Earnings Call Excerpt
Abercrombie & Fitch (ANF)
Q3 2006 Earnings Call
November 14, 2006 4:30 pm ET
Executives:
Tom Lennox, CC
Mike Jeffries, Chairman, CEO
Mike Kramer, CFO
Mike Nuzzo, VP Finance
Brian Logan, Controller
Analysts:
Dana Cohen, Banc of America Securities
Lauren Levitan, Cowen & Company
Barbara Wyckoff, Buckingham Research
Jeff Kleinfelter, Piper Jaffray
John Morris, Wachovia Securities
Jennifer Black, Jennifer Black & Associates
Lorraine Maikis, Merrill Lynch
Stacy Pak, Prudential Equity
Paul Lejeuz, Credit Suisse
Christine Chen, Pacific Growth Equities
Janet Kloppenberg, JJK Research
Jeff Black, Lehman Brothers
Randall Koenig, Bear Stearns
Rob Wilson, Tiburon Research
Marne Shapiro, Retail Tracker
Dana Telsey, Telsey Advisory Group
Mitch Kummetz, Robert W. Baird
Brian Tunick, J.P. Morgan
Crystal Kallik, D.A. Davidson
Kimberly Greenberger, Citigroup
Josh Schwartz, Flatbush Watermill
Robin Murchison, SunTrust Robinson Humphrey
Presentation
Operator
Please stand by. Good day and welcome to the Abercrombie & Fitch Third Quarter Earnings Results Conference Call. Today’s conference is being recorded. If you have a question at any time during today’s conference you may signal us by pressing * and 1 on your touchtone phone. We will open the call to take your questions at the end of the presentation. Now, at this time I’d like to turn the conference over to Mr. Tom Lennox, please go ahead sir.
Tom Lennox, CC
Good afternoon and welcome to our third quarter conference call. After the market closed, we released the third quarter sales and earnings release, balance sheet, income statement, and an updated financial history. If you haven’t seen these materials, they are available on our website.
This call is being taped and can be replayed by dialing 888-203-1112. You will need to reference the conference ID# 3554646. You may also access the replay through the Internet at abercrombie.com.
With me today are Mike Jeffries, Chairman and Chief Executive Officer; Mike Kramer, Chief Financial Officer; Mike Nuzzo, VP of Finance; and Brian Logan, the Company’s Controller.
Today’s earnings call will be limited to one hour. After our prepared comments, we will be available to take your questions for as long as time permits. Please limit yourself to one question so that we can speak with as many callers as possible.
Before we begin, I remind you that any forward-looking statements we may make today are subject to the Safe Harbor statements found in our earnings release and SEC filings.
Now to Mike Kramer.
Mike Kramer, CFO
Good afternoon. Before I get into quantitative details of the quarter I would like to start with an overview. First, we are really pleased with our performance this quarter. We were able to leverage operating expense while continuing to invest in our business. Additionally, we were extremely pleased with our top line performance. Our transactions per store growth of 12% compared to the third quarter of last year helped offset 3% decline in average transaction value, which was driven by a product mix shift from denim to tops. This transaction growth on top of last year’s stellar performance is extremely encouraging as we enter the Christmas season.
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