ABERCROMBIE & FITCH CO. Abercrombie & Fitch Co.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Fourteen Weeks Ended | Thirteen Weeks Ended | ||||||||
February 3, 2024 | % of Net | January 28, 2023 | % of Net | ||||||
Sales | Sales | ||||||||
Net sales | $ | 1,452,907 | 100.0 % | $ | 1,199,814 | 100.0 % | |||
Cost of sales, exclusive of depreciation and amortization | 539,338 | 37.1 % | 531,529 | 44.3 % | |||||
Gross profit | 913,569 | 62.9 % | 668,285 | 55.7 % | |||||
Stores and distribution expense | 499,075 | 34.4 % | 441,959 | 36.8 % | |||||
Marketing, general and administrative expense | 193,234 | 13.3 % | 138,084 | 11.5 % | |||||
Other operating (income) expense, net | (1,541) | (0.1)% | 1,220 | 0.1 % | |||||
Operating income | 222,801 | 15.3 % | 87,022 | 7.3 % | |||||
Interest (income) expense, net | (4,839) | (0.3)% | 4,113 | 0.3 % | |||||
Income before income taxes | 227,640 | 15.7 % | 82,909 | 6.9 % | |||||
Income tax expense | 66,537 | 4.6 % | 42,218 | 3.5 % | |||||
Net income | 161,103 | 11.1 % | 40,691 | 3.4 % | |||||
Less: Net income attributable to noncontrolling interests | 2,656 | 0.2 % | 2,358 | 0.2 % | |||||
Net income attributable to A&F | $ | 158,447 | 10.9 % | $ | 38,333 | 3.2 % | |||
Net income per share attributable to A&F | |||||||||
Basic | $ | 3.13 | $ | 0.78 | |||||
Diluted | $ | 2.97 | $ | 0.75 | |||||
Weighted-average shares outstanding: | |||||||||
Basic | 50,559 | 49,216 | |||||||
Diluted | 53,399 | 51,217 |
5
Abercrombie & Fitch Co.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Fifty-Three Weeks Ended | Fifty-Two Weeks Ended | ||||||||
February 3, 2024 | % of Net | January 28, 2023 | % of Net | ||||||
Sales | Sales | ||||||||
Net sales | $ | 4,280,677 | 100.0 % | $ | 3,697,751 | 100.0 % | |||
Cost of sales, exclusive of depreciation and amortization | 1,587,265 | 37.1 % | 1,593,213 | 43.1 % | |||||
Gross profit | 2,693,412 | 62.9 % | 2,104,538 | 56.9 % | |||||
Stores and distribution expense | 1,571,737 | 36.7 % | 1,496,962 | 40.5 % | |||||
Marketing, general and administrative expense | 642,877 | 15.0 % | 517,602 | 14.0 % | |||||
Other operating income, net | (5,873) | (0.1)% | (2,674) | (0.1)% | |||||
Operating income | 484,671 | 11.3 % | 92,648 | 2.5 % | |||||
Interest expense, net | 372 | 0.0 % | 25,632 | 0.7 % | |||||
Income before income taxes | 484,299 | 11.3 % | 67,016 | 1.8 % | |||||
Income tax expense | 148,886 | 3.5 % | 56,631 | 1.5 % | |||||
Net income | 335,413 | 7.8 % | 10,385 | 0.3 % | |||||
Less: Net income attributable to noncontrolling interests | 7,290 | 0.2 % | 7,569 | 0.2 % | |||||
Net income attributable to A&F | $ | 328,123 | 7.7 % | $ | 2,816 | 0.1 % | |||
Net income per share attributable to A&F | |||||||||
Basic | $ | 6.53 | $ | 0.06 | |||||
Diluted | $ | 6.22 | $ | 0.05 | |||||
Weighted-average shares outstanding: | |||||||||
Basic | 50,250 | 50,307 | |||||||
Diluted | 52,726 | 52,327 |
6
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, 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.
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
Fifty-Three Weeks Ended February 3, 2024
(in thousands, except per share data)
(Unaudited)
GAAP (1) | Excluded items | Adjusted | ||||||
non-GAAP | ||||||||
Asset impairment (2) | $ | 4,436 | $ | 4,436 | $ | - | ||
Operating income | 484,671 | (4,436) | 489,107 | |||||
Income before income taxes | 484,299 | (4,436) | 488,735 | |||||
Income tax expense (3) | 148,886 | (1,231) | 150,117 | |||||
Net income attributable to A&F | $ | 328,123 | $ | (3,205) | $ | 331,328 | ||
Net income per diluted share attributable to A&F | $ | 6.22 | $ | (0.06) | $ | 6.28 | ||
Diluted weighted-average shares outstanding: | 52,726 | 52,726 |
- "GAAP" refers to accounting principles generally accepted in the United States of America.
