ABERCROMBIE NYSE-ANF

TIMELINESS
SAFETY
TECHNICAL

3
3
3

High:
Low:

Raised 10/2/09

31.3
8.0

RECENT
PRICE
47.5
16.2

33.8
15.0

33.7
20.7

36.9 RELATIVE
DIVD
Median: 16.0) P/E RATIO 1.58 YLD 0.9%
77.03 P/ERATIO 25.3(Trailing:
47.4
23.1

74.1
44.2

79.4
50.0

85.8
67.7

82.1
13.7

42.3
17.0

58.5
29.9

78.3
48.2

Target Price Range

2014 2015 2016

LEGENDS
8.5 x Cash Flow p sh
. . . . Relative Price Strength
2-for-1 split 6/99
Options: Yes
Shaded areas indicate recessions

New 11/20/98
Raised 7/29/11

BETA 1.15 (1.00 = Market)

2014-16 PROJECTIONS

VALUE
LINE
128
96
80
64
48
40
32
24

Annl Total
Price
Gain
Return
High 115 (+50%) 11%
Low
80
(+5%)
2%
Insider Decisions
to Buy
Options
to Sell

S
0
1
1

O
0
1
1

N
0
2
2

D
0
1
1

J
0
1
1

F
0
1
1

M
0
2
2

A
0
2
2

M
0
4
5

16
12
% TOT. RETURN 6/11

Institutional Decisions
3Q2010
129
to Buy
to Sell
135
Hlds(000) 93540

4Q2010
142
169
83979

1Q2011
141
175
85943

Percent
shares
traded

75
50
25

1 yr.
3 yr.
5 yr.

The Abercrombie & Fitch brand was es- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
tablished in 1892 as a supplier of rugged 13.80 16.41 18.05 23.49 31.74 37.58 43.52 40.40 33.29 39.76 47.15 54.00
outdoor gear. In 1992, through the ex- 2.12 2.59 2.87 3.99 5.32 6.44 7.65 5.68
3.61
4.35
5.85
7.35
change of 43 million shares of Class B 1.65 1.94 2.06 2.50 3.75 4.59 5.20 3.05
.89
1.67
3.05
4.50
stock, Limited, Inc. repositioned the compa---.50
.60
.70
.70
.70
.70
.70
.70
.70
ny as a more fashion-oriented apparel busi- 6.02 7.71 9.21 7.78 11.34 15.92 18.78 21.06 20.78 21.67 23.35 26.45
ness. On September 26, 1996, an IPO of 98.90 97.27 94.61 86.04 87.73 88.30 86.16 87.64 87.99 87.25 87.00 87.00
8.05 million shares of Class A stock was 18.5 12.8 14.0 14.6 15.8 14.1 14.9 16.9
33.0
25.1 Bold figures are
Value Line
sold resulting in an 84.2% ownership by The
.95
.70
.80
.77
.84
.76
.79
1.02
2.20
1.62
estimates
Limited. Goldman Sachs led the spinoff on
---1.4%
1.0%
1.1%
.9%
1.4%
2.4%
1.7%
May 29, 1998 issuing .01367 of an Aber- 1364.9 1595.8 1707.8 2021.3 2784.7 3318.2 3749.9 3540.3 2928.6 3468.8 4100 4700
crombie share for each Limited share.
43.9% 44.7% 45.9% 50.2% 70.9% 71.0% 71.9% 73.1% 72.5% 70.4% 70.5% 71.0%
CAPITAL STRUCTURE as of 4/30/11
Total Debt $69.9 mill. Due in 5 Yrs $69.9 mill.
LT Debt $69.9 mill.
LT Interest $5.0 mill.
(4% of Capl)
Leases, Uncapitalized Annual rentals $331.2 mill.
No Defined Benefit Pension Plan
Pfd Stock None
Common Stock 87,667,424 shs.
as of 6/3/11
MARKET CAP: $6.8 billion (Mid Cap)
CURRENT POSITION 2009
2010
($MILL.)
Cash Assets
712.5
826.4
Receivables
90.9
81.3
Inventory (FIFO)
310.7
385.9
Other
121.8
139.7
Current Assets
1235.9 1433.3
Accts Payable
110.2
137.2
Debt Due
--Other
339.2
421.7
Current Liab.
449.4
558.9
ANNUAL RATES Past
of change (per sh)
10 Yrs.
Sales
14.0%
Cash Flow
11.0%
Earnings
3.5%
Dividends
-Book Value
21.5%
Fiscal
Year
Begins

