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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
ÍANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended January 28, 2012
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12107
ABERCROMBIE & FITCH CO.
(Exact name of registrant as specified in its charter)
Delaware 31-1469076
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
6301 Fitch Path, New Albany, Ohio 43054
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (614) 283-6500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Class A Common Stock, $.01 Par Value New York Stock Exchange
Series A Participating Cumulative Preferred
Stock Purchase Rights
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. ÍYes No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ÍNo
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. ÍYes No
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the Registrant was required to submit and post such files).) ÍYes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. Í
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act:
Large accelerated filer ÍAccelerated filer Non-accelerated filer Smaller reporting company
(Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ÍNo
Aggregate market value of the Registrant’s Class A Common Stock (the only outstanding common equity of the Registrant)
held by non-affiliates of the Registrant (for this purpose, executive officers and directors of the Registrant are considered affiliates)
as of July 29, 2011: $6,358,940,247.
Number of shares outstanding of the Registrant’s common stock as of March 16, 2012: 84,723,859 shares of Class A Common Stock.
DOCUMENT INCORPORATED BY REFERENCE:
Portions of the Registrant’s definitive proxy statement for the Annual Meeting of Stockholders, to be held on June 14, 2012, are
incorporated by reference into Part III of this Annual Report on Form 10-K.

Table of contents

  • Page 1
    ... Fitch Path, New Albany, Ohio (Address of principal executive offices) 43054 (Zip Code) Registrant's telephone number, including area code (614) 283-6500 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A Common Stock...

  • Page 2
    ABERCROMBIE & FITCH CO. TABLE OF CONTENTS PART I ITEM 1. ITEM 1A. ITEM 1B. ITEM 2. ITEM 3. ITEM 4. SUPPLEMENTAL ITEM. BUSINESS ...RISK FACTORS ...UNRESOLVED STAFF COMMENTS ...PROPERTIES ...LEGAL PROCEEDINGS ...MINE SAFETY DISCLOSURES ...EXECUTIVE OFFICERS OF THE REGISTRANT ...PART II MARKET FOR ...

  • Page 3
    ...-24.1 EX-31.1 EX-31.2 EX-32.1 EX-101 EX-101 EX-101 EX-101 EX-101 EX-101 PART IV EXHIBITS AND FINANCIAL STATEMENT SCHEDULES ... 111 INSTANCE DOCUMENT ...SCHEMA DOCUMENT ...CALCULATION LINKBASE DOCUMENT ...LABELS LINKBASE DOCUMENT ...PRESENTATION LINKBASE DOCUMENT ...DEFINITION LINKBASE DOCUMENT ...

  • Page 4
    ..., abercrombie kids, and Hollister brands. The Company also operates stores and direct-to-consumer operations offering bras, underwear, personal care products, sleepwear and at-home products for girls under the Gilly Hicks brand. As of January 28, 2012, the Company operated 946 stores in the United...

  • Page 5
    ... and personality of each brand. The store design, furniture, fixtures and music are all carefully planned and coordinated to create a shopping experience that reflects the Abercrombie & Fitch, abercrombie kids, Hollister or Gilly Hicks lifestyle. The Company's sales associates and managers are...

  • Page 6
    ...the number of retail stores operated by the Company at January 28, 2012: Fiscal 2011 Abercrombie & Fitch abercrombie kids Hollister Gilly Hicks Total U.S...International ...Total ...DIRECT-TO-CONSUMER BUSINESS. 280 14 294 154 5 159 494 77 571 18 3 21 946 99 1,045 The Company operates websites...

  • Page 7
    ... in New Albany, Ohio into one, with an expected completion date by the end of Fiscal 2012. The Company uses a third-party DC in the Netherlands for the distribution of merchandise to stores and direct-to-consumer customers located in Europe, and a third-party DC in Hong Kong for the distribution of...

  • Page 8
    ...-School and Holiday seasons. The Company believes it maintains a good relationship with its associates. However, in the normal course of business, the Company is party to lawsuits involving former and current associates. Please see the discussion in "ITEM 3. LEGAL PROCEEDINGS" in this Annual Report...

  • Page 9
    ...results of operations of RUEHL are reflected in Income (Loss) from Discontinued Operations, Net of Tax on the Consolidated Statements of Operations and Comprehensive Income included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K, for all periods presented...

  • Page 10
    ... that could adversely impact sales; • we have incurred, and may continue to incur, significant costs related to store closures; • our development of a new brand concept such as Gilly Hicks could have a material adverse effect on our financial condition or results of operations; • fluctuations...

