Abercrombie & Fitch.

Financial Report

Analysis of Second Source Financial Data Al Dominguez C University Finance and Accounting. Project

Table of Contents Section 1 2 3 4 5 6 7 8 9. 10 11 12 13 14 15 16. 19 Title Company Overview Financial Overview Company History Officers and Employees Board Members Retail Market overview and competition Accounting Issue Financial Summary Balance Sheets Annual Income Statements Annual Cash Flow Statements Shareholders Equity Statements Historical Price Per Share Horizontal Analysis Vertical Analysis Ratio Analysis Appendix 1 Page 3 3 4 5 6 7 8 10 11 12 13 13 14 14 17 19 21

Abercrombie & Fitch. Financial Report 20 References 24

Abercrombie & Fitch. Financial Report 1. Company overview Abercrombie & Fitch Co. (NYSE: ANF), a large specialty clothing and accessories retailer with over 850 stores in North America as of 2006 (Hoovers Premium, 2006), specializes in the sales of luxury casual apparel, as well as personal care and accessories for men, women, and kids, raging in age from 7 to 35 years old. During the fiscal year that ended in December of 2005, the company reported sales of $2,784.7 millions, with gross profits margins of 66.5%; securing a spot among the top 100 largest retail operations in US. (Appendix A, Table 19.) 2. Financial Overview Table 1. A&F Financial Overview Fiscal Year-End 2006 Sales (mil.) 1-Year Sales Growth 2006 Net Income (mil.) 1-Year Net Income Growth Auditor January $2,784.7 37.8% $334.0 54.4% PricewaterhouseCoopers LLP
Source: Hoovers Premium

Table 2. Summary of Annual Income Statements 2006 Revenue ($ mil.) Gross Profit ($ mil.) Operating Income ($ mil.) Total Net Income ($ mil.) Diluted EPS (Net Income) 2,784.7 1,851.4 542.7 334.0 3.66 3. Company History 3 2005 2,021.3 909.8 347.6 216.4 2.28 2004 1,707.8 716.9 331.2 204.8 2.06

Source: Hoovers Premium

Abercrombie & Fitch. Financial Report Abercrombie & Fitch (A&F) brand launched its first store in Manhattan, in 1892. At the time, the specialized establishment sold, almost exclusively, rugged outdoor gear to elite camping and sporting enthusiasts. In 1988 it was acquired by The Limited, now Limited Brands (NYSE:LTD), which also owns famous brands such as Victorias Secret, C.O. Bigelow, Bath & Body Works, and other popular names. With this acquisition, Abercrombie & Fitch was re-introduced as a fashion-oriented, casual apparel retail operation, focusing its marketing campaigns on college students 18 to 22 years old. The company went public on the New York Stock Exchange in 1996, under the guidance of CEO Michael Jeffries, who had taken control of operations since 1992, and gradually separated from Limited Brands. At the time of going public, Abercrombie & Fitch Co. operated over 190 stores across United States, and reported over $800 million in revenues .(Hoovers Premium, 2006) By 1998, A&F developed the abercrombie Kids brand, following a similar formula as previously set on its flag stores, but this time targeting a younger population between seven and 14 year old boys and girls. The next developed brand was Hollister, launched in 2000. It targets 14 to 18 year-old high schoolers, and offers similar casual apparel and accessories as the A&F brand, but at reduced prices in an effort to differentiate itself from the leading brand. RUEHL No.925, is the latest concept in chain retail stores developed by A&F, and opened its first three stores on September 2004. The RUEHL concept attempts to capitalize on the loyalty of its established clientele base, and targets men and women 22 through 35. (Hoovers Premium, 2006) As sales climbed up, the company developed its controversial A&F Quarterly magazine, published from 1997 to 2003. While the mixed magazine-catalog concept,

