Edgar Filing: ABERCROMBIE & FITCH CO /DE/

Abercrombie & Fitch Co. 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 3, 2007


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-12107

ABERCROMBIE & FITCH CO.

(Exact name of Registrant as specified in its charter)


Delaware		31-1469076

(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

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, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class A Common Stock		Outstanding at December 7, 2007

$.01 Par Value		86,152,517 Shares

ABERCROMBIE & FITCH CO.

TABLE OF CONTENTS


			Page No.
Part I. Financial Information

	Item 1.	Financial Statements

		Condensed Consolidated Statements of Net Income and Comprehensive Income Thirteen and Thirty-Nine Weeks Ended November 3, 2007 and October 28, 2006	3

		Condensed Consolidated Balance Sheets November 3, 2007 and February 3, 2007	4

		Condensed Consolidated Statements of Cash Flows Thirty-Nine Weeks Ended November 3, 2007 and October 28, 2006	5

		Notes to Condensed Consolidated Financial Statements	6

		Report of Independent Registered Public Accounting Firm	16

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

	Item 4.	Controls and Procedures	36

Part II. Other Information

	Item 1.	Legal Proceedings	37

	Item 1A.	Risk Factors	39

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

	Item 6.	Exhibits	41
EX-15
EX-31.1
EX-31.2
EX-32

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ABERCROMBIE & FITCH

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

AND COMPREHENSIVE INCOME

(Thousands, except per share amounts)

(Unaudited)


	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	November 3,			October 28,			November 3,			October 28,
	2007			2006			2007			2006

NET SALES	$	973,930		$	863,448		$	2,520,878		$	2,179,415

Cost of Goods Sold		328,887			295,250			835,128			726,043


GROSS PROFIT		645,043			568,198			1,685,750			1,453,372

Stores and Distribution Expense		355,770			308,456			998,425			837,302
Marketing, General and Administrative Expense		103,996			97,167			292,611			272,206
Other Operating Income, Net		(1,310	)		(266	)		(8,715	)		(5,392	)


OPERATING INCOME		186,587			162,841			403,429			349,256

Interest Income, Net		(4,618	)		(3,252	)		(12,472	)		(9,183	)


INCOME BEFORE INCOME TAXES		191,205			166,093			415,901			358,439

Provision for Income Taxes		73,620			64,062			156,960			134,445


NET INCOME	$	117,585		$	102,031		$	258,941		$	223,994


NET INCOME PER SHARE:
BASIC	$	1.35		$	1.16		$	2.96		$	2.55
DILUTED	$	1.29		$	1.11		$	2.82		$	2.44


WEIGHTED-AVERAGE SHARES OUTSTANDING:
BASIC		86,895			88,106			87,623			87,982
DILUTED		91,133			92,146			91,937			91,675


DIVIDENDS DECLARED PER SHARE	$	0.175		$	0.175		$	0.525		$	0.525

OTHER COMPREHENSIVE INCOME
Cumulative Foreign Currency Translation Adjustments	$	4,731		$	469		$	9,148		$	579

Unrealized (Loss) Gain on Available-For-Sale Securities, net of taxes of ($3) and $207 for the thirteen week periods ended November 3, 2007 and October 28, 2006, respectively, and ($61) and ($6) for the thirty-nine week periods ended November 3, 2007 and October 28, 2006, respectively		(5	)		309			(97	)		(14	)

	$	4,726		$	778		$	9,051		$	565


COMPREHENSIVE INCOME	$	122,311		$	102,809		$	267,992		$	224,559

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

ABERCROMBIE & FITCH

CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands)

(Unaudited)


	November 3, 2007			February 3, 2007

ASSETS
CURRENT ASSETS:
Cash and Equivalents	$	83,514		$	81,959
Marketable Securities		277,704			447,793
Receivables		65,282			43,240
Inventories		407,123			427,447
Deferred Income Taxes		35,369			33,170
Other Current Assets		73,293			58,469


TOTAL CURRENT ASSETS		942,285			1,092,078

PROPERTY AND EQUIPMENT, NET		1,286,606			1,092,282

OTHER ASSETS		80,247			63,707


TOTAL ASSETS	$	2,309,138		$	2,248,067


LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts Payable	$	171,003		$	100,919
Outstanding Checks		26,209			27,391
Accrued Expenses		260,453			260,219
Deferred Lease Credits		37,489			35,423
Income Taxes Payable		20,773			86,675


TOTAL CURRENT LIABILITIES		515,927			510,627

LONG-TERM LIABILITIES:
Deferred Income Taxes		18,176			30,394
Deferred Lease Credits		216,481			203,943
Other Liabilities		152,836			97,806


TOTAL LONG-TERM LIABILITIES		387,493			332,143

SHAREHOLDERS’ EQUITY:
Class A Common Stock — $0.01 par value: 150,000 shares authorized and 103,300 shares issued at each of November 3, 2007 and February 3, 2007		1,033			1,033
Paid-In Capital		310,758			289,732
Retained Earnings		1,851,531			1,646,290
Accumulated Other Comprehensive Income (Loss)		8,057			(994	)