  • Page 11
    ...volatile and investors may not be able to resell shares of our Common Stock at or above the price paid to acquire the shares; • our ability to attract customers to our stores depends, in part, on the success of the shopping malls in which most of our stores are located; • our net sales fluctuate...

  • Page 12
    ... to factors that affect worldwide economic conditions including unemployment, consumer credit availability, consumer debt levels, reductions in net worth based on declines in the financial, residential real estate and mortgage markets, sales tax rates and rate increases, fuel and energy prices...

  • Page 13
    ... a timely manner, we may experience inventory shortages, which may negatively impact customer relationships, diminish brand loyalty and result in lost sales. Any of these events could significantly harm our operating results and financial condition. Fluctuations in the cost, availability and quality...

  • Page 14
    ... stores or could adversely affect our inventory levels. Furthermore, our ability to conduct business in international markets may be adversely affected by legal, regulatory, political and economic risks. Our international expansion strategy and success could also be adversely impacted by the global...

  • Page 15
    ..., obtaining prime locations for stores, setting up foreign offices and distribution centers, as well as hiring experienced management. We may be unable to open and operate new stores successfully, or we may face operational issues that delay our intended pace of international store openings, and, in...

  • Page 16
    ...condition or results of operations. Historically, we have developed and launched new brands internally that have contributed to our sales growth. Our most recent brand, Gilly Hicks, offers bras, underwear, personal care products, sleepwear and at-home products for girls. The development of new brand...

  • Page 17
    ...stock price volatility in the future. Our market share may be negatively impacted by increasing competition and pricing pressures from companies with brands or merchandise competitive with ours. The sale of apparel and personal care products through stores and direct-to-consumer channels is a highly...

  • Page 18
    ... of our stores and the continuing popularity of malls in the U.S. and, increasingly, in many international locations as shopping destinations. We cannot control the development of new shopping malls in the United States or around the world; the availability or cost of appropriate locations within...

  • Page 19
    ... this seasonality, net sales and net income during any fiscal quarter cannot be used as an accurate indicator of our annual results. Any factors negatively affecting us during the third and fourth fiscal quarters of any year, including inclement weather or unfavorable economic conditions, could have...

  • Page 20
    ... to attract, retain and develop a sufficient number of qualified senior executive officers in future periods. Interruption in the flow of merchandise from our key vendors and international manufacturers could disrupt our supply chain, which could result in lost sales and could increase our costs. We...

  • Page 21
    ... distribution centers internationally makes us susceptible to disruptions or adverse conditions affecting our distribution centers. Our two distribution centers located in New Albany, Ohio, manage the receipt, storage, sorting, packing and distribution of merchandise to our North American stores...

  • Page 22
    ... orders are placed through our websites. In addition, a significant portion of sales made through our retail stores requires the collection of certain customer data, such as credit card information. In order for our sales channels to function and develop successfully, we and other parties involved...

  • Page 23
    ... trademarks could have a negative impact on our brand image and limit our ability to penetrate new markets. We believe our trademarks, Abercrombie & Fitch®, abercrombie®, Hollister®, Gilly Hicks® and the "Moose" and "Seagull" logos, are an essential element of our strategy. We have obtained or...

  • Page 24
    ... supplies from, or manufacture in, less costly markets or penetrate new markets should our business plan include selling our merchandise in those non-U.S. jurisdictions. We have an anti-counterfeiting program, under the auspices of the Abercrombie & Fitch Brand Protection Team, whose goal is to...

  • Page 25
    ...retailers generally and/or govern the importation, promotion and sale of merchandise and the operation of retail stores and distribution centers. As our business becomes more international in scope and we enter more countries internationally, the number of laws and regulations that we are subject to...

  • Page 26
    ...of any new or more stringent legislation including those related to health care, taxes, transportation and logistics, privacy, environmental issues, trade, product safety or employment and labor, could adversely affect our business and results of operations. Our unsecured Amended and Restated Credit...

  • Page 27
    ...reported financial results. Changing regulatory requirements for corporate governance and public disclosure, including SEC regulations and the Financial Accounting Standards Board's accounting standards requirements are creating additional complexities for public companies. For example, in July 2010...

  • Page 28
    ITEM 1B. UNRESOLVED STAFF COMMENTS None. 25

  • Page 29
    ... distribution and shipping facility located in the Columbus, Ohio area, all of which are owned by the Company. Additionally, the Company leases small facilities to house its design and sourcing support centers in Hong Kong, New York City and Los Angeles, California, as well as offices in the United...

  • Page 30
    ... resulted in dismissal of the state-court derivative action, which had been stayed pending resolution of the federal derivative cases. On December 21, 2007, Spencer de la Cruz, a former employee, filed an action against Abercrombie & Fitch Co. and Abercrombie & Fitch Stores, Inc. (collectively, the...

