ABERCROMBIE & FITCH REPORTS
SECOND QUARTER EPS GROWTH OF 26%
NEW ALBANY, Ohio / August 10, 2004 - Abercrombie & Fitch (NYSE: ANF) today
reported that earnings per share on a fully diluted basis for the second quarter
ended July 31, 2004 rose 26% to $0.44 versus $0.35 for the comparable period
last year.
Net sales for the thirteen weeks ended July 31, 2004 increased 13% to $401.3
million from $355.7 million for the thirteen weeks ended August 2, 2003.
Comparable store sales decreased 5% in the quarter.
Net income for the quarter increased 23% to $42.9 million compared to net income
of $34.8 million for the second quarter of fiscal 2003.
Mike Jeffries, Chairman and Chief Executive Officer, said, "We are pleased with
our second quarter results. Despite a difficult sales trend, our results reflect
strong margin improvement and solid EPS growth of 26%."
The Company said that assuming a continuation of the second quarter sales trend,
coupled with the continued investment in the business, earnings will be similar
to last year's third quarter EPS.
Abercrombie & Fitch operated a total of 727 stores at the end of the second
quarter, including 171 abercrombie stores and 197 Hollister Co. stores. The
Company operates e-commerce websites at www.abercrombie.com,
www.abercrombiekids.com, and www.hollisterco.com.
Today at 4:30 pm Eastern Time the Company will conduct a conference call.
Management will discuss the Company's performance, its plans for the future and
will accept questions from participants. To listen to the conference call, dial
(800) 811-0667 or internationally at (913) 981-4901. To listen via the internet,
go to www.abercrombie.com, select the Investor Relations page and click on
Calendar of Events. Replays of the call will be available shortly after its
completion. The audio replay can be accessed for two weeks following the
reporting date by calling (888) 203-1112 or internationally at (719) 457-0820
followed by the conference ID number 369567; or for 12 months by visiting the
Company's website at www.abercrombie.com.
# # #
For further information, call: Thomas D. Lennox
Director, Investor Relations and
Corporate Communications
(614) 283-6751
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, A&F's Form 10-K or made by management of A&F involve risks and
uncertainties and are subject to change based on various important factors, many
of which may be beyond the Company's control. Words such as "estimate,"
"project," "plan," "believe," "expect," "anticipate," "intend," and similar
expressions may identify forward-looking statements. The following factors, in
addition to those included in the disclosure under the heading "RISK FACTORS" in
"ITEM 1. BUSINESS" of A&F's Annual Report on Form 10-K for the fiscal year ended
January 31, 2004, in some cases have affected and in the future could affect the
Company's financial performance and could cause actual results for the 2004
fiscal year and beyond to differ materially from those expressed or implied in
any of the forward-looking statements included in this Press Release or
otherwise made by management: changes in consumer spending patterns and consumer
preferences; the effects of political and economic events and conditions
domestically and in foreign jurisdictions in which the Company operates,
including, but not limited to, acts of terrorism or war; the impact of
competition and pricing; changes in weather patterns; postal rate increases and
changes; paper and printing costs; market price of key raw materials; ability to
source product from its global supplier base; political stability; currency and
exchange risks and changes in existing or potential duties, tariffs or quotas;
availability of suitable store locations at appropriate terms; ability to
develop new merchandise; and ability to hire, train and retain associates.
Future economic and industry trends that could potentially impact revenue and
profitability are difficult to predict. Therefore, there can be no assurance
that the forward-looking statements included in this Press Release will prove to
be accurate. In light of the significant uncertainties in the forward-looking
statements included herein, the inclusion of such information should not be
regarded as a representation by the Company, or any other person, that the
objectives of the Company will be achieved. The forward-looking statements
herein are based on information presently available to the management of the
Company. Except as may be required by applicable law, the Company assumes no
obligation to publicly update or revise its forward-looking statements even if
experience or future changes make it clear that any projected results expressed
or implied therein will not be realized.
ABERCROMBIE & FITCH CO.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THIRTEEN WEEKS ENDED JULY 31, 2004 AND THIRTEEN WEEKS ENDED AUGUST 2, 2003
(IN THOUSANDS EXCEPT PER SHARE DATA)
ACTUAL ACTUAL
------------------------ -----------------------
2004 % of Sales 2003 % of Sales
--------- ---------- --------- ----------
Net Sales $ 401,346 100.0% $ 355,719 100.0%
--------- ------- --------- -------
Gross Income 181,588 45.2% 144,333 40.6%
Gen'l, Admin. & Store Oper. Exp 112,881 28.1% 88,716 24.9%
--------- ------- --------- -------
Operating Income 68,707 17.1% 55,617 15.6%
Interest Income, Net (1,358) -0.3% (861) -0.2%
--------- ------- --------- -------
Income Before Income Taxes 70,065 17.5% 56,478 15.9%
Income Tax Expense 27,210 6.8% 21,660 6.1%
Effective Rate 38.8% 38.4%
--------- -------
Net Income $ 42,855 10.7% $ 34,818 9.8%
--------- ------- --------- -------
Net Income Per Share:
Basic $ 0.45 $ 0.36
Diluted $ 0.44 $ 0.35
ABERCROMBIE & FITCH CO.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
TWENTY-SIX WEEKS ENDED JULY 31, 2004 AND TWENTY-SIX WEEKS ENDED AUGUST 2, 2003
(IN THOUSANDS EXCEPT PER SHARE DATA)
ACTUAL ACTUAL
------------------------- ------------------------
2004 % of Sales 2003 % of Sales
--------- ---------- --------- ----------
Net Sales $ 813,276 100.0% $ 702,442 100.0%
--------- --------- --------- -------
Gross Income 347,178 42.7% 272,521 38.8%
Gen'l, Admin. & Store Oper. Exp 231,150 28.4% 176,614 25.1%
--------- --------- --------- -------
Operating Income 116,028 14.3% 95,907 13.7%
Interest Income, Net (2,343) -0.3% (1,852) -0.3%
--------- --------- --------- -------
Income Before Income Taxes 118,371 14.6% 97,759 13.9%
Income Tax Expense 45,840 5.6% 37,390 5.3%
Effective Rate 38.7% 38.2%
--------- ---------
Net Income $ 72,531 8.9% $ 60,369 8.6%
--------- --------- --------- -------
Net Income Per Share:
Basic $ 0.76 $ 0.62
Diluted $ 0.75 $ 0.60
ABERCROMBIE & FITCH CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
JULY 31, 2004 JANUARY 31, 2004
------------- ----------------
ASSETS
- ------
Current Assets
Cash and Equivalents $ 572,148 $ 511,073
Marketable Securities 10,000 10,000
Receivables 16,083 7,197
Inventories 199,055 170,703
Store Supplies 32,964 29,993
Other 24,953 23,689
---------- ----------
Total Current Assets 855,203 752,655
Property and Equipment, Net 460,254 445,956
Other Assets 444 552
---------- ----------
TOTAL ASSETS $1,315,901 $1,199,163
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts Payable $ 137,429 $ 91,364
Accrued Expenses 154,133 138,232
Income Taxes Payable 35,255 50,406
---------- ----------
Total Current Liabilities 326,817 280,002
---------- ----------
Long-Term Liabilities
Debt -- --
Deferred Income Taxes 25,464 19,516
Other Long-Term Liabilities 27,526 28,388
---------- ----------
Total Long-Term Liabilities 52,990 47,904
---------- ----------
Total Shareholders' Equity 936,094 871,257
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,315,901 $1,199,163
---------- ----------