- Excluded items consist of pre-tax store impairment charges of $4.4 million.
- The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and an adjusted non-GAAP basis.
7
Abercrombie & Fitch Co.
Schedule of Non-GAAP Financial Measures
Fifty-Two Weeks Ended January 28, 2023
(in thousands, except per share data)
(Unaudited)
GAAP (1) | Excluded | Adjusted | ||||||
Items | Non-GAAP | |||||||
Asset impairment (2) | $ | 14,031 | $ | 14,031 | $ | - | ||
Operating income | 92,648 | (14,031) | 106,679 | |||||
Income before income taxes | 67,016 | (14,031) | 81,047 | |||||
Income tax expense (3) | 56,631 | (3,802) | 60,433 | |||||
Net income attributable to A&F | $ | 2,816 | $ | (10,229) | $ | 13,045 | ||
Net income per diluted share attributable to A&F | $ | 0.05 | $ | (0.20) | $ | 0.25 | ||
Diluted weighted-average shares outstanding: | 52,327 | 52,327 |
- "GAAP" refers to accounting principles generally accepted in the United States of America.
- Excluded items consist of pre-tax store and other asset asset impairment charges of $14.0 million.
- The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and an adjusted non-GAAP basis.
8
Abercrombie & Fitch Co.
Reconciliation of Constant Currency Financial Measures
Fourteen Weeks Ended February 3, 2024 and Thirteen Weeks Ended January 28, 2023
(in thousands, except percentage and basis point changes and per share data)
(Unaudited)
Net sales | 2023 | 2022 | % Change | ||||
GAAP (1) | $ | 1,452,907 | $ | 1,199,814 | 21% | ||
Impact from changes in foreign currency exchange rates (2) | - | 5,287 | 0% | ||||
Net sales on a constant currency basis | $ | 1,452,907 | $ | 1,205,101 | 21% | ||
Gross profit | 2023 | 2022 | BPS Change (3) | ||||
GAAP (1) | $ | 913,569 | $ | 668,285 | 720 | ||
Impact from changes in foreign currency exchange rates (2) | - | 3,702 | (10) | ||||
Gross profit on a constant currency basis | $ | 913,569 | $ | 671,987 | 710 | ||
Operating income | 2023 | 2022 | BPS Change (3) | ||||
GAAP (1) | $ | 222,801 | $ | 87,022 | 800 | ||
Excluded items (4) | - | (4,695) | (30) | ||||
Adjusted non-GAAP | $ | 222,801 | $ | 91,717 | 770 | ||
Impact from changes in foreign currency exchange rates (2) | - | 4,232 | (40) | ||||
Adjusted non-GAAP constant currency basis | $ | 222,801 | $ | 95,949 | 730 | ||
Net income per share attributable to A&F | 2023 | 2022 | $ Change | ||||
GAAP (1) | $ | 2.97 | $ | 0.75 | $2.22 | ||
Excluded items, net of tax (4) | - | (0.07) | (0.07) | ||||
Adjusted non-GAAP | $ | 2.97 | $ | 0.81 | $2.16 | ||
Impact from changes in foreign currency exchange rates (2) | - | 0.07 | (0.07) | ||||
Adjusted non-GAAP on a constant currency basis | $ | 2.97 | $ | 0.88 | $2.09 |
- "GAAP" refers to accounting principles generally accepted in the United States of America.
- 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.
- The estimated basis point change has been rounded based on the percentage change.
- Excluded items consist of pre-tax asset store impairment charges of $4.7 million for the prior year.
9
Abercrombie & Fitch Co.