  • Page 31
    ... class. On March 14, 2012, the Court continued the hearing to April 18, 2012. As of January 28, 2012, the Company increased its litigation reserve to cover the expected cost of the proposed settlement. On October 17, 2011, Amber Echavez a former employee, filed an action against Abercrombie & Fitch...

  • Page 32
    ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 29

  • Page 33
    ... for The Honorable Milton Pollack of the United States District Court for the Southern District of New York from 1989 to 1990. Before joining Vorys, Mr. Robins practiced for several years as an associate at Davis Polk & Wardwell in New York City. The executive officers serve at the pleasure of the...

  • Page 34
    ... 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 2011 and Fiscal 2010: Sales Price High Low Fiscal 2011 4th Quarter...

  • Page 35
    ... Fiscal 2010, A&F repurchased approximately 1.6 million shares of A&F's Common Stock in the open market with a cost of approximately $76.2 million. A&F did not repurchase any shares of A&F's Common Stock in the open market during Fiscal 2009. Both the Fiscal 2011 and the Fiscal 2010 repurchases...

  • Page 36
    ... (i) shares of A&F's Common Stock; (ii) the Standard & Poor's 500 Stock Index (the "S&P 500 Index") and (iii) the Standard & Poor's Apparel Retail Composite Index (the "S&P Apparel Retail Index"), including reinvestment of dividends. The plotted points represent the closing price on the last trading...

  • Page 37
    .... ABERCROMBIE & FITCH CO. FINANCIAL SUMMARY (Thousands, except per share and per square foot amounts, ratios and store and associate data) Summary of Operations (Information below excludes amounts related to discontinued operations, except where otherwise noted) 2011 2010 2009 2008 2007 Net Sales...

  • Page 38
    ...' Equity is computed by dividing net income (including discontinued operations) by the average stockholders' equity balance (including discontinued operations). A store is included in comparable store sales when it has been open as the same brand at least one year and its square footage has not...

  • Page 39
    ...-lived assets, charges related to store closures and lease exits, and other charges associated with legal settlements and a change in intent regarding the Company's auction rate securities (ARS), the Company reported adjusted, non-GAAP net income per diluted share from continuing operations of $2.30...

  • Page 40
    ... associated with 14 Abercrombie & Fitch, 21 abercrombie kids, 42 Hollister and two Gilly Hicks stores. For the fifty-two week period ended January 29, 2011, the charge was associated with two Abercrombie & Fitch, two abercrombie kids, nine Hollister and 13 Gilly Hicks stores. For the fifty-two week...

  • Page 41
    ... credit. The following data represents the amounts shown in the Company's Consolidated Statements of Operations and Comprehensive Income for the last three fiscal years, expressed as a percentage of net sales: 2011 2010 2009 NET SALES ...Cost of Goods Sold ...GROSS PROFIT ...Stores and Distribution...

  • Page 42
    ... 2010 2009 Net sales by segment (in thousands) ...U.S. Stores ...International Stores ...Direct-to-consumer ...Other ...Increase (decrease) in net sales from prior year ...U.S. Stores ...International Stores ...Direct-to-consumer ...Other ...Net sales by brand (in thousands) ...Abercrombie & Fitch...

  • Page 43
    ... the international appeal of our brands to build a highly profitable, sustainable, global business. There are five key elements to this strategy. First, continuing to provide high-quality, trend-right merchandise and a compelling and differentiated store experience. Second, continuing to close...

  • Page 44
    ... direct-to-consumer business, including shipping and handling revenue, accounted for 13.3% of total net sales in Fiscal 2011 compared to 11.7% in Fiscal 2010. Comparable store sales by brand for Fiscal 2011 were as follows: Abercrombie & Fitch increased 3%, with men's and women's increasing by a low...

  • Page 45
    ... $4.4 million associated with the closure of 64 domestic stores during the year. The decrease in stores and distribution expense rate for Fiscal 2011 was primarily driven by lower store occupancy costs as a percentage of net sales. Shipping and handling costs, including costs incurred to store, move...

  • Page 46
    ...ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report on Form 10-K for further discussion. Net Income and Net Income per Diluted Share Net income for Fiscal 2011 was $127.7 million compared to $150.3 million for Fiscal 2010. Net income per diluted share for Fiscal 2011 was $1.43...

  • Page 47
    ...-to-consumer business, including shipping and handling revenue, accounted for 11.7% of total net sales in Fiscal 2010 compared to 9.9% in Fiscal 2009. Comparable store sales by brand for Fiscal 2010 were as follows: Abercrombie & Fitch increased 9%, with women's increasing by a high single digit...