Treasury Stock, at Average Cost - 17,252 and 15,000 shares at November 3, 2007 and February 3, 2007, respectively		(765,661	)		(530,764	)


TOTAL SHAREHOLDERS’ EQUITY		1,405,718			1,405,297


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,309,138		$	2,248,067

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

ABERCROMBIE & FITCH

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands)

(Unaudited)


	Thirty-Nine Weeks Ended
	November 3, 2007			October 28, 2006

OPERATING ACTIVITIES:
Net Income	$	258,941		$	223,994

Impact of Other Operating Activities on Cash Flows:
Depreciation and Amortization		134,155			104,979
Amortization of Deferred Lease Credits		(27,911	)		(25,510	)
Share-Based Compensation		22,068			28,717
Tax Benefit from Share-Based Compensation		17,605			4,239
Excess Tax Benefit from Share-Based Compensation		(14,214	)		(2,972	)
Deferred Taxes		(14,417	)		(9,899	)
Loss on Disposal of Assets and Non-Cash Charge for Asset Impairment		7,042			6,034
Lessor Construction Allowances		29,763			32,940
Foreign Currency Gain		(965	)		—
Changes in Assets and Liabilities:
Inventories		28,204			(68,528	)
Accounts Payable and Accrued Expenses		35,057			18,680
Income Taxes		(65,450	)		(48,541	)
Other Assets and Liabilities		5,012			5,376


NET CASH PROVIDED BY OPERATING ACTIVITIES		414,890			269,509

INVESTING ACTIVITIES:
Capital Expenditures		(303,091	)		(302,852	)
Purchases of Marketable Securities		(911,542	)		(1,008,143	)
Proceeds from Sales of Marketable Securities		1,082,499			1,088,429


NET CASH USED FOR INVESTING ACTIVITIES		(132,134	)		(222,566	)

FINANCING ACTIVITIES:
Proceeds from Share-Based Compensation		35,874			9,541
Excess Tax Benefit from Share-Based Compensation		14,214			2,972
Purchase of Treasury Stock		(287,915	)		—
Change in Outstanding Checks and Other		(1,878	)		1,507
Dividends Paid		(46,254	)		(46,184	)


NET CASH USED FOR FINANCING ACTIVITIES		(285,959	)		(32,164	)

EFFECT OF EXCHANGE RATE ON CASH		4,758			—

NET INCREASE IN CASH AND EQUIVALENTS:		1,555			14,779
Cash and Equivalents, Beginning of Year		81,959			50,687


CASH AND EQUIVALENTS, END OF PERIOD	$	83,514		$	65,466


SIGNIFICANT NON-CASH INVESTING ACTIVITIES:
Change in Accrual for Construction in Progress	$	23,399		$	53,340

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

ABERCROMBIE & FITCH

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.		BASIS OF PRESENTATION

		Abercrombie & Fitch Co. (“A&F”), through its wholly-owned subsidiaries (collectively, A&F and its wholly-owned subsidiaries are referred to as the “Company”), is a specialty retailer of high quality, casual apparel for men, women and kids with an active, youthful lifestyle. The business was established in 1892.

		The accompanying condensed consolidated financial statements include the historical financial statements of, and transactions applicable to, the Company and reflect the assets, liabilities, results of operations and cash flows.

		The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are designated in the financial statements and notes by the calendar year in which the fiscal year commences. All references herein to “Fiscal 2007” represent the 52-week fiscal year that will end on February 2, 2008, and to “Fiscal 2006” represent the 53-week fiscal year that ended February 3, 2007.

		In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”), the Company determined its operating segments on the same basis it uses internally to evaluate performance. The operating segments identified by the Company — Abercrombie & Fitch, abercrombie, Hollister and RUEHL — have been aggregated and are reported as one reportable financial segment. The Company aggregates its operating segments because they meet the aggregation criteria set forth in paragraph 17 of SFAS No. 131. The Company believes its operating segments may be aggregated for financial reporting purposes because they are similar in each of the following areas: class of consumer, economic characteristics, nature of products, nature of production processes and distribution methods. Revenues relating to the Company’s international sales for the thirteen and thirty-nine week periods ended November 3, 2007 and October 28, 2006 were not material and therefore are not reported separately from domestic revenues.

		The condensed consolidated financial statements as of November 3, 2007 and for the thirteen and thirty-nine week periods ended November 3, 2007 and October 28, 2006 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in A&F’s Annual Report on Form 10-K for Fiscal 2006 filed on March 30, 2007. The year-end condensed balance sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America.

		In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position and results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for Fiscal 2007.

		In connection with the Company’s adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109” (“FIN 48”) on February 4, 2007, a $2.8 million cumulative effect adjustment was recorded as a reduction to beginning of the year retained earnings. See Note 8 for information about the adoption of FIN 48.

