Abercrombie & Fitch 2007 Annual Report Download

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Table of contents

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    ... Letter 6 Financial Summary 11 Management's Discussion and Analysis 12 Quantitative and Qualitative Disclosures About Market Risk 22 Consolidated ... Financial Statements 28 Report of Independent Registered Public Accounting Firm 40 Corporate Information 43 Senior Management and Board of Directors 44 ...

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  • Page 5
    ... for international expansion. In 2007, the Abercrombie & Fitch and Hollister stores located in Canada continued to generate more than three times the sales productivity of the average U.S. counterpart and our Abercrombie & Fitch London flagship generated similar sales per selling square foot to...

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  • Page 7
    ... $ 345 Total Number of Stores Open Gross Square Feet Average Number of Associates 1,035 7, 337,000 94,600 851 6, 025,000 69,100 700 5,016,000 30,200 * Fiscal 2006 was a fifty-three week year. ** A store is included in comparable store sales when it has been open as the same brand at least one...

  • Page 8
    ... with the Company's female customers by offering bras, underwear, personal care products, sleepwear and at-home products. The Company operated three Gilly Hicks stores at the end of Fiscal 2007 and plans to open 15 stores in Fiscal 2008. Although profitability was not achieved as originally expected...

  • Page 9
    ...of total net sales in Fiscal 2006. The increase was driven by store expansion, both domestically and internationally, improved in-stock inventory availability, an improved targeted e-mail marketing strategy and improved website functionality. For Fiscal 2007, gross profit increased to $2.511 billion...

  • Page 10
    ... knit tops, fleece and shorts, while jeans, skirts and pants posted negative comparable store sales. Direct-to-consumer net merchandise sales, sold through the Company's websites and catalogue, in the fourth quarter of Fiscal 2006 were $74.8 million, an increase of 57.5% versus net merchandise sales...

  • Page 11
    ... projects related to new construction and remodels, conversions and refreshes of existing Abercrombie & Fitch, abercrombie and Hollister stores. The remaining $150.5 million was used for projects at the home office and the distribution centers, including home office expansion, information technology...

  • Page 12
    ... 70 new Hollister stores, 16 new abercrombie stores, three new Abercrombie & Fitch stores, six new RUEHL stores and 15 new Gilly Hicks stores. During Fiscal 2008, the Company expects the average construction cost per square foot, net of construction allowances, for non-flagship Abercrombie & Fitch...

  • Page 13
    ... the fair value method and requires the use of an option-pricing model for estimating fair value. Accordingly, share-based compensation is measured at the grant date, based on the fair value of the award. The Company's equity compensation expense related to stock options is estimated using the Black...

  • Page 14
    ... amounts) NET SALES Cost of Goods Sold GROSS PROFIT Stores and Distribution Expense Marketing, General & Administrative Expense Other Operating Income, Net OPERATING INCOME Interest Income, Net INCOME BEFORE INCOME TAXES Provision for Income Taxes NET INCOME NET INCOME PER SHARE: 2007 $3,749...

  • Page 15
    ...119 41 Inventories Accounts Payable and Accrued Expenses Income Taxes Other Assets and Liabilities NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES: Capital Expenditures Purchases of Trust Owned Life Insurace Policies Purchases of Marketable Securities Proceeds of Sales of Marketable...

  • Page 16
    ... of February 3, 2007, all related to available-for-sale securities. CREDIT CARD RECEIVABLES million, $7.7 million and $3.8 million at February 2, 2008, February 3, 2007 and January 28, 2006, respectively. STORE SUPPLIES The initial inventory of supplies for new stores including, but not limited to...

  • Page 17
    ... as new information becomes available. 3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS STORE PRE-OPENING EXPENSES DESIGN AND DEVELOPMENT COSTS Marketing, general and administrative expense includes photography and media ads, store marketing, home office payroll, except for those departments included...

  • Page 18
    ... of control as defined in the plans. FAIR VALUE ESTIMATES The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model, which requires the Company to estimate the expected term of the stock option grants and expected future stock price volatility over...

  • Page 19
    ...) least 21 years of age and have completed a year of employment with Lapses of applicable statute of limitations (637) 1,000 or more hours of service. In addition, the Company maintains the Abercrombie & Fitch Nonqualified Savings and Supplemental Unrecognized tax benefits, February 2, 2008 $ 38,894...

  • Page 20
    ... class action, styled Robert Ross v. Abercrombie & Fitch Company, et al., was filed against A&F and certain of its officers in the United States District Court for the Southern District of Ohio on behalf of a purported class of all persons who purchased or acquired shares of A&F's Common Stock...

  • Page 21
    ...2008. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* 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 2007 and Fiscal 2006: SALES...

  • Page 22
    ... financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits...

  • Page 23
    ...required under Section 302 of the Sarbanes-Oxley Act of 2002, have been filed as exhibits to Abercrombie & Fitch Co.'s 2007 Annual Report on Form 10-K filed on March 28, 2008. In addition, in 2007, the Company's Chief Executive Officer submitted an annual certification to the New York Stock Exchange...

  • Page 24
    ... - Store Operations JOHN A. SINGLETON Senior Vice President - Supply Chain JEFFREY R. SINKEY Senior Vice President - Real Estate AMY L. ZEHRER Senior Vice President - Stores BOARD OF DIRECTORS MICHAEL S. JEFFRIES JAMES B. BACHMANN Chairman and Chief Executive Officer Retired Columbus Managing...