8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 17, 2009 (August 14, 2009)

ABERCROMBIE & FITCH CO.

(Exact name of registrant as specified in its charter)

Delaware	1-12107	31-1469076
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6301 Fitch Path, New Albany, Ohio	43054
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (614) 283-6500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On August 14, 2009, Abercrombie & Fitch Co. (the “Registrant”) issued a press release (the “Release”) reporting the Registrant’s unaudited financial results for the thirteen weeks (quarterly period) and twenty-six weeks ended August 1, 2009, along with the operating results for Ruehl for the thirteen and twenty-six weeks ended August 1, 2009. A copy of the Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The Registrant also made available in conjunction with the Release additional unaudited quarterly financial information as of and for the quarterly periods ended August 1, 2009 and May 2, 2009 and as of the end of and for each of the quarterly periods in the fiscal years ended January 31, 2009, February 2, 2008 and February 3, 2007. The additional quarterly and year-to-date financial information is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

The Registrant’s management conducted a conference call on August 14, 2009, at approximately 8:30 a.m., Eastern Time, to review the Registrant’s financial results for the thirteen and twenty-six week periods ended August 1, 2009. A copy of the transcript of the conference call is furnished as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 8.01. Other Events.

In the Release, the Registrant also announced that the Board of Directors of the Registrant had declared a quarterly cash dividend of $0.175 per share in respect of the Registrant’s Class A Common Stock. The dividend was declared on August 14, 2009 and is payable on September 15, 2009 to stockholders of record at the close of business on August 28, 2009.

Item 9.01. Financial Statements and Exhibits.

(a) through (c) Not applicable

(d) Exhibits:

The following exhibits are included with this Current Report on Form 8-K:

Exhibit No.	Description
99.1	Press Release issued by Abercrombie & Fitch Co. on August 14, 2009
99.2	Additional Unaudited Quarterly Financial Information made available by Abercrombie & Fitch
	Co. in conjunction with Press Release on August 14, 2009
99.3	Transcript of conference call held by management of Abercrombie & Fitch Co. on August 14,
	2009

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ABERCROMBIE & FITCH CO.
Dated: August 17, 2009	By:	/s/ Jonathan E. Ramsden
		Jonathan E. Ramsden
		Executive Vice President and Chief Financial Officer

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INDEX TO EXHIBITS

Current Report on Form 8-K
Dated August 17, 2009

Abercrombie & Fitch Co.

Exhibit No.	Description
99.1	Press Release issued by Abercrombie & Fitch Co. on August 14, 2009
99.2	Additional Unaudited Quarterly Financial Information made available by Abercrombie & Fitch Co. in conjunction with Press Release on August 14, 2009
99.3	Transcript of conference call held by management of Abercrombie & Fitch Co. on August 14, 2009

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EX-99.1

Exhibit 99.1

ABERCROMBIE & FITCH REPORTS SECOND QUARTER RESULTS

BOARD OF DIRECTORS DECLARES QUARTERLY DIVIDEND OF $0.175

New Albany, Ohio, August 14, 2009: Abercrombie & Fitch Co. (NYSE: ANF) today reported unaudited second quarter results which reflected a net loss of $26.7 million and a net loss per basic and diluted share of $0.30 for the thirteen weeks ended August 1, 2009, compared to net income of $77.8 million and net income per diluted share of $0.87 for the thirteen weeks ended August 2, 2008.

The unaudited results also reflect a loss before income taxes of $19.8 million for the thirteen weeks ended August 1, 2009, which includes pre-tax charges of $24.4 million associated with the closure of Ruehl operations and related store asset impairment charges as further described below.

Second Quarter Sales Highlights

• Total Company net sales decreased 23% to $648.5 million; comparable store sales decreased 30%

• Total Company direct-to-consumer net sales decreased 13% to $48.7 million

• Abercrombie & Fitch net sales of $285.3 million; Abercrombie & Fitch comparable store sales decreased 27%

• abercrombie net sales of $71.5 million; abercrombie comparable store sales decreased 29%

• Hollister Co. net sales of $274.3 million; Hollister Co. comparable store sales decreased 33%

• RUEHL net sales of $11.2 million; RUEHL comparable store sales decreased 31%

Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said:

“We continued to be confronted with very challenging conditions during the second quarter. We believe we are doing the right things to address those challenges and improve our domestic business. In the meantime, we remain very encouraged by our prospects for international growth.”

Second Quarter 2009 Financial Results

Net sales for the thirteen weeks ended August 1, 2009 decreased 23% to $648.5 million from $845.8 million for the thirteen weeks ended August 2, 2008. Total Company direct-to-consumer net sales decreased 13% to $48.7 million for the thirteen week period ended August 1, 2009, compared to the thirteen week period ended August 2, 2008. Total Company second quarter comparable store sales decreased 30%.

The gross profit rate for the quarter was 66.5%, 360 basis points lower than last year’s second quarter gross profit rate. The decrease in gross profit rate was primarily attributable to a higher markdown rate for the second quarter this year compared to the second quarter last year.

Stores and distribution expense, as a percentage of sales, increased to 56.6% from 42.6%. Although the Company was able to achieve savings in store payroll, direct-to-consumer and other variable expenses, the reduction in those expenses was less than the rate of the sales decline and not

enough to offset increases in rent, depreciation and other occupancy costs, as well as $23.0 million of net lease termination related costs associated with the exit of Ruehl. Stores and distribution expense for the second quarter also included Ruehl store asset impairment charges of $0.8 million.

Marketing, general and administrative expense for the second quarter was $88.7 million compared to $109.0 million during the same period last year. The reduction in marketing, general and administrative expense includes savings related to employee compensation and benefits, travel, outside services and marketing. Marketing, general and administrative expense for the quarter included $0.6 million of severance charges associated with the exit of Ruehl.

Operating loss for the second quarter was $21.5 million, inclusive of $23.6 million pre-tax charges associated with the exit of Ruehl and $0.8 million related store asset impairment charges.

Net interest income for the second quarter was $1.8 million, flat compared to the same period last year.

Loss before income taxes for the second quarter was $19.8 million, inclusive of $24.4 million pre-tax charges associated with the exit of Ruehl and related store asset impairment charges.

Income tax expense for the second quarter was $7.0 million, which was comprised of $11.5 million of expense related to a true-up of the first quarter income tax provision and $4.5 million of benefit associated with the second quarter loss before income taxes. The income tax true-up, as calculated in accordance with Financial Accounting Standards Interpretation No. 18, “Accounting for Taxes in Interim Periods,” was the result of a reduction of the estimated annual effective tax rate as determined in the second quarter. The lower projected rate is primarily due to a higher proportion of projected income before income taxes coming from international operations with a lower overall effective rate, and a lower proportion of projected income before income taxes coming from domestic operations, partially resulting from the second quarter charges associated with the closure of Ruehl.

The Company ended the second quarter with $366.5 million in cash and cash equivalents, and outstanding debt and letters of credit of $79.6 million. During the quarter, the Company repaid US dollar denominated borrowings of $100 million outstanding under the credit agreement and, separately, drew down approximately $37 million in foreign currency denominated borrowings to fund international lease and capital expenditure commitments.

Ruehl Update

As previously announced, on June 16, 2009 the Board of Directors approved the closure of the Company’s 29 Ruehl branded stores and related direct-to-consumer operations. The Company anticipates the closure will be substantially complete by the end of the current fiscal year.

The Company continues to expect that it will incur aggregate incremental net pre-tax charges to exit Ruehl of approximately $65 million, of which the Company incurred $23.6 million in the second quarter. The estimate of total charges is based on a number of significant assumptions and could change materially. The remaining charges are expected to be substantially recognized during the remaining two quarters of Fiscal 2009 in accordance with applicable accounting standards.

In addition to the $23.6 million exit costs, the Company incurred store asset impairment charges related to Ruehl of $50.7 million and $0.8 million in the first and second quarters of Fiscal 2009, respectively.

The unaudited results for the quarter also include the operating results for Ruehl as summarized in the table accompanying the financial statements included with this release.

Other Developments

During the quarter, the Company opened the first Epic Hollister flagship store, in New York, as well as two Hollister mall-based stores in the United Kingdom and one domestic abercrombie store.

The Company remains on track to open three international flagship stores in Fiscal 2009 including Abercrombie & Fitch and abercrombie in Milan and Abercrombie & Fitch in Tokyo.

Internationally, the Company remains on track to open ten mall-based stores in Fiscal 2009, including one abercrombie store in Canada and seven Hollister stores in the United Kingdom. The Company also expects to open one Hollister mall-based store in Germany and one in Italy.

Domestically, the Company plans to open nine mall-based stores in Fiscal 2009, including two abercrombie stores, four Hollister stores, one Gilly Hicks store and two outlet stores.

The Company now expects total capital expenditures for Fiscal 2009 to be approximately $185 million, including approximately $140 million related to new stores, store refreshes and remodels, and approximately $45 million related to information technology, distribution center and other home office projects. The reduction in capital expenditures from the previously announced estimate of $200 million is primarily a result of lower than expected construction costs related to Fiscal 2009 store openings as well as the reduction and postponement of non-essential projects related to existing stores.