Abercrombie & Fitch. Financial Report coined magalog by its producers, was relatively popular among its intended juvenile audience, it was topic of strong criticism by a number of organizations and rights activist groups, who complained about the strong nudity content depicted by both, young male and female models on the magazine pages. In 2004, A&F Quarterly was replaced by the less explicitly version A&F Magazine. (Wikipedia, 2006; Parvaz, 2003) In addition to conducting retailing operations on its four concept stores, A&F has developed online storefronts for each of its brands: www.abercrombiekids.com, www.abercrombie.com, www.hollisterco.com, and www.ruehl925.com. Most goods sold on-line follow the same concept as found on each of the brand stores, concentrating primarily on products such as backpacks, belts, caps, footwear, fragrances, hats, jackets, jeans, outwear, pants, shirts, shorts, skirts, sweaters, swimwear, tank tops, and underwear. (Hoovers Premium, 2006) 4. Officers and Employees Table 3. Officers and Employees Chairman and CEO Michael S. (Mike) Jeffries Age 61, $1,200,000 salary, $2,880,000 bonus Leslee K. Herro Age 44, $748,497 salary, $1,162,500 bonus Diane Chang Age 50, $773,077 salary, $1,162,500 bonus Michael W. Kramer Age 41 Roger E. Coville Thomas D. Mendenhall Age 44, $732,308 salary, $735,000 bonus

EVP, Planning and Allocation

EVP, Sourcing

SVP and CFO SVP SVP, General Manager, A&F and Abercrombie

Abercrombie & Fitch. Financial Report SVP and General Manager, RUEHL SVP and General Manager SVP and General Manager, Hollister SVP, Allocation SVP, Real Estate SVP and General Counsel CIO VP, Design, Ruehl Accessories SVP, Stores Human Relations VP, Diversity VP Men's Design, A&F VP Women's Design, A&F VP, Merchandising, Women's and Men's, RUEHL President, ANF (Japan) Senior Director of Brand Protection Director of Brand Protection Director of Investor Relations and Corporate Communications Mark S. Breitbart Age 36 Beverly House Charles F. Kessler Rebecca F. Lee Jeffrey Sinkley James A. Yano Age 54 Kristen Blum Kathy Formby David L. Leino Age 41 Todd Corley Stephan Milianich Lisa Converse Chad Kessler Toshiaki Tashiro Shane Berry John Carriero Thomas D. (Tom) Lennox
Source: Hoovers Premium

5. Board Members Table 4. Board Members Chairman and CEO Michael S. (Mike) Jeffries Age 61, $1,200,000 salary, $2,880,000 bonus James B. Bachmann Age 63 Daniel J. (Dan) Brestle Age 60

Director Director

Abercrombie & Fitch. Financial Report Director Director Director Director Director Director Director Lauren J. Brisky Age 55 Russell M. Gertmenian Age 58 John A. Golden Age 60 Archie M. Griffin Age 51 John W. (Jack) Kessler Age 70 Edward F. Limato Age 69 Allan A. Tuttle Age 66
Source: Hoovers Premium

6. Retail market overview and competition A&F is an apparel retailer operation; therefore, most of its market and operation strategies follow a cyclical and seasonal approach similar to that of the retail industry. Within this industry, A&F is considered an upscale specialty, mall base retailer. Due to the rapid change in market trends, global economies fluctuations of recent years, and the increasing growth of largest world retailers chains such as Wal-Mart Stores, Target, and Khols, many upscale retailers have turned to strategies that exploit exclusive trends to promote spending. (Biesada, 2006.) In the case of A&F, selling simple but high priced casual fashions, targeted at teenagers and young adults, is the formula driving the organizations increased profit margins beyond its competition. (Hoovers Premium, 2006.) Among the mayor competitors of A&F, there are other popular upscale mall retailers such as American Eagle Outfitters, Gap, and J.Crew, who, for the closing fiscal

Abercrombie & Fitch. Financial Report year of 2005, reported profits margins of 46.5%, 36.5%, and 41.8% respectively; but still all below the same indicator reported by A&F. (Hoovers Premium, 2006) Critical factors to the success of most specialty retailers include a strong expertise in real estate operations; the ability to maintain inventory flow at numerous stores; and the capacity to identify trends that could be converted into positive sales. Since most of the operations depends on a strong presence in upscale malls, fixed costs associated to leasing space is considered a percentage of net sales, and management is always looking to increase square footage occupancy, while reducing occupancy costs. (Hoovers Premium, 2006) 7. Accounting Issue At the beginning of 2005, A&F announced plans to restate previously posted financial reports, as result of warning letters sent by the SEC to a number of retailers, including A&F. (Bellows, 2005; Gordon, 2005.) The complain on the part of the SEC stems from apparent errors in current lease accounting practices, which led A&F to understate leasing expenses, while overstating net profits on its financial reports. As a result, Abercrombie said it expects net income to be reduced by about $1.1 million, or 1 cent a share, in 2005; $850,000, or 1 cent a share, in 2004; $850,000, or breaking even, in 2003; and $2 million, or 2 cents a share, in 2002. (Bellows, 2005) In the United States, accounting for leases is regulated the Financial Accounting Standards Board (FASB), and could be recognized as either operating leases, or capital leases. In the first case, no assets or liabilities are recorded on the financial statements, and lease amounts are expensed when incurred. Capital leases, on the other hand, are recorded as both, an asset and liability on the financial statements. Companies using