2008
2009
2010
2011
2012
Fiscal
Year
Begins

2008
2009
2010
2011
2012
Calendar

2007
2008
2009
2010
2011

4/30/11
741.8
83.2
358.4
156.1
1339.5
151.4
-340.4
491.8

Past Estd 08-10

5 Yrs.
to 14-16
9.0% 13.0%
2.5% 16.0%
-7.5% 26.0%
14.0%
3.0%
17.5% 13.0%

Full
QUARTERLY SALES ($ mill.)A
Fiscal
Apr.Per Jul.Per Oct.Per Jan.Per Year
800.2 845.8 896.3 998.0 3540.3
601.7 637.2 753.7 936.0 2928.6
687.8 745.8 885.8 1149.4 3468.8
836.7 875 1040 1348.3 4100
965 1010 1170 1555
4700
Full
EARNINGS PER SHARE AB
Fiscal
Apr.Per Jul.Per Oct.Per Jan.Per Year
.69
.87
.72
.78
3.05
d.26
d.09
.55
.68
.89
d.13
.22
.56
1.03
1.67
.27
.23
.75
1.80
3.05
.40
.55
1.20
2.35
4.50
QUARTERLY DIVIDENDS PAID D
Full
Mar.31 Jun.30 Sep.30 Dec.31 Year
.175
.175
.175
.175
.70
.175
.175
.175
.175
.70
.175
.175
.175
.175
.70
.175
.175
.175
.175
.70
.175
.175

(A) Fiscal year ends Saturday closest to January 31st of the following year. (B) Diluted earnings. Quarterly figures may not add to total due
to difference in share count. Excl. n.r. chg.: 04,

22.9%
491
168.7
39.0%
12.4%
241.6
-595.4
28.3%
28.3%
28.3%
--

23.2%
597
194.9
38.4%
12.2%
389.7
-749.5
26.0%
26.0%
26.0%
--

23.3%
700
205.1
38.8%
12.0%
472.7
-871.3
23.5%
23.5%
23.5%
--

24.1%
788
237.4
38.5%
11.7%
238.4
-669.3
35.5%
35.5%
28.5%
20%

24.4% 24.2% 24.6% 18.8%

851
944
1035
1125
342.2 422.2 475.7 272.3
39.2% 37.2% 37.4% 39.6%
12.3% 12.7% 12.7%
7.7%
455.5 581.5 597.2 635.0
--- - 100.0
995.1 1405.3 1618.3 1845.6
34.4% 30.0% 29.4% 14.1%
34.4% 30.0% 29.4% 14.8%
29.1% 25.7% 25.6% 11.5%
15%
15%
13%
22%

12.2% 13.3%
1096
1069
79.0 150.3
33.9% 34.3%
2.7%
4.3%
786.5 874.4
71.2
68.6
1827.9 1890.8
4.3%
7.9%
4.3%
8.0%
1.0%
4.7%
78%
41%

16.0%
1065
275
35.0%
6.7%
850
70.0
2030
13.0%
13.5%
10.5%
22%

18.0%
1080
400
35.0%
8.5%
950
70.0
2300
17.0%
17.5%
15.0%
15%

THIS
STOCK

VL ARITH.*
INDEX

121.1
13.4
30.7

35.8
51.3
50.6

VALUE LINE PUB. LLC

14-16

Sales per sh A
Cash Flowper sh
Earnings per sh AB
Divds Decld per sh D
Book Value per sh
Common Shs Outstg C
Avg Annl P/E Ratio
Relative P/E Ratio
Avg Annl Divd Yield