The Board of Directors declared a quarterly cash dividend of $0.175 per share on the Class A Common Stock of Abercrombie & Fitch Co. payable on September 15, 2009 to shareholders of record at the close of business on August 28, 2009.

At quarter end, the Company operated 350 Abercrombie & Fitch stores, 210 abercrombie stores, 510 Hollister Co. stores, 29 RUEHL stores and 16 Gilly Hicks stores in the United States. The Company also operated three Abercrombie & Fitch stores, three abercrombie stores and five Hollister Co. stores in Canada, and one Abercrombie & Fitch store and five Hollister Co. stores in the United Kingdom. The Company operates e-commerce websites at www.abercrombie.com, www.abercrombiekids.com, www.hollisterco.com, www.RUEHL.com and www.gillyhicks.com.

Today at 8:30 AM, Eastern Time, the Company will conduct a conference call. Management will discuss the Company’s performance, its plans for the future and will accept questions from participants. To listen to the live conference call, dial (888) 208-1507 or internationally at (913) 312-1522. To listen via the Internet, go to www.abercrombie.com, select the Investors page and scroll through the Calendar of Events. Replays of the call will be available shortly after its completion. The audio replay can be accessed for two weeks following the reporting date by calling (888) 203-1112 or internationally at (719) 457-0820 followed by the conference ID number 4106450; or for 12 months by visiting the Company’s website at www.abercrombie.com.

# # # #

For further information, call: Eric Cerny
Manager, Investor Relations
(614) 283-6385

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

A&F cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Press Release or made by management of A&F involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company’s control. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” and similar expressions may identify forward-looking statements. The following factors, in addition to those included in the disclosure under the heading “ FORWARD-LOOKING STATEMENTS AND RISK FACTORS” in “ITEM 1A. RISK FACTORS” of A&F’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009, in some cases have affected and in the future could affect the Company’s financial performance and could cause actual results for the 2009 fiscal year and beyond to differ materially from those expressed or implied in any of the forward-looking statements included in this Press Release or otherwise made by management: current financial crisis and general economic conditions; changes in consumer spending patterns and consumer preferences; the effects of political and economic events and conditions domestically and in foreign jurisdictions in which the Company operates, including, but not limited to, acts of terrorism or war; the impact of competition and pricing; changes in weather patterns; postal rate increases and changes; paper and printing costs; market price of key raw materials; ability to source product from its global supplier base; political stability; currency and exchange risks and changes in existing or potential duties, tariffs or quotas; availability of suitable store locations at appropriate terms; ability to develop new merchandise; ability to hire, train and retain associates; estimates of expenses which the Company may incur in connection with the closure of the Ruehl stores and related direct-to-consumer operations; and the outcome of pending litigation. Future economic and industry trends that could potentially impact revenue and profitability are difficult to predict. Therefore, there can be no assurance that the forward-looking statements included in this Press Release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company, or any other person, that the objectives of the Company will be achieved. The forward-looking statements herein are based on information presently available to the management of the Company. Except as may be required by applicable law, the Company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

# # # #

Abercrombie & Fitch Co.
Condensed Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended August 1, 2009 and Thirteen Weeks Ended August 2, 2008
(in thousands, except per share data)

	ACTUAL						ACTUAL
	2009			% of Sales			2008			% of Sales
Net Sales	$	648,459			100.0	%	$	845,799			100.0	%
Cost of Goods Sold		217,456			33.5	%		252,830			29.9	%
Gross Profit		431,003			66.5	%		592,969			70.1	%
Total Stores and Distribution Expense		367,199			56.6	%		360,719			42.6	%
Total Marketing, General and Administrative Expense		88,671			13.7	%		109,024			12.9	%
Other Operating Income, Net		(3,333	)		-0.5	%		(754	)		-0.1	%
Operating (Loss) Income		(21,534	)		-3.3	%		123,980			14.7	%
Interest Income, Net		(1,778	)		-0.3	%		(1,757	)		-0.2	%
(Loss) Income Before Income Taxes		(19,756	)		-3.0	%		125,737			14.9	%
Income Tax Expense		6,991			1.1	%		47,905			5.7	%
Net (Loss) Income		($26,747	)		-4.1	%	$	77,832			9.2	%
Net (Loss) Income Per Share:
Basic		($0.30	)				$	0.90
Diluted		($0.30	)				$	0.87
Weighted-Average Shares Outstanding:
Basic		87,878						86,842
Diluted		87,878						89,963

Abercrombie & Fitch Co.
Condensed Consolidated Statements of Operations
(Unaudited)
Twenty-Six Weeks Ended August 1, 2009 and Twenty-Six Weeks Ended August 2, 2008
(in thousands, except per share data)

	ACTUAL						ACTUAL
	2009			% of Sales			2008			% of Sales
Net Sales	$	1,260,595			100.0	%	$	1,645,977			100.0	%
Cost of Goods Sold		441,908			35.1	%		518,842			31.5	%
Gross Profit		818,687			64.9	%		1,127,135			68.5	%
Total Stores and Distribution Expense		756,798			60.0	%		702,507			42.7	%
Total Marketing, General and Administrative Expense		181,208			14.4	%		213,722			13.0	%
Other Operating Income, Net		(4,668	)		-0.4	%		(3,695	)		-0.2	%
Operating (Loss) Income		(114,651	)		-9.1	%		214,601			13.0	%
Interest Income, Net		(3,152	)		-0.3	%		(9,403	)		-0.6	%
(Loss) Income Before Income Taxes		(111,499	)		-8.8	%		224,004			13.6	%
Income Tax (Benefit) Expense		(25,512	)		-2.0	%		84,056			5.1	%
Net (Loss) Income		($85,987	)		-6.8	%	$	139,948			8.5	%
Net (Loss) Income Per Share:
Basic		($0.98	)				$	1.62
Diluted		($0.98	)				$	1.55
Weighted-Average Shares Outstanding:
Basic		87,788						86,588
Diluted		87,788						90,051

Abercrombie & Fitch Co.
Condensed Consolidated Balance Sheets
(in thousands)

	(Unaudited)
	August 1, 2009		January 31, 2009
ASSETS
Current Assets
Cash and Equivalents	$	366,484	$	522,122
Marketable Securities		59,698		—
Receivables		67,161		53,110
Inventories		325,596		372,422
Deferred Income Taxes		50,654		43,408
Other Current Assets		111,631		93,763
Total Current Assets		981,224		1,084,825
Property and Equipment, Net		1,344,175		1,398,655
Marketable Securities		143,731		229,081
Other Assets		170,028		135,620
TOTAL ASSETS	$	2,639,158	$	2,848,181
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts Payable and Outstanding Checks	$	157,040	$	149,753
Accrued Expenses		232,049		241,231
Deferred Lease Credits		45,787		42,358
Income Taxes Payable		1,412		16,455
Other Current Liabilities		4,820		—
Total Current Liabilities		441,108		449,797
Long-Term Liabilities
Deferred Income Taxes		12,698		34,085
Deferred Lease Credits		200,324		211,978
Debt		36,730		100,000
Other Liabilities		207,040		206,743
Total Long-Term Liabilities		456,792		552,806
Total Shareholders’ Equity		1,741,258		1,845,578
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,639,158	$	2,848,181

Abercrombie & Fitch Co.
Ruehl Operating Results ⁽¹⁾
(Unaudited)
(in thousands)

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	August 1, 2009			August 2, 2008			August 1, 2009			August 2, 2008
NET SALES	$	11,237		$	12,501		$	21,644		$	25,540
Cost of Goods Sold		4,750			5,079			8,926			10,685
GROSS PROFIT		6,487			7,422			12,718			14,855
Stores and Distribution Expense(2)		34,904			12,691			94,193			24,724
Marketing, General and Administrative Expense(3)		2,005			3,601			8,196			7,313
Other Operating Income, Net		—			(10	)		(11	)		(41	)
OPERATING LOSS		(30,422	)		(8,860	)		(89,660	)		(17,141	)

(1)	The results include Ruehl store and direct-to-consumer operating results and home office and other costs directly attributable to Ruehl operations.
(2)	Stores and Distribution Expense includes non-cash pre-tax asset impairment charges of approximately $0.8 million and $48.5 million during the thirteen and twenty-six weeks ended August 1, 2009, respectively. Stores and Distribution Expense also includes net lease termination related charges of approximately $23.0 million during the thirteen and twenty-six weeks ended August 1, 2009.
(3)	Marketing, General and Administrative Expense includes non-cash pre-tax asset impairment charges of approximately $3.0 million during the twenty-six weeks ended August 1, 2009. Marketing, General and Administrative Expense also includes severance charges of approximately $0.6 million during the thirteen and twenty-six weeks ended August 1, 2009.