Abercrombie & Fitch. Financial Report operating leases as oppose to capital leases, could potentially lower their reported debts while increasing returns on assets, therefore, understating expenses (McDonald, 2006) Some experts suggest that current lease regulations are flawed, allowing companies to exploit certain loopholes, which permit avoiding capitalizing certain expenses. Others argue that criticism to lease accounting rules are plagued with myths, such as the perceive conception that they are engineered to avoid capitalization (Heffes, 2006, p.16.), suggesting that structured or synthetic leases account for a fraction of leasing businesses. Nonetheless, in an article in Forbes points that Under current accounting, synthetic leases are legal, says Kevin Nunnink, chairman of real estate consultant Integra Realty Resources. But they are a subterfuge, a way to keep debt off the balance sheet. (Lubove & MacDonald, 2006) A synthetic lease is an off-balance-sheet transaction that allows companies to somewhat control leased property without having to show it as an asset or a liability in the financial statements. In addition, companies can depreciate lease improvements for tax purposes. Similarly, leases structured under this approach could be considered as operating leases, as oppose to a capital leases. (Taylor, 2006.) Details related to lease accounting issues, in the case of A&F, are still not clear, and cannot be claimed to be associated to synthetic leases. Still, considering that A&F rents all of its retail stores from major mall locations, it is also possible to infer the use of synthetic leases, giving the organization the opportunity to record some of its capital leases as operating leases. This will keep significant debts off the balance sheets; therefore, improving the organizations overall financial health. 8. Financial Summary

Abercrombie & Fitch. Financial Report Table 5. Abercrombie & Fitch Financial Summary
(Thousands except per share , ratios, and store associated data)

2006 Summary of Operations Net Sales Gross Profit Operating Income Operating Income as a Percentage of Net Sales Net Income Net Income as a Percentage of Net Sales Dividends Declared Per Share Net Income Per Weighted-Average Share Results Basic Fully-Diluted Fully-Diluted Weighted-Average Shares Outstanding Other Financial Information Total Assets Capital Expenditures Long-Term Debt Shareholders Equity Return on Average Shareholders Equity Net Retail Sales Per Average Gross Square Foot Stores at End of Year and Average Associates Total Number of Stores Open Gross Square Feet Average Number of Associates 1,789,71 8 256,422 995,117 40% 464 2,784,71 1 1,851,41 6 542,738 19.50% 333,986 12% 0.6

2005

2004

2,021,25 3 1,341,22 4 347,635 17.20% 216,376 10.70% 0.5

1,707,810 1,083,170 331,180 19.40% 204,830 12%

3.83 3.66 91,221

2.33 2.28 95,110

2.12 2.06 99,580

1,386,79 1 185,065 669,326 28% 360

1,401,369 159,777 857,765 26 345

851 6,025,00 0 69,100

788 5,590,00 0 48,500

700 5,016,000 30,200

(Source: Hoovers Premium)

9. Balance Sheets

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Abercrombie & Fitch. Financial Report Table 6. A&F Balance Sheets ($ mil.) Jan 06 Assets Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets Liabilities and Shareholder's Equity Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Noncurrent Liabilities Total Liabilities Shareholder's Equity Preferred Stock Equity Common Stock Equity Total Equity Shares Outstanding (mil.) Total Liabilities and Shareholders' Equity Jan 05 Jan 04

461.9 71.5 362.5 51.2 947.1 813.6 29 1,789.70 100.00

350.4 26.1 247.7 28 652.3 687 8.4 1,347.70 100.00

521.1 7.2 200.7 23.7 752.7 630 0.6 1,383.20 100.00

401.1 -90.5 491.5 -303 794.6

329.1 -84.7 413.9 -264.5 678.4

284.4 -26.6 311.1 -214.4 525.5

-995.1 995.1 87.7 1789.7

-669.3 669.3 86 1347.7

-857.8 857.8 94.6 1383.3

(Source: Hoovers Premium)

