Once again, I am proud to report that our company achieved record sales and earnings, marking 16
consecutive years of sales and earnings improvement.
Our success is a reflection of effective brand positioning
and our commitment to maintain and enhance that positioning over the long-term.
In 1992, we began to build a new Abercrombie & Fitch rooted in East Coast traditions with an Ivy League
We positioned the brand to target a young and hip customer by offering high quality, trend right
casual sportswear and creating a unique and exceptional in-store environment, which established an emotional
connection with our customer.
We developed standards for every aspect of the customer experience to ensure
that the brand’s image was reinforced through product design and presentation, marketing imagery, music
and lighting, fragrance and enthusiastic and energetic brand representatives.
We also recognized the importance
of protecting the long-term position of the brand by reinvesting in store refreshes and remodels, maintaining
full priced selling and avoiding market saturation.
These standards continue to be the foundation of the
brand and today, I believe Abercrombie & Fitch is better positioned than ever before.
Leveraging the branding success of Abercrombie & Fitch, which has achieved iconic status with worldwide
recognition, we applied our strategy to our other internally developed brands which include: abercrombie, Hollister,
Ruehl and Gilly Hicks.
While each brand possesses its own unique heritage and handwriting, they all share
common elements and characteristics including casual, classic, confidence, intelligence, privilege and a sense of
Our objective is to be the dominate, aspirational lifestyle brand for each brand’s targeted age group.
The success of our brand is demonstrated by our long-standing financial performance.
In 1992, we operated
40 Abercrombie & Fitch stores in the United States that generated $85.3 million in sales.
Today, across all
brands, we operate over 1,000 stores in the United States, Canada and the United Kingdom.
In 2007, we
generated $3.750 billion in sales and $475.7 million in net income, with earnings per diluted share of $5.20,
representing a 13% increase over 2006.
Since becoming a publicly held company in 1996, sales and earnings
per diluted share have increased by a compounded annual growth rate of 25% and 31%, respectively, far
exceeding industry averages.