EX-99.2

Exhibit 99.2

ABERCROMBIE & FITCH
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(Note 1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND STORE DATA)

	2006
	(53 week year)							2007							2008							2009
	(% Change)							(% Change)							(% Change)							(% Change)
	(Comp				(Total)			(Comp				(Total)			(Comp				(Total)			(Comp				(Total)
PERIOD	Stores)				(% Change)			Stores)				(% Change)			Stores)				(% Change)			Stores)				(% Change)
1. Sales
1st Qtr		6	%	657,271		20	%		-4	%	742,410		13	%		-3	%	800,178		8	%		-30	%	612,136		-24	%
2nd Qtr		0	%	658,696		15	%		-2	%	804,538		22	%		-4	%	845,799		5	%		-30	%	648,459		-23	%
3rd Qtr		5	%	863,448		22	%		1	%	973,930		13	%		-14	%	896,344		-8	%
4th Qtr		-3	%	1,138,744		18	%		-1	%	1,228,969		8	%		-25	%	997,955		-19	%
Year		2	%	3,318,158		19	%		-1	%	3,749,847		13	%		-13	%	3,540,276		-6	%
6 Mos		3	%	1,315,967		18	%		-3	%	1,546,948		18	%		-4	%	1,645,977		6	%		-30	%	1,260,595		-23	%
9 Mos		4	%	2,179,415		20	%		-1	%	2,520,878		16	%		-8	%	2,542,321		1	%
					(% of Sales)							(% of Sales)							(% of Sales)							(% of Sales)
2. Cost of Goods Sold
1st Qtr				227,355		34.6	%				255,141		34.4	%				266,012		33.2	%				224,452		36.7	%
2nd Qtr				203,438		30.9	%				251,100		31.2	%				252,830		29.9	%				217,456		33.5	%
3rd Qtr				295,250		34.2	%				328,887		33.8	%				304,401		34.0	%
4th Qtr				383,109		33.6	%				403,352		32.8	%				355,341		35.6	%
Year				1,109,152		33.4	%				1,238,480		33.0	%				1,178,584		33.3	%
6 Mos				430,793		32.7	%				506,241		32.7	%				518,842		31.5	%				441,908		35.1	%
9 Mos				726,043		33.3	%				835,128		33.1	%				823,243		32.4	%
					(% of Sales)							(% of Sales)							(% of Sales)							(% of Sales)
3. Gross Profit
1st Qtr				429,915		65.4	%				487,269		65.6	%				534,166		66.8	%				387,684		63.3	%
2nd Qtr				455,258		69.1	%				553,438		68.8	%				592,969		70.1	%				431,003		66.5	%
3rd Qtr				568,198		65.8	%				645,043		66.2	%				591,943		66.0	%
4th Qtr				755,635		66.4	%				825,617		67.2	%				642,614		64.4	%
Year				2,209,006		66.6	%				2,511,367		67.0	%				2,361,692		66.7	%
6 Mos				885,173		67.3	%				1,040,707		67.3	%				1,127,135		68.5	%				818,687		64.9	%
9 Mos				1,453,372		66.7	%				1,685,750		66.9	%				1,719,078		67.6	%

(1) The unaudited financial results for the thirteen weeks ended May 2, 2009 have been updated to include the non-cash impairment charge recorded in the first quarter, associated with the strategic review of the Ruehl business. The impairment charge is reflected in the condensed consolidated financial statements filed with Abercrombie & Fitch Co.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2009 filed with the Securities and Exchange Commission on June 9, 2009.

Q4 2006 Results are based on 14-week quarter

ABERCROMBIE & FITCH
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(Note 1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND STORE DATA)

	2006
	(53 week year)						2007						2008						2009
PERIOD				(% of Sales)						(% of Sales)						(% of Sales)						(% of Sales)
4. Total Stores and Distribution Expense
1st Qtr		258,352			39.3	%		308,238			41.5	%		341,788			42.7	%		389,599			63.6	%
2nd Qtr		270,494			41.1	%		334,417			41.6	%		360,719			42.6	%		367,199			56.6	%
3rd Qtr		308,456			35.7	%		355,770			36.5	%		386,545			43.1	%
4th Qtr		349,770			30.7	%		388,421			31.6	%		422,459			42.3	%
Year		1,187,071			35.8	%		1,386,846			37.0	%		1,511,511			42.7	%
6 Mos		528,846			40.2	%		642,655			41.5	%		702,507			42.7	%		756,798			60.0	%
9 Mos		837,302			38.4	%		998,425			39.6	%		1,089,052			42.8	%
				(% of Sales)						(% of Sales)						(% of Sales)						(% of Sales)
5. Total Marketing, General and Administrative Expense
1st Qtr		89,699			13.6	%		90,175			12.1	%		104,698			13.1	%		92,537			15.1	%
2nd Qtr		85,340			13.0	%		98,440			12.2	%		109,024			12.9	%		88,671			13.7	%
3rd Qtr		97,167			11.3	%		103,996			10.7	%		104,959			11.7	%
4th Qtr		101,623			8.9	%		103,147			8.4	%		100,978			10.1	%
Year		373,828			11.3	%		395,758			10.6	%		419,659			11.9	%
6 Mos		175,039			13.3	%		188,615			12.2	%		213,722			13.0	%		181,208			14.4	%
9 Mos		272,206			12.5	%		292,611			11.6	%		318,681			12.5	%
				(% of Sales)						(% of Sales)						(% of Sales)						(% of Sales)
6. Other Operating Income, Net
1st Qtr		(2,121	)		-0.3	%		(3,854	)		-0.5	%		(2,941	)		-0.4	%		(1,335	)		-0.2	%
2nd Qtr		(3,005	)		-0.5	%		(3,551	)		-0.4	%		(754	)		-0.1	%		(3,333	)		-0.5	%
3rd Qtr		(266	)		0.0	%		(1,310	)		-0.1	%		299			0.0	%
4th Qtr		(4,592	)		-0.4	%		(3,019	)		-0.2	%		(5,468	)		-0.5	%
Year		(9,983	)		-0.3	%		(11,734	)		-0.3	%		(8,864	)		-0.3	%
6 Mos		(5,126	)		-0.4	%		(7,405	)		-0.5	%		(3,695	)		-0.2	%		(4,668	)		-0.4	%
9 Mos		(5,392	)		-0.2	%		(8,715	)		-0.3	%		(3,396	)		-0.1	%

(1) The unaudited financial results for the thirteen weeks ended May 2, 2009 have been updated to include the non-cash impairment charge recorded in the first quarter, associated with the strategic review of the Ruehl business. The impairment charge is reflected in the condensed consolidated financial statements filed with Abercrombie & Fitch Co.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2009 filed with the Securities and Exchange Commission on June 9, 2009.

Q4 2006 Results are based on 14-week quarter

ABERCROMBIE & FITCH
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(Note 1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND STORE DATA)

	2006
	(53 week year)						2007						2008						2009
PERIOD				(% of Sales)						(% of Sales)						(% of Sales)						(% of Sales)
7. Operating Income (Loss)
1st Qtr		83,985			12.8	%		92,710			12.5	%		90,621			11.3	%		(93,117	)		-15.2	%
2nd Qtr		102,429			15.6	%		124,132			15.4	%		123,980			14.7	%		(21,534	)		-3.3	%
3rd Qtr		162,841			18.9	%		186,587			19.2	%		100,140			11.2	%
4th Qtr		308,834			27.1	%		337,068			27.4	%		124,645			12.5	%
Year		658,090			19.8	%		740,497			19.7	%		439,386			12.4	%
6 Mos		186,415			14.2	%		216,842			14.0	%		214,601			13.0	%		(114,651	)		-9.1	%
9 Mos		349,256			16.0	%		403,429			16.0	%		314,741			12.4	%
				(% of Sales)						(% of Sales)						(% of Sales)						(% of Sales)
8. Interest Income, Net
1st Qtr		(3,166	)		-0.5	%		(3,711	)		-0.5	%		(7,646	)		-1.0	%		(1,374	)		-0.2	%
2nd Qtr		(2,765	)		-0.4	%		(4,143	)		-0.5	%		(1,757	)		-0.2	%		(1,778	)		-0.3	%
3rd Qtr		(3,252	)		-0.4	%		(4,618	)		-0.5	%		(560	)		-0.1	%
4th Qtr		(4,714	)		-0.4	%		(6,356	)		-0.5	%		(1,419	)		-0.1	%
Year		(13,896	)		-0.4	%		(18,828	)		-0.5	%		(11,382	)		-0.3	%
6 Mos		(5,931	)		-0.5	%		(7,854	)		-0.5	%		(9,403	)		-0.6	%		(3,152	)		-0.3	%
9 Mos		(9,183	)		-0.4	%		(12,472	)		-0.5	%		(9,963	)		-0.4	%
				(% of Sales)						(% of Sales)						(% of Sales)						(% of Sales)
9. Pre-tax Income (Loss)
1st Qtr		87,151			13.3	%		96,421			13.0	%		98,267			12.3	%		(91,743	)		-15.0	%
2nd Qtr		105,194			16.0	%		128,275			15.9	%		125,737			14.9	%		(19,756	)		-3.0	%
3rd Qtr		166,093			19.2	%		191,205			19.6	%		100,700			11.2	%
4th Qtr		313,548			27.5	%		343,424			27.9	%		126,064			12.6	%
Year		671,986			20.3	%		759,325			20.2	%		450,768			12.7	%
6 Mos		192,346			14.6	%		224,696			14.5	%		224,004			13.6	%		(111,499	)		-8.8	%
9 Mos		358,439			16.4	%		415,901			16.5	%		324,704			12.8	%

(1) The unaudited financial results for the thirteen weeks ended May 2, 2009 have been updated to include the non-cash impairment charge recorded in the first quarter, associated with the strategic review of the Ruehl business. The impairment charge is reflected in the condensed consolidated financial statements filed with Abercrombie & Fitch Co.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2009 filed with the Securities and Exchange Commission on June 9, 2009.