11

Abercrombie & Fitch. Financial Report 10. Annual Income Statements Table 7. A&F Summarized Annual Income Statements 2006 Net Sales ($ mil.) Gross Profit ($ mil.) Operating Income ($ mil.) Total Net Income ($ mil.) Diluted EPS (Net Income) 2,784.7 0 1,851.4 0 542.7 334 3.66 2005 2,021.30 909.8 347.6 216.4 2.28 2004 1,707.80 716.9 331.2 204.8 2.06

(Source: Hoovers Premium)

Table 8. A&F Detailed Income Statements ($ mil.) Jan 06 100 2,784.7 933.3 1,851.40 66.50% 1,217.00 91.7 542.7 19.50% 6.7 -549.4 215.4 334 334 -334 334 12.00% 3.66 91.2 Jan 05 100 2,021.3 1,111.5 909.8 45.00% 489.1 73 347.6 17.20% 5.2 -352.9 136.5 216.4 216.4 -216.4 216.4 10.70% 2.28 95.1 Jan 04 100 1707.8 990.9 716.9 42.00% 321 64.8 331.2 19.40% 3.7 -334.9 130.1 204.8 204.8 -204.8 204.8 12.00% 2.06 99.6

Net Sales Cost of Goods Sold Gross Profit Gross Profit Margin SG&A Expense Depreciation & Amortization Operating Income Operating Margin Nonoperating Income Nonoperating Expenses Income Before Income Taxes Income Taxes Net Income After Taxes Continuing Operations Discontinued Operations Total Operations Total Net Income Net Profit Margin Diluted EPS from Total Net Income ($) Fully-Diluted Weighted-Average Shares Outstanding

12

Abercrombie & Fitch. Financial Report

(Source: Hoovers Premium)

11. Annual Cash Flow Statements Table 9. A&F Annual Cash Flow Statements ($ mil.) Jan 06 Net Operating Cash Flow Net Investing Cash Flow Net Financing Cash Flow Net Change in Cash Depreciation & Amortization Capital Expenditures Cash Dividends Paid 453.6 (668.3) (73.3) (288.0) 91.7 (256.4) (52.2) Jan 05 426.1 279.6 (411.8) 294 73 (185.1) (46.4) Jan 04 342.5 (237.8) (91.8) 13 64.8 (159.8) --

(Source: Hoovers Premium)

12. Shareholders Equity Statements Table 10. A&F Shareholders' Equity Statements ($ mil.) 2006 Previous Retained Earnings Net Income Dividends Unrealized Gains Adjustments Balance Retained Earnings 1,076,023 333,986 (52,218) (718) (78) 1,356,995 2005 906,085 216,376 (46,438) --1,076,023 2004 701,255 204,830 ---906,085

(Source: Hoovers Premium)

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Abercrombie & Fitch. Financial Report 13. Historical Price per Share Table 11. A&F Summarized Historical Price per Share Adj Close*

Date

Open

High

Low

Close

Volume 1,456,60 0 607,800 927,500

31-Dec-03 31-Dec-04 30-Dec-05

25 47.15 65.25

25.02 47.37 66

24.71 46.91 64.9

24.71 46.95 65.18

23.97 46.08 64.63

* Close price adjusted for dividends and splits. (Source: Yahoo Finance)

14. Horizontal Analysis The financial horizontal analysis allows the evaluation of financial statements amounts over a period of time. (Reimers, 2006, p.623.) The following tables reflect a horizontal analysis based on the Balance Sheet Statement, the Summarized Annual Income Statement, the Statement of Cash Flow, and the Detailed Income Statement. Table 12. A&F Horizontal Analysis of Balance Sheets 2006 Assets Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets 2005 2004