  • Page 48
    ... amended credit agreement. The effective tax rate from continuing operations for Fiscal 2010 was 34.3% compared to 33.9% for Fiscal 2009, in each year benefiting from foreign operations. Loss from Discontinued Operations, Net of Tax The Company completed the closure of its RUEHL branded stores and...

  • Page 49
    ... Fiscal 2009. Net income per diluted share for Fiscal 2010 included store-related asset impairment charges of approximately $0.34 per diluted share associated with 26 stores and store exit charges of approximately $0.03 per diluted share associated with the closure of 64 domestic stores. Net income...

  • Page 50
    ...in the number of new international retail locations, including flashship locations, as well as Home Office, Distribution Centers and Information Technology infrastructure projects. Cash inflows from investing activities were less in Fiscal 2011 due to a reduction in proceeds from sales of marketable...

  • Page 51
    ... Plan (the "SERP") for the Company's Chief Executive Officer with a present value of $14.6 million at January 28, 2012. See Note 18, "Retirement Benefits," of the Notes to Consolidated Financial Statements included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report...

  • Page 52
    included in the text under the caption "EXECUTIVE OFFICER COMPENSATION" in A&F's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on June 14, 2012, incorporated by reference in "ITEM 11. EXECUTIVE COMPENSATION" of this Annual Report on Form 10-K. Obligations for Financing...

  • Page 53
    ...two weeks ended January 28, 2012 and January 29, 2011, respectively, were as follows: Store Activity Abercrombie & Fitch abercrombie Hollister Gilly Hicks Total U.S. Stores January 29, 2011 ...New ...Closed ...January 28, 2012 ...Gross Square Feet at January 28, 2012 ...International Stores January...

  • Page 54
    ... millions) 2011 2010 2009 New Store Construction, Store Refreshes and Remodels ...Home Office, Distribution Centers and Information Technology ...Total Capital Expenditures ... $258.0 60.6 $318.6 $118.0 42.9 $160.9 $137.0 38.5 $175.5 During Fiscal 2012, based on new store opening plans and other...

  • Page 55
    ... assumptions that management believes to be reasonable. The Company sells gift cards in its stores and through direct-to-consumer operations. The Company accounts for gift cards sold to customers by recognizing a liability at the time of sale. The liability remains on the Company's books until the...

  • Page 56
    ... the periodic coupon rate adjusted for the marketability discount, market required rate of return and expected term. While the Company changed its intent regarding the sale of its ARS securities, the Company has not made any material changes in the accounting methodology used to determine the fair...

  • Page 57
    ...inventory for lost or stolen items. The Company has not made any material changes in the accounting methodology used to determine the shrink reserve or the valuation reserve over the past three fiscal years. The Company does not expect material changes in the near term to the underlying assumptions...

  • Page 58
    ...undiscounted future cash flow model include sales, gross margin and, to a lesser extent, operating expenses. The Company has not made any material changes in the accounting methodology used to determine impairment loss over the past three fiscal years. During Fiscal 2011, 107 stores were tested for...

  • Page 59
    ... for income taxes is determined using the asset and liability approach. Tax laws often require items to be included in tax filings at different times than the items are being reflected in the financial statements. A current liability is recognized for the estimated taxes payable for the current year...

  • Page 60
    ... Effective February 2, 2003, the Company established a Chief Executive Officer Supplemental Executive Retirement Plan to provide additional retirement income to its Chairman and Chief Executive Officer. Subject to service requirements, the CEO will receive a monthly benefit equal to 50% of his final...

  • Page 61
    ... varies by security. The credit ratings may change over time and would be an indicator of the default risk associated with the ARS and could have a material effect on the value of the ARS. During the fifty-two weeks ended January 28, 2012, the Company changed its intent regarding the sale of its ARS...

  • Page 62
    Foreign Exchange Rate Risk A&F's international subsidiaries generally operate with functional currencies other than the U.S. dollar. The Company's Consolidated Financial Statements are presented in U.S. dollars. Therefore, the Company must translate revenues, expenses, assets and liabilities from ...

  • Page 63
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ABERCROMBIE & FITCH CO. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Thousands, except share and per share amounts) 2011 2010 2009 NET SALES ...Cost of Goods Sold ...GROSS PROFIT ...Stores and Distribution Expense ...Marketing...

  • Page 64
    ...' EQUITY: Class A Common Stock - $0.01 par value: 150,000 shares authorized and 103,300 shares issued at each of January 28, 2012 and January 29, 2011 . . Paid-In Capital ...Retained Earnings ...Accumulated Other Comprehensive Income (Loss), net of tax ...Treasury Stock, at Average Cost - 17...