Q4 2006 Results are based on 14-week quarter

ABERCROMBIE & FITCH
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(Note 1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND STORE DATA)

	2006
	(53 week year)					2007					2008					2009
PERIOD			(Tax Rate)					(Tax Rate)					(Tax Rate)						(Tax Rate)
10. Taxes
1st Qtr		30,911		35.5	%		36,340		37.7	%		36,151		36.8	%		(32,503	)			35.4	%
2nd Qtr		39,472		37.5	%		47,000		36.6	%		47,905		38.1	%		6,991				-35.4	%
3rd Qtr		64,062		38.6	%		73,620		38.5	%		36,800		36.5	%
4th Qtr		115,356		36.8	%		126,668		36.9	%		57,657		45.7	%
Year		249,800		37.2	%		283,628		37.4	%		178,513		39.6	%
6 Mos		70,383		36.6	%		83,340		37.1	%		84,056		37.5	%		(25,512	)			22.9	%
9 Mos		134,445		37.5	%		156,960		37.7	%		120,856		37.2	%
			(% of Sales)					(% of Sales)					(% of Sales)						(% of Sales)
11. Net Income (Loss)
1st Qtr		56,240		8.6	%		60,081		8.1	%		62,116		7.8	%		(59,240	)			-9.7	%
2nd Qtr		65,722		10.0	%		81,275		10.1	%		77,832		9.2	%		(26,747	)			-4.1	%
3rd Qtr		102,031		11.8	%		117,585		12.1	%		63,900		7.1	%
4th Qtr		198,192		17.4	%		216,756		17.6	%		68,407		6.9	%
Year		422,186		12.7	%		475,697		12.7	%		272,255		7.7	%
6 Mos		121,963		9.3	%		141,356		9.1	%		139,948		8.5	%		(85,987	)			-6.8	%
9 Mos		223,994		10.3	%		258,941		10.3	%		203,848		8.0	%
			(% Change)					(% Change)					(% Change)						(% Change)
12. Net Income (Loss)
1st Qtr		56,240		39.3	%		60,081		6.8	%		62,116		3.4	%		(59,240	)		NM
2nd Qtr		65,722		14.5	%		81,275		23.7	%		77,832		-4.2	%		(26,747	)		NM
3rd Qtr		102,031		42.5	%		117,585		15.2	%		63,900		-45.7	%
4th Qtr		198,192		20.4	%		216,756		9.4	%		68,407		-68.4	%
Year		422,186		26.4	%		475,697		12.7	%		272,255		-42.8	%
6 Mos		121,963		24.8	%		141,356		15.9	%		139,948		-1.0	%		(85,987	)		NM
9 Mos		223,994		32.3	%		258,941		15.6	%		203,848		-21.3	%
			(% Change)					(% Change)					(% Change)						(% Change)
13. Net Income (Loss) per Diluted Share
1st Qtr	$	0.62		37.8	%	$	0.65		5.0	%	$	0.69		6.2	%		($0.68	)		NM
2nd Qtr	$	0.72		14.4	%	$	0.88		22.2	%	$	0.87		-1.1	%		($0.30	)		NM
3rd Qtr	$	1.11		40.5	%	$	1.29		16.2	%	$	0.72		-44.2	%
4th Qtr	$	2.14		18.9	%	$	2.40		12.1	%	$	0.78		-67.5	%
Year	$	4.59		25.4	%	$	5.20		13.3	%	$	3.05		-41.3	%
6 Mos	$	1.34		25.2	%	$	1.53		14.2	%	$	1.55		1.3	%		($0.98	)		NM
9 Mos	$	2.44		30.5	%	$	2.82		15.6	%	$	2.27		-19.5	%

(1) The unaudited financial results for the thirteen weeks ended May 2, 2009 have been updated to include the non-cash impairment charge recorded in the first quarter, associated with the strategic review of the Ruehl business. The impairment charge is reflected in the condensed consolidated financial statements filed with Abercrombie & Fitch Co.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2009 filed with the Securities and Exchange Commission on June 9, 2009.

Q4 2006 Results are based on 14-week quarter

ABERCROMBIE & FITCH
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(Note 1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND STORE DATA)

	2006
PERIOD	(53 week year)					2007					2008					2009
14. Weighted-Average Shares Outstanding (Basic and Diluted)
1st Qtr		91,327					92,292					90,138					87,697
2nd Qtr		91,178					92,294					89,963					87,878
3rd Qtr		92,146					91,133					88,806
4th Qtr		92,572					90,235					88,258
Year		92,010					91,523					89,291
6 Mos		91,274					92,369					90,051					87,788
9 Mos		91,675					91,937					89,636
15. Actual Shares Outstanding — End of Period
1st Qtr		87,958					87,867					86,446					87,840
2nd Qtr		88,038					88,292					86,999					87,908
3rd Qtr		88,192					86,050					87,048
4th Qtr		88,300					86,156					87,055
			(% Increase)					(% Increase)					(% Increase)					(% Increase)
16. Number of Stores — End of Period
1st Qtr		846		8.0	%		954		12.8	%		1,047		9.7	%		1,126		7.5	%
2nd Qtr		880		9.5	%		984		11.8	%		1,081		9.9	%		1,132		4.7	%
3rd Qtr		912		11.2	%		1,014		11.2	%		1,106		9.1	%
4th Qtr		944		10.9	%		1,035		9.6	%		1,125		8.7	%
			(% Increase)					(% Increase)					(% Increase)					(% Increase)
17. Gross Square Feet — End of Period
1st Qtr		5,974		7.2	%		6,774		13.4	%		7,437		9.8	%		8,028		7.9	%
2nd Qtr		6,220		9.6	%		6,994		12.4	%		7,674		9.7	%		8,120		5.8	%
3rd Qtr		6,441		11.3	%		7,188		11.6	%		7,858		9.3	%
4th Qtr		6,694		11.1	%		7,337		9.6	%		8,023		9.3	%

(1) The unaudited financial results for the thirteen weeks ended May 2, 2009 have been updated to include the non-cash impairment charge recorded in the first quarter, associated with the strategic review of the Ruehl business. The impairment charge is reflected in the condensed consolidated financial statements filed with Abercrombie & Fitch Co.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2009 filed with the Securities and Exchange Commission on June 9, 2009.

Q4 2006 Results are based on 14-week quarter

EX-99.3

Exhibit 99.3

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1

Final Transcript

Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

CORPORATE PARTICIPANTS

Eric Cerny
Abercrombie & Fitch Co. — Manager — IR

Mike Jeffries
Abercrombie & Fitch Co. — Chairman, CEO

Jonathan Ramsden
Abercrombie & Fitch Co. — EVP, CFO

Brian Logan
Abercrombie & Fitch Co. — VP, Finance

CONFERENCE CALL PARTICIPANTS

Michelle Tan
Goldman Sachs — Analyst

Christine Chen
Needham & Co — Analyst

Janet Kloppenburg
JJK Research — Analyst

Jeff Klinefelter
Piper Jaffray — Analyst

Edward Yruma
KeyBanc Capital Markets — Analyst

Linda Tsai
MKM Partners — Analyst

Paul Lejuez
Credit Suisse — Analyst

Kimberly Greenberger
Citigroup — Analyst

Adrienne Tennant
FBR Capital Markets — Analyst

Jennifer Black
Jennifer Black & Associates — Analyst

Liz Dunn
Thomas Weisel Partners — Analyst

Dana Telsey
Telsey Advisory Group — Analyst

Laura Champine
Cowen & Co — Analyst

Stacy Pak
SP Research — Analyst

Jeff Black
Barclays Capital — Analyst

Richard Jaffe
Stifel Nicolaus — Analyst

Randy Konik
Jefferies & Co — Analyst

Lorraine Hutchinson
BAS-ML — Analyst

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Final Transcript

Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Eric Beder
Brean Murray — Analyst

Marni Shapiro
The Retail Tracker — Analyst

Josh Schwartz
Flatbush Watermill LLC — Analyst

Roxanne Meyer
UBS — Analyst

Howard Tubin
RBC Capital Markets — Analyst

Magnum Patois
Marquis — Analyst

PRESENTATION

Operator

Good day, everyone and welcome to the Abercrombie and Fitch second quarter earnings call. Today’s conference is being recorded. (Operator Instructions). We will open the call to take your questions at the end of the presentation. And we ask that you limit yourselves to one question during the question-and-answer session.

At this time, I would like to turn the conference over to Mr. Eric Cerny. Mr. Cerny, please go ahead, sir.