Reconciliation of Constant Currency Financial Measures
Fifty-Three Weeks Ended February 3, 2024 and Fifty-Two Weeks Ended January 28, 2023
(in thousands, except percentage and basis point changes and per share data)
(Unaudited)
Net sales | 2023 | 2022 | % Change | ||||
GAAP (1) | $ | 4,280,677 | $ | 3,697,751 | 16% | ||
Impact from changes in foreign currency exchange rates (2) | - | 6,500 | 0% | ||||
Net sales on a constant currency basis | $ | 4,280,677 | $ | 3,704,251 | 16% | ||
Gross profit | 2023 | 2022 | BPS Change (3) | ||||
GAAP (1) | $ | 2,693,412 | $ | 2,104,538 | 600 | ||
Impact from changes in foreign currency exchange rates (2) | - | (8,969) | 30 | ||||
Gross profit on a constant currency basis | $ | 2,693,412 | $ | 2,095,569 | 630 | ||
Operating income | 2023 | 2022 | BPS Change (3) | ||||
GAAP (1) | $ | 484,671 | $ | 92,648 | 880 | ||
Excluded items (4) | (4,436) | (14,031) | (30) | ||||
Adjusted non-GAAP | $ | 489,107 | $ | 106,679 | 850 | ||
Impact from changes in foreign currency exchange rates (2) | - | (9,608) | 30 | ||||
Adjusted non-GAAP on a constant currency basis | $ | 489,107 | $ | 97,071 | 880 | ||
Net income per share attributable to A&F | 2023 | 2022 | $ Change | ||||
GAAP (1) | $ | 6.22 | $ | 0.05 | $6.17 | ||
Excluded items, net of tax (4) | (0.06) | (0.20) | (0.14) | ||||
Adjusted non-GAAP | $ | 6.28 | $ | 0.25 | $6.03 | ||
Impact from changes in foreign currency exchange rates (2) | - | (0.13) | 0.13 | ||||
Adjusted non-GAAP on a constant currency basis | $ | 6.28 | $ | 0.12 | $6.16 |
- "GAAP" refers to accounting principles generally accepted in the United States of America.
- 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.
- The estimated basis point change has been rounded based on the percentage change.
- Excluded items consist of pre-tax asset store impairment charges of $4.4 million and $14.0 million for the current year and prior year, respectively.
10
Abercrombie & Fitch Co.
Reconciliation of Constant Currency Net Sales by Segment and Brand
Fourteen Weeks Ended February 3, 2024 and Thirteen Weeks Ended January 28, 2023
(in thousands, except percentage changes)
(Unaudited)
2023 | 2022 | Non-GAAP | ||||||||||
Impact From | Non-GAAP | Constant | ||||||||||
Changes In | GAAP | Currency | ||||||||||
GAAP | GAAP | Foreign Currency | Constant | Basis | ||||||||
Exchanges Rates | Currency Basis | % Change | % Change | |||||||||
Net sales by segment: (2) | (1) | |||||||||||
Americas (3) | $ | 1,191,259 | $ | 971,091 | $ | (58) | $ | 971,033 | 23% | 23% | ||
EMEA (4) | 219,050 | 193,400 | 6,374 | 199,774 | 13% | 10% | ||||||
APAC (5) | 42,598 | 35,323 | (1,029) | 34,294 | 21% | 24% | ||||||
Total company | $ | 1,452,907 | $ | 1,199,814 | $ | 5,287 | $ | 1,205,101 | 21% | 21% | ||
2023 | 2022 | Non-GAAP | ||||||||||
Impact From | Non-GAAP | Constant | ||||||||||
Changes In | GAAP | Currency | ||||||||||
GAAP | GAAP | Foreign Currency | Constant | Basis | ||||||||
Exchanges Rates | Currency Basis | % Change | % Change | |||||||||
(1) | ||||||||||||
Net sales by brand: | ||||||||||||
Abercrombie (6) | 755,203 | 560,438 | 843 | 561,281 | 35% | 35% | ||||||
Hollister (7) | $ | 697,704 | $ | 639,376 | $ | 4,444 | $ | 643,820 | 9% | 8% | ||
Total company | $ | 1,452,907 | $ | 1,199,814 | $ | 5,287 | $ | 1,205,101 | 21% | 21% | ||
- 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.
- Net sales by segment are presented by attributing revenues to an individual country on the basis of the segment that fulfills the order.
- The Americas segment includes the results of operations in North America and South America.
- The EMEA segment includes the results of operations in Europe, the Middle East and Africa.
- The APAC segment includes the results of operations in the Asia-Pacific region, including Asia and Oceania.
- Abercrombie brands includes Abercrombie & Fitch and abercrombie kids.
- Hollister brands includes Hollister and Gilly Hicks.
11
Abercrombie & Fitch Co.