  • Page 65
    ... Issuances and Exercises ...Share-based Compensation Expense ...Losses on Marketable Securities reclassed to the Income Statement ...Net Change in Unrealized Gains or Losses on Derivative Financial Instruments ...Foreign Currency Translation Adjustments ...Balance, January 28, 2012 ... 87,636 $1,033...

  • Page 66
    ABERCROMBIE & FITCH CO. CONSOLIDATED STATEMENTS OF CASH FLOWS 2011 2010 (Thousands) 2009 OPERATING ACTIVITIES: Net Income ...Impact of Other Operating Activities on Cash Flows: Depreciation and Amortization ...Non-Cash Charge for Asset Impairment ...Loss on Disposal / Write-off of Assets ...Lessor ...

  • Page 67
    ... the results of stores in the United States and Puerto Rico. The International Stores reportable segment includes the results of stores in Canada, Europe and Asia. The Direct-to-Consumer reportable segment operating income is defined as income directly associated with the website operations, both...

  • Page 68
    ... the net book value of store long-lived assets. International Stores also includes VAT receivables. Total assets for the Direct-to-Consumer reportable segment primarily consist of credit card receivables, merchandise inventory, and the net book value of information technology and distribution center...

  • Page 69
    ...stores and direct-to-consumer operations, including shipping and handling revenue. Net sales are reported by geographic area based on the location of the customer. January 28, 2012 Fifty-Two Weeks Ended January 29, 2011 January 30, 2010 (in thousands): United States ...Europe ...Other International...

  • Page 70
    ... will be recovered as sales are made to customers. INVENTORIES Inventories are principally valued at the lower of average cost or market utilizing the retail method. The Company determines market value as the anticipated future selling price of merchandise less a normal margin. An initial markup is...

  • Page 71
    ... to seven years for information technology; and from three to 20 years for other property and equipment. The cost of assets sold or retired and the related accumulated depreciation or amortization are removed from the accounts with any resulting gain or loss included in net income. Maintenance and...

  • Page 72
    ...the assets. Factors used in the evaluation include, but are not limited to, management's plans for future operations, recent operating results and projected cash flows. See Note 8, "Property and Equipment, Net," for further discussion. The Company expenses all internal-use software costs incurred in...

  • Page 73
    ... and the related direct shipping and handling costs are classified as Stores and Distribution Expense. Associate discounts are classified as a reduction of net sales. The Company reserves for sales returns through estimates based on historical experience. The sales return reserve was $7.0 million...

  • Page 74
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company is not required by law to escheat the value of unredeemed gift cards to the states in which it operates. During Fiscal 2011, Fiscal 2010 and Fiscal 2009, the Company recognized other operating income for ...

  • Page 75
    ... during the first three quarters of the current fiscal year. The Company does not believe the correction was material to any current or prior interim or annual periods that were affected. STORE PRE-OPENING EXPENSES Pre-opening expenses related to new store openings are charged to operations...

  • Page 76
    ...to design and develop the Company's merchandise are expensed as incurred and are reflected as a component of "Marketing, General and Administrative Expense." NET INCOME PER SHARE Net income per basic share is computed based on the weighted-average number of outstanding shares of Class A Common Stock...

  • Page 77
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 2010, respectively. The Company also recognized $19.2 million, $14.7 million and $12.8 million in tax benefits related to share-based compensation for the fifty-two week periods ended January 28, 2012, January 29, 2011 ...

  • Page 78
    ... as the annualized standard deviation of the differences in the natural logarithms of the weekly stock closing price, adjusted for stock splits and dividends. In the case of restricted stock units, the Company calculates the fair value of the restricted stock units granted using the market price of...

  • Page 79
    ... estimated fair value of stock options granted during the fifty-two weeks ended January 30, 2010, and the weighted-average assumptions used in calculating such fair value, on the date of grant, were as follows: Fiscal Year 2009 Grant date market price ...Exercise price ...Fair value ...Assumptions...

  • Page 80
    ... used in calculating such fair value, on the date of grant, were as follows: Fiscal Year Chairman and Chief Executive Officer 2011 2010 2009 Other Executive Officers 2011 2010 2009 All Other Associates 2011 2010 2009 Grant date market price ...Exercise price ...Fair value ...Assumptions: Price...

  • Page 81
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The grant date fair value of stock appreciation rights which vested during the fifty-two weeks ended January 28, 2012 and January 29, 2011 was $11.3 million and $5.0 million, respectively. As of January 28, 2012, there ...

