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Market Update : 
Abercrombie & Fitch Q1 Earnings Call
Author: 123jump.com Staff
123jump.com
Last Update: 7:12 AM ET May 19 2009


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I do not at the top of my head have a total figure. I can get it for you Christine. I would be saying something that''s wrong. It is a much higher percent of fashion than what we call core product. But I don''t have an exact second or third quarter figure. But you''re absolutely right that it''s a percentage of…the business is higher. We have a much bigger SKU count in fashion than in core. And I think you are seeing that in the inventories right now. We can get back to you with that exact figure, we don''t have it here.

Operator

We go next with Robin Murchison with SunTrust.

Robin Murchison – SunTrust Robinson Humphrey

Good morning and thank you for taking my question. Am I right that you are saying that your U.K. price points are remaining stable with last year and are international DTC sales growing? Thank you.

Mike Jeffries

The answer is that U.K. prices are stable, in pounds. And the answer to international direct-to-consumer is one that is difficult to answer right now. We had a system problem with some of the items on the international Website. I think what we can say is that the…I can''t really answer the question. We are going back up on the 18th with a full assortment of items on the international Website because of some programming difficulties. We have had a limited assortment for the last two months.

Operator

For our next question we go to Lorraine Hutchison with Bank of America/Merrill Lynch.

Lorraine Hutchison – Bank of America/Merrill Lynch

Thank you good morning. On the first quarter call you had spoken about some longer-term store and distribution cost cutting initiatives that we may see the benefit of in the back half. I''m just curious, I know you gave the guidance for the fixed piece of that, but are there any pieces of payroll, or any of the other variable costs that we could see continuing to decline as the year goes on?

Jonathan Ramsden

We are continuing to look at all of those components, both in the occupancy side of it and the other more variable components and there are some initiatives that we have identified recently that will be going into effect over the next few quarters. It''s a point about sort of structure going forward. I think it significantly comes back to the occupancy cost side of the equation where clearly we have had a significant de-leveraging effect. And that''s more of a medium-term objective in terms of realigning that with sales. It''s not something that we can immediately change in the short-term.

Mike Jeffries

May I have just one comment, one more comment, about the international Website just so that we are totally clear. We don''t have clearance on the international Website and by taking that off we eliminated the items that were a full assortment. That is why that business has been difficult to judge. But as of the 18th, those items will be back on the Website but at higher retails for Europe. We''re doing everything we can to protect the international business and brands.

Operator

Our next question comes from Kimberly Greenberger with Citigroup.

Kimberly Greenberger – Citigroup

Great, thank you good morning.

Mike Jeffries


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