Reconciliation of Constant Currency Net Sales by Segment and Brand
Fifty-Three Weeks Ended February 3, 2024 and Fifty-Two Weeks Ended January 28, 2023
(in thousands, except percentage changes)
(Unaudited)
2023 | 2022 | Non-GAAP | ||||||
Impact From | Non-GAAP | Constant | ||||||
Changes In | GAAP | Currency | ||||||
GAAP | GAAP | Foreign Currency | Constant | Basis | ||||
Exchanges Rates | Currency Basis | % Change | % Change | |||||
Net sales by segment: (2) | (1) | |||||||
Americas (3) | $3,455,674 | $2,920,157 | $(3,925) | $2,916,232 | 18% | 18% | ||
EMEA (4) | 687,095 | 658,794 | 15,498 | 674,292 | 4% | 2% | ||
APAC (5) | 137,908 | 118,800 | (5,073) | 113,727 | 16% | 21% | ||
Total company | $4,280,677 | $3,697,751 | $6,500 | $3,704,251 | 16% | 16% | ||
2023 | 2022 | Non-GAAP | ||||||
Impact From | Non-GAAP | Constant | ||||||
Changes In | GAAP | Currency | ||||||
GAAP | GAAP | Foreign Currency | Constant | Basis | ||||
Exchanges Rates | Currency Basis | % Change | % Change | |||||
Net sales by brand: | (1) | |||||||
Abercrombie (6) | $2,201,686 | $1,734,866 | $(1,234) | $1,733,632 | 27% | 27% | ||
Hollister (7) | 2,078,991 | 1,962,885 | 7,734 | 1,970,619 | 6% | 5% | ||
Total company | $4,280,677 | $3,697,751 | $6,500 | $3,704,251 | 16% | 16% | ||
- 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.
- Net sales by segment are presented by attributing revenues to an individual country on the basis of the segment that fulfills the order.
- The Americas segment includes the results of operations in North America and South America.
- The EMEA segment includes the results of operations in Europe, the Middle East and Africa.
- The APAC segment includes the results of operations in the Asia-Pacific region, including Asia and Oceania.
- Abercrombie brands includes Abercrombie & Fitch and abercrombie kids.
- Hollister brands includes Hollister and Gilly Hicks.
12
Abercrombie & Fitch Co.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
February 3, 2024 | January 28, 2023 | ||||
Assets | |||||
Current assets: | |||||
Cash and equivalents | $ | 900,884 | $ | 517,602 | |
Receivables | 78,346 | 104,506 | |||
Inventories | 469,466 | 505,621 | |||
Other current assets | 88,569 | 100,289 | |||
Total current assets | 1,537,265 | 1,228,018 | |||
Property and equipment, net | 538,033 | 551,585 | |||
Operating lease right-of-use assets | 678,256 | 723,550 | |||
Other assets | 220,679 | 209,947 | |||
Total assets | $ | 2,974,233 | $ | 2,713,100 | |
Liabilities and stockholders' equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 296,976 | $ | 258,895 | |
Accrued expenses | 436,655 | 413,303 | |||
Short-term portion of operating lease liabilities | 179,625 | 213,979 | |||
Income taxes payable | 53,564 | 16,023 | |||
Total current liabilities | 966,820 | 902,200 | |||
Long-term liabilities: | |||||
Long-term portion of operating lease liabilities | $ | 646,624 | $ | 713,361 | |
Long-term borrowings, net | 222,119 | 296,852 | |||
Other liabilities | 88,683 | 94,118 | |||
Total long-term liabilities | 957,426 | 1,104,331 | |||
Total Abercrombie & Fitch Co. stockholders' equity | 1,035,160 | 694,841 | |||
Noncontrolling interests | 14,827 | 11,728 | |||
Total stockholders' equity | 1,049,987 | 706,569 | |||
Total liabilities and stockholders' equity | $ | 2,974,233 | $ | 2,713,100 | |
13
Abercrombie & Fitch Co.
Condensed Consolidated Statements of Cash Flows
(in thousands, except per share data)
(Unaudited)
Fifty-Three Weeks Ended | Fifty-Two Weeks Ended | ||||
February 3, 2024 | January 28, 2023 | ||||
Operating activities | |||||
Net cash provided by (used for) operating activities | $ | 653,422 | $ | (2,343) | |
Investing activities | |||||
Purchases of property and equipment | $ | (157,797) | $ | (164,566) | |
Proceeds from the sale of property and equipment | 615 | 11,891 | |||
Withdrawal of Rabbi Trust assets | - | 12,000 | |||
Net cash used for investing activities | $ | (157,182) | $ | (140,675) | |
Financing activities | |||||
Purchase of senior secured notes | (77,972) | (7,862) | |||
Payment of debt issuance costs and fees | (180) | (181) | |||
Purchases of common stock | - | (125,775) | |||
Other financing activities | (33,049) | (21,511) | |||
Net cash used for financing activities | $ | (111,201) | $ | (155,329) | |
Effect of foreign currency exchange rates on cash | $ | (2,923) | $ | (8,452) | |
Net increase (decrease) in cash and equivalents, and restricted cash and equivalents | $ | 382,116 | $ | (306,799) | |
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 | $ | 909,685 | $ | 527,569 | |
14
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Abercrombie & Fitch Co. published this content on 06 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 12:38:06 UTC.
