit
benefits |
(1,177 |
) |
|
0.0 |
% |
|
(12,490 |
) |
|
(0.6 |
)% |
Asset impairment, exclusive of
flagship store exit charges |
10,199 |
|
|
0.4 |
% |
|
57,340 |
|
|
2.9 |
% |
Other operating income,
net |
(4,586 |
) |
|
(0.2 |
)% |
|
(1,562 |
) |
|
(0.1 |
)% |
Operating income (loss) |
244,951 |
|
|
9.6 |
% |
|
(136,368 |
) |
|
(6.8 |
)% |
Interest expense, net |
27,151 |
|
|
1.1 |
% |
|
19,277 |
|
|
1.0 |
% |
Income (loss) before income
taxes |
217,800 |
|
|
8.5 |
% |
|
(155,645 |
) |
|
(7.8 |
)% |
Income tax expense |
15,560 |
|
|
0.6 |
% |
|
38,565 |
|
|
1.9 |
% |
Net income (loss) |
202,240 |
|
|
7.9 |
% |
|
(194,210 |
) |
|
(9.7 |
)% |
Less: Net income attributable
to noncontrolling interests |
4,739 |
|
|
0.2 |
% |
|
2,203 |
|
|
0.1 |
% |
Net income (loss) attributable
to Abercrombie & Fitch Co. |
$ |
197,501 |
|
|
7.7 |
% |
|
$ |
(196,413 |
) |
|
(9.8 |
)% |
|
|
|
|
|
|
|
|
Net income (loss) per share
attributable to Abercrombie & Fitch Co.: |
|
|
|
|
|
|
|
Basic |
$ |
3.24 |
|
|
|
|
$ |
(3.14 |
) |
|
|
Diluted |
$ |
3.10 |
|
|
|
|
$ |
(3.14 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
60,879 |
|
|
|
|
62,541 |
|
|
|
Diluted |
63,770 |
|
|
|
|
62,541 |
|
|
|
|
|
|
|
|
|
|
|
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 primarily attributable to the COVID-19 pandemic or related
to the company’s flagship stores, 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, at times 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. In
light of store closures related to COVID-19, the Company has not
disclosed comparable sales for Fiscal 2021.
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 |
Thirteen Weeks Ended October 30, 2021 |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
GAAP (1) |
|
Excluded items |
|
Adjusted non-GAAP |
Asset impairment, exclusive of flagship store exit charges (2) |
$ |
6,749 |
|
|
$ |
6,749 |
|
|
$ |
— |
|
Operating income |
72,731 |
|
|
(6,749 |
) |
|
79,480 |
|
Income before income
taxes |
65,461 |
|
|
(6,749 |
) |
|
72,210 |
|
Income tax expense (3) |
16,383 |
|
|
(1,375 |
) |
|
17,758 |
|
Net income attributable to
Abercrombie & Fitch Co. |
$ |
47,233 |
|
|
$ |
(5,374 |
) |
|
$ |
52,607 |
|
|
|
|
|
|
|
Net income per diluted share
attributable to Abercrombie & Fitch Co. |
$ |
0.77 |
|
|
$ |
(0.09 |
) |
|
$ |
0.86 |
|
Diluted weighted-average
shares outstanding: |
61,465 |
|
|
|
|
61,465 |
|
(1) “GAAP” refers to accounting
principles generally accepted in the United States of America.
(2) Excluded items consist of
pre-tax store asset impairment charges of $6.7 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 |
Thirteen Weeks Ended October 31, 2020 |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
GAAP (1) |
|
Excluded items |
|
Adjusted non-GAAP |
Asset impairment, exclusive of flagship store exit charges (2) |
$ |
6,329 |
|
|
$ |
6,329 |
|
|
$ |
— |
|
Operating income |
58,616 |
|
|
(6,329 |
) |
|
64,945 |
|
Income before income
taxes |
49,808 |
|
|
(6,329 |
) |
|
56,137 |
|
Income tax expense (3) |
5,779 |
|
|
(369 |
) |
|
6,148 |
|
Net income attributable to
Abercrombie & Fitch Co. |
$ |
42,271 |
|
|
$ |
(5,960 |
) |
|
$ |
48,231 |
|
|
|
|
|
|
|
Net income per diluted share
attributable to Abercrombie & Fitch Co. |
$ |
0.66 |
|
|
$ |
(0.09 |
) |
|
$ |
0.76 |
|
Diluted weighted-average
shares outstanding: |
63,877 |
|
|
|
|
63,877 |
|
(1) “GAAP” refers to accounting
principles generally accepted in the United States of America.