Eric Cerny — Abercrombie & Fitch Co. — Manager — IR

Good morning, and welcome to our second quarter earnings call. Earlier this morning, we released our second quarter sales and earnings, balance sheet, statement of operations, and an updated financial history. Please feel free to reference these materials, available on our website. This call is being recorded and the replay may be accessed through the Internet at Abercrombie.com. Before we begin, I remind you that any forward-looking statements we may make today are subject to the Safe Harbor statement found in our SEC filings.

Today’s earnings call will be limited to one hour. We will begin the call with a few brief remarks from Mike, followed by a review of the financial performance for the quarter from Jonathan Ramsden and Brian Logan. 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 we can speak with as many callers as possible. Now to Mike.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good morning, everyone. Thank you for joining us today. We continue to be confronted with very challenging conditions during the second quarter. We believe we are doing the right things to address those challenges and improve our domestic business. In the meantime, we remain very encouraged by our prospects for international growth.

As a company that stands for optimism, confidence, and aspiration, we sell the best of America, and we think that the world has a growing appreciation of these values. However, consumer spending patterns domestically continue to be dictated by cost and value propositions, and this is clearly a headwind for our premium brands. We find ourselves working to affect the things that are within our control, and remain confident that we will be better positioned as a result of our actions to take advantage of the eventual turnaround.

Jonathan and Brian will provide more detail on our financial results in a moment, but I would like to share with you some of the key points regarding our strategy as well as some of the things we are seeing today that allow us to look to the future with optimism. First, as many of you have heard me say before, our future is tied to the international expansion of our brands. We increasingly see this opportunity, which will drive the future growth and profitability of our business, pointing in a positive direction.

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Final Transcript

Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Our performance in the UK proves that there’s a strong demand for our brands overseas. The Abercrombie & Fitch flagship in London, having opened its doors 2.5 years ago continues to comp significantly positively. We currently have five Hollister mall-based stores in the UK, and are extremely pleased with the reception the brand has received as we have opened each location. We are clearly offering the international customer a shopping experience unlike anything they currently have.

Second, we feel very good about the progress we have made on our product offering. We are always pushing ourselves to offer classic casual trend right exceptional quality product, but have admittedly missed some of the fashion opportunities that drove the business in the spring. We feel like we have corrected those fashion misses and have been increasingly adding fashion elements to the assortment throughout the quarter in preparation for back-to-school and Christmas shopping, particularly for the female business. We’ve heard the reaction from many of you as well as our store associates and our customers. You like the newness and the variety we have added to our assortments.

Third, as I mentioned to you last quarter, we recognize price is an important component of our business model. We are planning to deliver greater reductions in AUR for the fall season, but we’ll continue to review pricing on an ongoing basis. For the back-to-school and Christmas shopping periods, you will continue to see us offer a balance of full-priced fashion product and specialty priced product throughout the store. Spring 2010 we are sourcing into lower product costs to help support lower AURs. Most importantly, we will do this while protecting quality.

Lastly, it was great to see so many of you at the epic Hollister opening in Soho in July. For those of you not able to make it, I encourage you to pay a visit to the store. We believe it is truly a unique experience and expect it to be a tourist destination for the Hollister customer and to support our international Hollister rollout. With that, I will hand the call over to Jonathan, but will be available to answer your questions at the end of our comments.

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

Thank you, Mike, and good morning, everyone. The second quarter the company’s net sales decreased 23% to $648.5 million, our comp sales decreased 30%. Our gross margin rate for the quarter was 66.5%, down 360 basis points, approximately in line with the first quarter gross margin reduction. Again, reflecting our higher markdown rate for the quarter. For the full season, we anticipate further gross margin erosion compared to last year, although we expect the rate of erosion to moderate compared to the first half of the year.

Our operating loss for the quarter was $21.5 million. This included pretax charges of $24.4 million associated with the closure of RUEHL and an operating loss from continued RUEHL store and DTC operations of $6 million. The impact of RUEHL operations is summarized in an attachment to this morning’s earnings release.

During the quarter, we continued to make progress on operating expenses. Marketing, general, and administrative expense for the second quarter was $88.7 million, down 19% versus last year’s expense of $109 million. The reduction in MG&A includes savings related to employee compensation and benefits, travel, outside services, and marketing. MG&A for the quarter also included $0.6 million of severance charges associated with the exit of RUEHL. For the balance of the year we anticipate the percentage reduction at MG&A will moderate to a single-digit figure as we anniversary 2008 savings and potentially restore a portion of incentive and related comp accrual.

Stores and distribution expense of $367.2 million for the quarter included $23.8 million of RUEHL exit and store asset impairment charges. Excluding those charges, store occupancy costs accounted for 24.9% of sales and for approximately 730 basis points of operating margin de- leverage relative to the prior year. Reversal of this de-leveraging effect over time will depend in part on an increase in domestic store productivity levels. In addition, we will benefit from the opening of international stores for which we’ve been paying significant pre opening rent during 2009. Beyond that, we are in the process of reviewing our domestic store base. We currently have approximately 270 leases expiring between now and the end of fiscal year 2011, and a disproportionate number of our currently underperforming stores have leases expiring during this period.

Prior to the effect of RUEHL exit charges, we expect store occupancy costs to continue to increase modestly in dollar terms over the balance of the year as a result of new stores. All other stores and distribution expenses comprising selling, payroll, store management, support, distribution, DTC and other costs, represented 28% of sales and were down approximately 14% on a year-over-year basis, and approximately 19% on an average store basis. These reductions were realized despite having to absorb $1.4 million of expense associated with increases in minimum wage rates. During the quarter, we implemented additional cost saving initiatives including a non payroll area such as repairs an maintenance.

Year-over-year de-leveraging effect of all other stores and distribution expenses was 300 basis points for the quarter compared to 440 basis points for the first quarter. We anticipate a minimal level of de-leveraging for the balance of the year. As an update to our specific plans for new store openings in 2009, domestically, in addition to the Hollister epic flag ship store in Soho that opened in July, we now expect to open nine stores in

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Final Transcript

Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

2009. This includes two Abercrombie stores, four Hollister stores, one Gilly Hicks store, and two outlet stores. Internationally we remain on track to open Abercrombie & Fitch and Abercrombie flagships in Milan in October, and an Abercrombie & Fitch flagship in Tokyo in December.

We now expect to open seven Hollister mall-based stores in the UK, one Hollister mall-based store in Frankfurt, Germany, one Hollister mall-based store in Rome, and one kids store in Canada. To provide some color on our international results, our year to date international store sales have been around $90 million at productivity levels in excess of our average domestic stores. Our Hollister store at White City in London is our single most productive Hollister store on a per square foot basis.

Fiscal 2009 total capital expenditures are now expected to be approximately $185 million, including approximately $140 million related to new stores, store refreshes and remodels, and approximately $45 million related to IT distribution center and other home office projects. The reduction in capital expenditures from the previously announced estimate of $200 million is primarily a result of net reductions in construction costs related to 2009 store openings, timing effects related to 2010 store openings, and the reduction and postponement of nonessential capital projects related to existing stores. We continue to expect an accelerated rate of openings for international mall-based Hollister stores in 2010 and 2011.

Now to Brian, who will provide some additional detail on our first quarter financial performance.

Brian Logan — Abercrombie & Fitch Co. — VP, Finance

Thank you, Jonathan. As reported, fiscal 2009 second quarter net sales for the 13 weeks ended August 1st, 2009, decreased 23% to $648.5 million from $845.8 million for the 13 weeks ended August 2nd, 2008. Second quarter direct to consumer net sales decreased 13% to $48.7 million.

Total company comparable store sales decreased 30%. Average transactions per store decreased 22%. Average transaction value decreased 8%, and average unit retail decreased 5% for the quarter.

Across all brands, the masculine categories continued to outperform the feminine categories, as male comparable store sales decreased by a low 20%, while female comparable store sales decreased by a mid-30%. From a merchandise classification standpoint, on a total company basis for both male and female, knit tops, graphic tees and shorts were the weakest performer, while female, wovens, and dresses performed stronger. For the second quarter, the gross profit rate was 66.5%, down 360 basis points from last year’s second quarter rate of 70.1%, reflecting a higher markdown rate.

We ended the second quarter with inventory per gross square foot at cost down 35%. Stores and distribution expense for the quarter as a percentage of sales increased 14 percentage points to 56.6% versus 42.6% last year. Stores and distribution expense included $23 million of lease termination related costs associated with the exit of RUEHL and $0.8 million of RUEHL store asset impairment charges.

For the second quarter, marketing, general, and administrative expense was $88.7 million, down 19% versus last year’s expense of $109 million. As a percentage of sales, MG&A expense increased 80 basis points to 13.7% from 12.9% last year. MG&A expense for the quarter included $0.6 million of severance charges associated with the exit of RUEHL.

Income tax expense for the second quarter was $7 million, which was comprised of $11.5 million of expense related to a true-up of the first quarter income tax provision and $4.5 million of benefit associated with the second quarter loss before income taxes. The income tax true-up, as calculated in accordance with FIN 18, was a result of a reduction of the estimated annual effective tax rate as determined in the second quarter. The lower projected rate is primarily due to a higher proportion of projected income before income taxes, coming from international operations with a lower overall effective tax rate, and a lower proportion of projected income before income taxes coming from domestic operations, partially resulting from the second quarter charges associated with the closure of RUEHL.

