Abercrombie & Fitch Co Class A ANF
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/22/2013

Operator: Good day, and welcome to the Abercrombie & Fitch Fourth Quarter 2012 Earnings Results Conference Call. Today's call is being recorded. We will open the call to take your questions at the end of the presentation. We ask that you limit yourself to one question during the question-and-answer session.

At this time, I would like to turn the conference over to Brian Logan. Mr. Logan, please go ahead.

Brian Logan - VP, IR and Controller: Good morning, and welcome to our fourth quarter earnings call. Earlier today, we released our fourth quarter sales and earnings, income statement, balance sheet, store opening and closing summary, and an updated financial history. Please feel free to reference these materials available on our website.

Also available on our website is an Investor Presentation which we will be referring to in our comments during this call. Today's earnings is being recorded and the replay may be accessed through the Internet at under the Investors section. The call is scheduled for one hour.

Joining me today are Mike Jeffries and Jonathan Ramsden.

Before we begin, I'll remind you that any forward-looking statements we may make today are subject to the Safe Harbor statements found in our SEC filings.

In addition, in our press release this morning, we announced that the Company has converted to the cost method of accounting for inventory. We will discuss the background to and impact of this change later in the prepared remarks. In general, our comments for the fourth quarter and full year 2012 are based on the retail method of accounting to be consistent with the basis on which we gave our guidance coming into the quarter.

Also, as a reminder, the fiscal 2012 retailer calendar includes a 53rd week and therefore, fourth quarter and full year comparable sales are compared to the respective 14-week and 53-week periods ended February 4, 2012.

Finally, effective with the fourth quarter results, we are moving to reporting our primary comparable sales metric inclusive of direct to consumer sales. We believe this change is appropriate now that we have a more established comparable sales base for our international direct to consumer operations. For comparison purposes, we're also continuing to provide comp store sales excluding direct to consumer.

We will now begin the call with a few remarks from Mike, followed by a review of the financial performance for the quarter from Jonathan and me. After our prepared comments we will be available to take your questions for as long as time permits.

With that, I will turn the call over to Mike.

Michael S. Jeffries - Chairman and CEO: Good morning, everyone. We are very pleased with our results for the fourth quarter. Our sales were in line with our guidance coming into the quarter and our earnings exceeded expectations due to a very strong gross margin performance along with continued tight expense control. Excluding impairment charges, our adjusted diluted earnings per share for the year was $3.22 under the retail method. Total sales for the quarter were up 11%. Total comparable sales including direct to consumer sales were down 1% with the U.S. flat and international down 3%.

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