(2) Excluded items consist of
pre-tax store asset impairment charges of $6.3 million, which are
principally the result of the impact of COVID-19 on store cash
flows.
(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 30, 2021 |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
GAAP (1) |
|
Excluded items |
|
Adjusted non-GAAP |
Asset impairment, exclusive of flagship store exit charges (2) |
$ |
10,199 |
|
|
$ |
10,199 |
|
|
$ |
— |
|
Operating income |
244,951 |
|
|
(10,199 |
) |
|
255,150 |
|
Income before income
taxes |
217,800 |
|
|
(10,199 |
) |
|
227,999 |
|
Income tax expense (3) |
15,560 |
|
|
(2,048 |
) |
|
17,608 |
|
Net income attributable to
Abercrombie & Fitch Co. |
$ |
197,501 |
|
|
$ |
(8,151 |
) |
|
$ |
205,652 |
|
|
|
|
|
|
|
Net income per diluted share
attributable to Abercrombie & Fitch Co. |
$ |
3.10 |
|
|
$ |
(0.13 |
) |
|
$ |
3.22 |
|
Diluted weighted-average
shares outstanding: |
63,770 |
|
|
|
|
63,770 |
|
(1) “GAAP” refers to accounting
principles generally accepted in the United States of America.
(2) Excluded items consist of
pre-tax store asset impairment charges of $10.2 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 31, 2020 |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
GAAP (1) |
|
Excluded items |
|
Adjusted non-GAAP |
Asset impairment, exclusive of flagship store exit charges (2) |
$ |
57,340 |
|
|
$ |
57,340 |
|
|
$ |
— |
|
Operating loss |
(136,368 |
) |
|
(57,340 |
) |
|
(79,028 |
) |
Loss before income taxes |
(155,645 |
) |
|
(57,340 |
) |
|
(98,305 |
) |
Income tax expense (3) |
38,565 |
|
|
(3,635 |
) |
|
42,200 |
|
Net loss attributable to
Abercrombie & Fitch Co. |
$ |
(196,413 |
) |
|
$ |
(53,705 |
) |
|
$ |
(142,708 |
) |
|
|
|
|
|
|
Net loss per diluted share
attributable to Abercrombie & Fitch Co. |
$ |
(3.14 |
) |
|
$ |
(0.86 |
) |
|
$ |
(2.28 |
) |
Diluted weighted-average
shares outstanding: |
62,541 |
|
|
|
|
62,541 |
|
(1) “GAAP” refers to accounting
principles generally accepted in the United States of America.
(2) Excluded items consist of
pre-tax store asset impairment charges of $57.3 million, which are
principally the result of the impact of COVID-19 on store cash
flows.
(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 30, 2021 |
(in thousands, except percentage and basis point changes
and per share data) |
(Unaudited) |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
% Change |
Net
sales |
|
|
|
|
|
GAAP (1) |
$ |
905,160 |
|
|
$ |
819,653 |
|
|
10% |
Impact from changes in foreign currency exchange rates (2) |
— |
|
|
3,540 |
|
|
—% |
Net sales on a constant currency basis |
$ |
905,160 |
|
|
$ |
823,193 |
|
|
10% |
|
|
|
|
|
|
Gross
profit |
2021 |
|
2020 |
|
BPS Change (3) |
GAAP (1) |
$ |
576,244 |
|
|
$ |
524,433 |
|
|
(30) |
Impact from changes in foreign currency exchange rates (2) |
— |
|
|
(1,702 |
) |
|
50 |
Gross profit on a constant currency basis |
$ |
576,244 |
|
|
$ |
522,731 |
|
|
20 |
|
|
|
|
|
|
Operating
income |
2021 |
|
2020 |
|
BPS Change (3) |
GAAP (1) |
$ |
72,731 |
|
|
$ |
58,616 |
|
|
80 |
Excluded items (4) |
(6,749 |
) |
|
(6,329 |
) |
|
10 |
Adjusted non-GAAP |
$ |
79,480 |
|
|
$ |
64,945 |
|
|
90 |
Impact from changes in foreign currency exchange rates (2) |
— |
|
|
(4,067 |
) |
|
50 |
Adjusted non-GAAP constant currency basis |
$ |
79,480 |
|
|
$ |
60,878 |
|
|
140 |
|
|
|
|
|
|
Net income per diluted
share attributable to Abercrombie & Fitch Co. |
2021 |
|
2020 |
|
$ Change |
GAAP (1) |
$ |
0.77 |
|
|
$ |
0.66 |
|
|
$0.11 |
Excluded items, net of tax (4) |
(0.09 |
) |
|
(0.09 |
) |
|
0.00 |
Adjusted non-GAAP |
$ |
0.86 |
|
|
$ |
0.76 |
|
|
$0.10 |
Impact from changes in foreign currency exchange rates (2) |
— |
|
|
(0.05 |
) |
|
0.05 |
Adjusted non-GAAP constant currency basis |
$ |
0.86 |
|
|
$ |
0.71 |
|
|
$0.15 |
(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
pre-tax store asset impairment charges of $6.7 million and $6.3
million for the current year and prior year, respectively.