31.8% 173.9% 46.3% 82.9% 45.2% 18.4% 245.2% 32.8%

(32.8)'% 262.5% 23.4% 18.1% (13.3)'% 9.0% 1300.0% (2.6)'%

100% 100% 100% 100% 100% 100% 100% 100%

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Abercrombie & Fitch. Financial Report Table 12b. A&F Horizontal Analysis of Balance Sheets (Continuation) 2006 Liabilities and Shareholder's Equity Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Noncurrent Liabilities Total Liabilities Shareholder's Equity Preferred Stock Equity Common Stock Equity Total Equity Shares Outstanding (mil.) Total Liabilities and Shareholders' Equity 2005 2004

21.9% 6.8% 18.7% 14.6% 17.1%

15.7% 218.4% 33.0% 23.4% 29.1%

100% 100% 100% 100% 100% 100%

-48.7% 48.7% 2.0% 32.8%

-(22)'% (22)'% (9.1)'% (2.6)'%

-100% 100% 100% 100%

Table 13. A&F Horizontal Analysis of Summarized Annual Income Statements 2006 Revenue ($ mil.) Gross Profit ($ mil.) Operating Income ($ mil.) Total Net Income ($ mil.) Diluted EPS (Net Income) 37.8% 103.5% 56.1% 54.3% 60.5% 2005 18.4% 26.9% 5.0% 5.7% 10.7% 2004 100% 100% 100% 100% 100%

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Abercrombie & Fitch. Financial Report

Table 14. A&F Horizontal Analysis of detailed Income Statements Jan 06 Net Sales Cost of Goods Sold Gross Profit Gross Profit Margin SG&A Expense Depreciation & Amortization Operating Income Operating Margin Nonoperating Income Nonoperating Expenses Income Before Income Taxes Income Taxes Net Income After Taxes Continuing Operations Discontinued Operations Total Operations Total Net Income Net Profit Margin Diluted EPS from Total Net Income ($) Fully-Diluted Weighted-Average Shares Outstanding 37.8% (16)'% 103.5% 47.8% 148.8% 25.6% 56.1% 13.4% 28.8% -55.7% 57.8% 54.3% Jan 05 18.4% 12.2% 26.9% 7.1% 52.4% 12.7% 5.0% (11.3)'% 40.5% -5.37% 4.92% 5.66% Jan 04 100% 100% 100% 100% 100% 100% 100% 100% 100% -100% 100% 100% 100% -100% 100% 100% 100% 100%

54.3% 5.66% --54.3% 5.66% 54.3% 5.66% 12.1% (10.83)'% 60.5% (4.1)'% 10.68% (4.52)/%

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Abercrombie & Fitch. Financial Report

Table 15. A&F Horizontal Analysis of Annual Cash Flow Statements Jan 06 Net Operating Cash Flow Net Investing Cash Flow Net Financing Cash Flow Net Change in Cash Depreciation & Amortization Capital Expenditures Cash Dividends Paid 6.5% (339)'% (82)'% (198)'% 25.6% 38.5% 12.5% Jan 05 24.4% (218)'% 348.6% 2161.5% 12.7% 15.8% 100.0% Jan 04 100% 100% 100% 100% 100% 100% --

15. Vertical Analysis A vertical analysis compares items in the financial statements, using as a reference a common amount on each statement. (Reimers, 2006. p. 624) The tables below provide a vertical analysis for the Balance Sheet and the Income Statement. Table 16. A&F Balance Sheets Vertical Analysis (%) Jan 06 Assets Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets Jan 05 Jan 04

25.81 4.00 20.25 2.86 52.92 45.46 1.62 100.0%

26.00 1.94 18.38 2.08 48.40 50.98 0.62 100.0%

37.67 0.52 14.51 1.71 54.42 45.55 0.04 100.0%

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Abercrombie & Fitch. Financial Report

Table 16b. A&F Balance Sheets Vertical Analysis (%) (Continuation) Jan 06 Liabilities and Shareholder's Equity Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Noncurrent Liabilities Total Liabilities Shareholder's Equity Preferred Stock Equity Common Stock Equity Total Equity Total Liabilities and Shareholders' Equity Jan 05 Jan 04