76.45
10.85
7.50
.84
42.35
85.00
13.0
.85
.9%

Sales ($mill) A
Gross Margin E
Operating Margin
Number of Stores
Net Profit ($mill)
Income Tax Rate
Net Profit Margin
Working Capl ($mill)
Long-Term Debt ($mill)
Shr. Equity ($mill)
Return on Total Capl
Return on Shr. Equity
Retained to Com Eq
All Divds to Net Prof

6500
72.0%
20.0%
1160
650
37.0%
10.0%
1700
Nil
3600
18.0%
18.0%
16.0%
11%

BUSINESS: Abercrombie & Fitch Company retails lines of mens,

womens, and childrens clothing. Operates under the names Abercrombie & Fitch, abercrombie, Hollister, and Gilly Hicks. Originally
established in 1892 to supply apparel for the rugged outdoors. Now,
the company is better known for its youthful, fashion-oriented
casual apparel. Basic apparel line includes jeans, T-shirts, knits,

and button-downs. Has 1,069 stores located in North America,

Europe, and Japan as of 1/29/11. RUEHL discontd in 2009. Has
about 85,000 empls. (incl. 9,000 full-time). Chrmn. & CEO: Michael
Jeffries owns 3.0% of common; other officers and directors, .7%
(5/11 proxy). Inc.: Delaware. Addr.: 6301 Fitch Path, New Albany,
Ohio 43054. Tel.: 614-283-6500. Internet: www.abercrombie.com.

Fiscal 2011 (began January 30th)

should be an excellent year for Abercrombie & Fitch. Share profit in the
opening quarter eclipsed our estimate of
$0.03 and the year-earlier loss of $0.13, on
a 22% sales advance. Comps were up
across all three major chainsAbercrombie
& Fitch, abercrombie kids, and Hollister.
International-based and online sales were
especially strong. Meanwhile, good expense leverage led to healthy margin performance. Except for the July period, prospects for the balance of the year should be
fairly positive, too. Thus, weve upped our
annual share-net target from $2.75.
Margins ought to pick up, despite
pressure from increasing product
costs and some other expenses. Higher
sourcing costs probably hurt the gross
margin in the second quarter. That, along
with store opening expenses associated
with the retailers global expansion strategy (more below), likely took a toll on the
operating margin. But the picture should
be rosier in the back half, as ANF raises
its prices to offset higher product costs,
though caution is needed to avoid pushing
customers away. Too, sales generated from

new stores and lower expenses from the

closure of 50 underperforming domestic
shops ought to help improve leverage.
International expansion remains a
key theme for this retailer, mostly to
compensate for the maturing domestic
business, where the store base is being
reduced. ANF continues to focus on expanding in markets throughout Europe
and Asia, where its brand is gaining
ground and growth opportunities are vast.
Five A&F flagship stores are on track to
debut
in
France,
Spain,
Belgium,
Germany, and Singapore; up to 40 Hollister shops are slated to open in Europe
and Asia. Latin America is another region
likely to be tapped a few years from now.
Neutrally ranked Abercrombie stock
has risen substantially since our May
review, reflecting investor enthusiasm
with the companys expansion plans. Indeed, international-based sales and a
growing online business should help the
retailer prosper over to mid-decade. But
wed defer commitments for now, as the
recent price discounts much of the growth
we foresee.
J. Susan Ferrara
August 5, 2011

$0.22; 05, $0.09. Excl. inc. (loss) from disc. Dividends historically paid mid- or late March,
ops.: 09, ($0.89); Q111, $0.01. Next egs. rpt. June, Sept., Dec. (E) Beginning FY05, data redue mid-Aug. (C) In millions, adjusted for stock flect new classification of cost of goods sold.
split. (D) Began paying dividends in 04.

2011, Value Line Publishing LLC. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscribers own, non-commercial, internal use. No part
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.

Companys Financial Strength

Stocks Price Stability
Price Growth Persistence
Earnings Predictability

A
40
55
45

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