Abercrombie & Fitch Co. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
October 30, 2021 |
|
January 30, 2021 |
|
October 31, 2020 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and equivalents |
$ |
865,622 |
|
|
$ |
1,104,862 |
|
|
$ |
812,881 |
|
Receivables |
83,447 |
|
|
83,857 |
|
|
89,074 |
|
Inventories |
543,713 |
|
|
404,053 |
|
|
545,548 |
|
Other current assets |
111,423 |
|
|
68,857 |
|
|
73,776 |
|
Total current assets |
1,604,205 |
|
|
1,661,629 |
|
|
1,521,279 |
|
Property and equipment,
net |
516,176 |
|
|
550,587 |
|
|
593,932 |
|
Operating lease right-of-use
assets |
762,641 |
|
|
893,989 |
|
|
955,781 |
|
Other assets |
229,512 |
|
|
208,697 |
|
|
205,970 |
|
Total assets |
$ |
3,112,534 |
|
|
$ |
3,314,902 |
|
|
$ |
3,276,962 |
|
|
|
|
|
|
|
Liabilities and stockholders’
equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
424,560 |
|
|
$ |
289,396 |
|
|
$ |
334,775 |
|
Accrued expenses |
355,149 |
|
|
396,365 |
|
|
356,370 |
|
Short-term portion of operating lease liabilities |
209,812 |
|
|
248,846 |
|
|
255,775 |
|
Income taxes payable |
39,900 |
|
|
24,792 |
|
|
6,663 |
|
Total current liabilities |
1,029,421 |
|
|
959,399 |
|
|
953,583 |
|
Long-term liabilities: |
|
|
|
|
|
Long-term portion of operating lease liabilities |
$ |
764,346 |
|
|
$ |
957,588 |
|
|
$ |
1,010,051 |
|
Long-term borrowings, net |
303,247 |
|
|
343,910 |
|
|
343,559 |
|
Other liabilities |
97,191 |
|
|
104,693 |
|
|
110,965 |
|
Total long-term
liabilities |
1,164,784 |
|
|
1,406,191 |
|
|
1,464,575 |
|
Total Abercrombie & Fitch Co. stockholders’ equity |
908,934 |
|
|
936,628 |
|
|
849,379 |
|
Noncontrolling interests |
9,395 |
|
|
12,684 |
|
|
9,425 |
|
Total stockholders’
equity |
918,329 |
|
|
949,312 |
|
|
858,804 |
|
Total liabilities and
stockholders’ equity |
$ |
3,112,534 |
|
|
$ |
3,314,902 |
|
|
$ |
3,276,962 |
|
Abercrombie & Fitch Co. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Thirty-nine Weeks Ended |
|
October 30, 2021 |
|
October 31, 2020 |
Operating
activities |
|
|
|
Net cash provided by operating activities |
$ |
131,287 |
|
|
$ |
108,894 |
|
|
|
|
|
Investing
activities |
|
|
|
Purchases of property and equipment |
$ |
(62,223 |
) |
|
$ |
(91,748 |
) |
Withdrawal of funds from Rabbi Trust assets (1) |
— |
|
|
50,000 |
|
Net cash used for investing
activities |
$ |
(62,223 |
) |
|
$ |
(41,748 |
) |
|
|
|
|
Financing
activities |
|
|
|
Proceeds from issuance of senior secured notes |
— |
|
|
350,000 |
|
Proceeds from borrowings under the asset-based senior secured
credit facility |
— |
|
|
210,000 |
|
Repayment of term loan facility borrowings |
— |
|
|
(233,250 |
) |
Repayment of borrowings under the asset-based senior secured credit
facility |
— |
|
|
(210,000 |
) |
Purchase of senior secured notes |
(46,969 |
) |
|
— |
|
Payment of debt issuance or modification costs and fees |
(2,016 |
) |
|
(7,151 |
) |
Purchases of common stock |
(235,249 |
) |
|
(15,172 |
) |
Dividends paid |
— |
|
|
(12,556 |
) |
Other financing activities |
(20,124 |
) |
|
(11,742 |
) |
Net cash (used for) provided
by financing activities |
$ |
(304,358 |
) |
|
$ |
70,129 |
|
|
|
|
|
Effect of foreign currency
exchange rates on cash |
$ |
(8,560 |
) |
|
$ |
2,269 |
|