22.4 -5.1 27.5 -16.9 44.4

24.4 -6.3 30.7 -19.6 50.3

20.6 -1.9 22.5 -15.5 38.0

-55.6 55.6 100%

-49.7 49.7 100%

-62.0 62.0 100%

Table 17. A&F Vertical Analysis of Detailed Income Statements (%) Jan 06 Net Sales Cost of Goods Sold Gross Profit SG&A Expense Depreciation & Amortization Operating Income Operating Margin Nonoperating Income Nonoperating Expenses Income Before Income Taxes Income Taxes Net Income After Taxes 100% 33.52 66.48 43.70 3.29 19.49 0.01 0.24 -19.73 7.74 11.99 Jan 05 100% 54.99 45.01 24.20 3.61 17.20 0.01 0.26 -17.46 6.75 10.71 Jan 04 100% 58.02 41.98 18.80 3.79 19.39 0.01 0.22 -19.61 7.62 11.99

Table 17b. A&F Vertical Analysis of Detailed Income Statements (%) (Continuation)

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Abercrombie & Fitch. Financial Report

Jan 06 Continuing Operations Discontinued Operations Total Operations Total Net Income Diluted EPS from Total Net Income ($) Fully-Diluted Weighted-Average Shares Outstanding 11.99 -11.99 11.99 0.00 0.13 3.28

Jan 05 10.71 -10.71 10.71 0.00 0.11 4.70

Jan 04 11.99 -11.99 11.99 0.00 0.12 5.83

16. Ratio Analysis Ratios are calculated using information on the financial statements. Each of the ratio categories on table 18 below provides additional information about the financial health of the company. The four main categories include Liquidity ratios, which measures the companys ability to pay for its current bills and operating costs; Solvency ratios, which measures the ability of the company to satisfy its long term obligations; Profitability ratios, which measures the companys operating and income performance; and Market indicators, which provide a relation of the companys current market price versus the earning or dividends per stock.

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Abercrombie & Fitch. Financial Report

Table 18. A&F Financial Ratios 2006 Liquidity Ratios Current Ratio Quick Ratio Working Capital Inventory Turnover Ratio Accounts Receivables Turnover Ratio Current Cash Debt Coverage Ratio Solvency Ratios Debt to equity Ratio Times interest earned Ratio Cash Flow Adequacy Ratio Profitability Ratios Return on Assets Asset Turnover Ratio Return on Equity Gross Profit Ratio Profit Margin Ratio Earnings Per Share Market Indicators Price-earnings Ratio Dividend Yield Ratio 2005

2.25 1.19 $455.60 3.06 57.06 1.02

1.99 0.98 $238.40 4.96 121.40 0.97

0.80 81 0.68

1.01 66.85 1.52

0.22 1.78 0.40 0.66 0.12 3.66

0.16 1.48 0.28 0.45 0.11 2.28

17.66 0.01

20.21 0.01

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Abercrombie & Fitch. Financial Report

19. Appendix 1. Table 19. Top 100 ranked retailers in United States Store Name Wal-Mart Stores Inc. Home Depot Kroger Co. Sears Holdings(***) Costco Target Corp. Lowe's Cos. Walgreen Co. Albertson's Safeway CVS Corp. Best Buy Ahold USA(**) Federated Department Stores Publix Super Markets J.C. Penney() Rite Aid Delhaize America Staples TJX Cos. Gap Inc. Office Depot Meijer Kohl's Department Stores 7-Eleven Military Exchange System Circuit City Stores Toys "R" Us H.E. Butt Grocery Co. SuperValu(**) Couche-Tard Winn-Dixie Limited Brands CCA Global Partners 21 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Revenues 312,427,000.00 81,511,000.00 60,533,000.00 54,261,000.00 52,935,000.00 52,620,000.00 43,243,000.00 42,201,600.00 40,358,000.00 38,416,000.00 37,006,200.00 30,848,000.00 22,547,000.00 22,390,000.00 20,589,130.00 18,781,000.00 17,276,968.00 16,564,900.00 16,078,852.00 16,057,935.00 16,023,000.00 14,278,944.00 14,100,000.00 13,402,217.00 12,300,000.00 11,864,770.00 11,597,686.00 11,275,000.00 11,100,000.00 10,634,954.00 10,460,000.00 9,921,319.00 9,699,000.00 9,600,000.00

