Abercrombie & Fitch 2005 Annual Report Download - page 41

Abercrombie &Fitch
to the business combination or sale (or in certain circumstances, an
affiliate) which at the time of such transaction will have a market
value of twice the exercise price of the Right.
The Rights will expire on July 16, 2008, unless earlier exchanged or
redeemed. A&F may redeem all of the Rights at a price of $.01 per
whole Right at any time before any person becomes an Acquiring
Person.
Rights holders have no rights as a shareholder of A&F, including
the right to vote and to receive dividends.
15. COMPREHENSIVE INCOME Comprehensive income con-
sists of cumulative foreign currency translation adjustments and unre-
alized gains and losses on marketable securities.
16. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial results for Fiscal 2005 and Fiscal
2004 follow (thousands except per share amounts):
Fiscal 2005 Quarter First Second Third Fourth
Net sales $546,810 $571,591 $704,918 $961,392
Gross profit $357,252 $389,660 $465,086 $639,418
Operating income $ 68,289 $ 91,087 $115,874 $267,488
Net income $ 40,359 $ 57,401 $ 71,600 $164,626
Net income per basic share $0.47 $0.66 $0.81 $1.88
Net income per fully-diluted share $0.45 $0.63 $0.79 $1.80
Fiscal 2004 Quarter First Second Third Fourth
Net sales $411,930 $401,346 $520,724 $687,254
Gross profit $267,924 $280,917 $336,617 $455,767
Operating income $ 46,722 $ 68,762 $ 61,978 $170,175
Net income $ 29,317 $ 42,888 $ 39,911 $104,260
Net income per basic share $0.31 $0.45 $0.43 $1.19
Net income per fully-diluted share $0.30 $0.44 $0.42 $1.15
MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING The management of the
Company is responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal con-
trol over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act, is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the prepa-
ration of financial statements for external purposes and in accordance
with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in condi-
tions, or that the degree of compliance with the policies or procedures
may deteriorate.
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Management evaluated the effectiveness of the Company’s internal
control over financial reporting as of January 28, 2006 using criteria
established in Internal Control-Intergrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on the assessment of the Company’s internal control
over financial reporting, management has concluded that, as of
January 28, 2006, the Company’s internal control over financial report-
ing was effective.
The Company’s independent registered public accounting firm,
PricewaterhouseCoopers LLP, has audited management’s assessment
of the effectiveness of the Company’s internal control over financial
reporting as of January 28, 2006 as stated in their report, which is
included herein.
MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PUR-
CHASES OF EQUITY SECURITIES A&F’s Class A Common
Stock (the “Common Stock”) is traded on the New York Stock
Exchange under the symbol “ANF.” The table below sets forth the high
and low sales prices of A&F’s Common Stock on the New York Stock
Exchange for Fiscal 2005 and Fiscal 2004:
Sales Price
High Low
Fiscal 2005
4th Quarter $68.25 $50.25
3rd Quarter $72.66 $44.17
2nd Quarter $74.10 $52.51
1st Quarter $59.98 $49.74
Fiscal 2004
4th Quarter $53.03 $38.51
3rd Quarter $39.94 $27.42
2nd Quarter $39.46 $30.93
1st Quarter $36.38 $25.53
Beginning in Fiscal 2004, the Board of Directors voted to initiate a
cash dividend, at an annual rate of $0.50 per share. A quarterly divi-
dend, of $0.125 per share, was paid in March, June, September and
December 2004. A quarterly dividend, of $0.125 per share, was paid in
March and June 2005. In August 2005, the Board of Directors
increased the quarterly dividend to $0.175 per share, which was paid
in September and December of Fiscal 2005. The Company expects to
continue to pay a dividend, subject to Board of Directors review of the
Company’s cash position and results of operations.
As of April 1, 2006, there were approximately 5,340 shareholders
of record. However, when including investors holding shares in bro-
ker accounts under street name, active associates who participate in
A&F’s stock purchase plan and associates who own shares through
A&F-sponsored retirement plans, A&F estimates that there are
approximately 60,150 shareholders.