Net (decrease) increase in
cash and equivalents, and restricted cash and equivalents |
$ |
(243,854 |
) |
|
$ |
139,544 |
|
Cash and equivalents, and
restricted cash and equivalents, beginning of period |
$ |
1,124,157 |
|
|
$ |
692,264 |
|
Cash and equivalents, and
restricted cash and equivalents, end of period |
$ |
880,303 |
|
|
$ |
831,808 |
|
(1) As disclosed in the Form
10-K for the year ended January 30, 2021, during the fourth quarter
ended January 30, 2021, an error relating to the cash flow
presentation of the $50 million withdrawal of the excess funds from
the company’s Rabbi Trust assets was identified. The cash flows
presented for the year-to-date periods ended May 2, 2020, August 1,
2020, and October 31, 2020 incorrectly classified such withdrawal
as a cash inflow from operating activities, rather than a cash
inflow from investing activities. This cash flow statement reflects
the correct classification.
Abercrombie & Fitch
Co.Store Count
|
Thirteen Weeks Ended October 30, 2021 |
|
Hollister (1) |
|
Abercrombie (2) |
|
Total Company (3) |
|
United States |
|
International |
|
United States |
|
International |
|
United States |
|
International |
|
Total |
July 31, 2021 |
355 |
|
150 |
|
179 |
|
49 |
|
534 |
|
199 |
|
733 |
New |
1 |
|
1 |
|
2 |
|
1 |
|
3 |
|
2 |
|
5 |
Permanently closed |
(1) |
|
— |
|
— |
|
(2) |
|
(1) |
|
(2) |
|
(3) |
October 30, 2021 |
355 |
|
151 |
|
181 |
|
48 |
|
536 |
|
199 |
|
735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended October 30, 2021 |
|
|
|
Hollister (1) |
|
Abercrombie (2) |
|
Total Company (3) |
|
United States |
|
International |
|
United States |
|
International |
|
United States |
|
International |
|
Total |
January 30, 2021 |
347 |
|
150 |
|
190 |
|
48 |
|
537 |
|
198 |
|
735 |
New |
9 |
|
5 |
|
6 |
|
3 |
|
15 |
|
8 |
|
23 |
Permanently closed |
(1) |
|
(4) |
|
(15) |
|
(3) |
|
(16) |
|
(7) |
|
(23) |
October 30, 2021 |
355 |
|
151 |
|
181 |
|
48 |
|
536 |
|
199 |
|
735 |
(1) Hollister includes the
company’s Hollister and Gilly Hicks brands. Locations with Gilly
Hicks carveouts within Hollister stores are represented as a single
store count. Excludes 10 international franchise stores as of
October 30, 2021, 10 international franchise stores as of
July 31, 2021, and 9 international franchise stores as of
January 30, 2021. Excludes 14 Company-operated temporary
stores as of each of October 30, 2021 and July 31, 2021,
and 12 Company-operated temporary stores as of January 30,
2021.
(2) Abercrombie includes the
company's Abercrombie & Fitch and abercrombie kids brands.
Locations with abercrombie kids carveouts within Abercrombie &
Fitch stores are represented as a single store count. Excludes 13
international franchise stores as of October 30, 2021, 12
international franchise stores as of and July 31, 2021, and 10
international franchise stores as of January 30, 2021.
Excludes four Company-operated temporary stores as of each of
October 30, 2021 and July 31, 2021, and two
Company-operated temporary stores as of January 30, 2021.
(3) This store count excludes
one international third-party operated multi-brand outlet store as
of each of October 30, 2021, July 31, 2021, and
January 30, 2021.
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