Abercrombie & Fitch. Financial Report A&P Dollar General Amazon.com Brooks-Eckerd BJ's Wholesale Club Dell Computer(**) Nordstrom Dillard's Menards(*) QVC(**) CDW Corp. Saks, Inc. Blockbuster Family Dollar Stores Bed Bath & Beyond AutoZone Foot Locker() Giant Eagle Defense Commissary Agency Barnes & Noble CompUSA(*) RadioShack Ross Stores Hy-Vee Sherwin Williams(**) Whole Foods Market Longs Drug Stores OfficeMax(**) Big Lots Inc. Pantry Advance Auto Parts Stock Building Supply Luxottica Group(**) Borders Group Pathmark Stores 84 Lumber Neiman Marcus Group Wegmans Food Markets Roundy's PetSmart Michaels Stores Aldi Williams-Sonoma 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 8,740,300.00 8,582,237.00 8,490,000.00 8,211,224.00 7,949,934.00 7,930,000.00 7,722,860.00 7,560,191.00 7,500,000.00 6,501,000.00 6,291,845.00 5,953,352.00 5,864,400.00 5,824,808.00 5,809,562.00 5,710,882.00 5,653,000.00 5,500,000.00 5,369,000.00 5,103,004.00 5,100,000.00 5,081,700.00 4,944,179.00 4,900,000.00 4,848,000.00 4,701,289.00 4,670,303.00 4,529,100.00 4,429,905.00 4,429,239.00 4,264,971.00 4,163,700.00 4,105,893.00 4,030,000.00 3,977,000.00 3,920,000.00 3,821,900.00 3,800,000.00 3,800,000.00 3,760,499.00 3,676,365.00 3,600,000.00 3,538,947.00

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Abercrombie & Fitch. Financial Report Casey's General Store Burlington Coat Factory Warehouse Corp. Dollar Tree Stater Bros. Markets Racetrac Petroleum BI-LO Holdings Raley's GameStop Corp. Wawa(*) Home Shopping Network(**) Balk Retail Ventures Abercrombie & Fitch Berkshire Hathaway(**) Charming Shoppes Price Chopper/Golub Corp. Linens 'n Things Medicine Shoppe International Payless ShoeSource Harris-Teeter(**) Dick's Sporting Goods Trader Joe's Speedway SuperAmerica() 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 3,514,464.00 3,449,000.00 3,393,924.00 3,372,243.00 3,300,000.00 3,200,000.00 3,200,000.00 3,091,783.00 3,080,000.00 3,050,900.00 2,968,777.00 2,913,371.00 2,784,711.00 2,759,000.00 2,755,725.00 2,700,000.00 2,694,700.00 2,670,000.00 2,667,300.00 2,644,976.00 2,624,987.00 2,570,000.00 2,531,000.00

Source: Hoovers Premium

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Abercrombie & Fitch. Financial Report 20. References Biesada, A. (2006). Apparel and accessories retail industry overview. Hoover Premium. Retrieved on Monday, August 28, 2006 from http://premium.hoovers.com/subscribe/ind/overview.xhtml?HICID=1519 Bellows, C. (February, 2005). Toys R Us, Abercrombie to restate. Lease accounting review prompts earnings adjustments. Market Watch. Retrieved on Tuesday, August 15, 2006 from http://www.marketwatch.com/News/Story/Story.aspx?guid= %7BF618BB83-037B-4D7E-8CAB-E713534E0027%7D&siteId=google Gordon, M. (February, 2005). Grocers disclose lease payments revisions. Associated Press Online. Retrieved on Tuesday, August 15, 2006 from Lexis/Nexis http://web.lexis-nexis.com.library.capella.edu/universe/document? _m=a9973076cae2d24edd57040de7f7187f&_docnum=3&wchp=dGLbVzzzSkVb&_md5=6e39ef6e30ee607d04c4f3e00ae813b3 Heffes, E.M., (Jul/Aug 2006). Lease accounting: Are current rules as bad as some say? Financial Executive. 23(6), pp. 16-17 Hoovers Premium (2006). Abercrombie & Fitch. Facts, history, products, competitors, competitive landscape, people, financial data. Retrieved on Tuesday, August 29, 2006 from http://premium.hoovers.com/subscribe/co/overview.xhtml? ID=ffffhyrkffyxrjyrjx Lubove, S; MacDonald, E. (2002). Debt? Who, Me? Forbes. 169(4) pp.56-57 McDonald, E. (2005). Lease accounting gets uglier. Forbes. Retrieved on Tuesday, August 15, 2006 from http://www.forbes.com/business/2005/03/14/cz_em_0314lease.html

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