  • Page 82
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) January 29, 2011, respectively. Restricted cash includes various cash deposits with international banks that are used as collateralization for customary non-debt banking commitments and deposits into trust accounts to ...

  • Page 83
    ... used as a source of funds to match respective funding obligations to participants in the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan I, the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan II and the Chief Executive Officer Supplemental...

  • Page 84
    ... contracts is determined by using quoted market prices of the same or similar instruments, adjusted for counterparty risk. The level 3 assets include available-for-sale investments in insured student loan backed ARS and insured municipal authority bond ARS. The Company measures the fair value...

  • Page 85
    ..., included in Stores and Distribution Expense on the Consolidated Statement of Operations and Comprehensive Income for the fifty-two weeks ended January 28, 2012. The asset impairment charge was related to 14 Abercrombie & Fitch, 21 abercrombie kids, 42 Hollister, and two Gilly Hicks stores. 82

  • Page 86
    ... in Stores and Distribution Expense on the Consolidated Statement of Operations and Comprehensive Income for the fifty-two weeks ended January 29, 2011. The charge was associated with one Abercrombie & Fitch, one abercrombie kids and three Hollister stores. In the fourth quarter of Fiscal 2010, as...

  • Page 87
    ... & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 9. OTHER ASSETS Other assets consisted of (in thousands): 2011 2010 Rabbi Trust ...Long-term deposits ...Long-term supplies ...Intellectual property ...Restricted cash ...Non-current deferred tax assets ...Prepaid income tax...

  • Page 88
    ... 10,277 82,545 $300,100 Accrued payroll and related costs include salaries, benefits, withholdings and other payroll related costs. Other accrued expenses include expenses incurred but not yet paid related to outside services associated with store, direct-to-consumer and home office operations. 85

  • Page 89
    ... charges to foreign affiliates for management fees, cost-sharing, royalties and interest. The provision for income taxes from continuing operations consisted of (in thousands): 2011 2010 2009 Current: Federal ...State ...Foreign ...Deferred: Federal ...State ...Foreign ...Total provision ... $100...

  • Page 90
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Reconciliation between the statutory federal income tax rate and the effective tax rate for continuing operations is as follows: 2011 2010 2009 Federal income tax rate ...State income tax, net of federal income tax ...

  • Page 91
    ... tax assets because management believes that it is more likely than not that the full amount of the net deferred tax assets will be realized in the future. 2011 2010 (In thousands) 2009 Unrecognized tax benefits, beginning of the year ...Gross addition for tax positions of the current year ...Gross...

  • Page 92
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 15. LONG-TERM DEBT On July 28, 2011, the Company entered into an unsecured Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") under which up to $350 million is available. This Amended ...

  • Page 93
    ...outstanding under the Prior Credit Agreement was 2.4% for the fifty-two weeks ended January 28, 2012. 16. DERIVATIVES The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivatives, primarily forward contracts, to manage the financial impacts of these...

  • Page 94
    ... losses that are reported in Accumulated Other Comprehensive Income (Loss). Substantially all of the remaining unrealized gains or losses related to foreign-currency-denominated inter-company inventory sales that have occurred as of January 28, 2012 will be recognized in costs of goods sold over the...

  • Page 95
    ABERCROMBIE & FITCH CO. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company also uses foreign exchange forward contracts to hedge certain foreign currency denominated net monetary assets/liabilities. Examples of monetary assets/liabilities include cash balances, receivables and ...

  • Page 96
    ... 28, January 29, 2012 2011 2012 2011 2012 2011 (in thousands) Derivatives in Cash Flow Hedging Relationships Foreign Exchange Forward Contracts ...$14,415 $1,614 Cost of Goods Sold $982 $2,122 Other Operating Expense (Income), Net $(1,190) $(304) (a) The amount represents the change in fair...

  • Page 97
    ... an accrual adjustment related to the settlement of outstanding lease obligations. 18. RETIREMENT BENEFITS The Company maintains the Abercrombie & Fitch Co. Savings & Retirement Plan, a qualified plan. All U.S. associates are eligible to participate in this plan if they are at least 21 years of age...

  • Page 98
    ...the Special Litigation Committee Report. On March 12, 2009, the Company's motion was granted and, on April 10, 2009, plaintiffs filed an appeal from the order of dismissal in the United States Court of Appeals for the Sixth Circuit. On April 5, 2011, a panel of the United States Court of Appeals for...

  • Page 99
    ... class. On March 14, 2012, the Court continued the hearing to April 18, 2012. As of January 28, 2012, the Company increased its litigation reserve to cover the expected cost of the proposed settlement. On October 17, 2011, Amber Echavez, a former employee, filed an action against Abercrombie & Fitch...