The effective tax rate for the third and fourth quarter of fiscal 2009 could be impacted by a number of factors, including the recognition of additional RUEHL charges related to the exit of RUEHL. For the fiscal 2010, we expect the effective tax rate to return to historic levels.

For the second quarter, we reported a net loss of $26.7 million, and a net loss per basic and diluted share of $0.30 compared to net income of $77.8 million, and net income per diluted share of $0.87 last year. The second quarter net loss and net loss per diluted and basic share, included pretax charges of $24.4 million associated with the exit of RUEHL and related RUEHL store asset impairment charges, and $11.5 million of expense related to a true-up of the first quarter income tax provision.

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

We ended the second quarter with $366.5 million in cash and cash equivalents, and outstanding debt and letters of credit of $79.6 million. During the quarter we repaid the US dollar denominated borrowings of $100 million outstanding at the beginning of the quarter under the credit agreement and separately, we drew down approximately $37 million in foreign currency denominated borrowings used to fund international lease and capital expenditure commitments. Also during the second quarter, certain auction-rate securities with a fair value of $59.7 million and for which the company has a right to exercise a put option at par commencing in June 2010 were reclassified from non current marketable securities to current marketable securities. The put option with the fair value of $16.3 million, was also reclassified from other assets to other current assets.

During the second quarter, we opened six new stores, resulting in a 1% growth in square footage from the end of the first quarter of 2009. We ended the second quarter with a total of 354 Abercrombie & Fitch, 213 Abercrombie, 520 Hollister, 29 RUEHL, and 16 Gilly Hicks stores, including three Abercrombie & Fitch, three Abercrombie, and five Hollister stores in Canada, and one Abercrombie & Fitch and five Hollister stores in the United Kingdom.

This concludes our prepared comments section of the call. We are now available to take your questions. Please limit yourself to one question so that we can speak to as many callers as possible. After everyone has had a chance, we will be happy to take follow-up questions. Thank you.

QUESTION AND ANSWER

Operator

Thank you, sir. Ladies and gentlemen, our question-and-answer session will be conducted electronically. (Operator Instructions). We will pause for just a moment to assemble the question roster. And for our first question we go to Michelle Tan with Goldman Sachs.

Michelle Tan — Goldman Sachs — Analyst

Great, thank you. I was wondering if you could give us a little more color on the incremental cost savings, the occupancy came in a little lower than I think you had expected, and also the decline in non occupancy was a decent amount better than last quarter, so just wondering if you could help us understand where those came from and then how sustainable that is through the rest of the year.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Hey, Michelle. How are you?

Michelle Tan — Goldman Sachs — Analyst

Good, how are you?

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

G thanks. Yeah, I guess in terms of the occupancy, I think what we said on the last call was in that dollar terms it was going to be pretty much in line with the first quarter, and we were pretty close to that. There wasn’t a significant change there. On the other stores and distribution expenses, we were able to make progress, particularly — we mentioned a couple minutes ago the repairs and maintenance expense area. That was a fairly significant reduction that we hadn’t anticipated at the time of the last call but on which we were able to make some good progress during the quarter, then there were a number of other less significant individual components, but that repairs and maintenance piece was the biggest single component.

Operator

And for our next question we go to Christine Chen with Needham & Company.

Christine Chen — Needham & Co — Analyst

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Good morning.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good morning, Christine.

Christine Chen — Needham & Co — Analyst

Good morning. I just was wondering, I know that at the front of the store you have denim that has been on limited time lower price points, and I’m just wondering if that’s getting the traffic and the conversion that you anticipated.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

The answer to that is yes. This is the third time we’ve done it. We started the first time last Christmas, and we see that it works, but it is really just a part of a total denim strategy. I feel very happy with our denim assortments for back-to-school. I think we’re in the right silhouettes. I think our washes continue to be beautiful. I think we dominate in the destroyed category, which is very trend right, and price is a factor in the whole equation. Clearly denim is a very competitive category for back to school. We’re happy with how we’re positioned, and we’ll see how the other season works out, but thank you.

Operator

We go next to Janet Kloppenberg with JJK Research.

Janet Kloppenburg — JJK Research — Analyst

Good morning, everyone.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good morning, Janet.

Janet Kloppenburg — JJK Research — Analyst

Mike, I was wondering if could you spend a few minutes talking to us about what’s happening in the basics business and the fashion business. It seems that the basic business has been where the greatest resistance has been. Maybe you could talk about how you remedy that, and also talk a little bit about the trend or the response to the much better fashion product that you now have at both Hollister and Abercrombie & Fitch. Thanks so much.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Great question. It’s clear that the basic categories are and have been troubled, and the most susceptible to price. So our solution has been that the basic categories are the ones that we offer at the most compelling prices. We continue to see and believe that customers will pay for the right fashion. And that’s exactly what’s happening in the business. You’ve seen, customers have seen, many of you out there have commented about the improved fashion content in the A&F and the Hollister stores, and we’re very pleased with the direction it’s going. We continue to be excited about the plaid statement, and it’s clearly resonating with the customer. The story will continue to be about newness, more fashion, continuous flows throughout the fall season, and the fashion content of our inventory is much improved. It’s a work in progress.

Operator

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Again, ladies and gentlemen, we do ask that you limit yourselves to one question. We go next to Jeff Klinefelter with Piper Jaffray.

Jeff Klinefelter — Piper Jaffray — Analyst

Yes, thank you, hi, guys.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Hi, Jeff.

Jeff Klinefelter — Piper Jaffray — Analyst

Jonathan, maybe you can frame up this again, recap. On the international side with all the pre opening expenses you have been incurring, remind us what you’re incurring from those, and also any other corporate related expenses that you do direct toward international, and then how that’s going to be offset by these store openings this year, how much of that will continue next year with really, I guess, just Paris on deck, and I just wanted to clarify something, tell me again the occupancy de-leveraging versus the store expense de-leveraging domestically? Thank you.

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

Brian will give you the pre opening rent figures in a second. Let me give you the de-leveraging effects again. I guess what we’re saying for the all other stores and distribution expenses, excluding store occupancy, de-leveraging effect fork the balance of the year will be minimal. I’m just digging out the numbers here. For the second quarter, it was 300 basis points for those expenses versus 440 for the first quarter, and we see that going to a minimal level of de-leveraging for the balance of the year. Store occupancy was a 730-basis-points de-leveraging in Q2. In dollar terms on store occupancy we see that rising modestly over the remaining two quarters of the year.

Brian Logan — Abercrombie & Fitch Co. — VP, Finance

Jeff this is Brian. The pre opening rent, incremental pre opening rent in the second quarter of this year over second quarter of last year was about $1 million. We are starting to see that incremental impact come down. In the first quarter it was roughly $3.5 to $4 million. It’s come down to $1 million in the second quarter. For the balance of the year, we aren’t anticipating a meaningful impact on an incremental basis, largely because we’re starting to anniversary some of the pre opening rent we had to take last year for the flagships and also a lot of the domestic new store construction is down in the second half of the year versus the second half of last year. So on a year-over-year basis for the remainder of the year, we don’t anticipate much of an incremental benefit or expense associated with pre opening rent.

Operator

We go next to Edward Yruma with KeyBanc Capital Markets.

Edward Yruma — KeyBanc Capital Markets — Analyst

Can you give us a quick update on the Copenhagen store and whether you still expect to open that?

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

We are continuing to review that, we have not made a final decision on what we’re going to do with that store.

Operator

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

For our next question, we go to Linda Tsai with MKM Partners.

Linda Tsai — MKM Partners — Analyst

Similar to the improvements you’ve infused in the fashion product, do you think there’s opportunity to improve the basic styles more meaningfully as well?

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

I think that’s a good question, and the answer is absolutely yes. It is an era of more meaningful decoration is a way to put it, and we’re working very hard on that. So in answer, a little more color on Janet’s question, basics, we’re reducing the percentage in the inventory that is basic. That is basic is being priced more aggressively, and we are working on updating them. It’s a combination of the three. But that’s a good question. Thanks, Linda.

Operator

We go next to Paul Lejuez with Credit Suisse.

Paul Lejuez — Credit Suisse — Analyst

Just wondering if you have a certain number in mind when you’re thinking about reviewing your stores that are up for lease renewal and just wondering if there’s one division that might get hit with more closings than the others. Thanks.

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

Hi, Paul. I think on the first part of the question, we don’t have a specific number at this point. We’re going to take the balance of this year to continue to dig into that and think about what we think the optimal footprint size should be going forward, and obviously in part that’s going to be a function of what level of recovery we anticipate over time domestically. So we aren’t entirely through that. I think we do believe that if there is a contraction it would be more into towards the A & F brand than the other brands.

Operator

We go next to Kimberly Greenberger with Citi.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Hi, Kimberly.

