ANFannual2007 - Table of ConTenTs Chairman's Letter 6 Financial Summary 11 Management's Discussion and Analysis 12 Quantitative and Qualitative

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TABLE OF CONTENTS Chairman’s Letter 6 Financial Summary 11 Management’s Discussion and Analysis 12 Quantitative and Qualitative Disclosures About Market Risk 22 Consolidated Statements of Net Income and Comprehensive Income 24 Consolidated Balance Sheets 25 Consolidated Statements of Shareholders’ Equity 26 Consolidated Statements of Cash Flows 27 Notes to Consolidated Financial Statements 28 Report of Independent Registered Public Accounting Firm 40 Corporate Information 43 Senior Management and Board of Directors 44 3
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6 7 CHAIRMAN’S LETTER 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 heritage. 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 humor. 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.
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This note was uploaded on 07/06/2009 for the course AIM intro taught by Professor Staff during the Spring '09 term at University of Texas at Dallas, Richardson.

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ANFannual2007 - Table of ConTenTs Chairman's Letter 6 Financial Summary 11 Management's Discussion and Analysis 12 Quantitative and Qualitative

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