  • Page 100
    ... separate but consecutive statements. The amendment does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income under current GAAP. This guidance is effective for the Company's fiscal year and interim...

  • Page 101
    ... Date occurs. The "Distribution Date" generally means the earlier of (i) the close of business on the 10th day after the date (the "Share Acquisition Date") of the first public announcement that a person or group (other than A&F or any of A&F's subsidiaries or any employee benefit plan of A&F or of...

  • Page 102
    ... FINANCIAL STATEMENTS - (Continued) 23. QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized unaudited quarterly financial results for Fiscal 2011 and Fiscal 2010 follows (in thousands, except per share amounts): Fiscal 2011 Quarter First Second Third Fourth Net sales ...Gross profit ...Net income...

  • Page 103
    ... on these financial statements and on the Company's internal control over financial reporting based on our integrated audit. 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...

  • Page 104
    ... of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ PricewaterhouseCoopers LLP Columbus, Ohio March 27, 2012 101

  • Page 105
    ITEM 9. None. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. 102

  • Page 106
    ... public accounting firm, PricewaterhouseCoopers LLP, has issued an audit report on the effectiveness of A&F's internal control over financial reporting as of January 28, 2012 as stated in their report, which is included in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA" of this Annual Report...

  • Page 107
    Changes in Internal Control Over Financial Reporting There were no changes in A&F's internal control over financial reporting during the fourth quarter ended January 28, 2012 that materially affected, or are reasonably likely to materially affect, A&F's internal control over financial reporting. ...

  • Page 108
    ITEM 9B. OTHER INFORMATION. None. PART III 105

  • Page 109
    ... OWNERS AND MANAGEMENT - Section 16(a) Beneficial Ownership Reporting Compliance" in A&F's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on June 14, 2012. Code of Business Conduct and Ethics Information concerning the Abercrombie & Fitch Code of Business Conduct and...

  • Page 110
    ITEM 11. EXECUTIVE COMPENSATION. Information regarding executive compensation is incorporated by reference from the text to be included under the ...REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION" and "EXECUTIVE OFFICER COMPENSATION" in A&F's definitive Proxy Statement for the Annual...

  • Page 111
    ...in A&F's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on June 14, 2012. Information regarding the number of securities to be issued and remaining available under equity compensation plans as of January 28, 2012 is incorporated by reference from the text to be included...

  • Page 112
    ... AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Information concerning certain relationships and transactions involving the Company and certain related persons within the meaning of Item 404(a) of SEC Regulation S-K as well as information concerning A&F's policies and procedures for the...

  • Page 113
    ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Information concerning the pre-approval policies and procedures of A&F's Audit Committee and fees for services rendered by the Company's principal independent registered public accounting firm is incorporated by reference from the text to be included ...

  • Page 114
    ... FINANCIAL STATEMENT SCHEDULES. (a) The following documents are filed as a part of this Annual Report on Form 10-K: (1) Consolidated Financial Statements: Consolidated Statements of Operations and Comprehensive Income for the fiscal years ended January 28, 2012, January 29, 2011 and January 30, 2010...

  • Page 115
    ... Annual Report on Form 10-K for the fiscal year ended January 30, 1999 (File No. 001-12107). Certificate of Decrease of Shares Designated as Class B Common Stock as filed with the Delaware Secretary of State on July 30, 1999, incorporated herein by reference to Exhibit 3.3 to A&F's Quarterly Report...

  • Page 116
    ...(Amendment No. 2), dated and filed June 12, 2008 (File No. 001-12107). Appointment and Acceptance of Successor Rights Agent, effective as of the opening of business on November 2, 2009, between A&F and American Stock Transfer & Trust Company, LLC (as successor to National City Bank), as Rights Agent...

  • Page 117
    ... 29, 2012 (File No. 001-12107). Abercrombie & Fitch Co. Incentive Compensation Performance Plan, incorporated herein by reference to Exhibit 10.1 to A&F's Current Report on Form 8-K dated and filed June 18, 2007 (File No. 001-12107). 1998 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option...

  • Page 118
    ... by reference to Exhibit 10.1 to A&F's Current Report on Form 8-K dated and filed January 31, 2011 (File No. 001-12107). Aircraft Time Sharing Agreement, made and entered into to be effective as of June 1, 2010, by and between Abercrombie & Fitch Management Co., as Lessor, and Michael S. Jeffries...

  • Page 119
    ...). Abercrombie & Fitch Co. 2003 Stock Plan for Non-Associate Directors, incorporated herein by reference to Exhibit 10.9 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended May 3, 2003 (File No. 001-12107). Form of Restricted Shares Award Agreement (also called Stock Unit Agreement...