Kimberly Greenberger — Citigroup — Analyst

Good morning. I just had a follow-up on Paul’s question. Here in the United States do you feel like all of your brands are fairly mature outside of, perhaps, Gilly Hicks? If it not, if you see growth here in the United States, which brand or brands would you expect to continue to be able to grow, and on a net basis do you expect to contract, for example, the Abercrombie & Fitch brand? Thanks.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

I think the answer to that is yes. We think we’re mature in the United States in all of the brands, with the exception of Gilly. There would be slight contraction in the Hollister brand and the contraction that will occur will be in the Abercrombie & Fitch and kids brands domestically.

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

And I would just add to that, the return on capital we’re currently seeing in the UK rollout is much greater than anything we would expect to get through further expansion in the US at this point. Obviously, we’ll continue to review that as we open up in additional countries.

Operator

We go next to Adrienne Tennant with FBR Capital Markets.

Adrienne Tennant — FBR Capital Markets — Analyst

Good morning, everyone. My questions for you. What has been the learnings in May, you kind of started promoting a little bit more, driving a little bit more through some of the clearance activity. Historically, it seems that Abercrombie has used clearance or markdowns to clear goods as opposed to drive traffic. And so what learnings have you had and what’s kind of the go-forward strategy on promotions and clearance?

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

The learning is that we’re in very tough economic times where price has become more of an object for us than it ever has been, and we’re using this strategy to drive traffic during this time. It is not the primary vehicle, nor it will be the primary vehicle for driving business. But it is part of the balance at this point. I would certainly hope that the future we would use and — use less and wean ourselves of this vehicle. But it is not the driving force of this business. The driving force is fashion, quality, aspiration, and will continue to be so. And I think you see the stores and how we’re treating it. That’s exactly how it appears to our customer.

Operator

We go next to Jennifer Black of Jennifer Black & Associates.

Jennifer Black — Jennifer Black & Associates — Analyst

Hi there.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Hi, Jennifer.

Jennifer Black — Jennifer Black & Associates — Analyst

Hi, Mike. Just a follow-up to what we’ve been talking about. I was curious to know what kind of response you got when you started sending the e-mail blasts with the select washes, and I was curious to know what kind of website hits you got, and then anything overall about on-line would be great. Thank you very much.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

That’s a great question. Because you can see that we’re concentrating on it. The e-mail response to our plaid blasts and to the denim blasts both have been terrific. We are looking at this — all the media at our disposal in a very comprehensive way. You will see more product offerings from us and more experimentation with what we might do. Again, as you might suspect, the lead will be fashion product, lifestyle, and not price. We’re delighted with what’s happened over the last few weeks, and we see more of it coming.

Brian Logan — Abercrombie & Fitch Co. — VP, Finance

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

And I think, Jennifer, the direct to consumer business for the quarter was down 13%, which was an improvement over the first quarter, and we think that the e-mail blasts were one of the contributing factors to that.

Operator

We go next to Liz Dunn with Thomas Weisel.

Liz Dunn — Thomas Weisel Partners — Analyst

Good morning.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Hi, Liz.

Liz Dunn — Thomas Weisel Partners — Analyst

I guess my question relates to pricing. We’ve heard from some suppliers that the pricing strategy will be sort of more of a tiered structure. Is your thinking that if you do layer on a tiered pricing structure, that you can sort of flex that as the economy improves and pull back on some of the lower price stuff and increase the higher price stuff, or what’s kind of your thinking there, and how do you communicate this pricing strategy to consumers, because I think one concept we’ve talked about in the past is that they seem to be sort of boycotting higher priced brands. Thanks.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Well, we do have a tiered pricing strategy. It has — I’m stumbling with the answer because we continue to audit the results on a weekly basis. We kind of do more of what works and less of what doesn’t. The future is that we will have a tiered pricing strategy. The issue that’s been raised is whether we’re going to be offering them at clearance prices or ticket prices. And the answer to that is that ticket prices will become a bigger and bigger part of our assortment. I think that might be what you’re getting at. But thanks for the question.

Operator

Again, ladies and gentlemen, we do ask that you limit yourself to one question. We go next to Dana Telsey with Telsey Advisory Group.

Dana Telsey — Telsey Advisory Group — Analyst

Good morning, everyone. Hi. Can you talk a little bit on the international business? Learnings from Hollister, learnings from Abercrombie international, how is it different from the US and how is what you’ve learned at Abercrombie in in forming Hollister, what’s different than you may have expected in helping you go forward.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Great question. The key to our international business is that we run at the same as we do the domestic business. You cannot tell the difference between being in London, New York, Los Angeles, or San Francisco. And the interesting thing about it, Dana, is that we sell the same things and the same depths virtually everywhere. There’s some slight variations.

But what we’re selling is the American lifestyle and everything that it represents. So casual, energetic, young product resonates with people in London, now the UK, we’re hoping Italy in store, we’re hoping Germany, but we come at that with a great deal of confidence because we see that we’re doing business with those people in other stores or through the Internet now. But the issue is really that it’s very much the same, and that’s how we’re approaching the international business. We clearly learned from A & F that that is the case, but we’re seeing that that’s absolutely the

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

case in Hollister and the UK, and we’re seeing throughout the UK, it’s not just a London suburban thing, we’re now outside of London suburb successfully and selling the same lifestyle experience and product but great question.

Operator

We go next to Laura Champine with Cowen.

Laura Champine — Cowen & Co — Analyst

Good morning. My question is on AUR. I did get your comments that you will be, so next spring for those lower AURs, which my assumption is that that protects the margin, but anything you’re willing to give us as far as quantifying those lower price points and mentioning which brands. You’ve mentioned that kids and Hollister sees the most impact, but anything you can give us, sort of a blended AUR change and how your strategy is set up there.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

I can tell you that it will continue to be most dramatic in kids and Hollister, that the AUR decrease will be greater in third quarter than it’s been in second. And that’s about the extent of the color that I can offer. But you’re exactly right, the key is lowering the average unit cost, which we will do and are doing for third, fourth, first, and second quarters. Thanks. Jonathan.

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

Yeah, just to add to that, Laura, the AUR is an average of lots of different components, and I think as well as getting the AUR down, we will continue to refine how we deliver that AUR to do so most effectively over time.

Operator

We go next to Stacy Pak with S P Research.

Stacy Pak — SP Research — Analyst

Hi, thanks.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Stacy, we haven’t talked to you in years.

Stacy Pak — SP Research — Analyst

How are you, Mike?

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good. You?

Stacy Pak — SP Research — Analyst

Very good, thanks.

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Final Transcript

Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good.

Stacy Pak — SP Research — Analyst

Question for you on just the domestic flagships, Mike. Can you comment on the success of the epic Hollister and to date, should we sort of assume that you’re — we should assume the same kind of success level per foot as a Fifth Avenue, and then with regard to the kids flagship, how do you think about cannibalization of Fifth Avenue? And then just your comment earlier about your brands being mature in the US, how do you think about opening flagships now in the US, given you think those brands are mature? Thanks.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Okay. Let’s start with Epic. We’re very pleased with Epic, and we’re very pleased on number of fronts. One, it’s going to be a major volume store. It will not reach the productivity per foot of Fifth Avenue, and we haven’t planned to the do. So beyond that we don’t really talk about the figures. But you can see it’s a successful store.

Point two is, what Epic has allowed us to do in terms of extending the lifestyle experience, we’re going to take many of the things that we’re doing in that store and take them to the Hollister chain. In the new stores that we’re opening in Europe, which is a very exciting thing.

But the third factor is something that is more subtle and some of you picked up on. Epic offered us the opportunity to extend our assortments and to really, as a company, dig into what is the heart of Hollister, southern California beach culture, the and how do we reflect that in the assortments for the chain, to let us further differentiate Hollister from the other brands. So from all three points of view, we’re very thrilled with Epic.

Kids flagship on Fifth Avenue, we’re looking at very carefully, and I will be very candid with you, we are looking at maximizing the bottom line in that location. And it’s really the bottom line on Fifth Avenue. So cannibalization to kids could be a fact to but we’re very committed as a company to making sure that we get the best return on Fifth Avenue. So we might be looking at other options.

The third factor, flagships in the US, we don’t see the opportunity for many more flagships in the US. The only opportunity in a flagship is international. So in those locations that would attract international customers, we’re interested, but there really aren’t any more US flagships on our horizon at all. There are too many opportunities overseas. Good questions.

Operator

We go next to Jeff Black with Barclays Capital.

Jennifer Black — Jennifer Black & Associates — Analyst

Hey, thanks. I guess, Mike, for you, you just want to go with the pricing question another way. How do you look at the longevity of what’s happening? You’ve talked in the past about keeping the premium price points and keeping a fairly wide gap between your competitors, now we’re talking about obviously in Hollister decreasing that. How far do you think we’ve come in 3Q and 4Q on the pricing front, and when do you think, given all that’s happened, is it permanent? When do you think we’re in a better position? Is it spring? Is it next fall? Thanks.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Jeff, if could answer that question, I could move to the White House. I don’t know, and I don’t think anyone does. We’re in an economic situation that’s affected consumer confidence, and aspirational better brands have have been hardest hit. Will it turn around? Absolutely. I think we are doing the right thing today. We’re maintaining the aspirational natures of our business in terms of lifestyle, environment and product quality. That’s what we stand for. And we’re withstanding the storm at this point.

