ABERCROMBIE & FITCH CO. REPORTS FIRST QUARTER RESULTS

Delivers top-line growth, positive comparable sales and bottom-line improvement

New Albany, Ohio, May 29, 2019: Abercrombie & Fitch Co. (NYSE: ANF) today announced results for the first quarter ended May 4, 2019, which are compared to results for the first quarter ended May 5, 2018. A description of the use of non-GAAP financial measures and a schedule reconciling GAAP financial measures to adjusted non-GAAP financial measures accompanies this release.

A summary of results for the first quarter ended May 4, 2019:
Net sales increased to $734.0 million, including the adverse impact from changes in foreign currency exchange rates of approximately $16 million or 2%.
Positive comparable sales of 1%, on top of 5% last year.
Gross profit rate of 60.5%, flat to last year.
Operating expense, excluding other operating income, of $472.0 million leveraged 230 basis points on a GAAP basis and 160 basis points on an adjusted non-GAAP basis.
Operating loss of $27.3 million. Operating loss margin improved 210 basis points from last year to 3.7%. Excluding certain items, adjusted non-GAAP operating loss margin improved 130 basis points from last year.
Net loss per diluted share was $0.29 compared to $0.62 last year and was adversely impacted by year-over-year changes in foreign currency exchange rates, net of hedging, of approximately $0.02. Excluding certain items, adjusted non-GAAP net loss per diluted share last year was $0.56.

Fran Horowitz, Chief Executive Officer, said, "We achieved our seventh consecutive quarter of positive comparable sales fueled by ongoing strength at Hollister and a return to positive comps at Abercrombie. This contributed to top-line growth, operating margin improvement and a net loss reduction compared to last year."

"We are focused on our transformation initiatives, with global store network optimization a key priority. We continue to believe in stores and are committed to delivering intimate, omni-channel brand experiences that closely align with our customers’ needs. In line with our strategy, we are announcing plans to close three additional flagship locations, bringing the total to five since 2017. Except for the charges from these flagship store actions, we remain on track to achieve our previously communicated fiscal 2019 outlook and continue to lay the foundation to achieving our fiscal 2020 targets."

Details related to net loss per diluted share for the first quarter are as follows:
 
 
2019
 
2018
GAAP
 
$(0.29)
 
$(0.62)
Excluded items, net of tax effect  (1)
 

 
(0.06)
Adjusted non-GAAP
 
$(0.29)
 
$(0.56)
(1) 
Excluded items last year consist of pre-tax legal charges of $5.6 million. There were no excluded items in the current year.

Details related to sales for the first quarter are as follows:
(in thousands)
2019
 
2018
 
% Change
 
Comparable sales (1)
Net sales by brand:
 
 
 
 
 
 
 
Hollister
$
428,448

 
$
423,628

 
1%
 
2%
Abercrombie (2)
305,524

 
307,271

 
(1)%
 
1%
Total company
$
733,972

 
$
730,899

 
0%
 
1%
 
 
 
 
 
 
 
 
Net sales by region:
 
 
 
 
 
 
 
United States
$
469,658

 
$
449,126

 
5%
 
4%
International
264,314

 
281,773

 
(6)%
 
(4)%
Total company
$
733,972

 
$
730,899

 
0%
 
1%
(1) 
Comparable sales are calculated on a constant currency basis. Refer to "REPORTING AND USE OF GAAP AND NON-GAAP MEASURES," for further discussion.
(2) 
Abercrombie includes the Abercrombie & Fitch and abercrombie kids brands.

1

The following information was filed by Abercrombie Fitch Co (ANF) on Thursday, May 30, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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