  • Page 120
    ... 10.16 to A&F's Quarterly Report on Form 10-Q for the quarterly period ended October 30, 2004 (File No. 001-12107). Form of Restricted Shares Award Agreement (also called Stock Unit Agreement) used for grants under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates prior to November 28...

  • Page 121
    ... Current Report on Form 8-K dated and filed February 3, 2005 (File No. 001-12107). Form of Restricted Shares Award Agreement used for grants under the Abercrombie & Fitch Co. 2002 Stock Plan for Associates on or after March 6, 2006, incorporated herein by reference to Exhibit 10.35 to A&F's Annual...

  • Page 122
    ... A&F's Current Report on Form 8-K dated and filed February 17, 2009 (File No. 001-12107). Form of Stock Appreciation Right Agreement to be used to evidence the Semi-Annual Grants of stock appreciation rights to Michael S. Jeffries under the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan (now...

  • Page 123
    ... by reference to Exhibit 10.50 to A&F's Annual Report on Form 10-K for the fiscal year ended January 31, 2009 (File No. 001-12107). Computation of Leverage Ratio and Coverage Ratio for the fiscal year ended January 28, 2012. Abercrombie & Fitch Code of Business Conduct and Ethics, as amended by the...

  • Page 124
    ... & Fitch Co.'s Annual Report on Form 10-K for the fiscal year ended January 28, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations and Comprehensive Income for the fiscal years ended January 28, 2012, January 29, 2011 and January 30, 2010; (ii...

  • Page 125
    ... authorized. ABERCROMBIE & FITCH CO. Date: March 27, 2012 By /s/ JONATHAN E. RAMSDEN Jonathan E. Ramsden, Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 126
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 28, 2012 ABERCROMBIE & FITCH CO. (Exact name of registrant as specified in its charter) EXHIBITS

  • Page 127
    ... & Fitch Co.'s Annual Report on Form 10-K for the fiscal year ended January 28, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations and Comprehensive Income for the fiscal years ended January 28, 2012, January 29, 2011 and January 30, 2010; (ii...

  • Page 128
    ... 12.1 ABERCROMBIE & FITCH CO. Computation of Leverage Ratio and Coverage Ratio Fiscal Year Ended January 28, 2012 (Dollars in thousands) Leverage Ratio Calculation: ...Adjusted Total Debt (1) ...Consolidated EBITDAR (2) ...Leverage Ratio ...Coverage Ratio Calculation: Consolidated EBITDAR(2) ...Net...

  • Page 129
    ... (e) 17. Gilly Hicks LLC (e) 18. Abercrombie & Fitch Europe SA (f) 19. Abercrombie & Fitch Hong Kong Limited (f) 20. AFH Puerto Rico LLC 21. AFH Brasil Participações Ltda. (f)* 22. A&F Canada Holding Co (f) 23. Abercrombie & Fitch Trading Co. (g) 24. AFH Canada Stores Co. 25. AFH Japan GK (i) 26...

  • Page 130
    ... of AFH Hong Kong Limited Abercrombie & Fitch Management Co. owns 1% (8,500 shares @ R$1.00/share) of AFH Brasil Participações Ltda. Abercrombie & Fitch International, Inc. owns the remaining 99% (841,500 shares @ R$1.00/share). ** Abfico Netherlands Distribution B.V. owns three shares (EUR 300...

  • Page 131
    ..., 333-145166 and 333-176135) of Abercrombie & Fitch Co. of our report dated March 27, 2012 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP Columbus, Ohio March 27...

  • Page 132
    ...officer and director of Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012...as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and ...

  • Page 133
    ...officer of Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all ...

  • Page 134
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 135
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 136
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 137
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 138
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 139
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 140
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 141
    ...Abercrombie & Fitch Co., a Delaware corporation, which anticipates filing an Annual Report on Form 10-K for the fiscal year ended January 28, 2012..., as attorney in-fact and agent to sign for the undersigned, in any and all capacities, such Annual Report on Form 10-K and any and all amendments...

  • Page 142
    ...'s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and...

  • Page 143
    ... Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 27, 2012 By: /s/ MICHAEL S. JEFFRIES Michael S. Jeffries Chairman and Chief Executive Officer (Principal Executive...

  • Page 144
    ...'s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and...

  • Page 145
    ... material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 27, 2012 By: /s/ JONATHAN E. RAMSDEN Jonathan E. Ramsden Executive Vice President and Chief Financial Officer (Principal Financial Officer)

  • Page 146
    ... and Chief Financial Officer Dated: March 27, 2012 These certifications are being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed "filed...