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

When will the US turn around? I’m not sure, but it’s going to. And there’s a continual demand for aspirational product. That’s the history of the world. Sometimes less, sometimes more. But look at what’s going on with us in the UK right now. So, not sure, but that’s what we’re going to do.

Operator

We go next to Richard Jaffe with Stifel Nicolaus.

Richard Jaffe — Stifel Nicolaus — Analyst

Thanks very much, guys and well done considering the circumstances.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Thank you.

Richard Jaffe — Stifel Nicolaus — Analyst

A question about store closings and how you’re thinking about store closings. Obviously the environment is unusual and I’m convinced it will change. Wondering how you are going to look at the lease renewals and how much optimism you will put into that, I guess pro forma to go forward estimates, or on the opposite, how aggressive are you being in keeping the stores in prestige locations? I’m trying to get a better sense of the hurdle you’re going to set for these underperforming stores that may or may not be closed.

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

Hi, Richard. We’re basically going to take the balance of this year really to look very hard at that. As we get towards the end of the year we’ll have some greater degree of visibility than we have today in terms of what we can expect in terms of a recovery. But we’re going to look at it market by market. It’s going to be a very detailed look at the expirations what we can expect if we were to close a particular store in a market to transfer to other stores, and we’re still working through that yet, so I don’t think we’re in a position to give a whole lot more guidance, but obvious we will assume some level of recovery, since we don’t expect the business to flat line its current level on a long-term basis, but that aspect of it, the cost structure aspect, then just going market by market and looking at what we think the optimal footprint is in each market.

Operator

Our next question we go to Randy Konik with Jefferies.

Randy Konik — Jefferies & Co — Analyst

Question for Jonathan. You spoke about gross margin deteriorating but getting less — being less so than the second quarter. With the AURs coming down is that a function of you think the IMU is going to be heading higher, and the markdown rate will go down because of the tight inventory? Going into the fourth quarter, given that you are going to be lapping significant margin reductions from 4Q 2008, is it something that you can see the gross margin starting to flatten out towards the end of the year? Thanks.

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

Hey, Randy. What we’re saying is that there will continue to be margin erosion in the fall, but since our prior year full margin was already impacted by additional markdowns we took in the fall season last year, the year-over-year margin erosion for the fall will be less than it’s been, we expect, in the first half of the year. The reason it will will continue to be pressured is we are expecting to have to take markdowns as we move towards sourcing into those lower AURs.

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Operator

We go next to Lorraine Hutchinson with Banc of America.

Lorraine Hutchinson — BAS-ML — Analyst

Good morning. I was hoping for an update on Gilly Hicks, and any early learnings there and just an update on the time line, how long will you wait to potentially reaccelerate the growth rate there.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good question. We remain very enthusiastic about Gilly, but very diligent at developing each of the businesses within that brand. We’re newcomers to bras and underwear. We’re learning a ton. And we have a very detailed growth plan for that business that calls for growth by category in terms of volume and margin. I think that the biggest learning curve for that business can be looked at in terms of what we learned from RUEHL. And the biggest learning from RUEHL is that as a company, we don’t do mature well. That’s a lesson for Gilly to go forward, and all of our brands. But good question, thanks.

Operator

We go next to Eric Beder with Brean Murray.

Eric Beder — Brean Murray — Analyst

Good morning. Question and clarification. Want to talk a little bit about logoing. If we look at some of the Hollister stores, it would seem that you’ve moved a little bit away from the level of logoing. How do you look upon that, and how aggressive are you going to be with that? And just a clarification, what should we be looking at the tax rate going forward for the second half of this year and for 2010?

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

That’s a good observation. We look to decrease the percentage of logo in all of our brands. We think that’s an important concept for sustainability of the brands, and having said that, logo is very important, because it represents the brand, but we are decreasing the percentage of logo in all the brands.

Brian Logan — Abercrombie & Fitch Co. — VP, Finance

Eric, as far as the effective tax rate, we won’t be giving guidance for the back half of the year on the effective tax rate because it can be affected by a number of factors, one of which would be any additional RUEHL charges that we may take in the back half of the year. So that could cause the rate to fluctuate in the third and fourth quarter. But for the — in 2010, we would expect that our effective tax rate would return to more of the historic levels that we’ve seen in the past.

Operator

We go next to Marni Shapiro with The Retail Tracker.

Marni Shapiro — The Retail Tracker — Analyst

Hey, guys. Since I’m so late in the call I’m going to ask you two questions. One very simple. If you can just give us an update on the ancillary products. Belts are obviously blowing out, but just bags and personal care, outerwear, and then Mike a bigger picture question. It seems to me when I walk through the stores, this is not about the brand, that the right product is selling out, in a week or two, at full price. So when I boil this

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

down, I know we all like to make this so complicated, but when we boil this down, isn’t is it really just about getting more right product in the store?

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Sure. As usual you’re right, and that’s our strategy. And more right product, more often. And you see that it is selling out, but we have lots of things in the pipeline. So it’s working on the fashion part of the business. We’re working hard, and you put it — I can’t put it better than that.

Sure, we are — belts are blowing out, our outerwear is very good, dresses are very good, fashion fleece is very good, and you are going to see lots of things that we sell out, but it can be replaced by other exciting things. I’m thrilled at the process. I don’t want you to think that we’ve reached Nirvana, because we haven’t. This is a work in progress, but we have a company very engaged in doing what you’re talking about. Thanks, Marni.

Operator

We go next to Josh Schwartz with Flatbush Watermill LLC.

Josh Schwartz — Flatbush Watermill LLC — Analyst

Good morning, guys.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

Good morning, Josh.

Josh Schwartz — Flatbush Watermill LLC — Analyst

Mike, I just want to, actually, my question was raised about Gilly Hicks and some things, how RUEHL learnings might affect it going forward, but you raised this idea that you learned that the company doesn’t do mature very well, so I want to make sure I understand what you are saying. Are you saying you need to learn how to do mature better, or Gilly Hicks is — I guess because Gilly is a more mature concept in terms of the target audience and that, so the potential is lower than you thought. Just what you really mean.

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

What I really meant was reeve tried to do mature, and we’re not going to do any more of it. I think we ended up doing RUEHL very well without great success. We know that we do young well, and we have to be focused as a company on doing young well. I think Gilly was veering a little old. It’s clear that she’s a 20-year-old. That’s what we’re going after in that business. That’s where we’re successful, that’s what we’re building on.

But it’s a commentary for our whole business. We are young, we’re sexy, we’re controversial at times. That’s what we know how to do, and that’s the business that we own here and are comfortable that we can around the world. Thanks, Josh.

Operator

Our next question we go to Roxanne Meyer with UBS.

Roxanne Meyer — UBS — Analyst

Great, thanks. Just a follow-up on Marni’s question. Thank you for elaborating on some of the early wins. Can you just put it in context of the total comp performance. We’ve seen some great new product come in the stores, but it hasn’t moved the dial on comp. Just looking to appreciate what percent of your merchandise do you think is positioned well, and how long it can take before it actually shows up in the numbers.

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

I think the answer to that question is — and I don’t want to raise people’s expectations. It is starting to show up in the numbers, but it’s hidden in the numbers. We will hope that it’s going to drive total in the future. I can’t tell you when. We’re working hard at it. You are seeing it, and over some point, we’re comfortable that it will move the needle. I can’t be more precise than that. But thank you.

Operator

We go next to Howard Tubin with RBC Capital Markets.

Howard Tubin — RBC Capital Markets — Analyst

How should we think about inventory for the rest of the year. It’s down pretty meaningfully. Should those declines moderate as we get into the third and fourth quarter?

Mike Jeffries — Abercrombie & Fitch Co. — Chairman, CEO

I think the answer to that question is minus 35% on a per square foot basis was very — it was a low number, we planned that low number, and we hit it. In hindsight, we think that number is a little low. And it was just a function of us conservatively planning the business. As you know, we’re conservative. We will be — we had the opportunity to be a little less conservative in the fourth quarter and the first quarter. But good questions.

Operator

We go next to [Magnum Patois with Marquis.]

Magnum Patois — Marquis — Analyst

Good morning. Can you tell us a little bit on the share repurchase or dividends going forward?

Jonathan Ramsden — Abercrombie & Fitch Co. — EVP, CFO

On the share repurchase, we do have an open authorization to repurchase. We don’t have any current plans to resume share repurchase. On the dividend, the board approved the quarterly dividend yesterday, which is the same as the quarterly dividend in the prior quarter. And we have no current plans to change that at this point.

Operator

Ladies and gentlemen, this does conclude our question-and-answer session. Mr. Cerny, I will turn the call back over to you for any closing remarks.

Eric Cerny — Abercrombie & Fitch Co. — Manager — IR

Thank you for joining us on our call today.

Operator

ladies and gentlemen, this does conclude the conference call. We do appreciate your participation.

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Aug. 14. 2009 / 8:30AM ET, ANF — Q2 2009 Abercrombie & Fitch Co. Earnings Conference Call

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