		The condensed consolidated financial statements as of November 3, 2007 and for the thirteen and thirty-nine week periods ended November 3, 2007 and October 28, 2006 included herein have been reviewed by PricewaterhouseCoopers LLP, an independent registered public accounting firm, and the report of such firm follows the notes to the condensed consolidated financial statements.

		PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 (the “Act”) for their report on the condensed consolidated financial statements because their report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

2.		SHARE-BASED COMPENSATION

		The Company accounts for share-based compensation under the provisions of SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”), which requires share-based compensation related to stock options to be measured based on estimated fair values at the date of grant using an option-pricing model.

		Financial Statement Impact

		The following table summarizes share-based compensation expense (in thousands):


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	November 3,		October 28,		November 3,		October 28,
	2007		2006		2007		2006

Stores and distribution expense	$	530	$	750	$	1,056	$	1,806
Marketing, general and administrative expense		8,178		7,368		21,012		26,911


Share-based compensation expense	$	8,708	$	8,118	$	22,068	$	28,717

The Company also recognized $3.5 million and $8.6 million in tax benefits related to share-based compensation for the thirteen and thirty-nine week periods ended November 3, 2007, respectively, and $3.1 million and $9.6 million in tax benefits related to share-based compensation for the thirteen and thirty-nine week periods ended October 28, 2006, respectively.

The Company adjusts share-based compensation expense on a quarterly basis for actual forfeitures and for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The effect of adjustments for forfeitures during the thirteen and thirty-nine week periods ended November 3, 2007 and October 28, 2006 was immaterial.

A&F issues shares of Class A Common Stock (“Common Stock”) for stock option exercises and restricted stock unit vestings from treasury stock. As of November 3, 2007, A&F had enough treasury stock available to cover stock options and restricted stock units outstanding without having to repurchase additional shares.

Fair Value Estimates

The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model, which requires the Company to estimate the expected term of stock option grants and expected future stock price volatility over the expected term. Estimates of expected term, which represents the period of time the Company expects the stock options will be outstanding, are based on historical experience. Estimates of expected future stock price volatility are based on the volatility of A&F’s Common Stock price for the most recent historical period equal to the expected term of the stock option. The Company calculates volatility as the annualized standard deviation of the differences in the natural logarithms of the weekly stock closing price, adjusted for stock splits and dividends.

The weighted-average estimated fair value of stock options granted during the thirty-nine weeks ended November 3, 2007 and October 28, 2006, as well as the assumptions used in calculating such values on the date of grant, were as follows:


	Thirty-Nine Weeks Ended						Thirty-Nine Weeks Ended
	November 3, 2007						October 28, 2006
	Executive			Other			Executive			Other
	Officers			Associates			Officers			Associates
Exercise price	$	74.02		$	74.02		$	58.22		$	58.04

Fair value	$	22.63		$	22.63		$	24.92		$	20.67

Assumptions:

Price volatility		34	%		34	%		47	%		42	%
Expected term (years)		4			4			5			4
Risk-free interest rate		4.5	%		4.5	%		4.9	%		4.9	%
Dividend yield		1.0	%		1.0	%		1.2	%		1.2	%

In the case of restricted stock units, the Company calculates the fair value of the restricted stock units granted as the market price of the underlying Common Stock on the date of grant, adjusted for expected dividend payments during the vesting period.

Stock Option Activity

Below is the summary of stock option activity for the thirty-nine weeks ended November 3, 2007:


								Weighted-Average
	Number of			Weighted-Average		Aggregate		Remaining
Stock Options	Shares			Exercise Price		Intrinsic Value		Contractual Life
Outstanding at February 3, 2007		8,804,724		$	38.07
Granted		331,750			74.02
Exercised		(1,218,937	)		28.91
Forfeited or cancelled		(82,625	)		60.93

Outstanding at November 3, 2007		7,834,912		$	40.78	$	289,990,699		3.2


Options expected to vest as of November 3, 2007		586,751		$	65.17	$	7,408,101		8.6


Options exercisable at November 3, 2007		7,151,112		$	38.41	$	281,624,664		2.6

The total intrinsic value of stock options exercised during the thirty-nine weeks ended November 3, 2007 and October 28, 2006 was $59.6 million and $11.9 million, respectively.

As of November 3, 2007, there was $13.0 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock options. The unrecognized cost is expected to be recognized over a weighted-average period of 1.4 years.

Restricted Stock Unit Activity

Below is the summary of restricted stock unit activity for the thirty-nine weeks ended November 3, 2007:


				Weighted-Average Grant
Restricted Stock Units	Number of Shares			Date Fair Value
Non-vested at February 3, 2007		2,043,456		$	40.65
Granted		698,900		$	72.60
Vested		(279,220	)	$	49.69
Forfeited		(137,595	)	$	59.91

Non-vested at November 3, 2007		2,325,541		$	47.66

The total fair value of restricted stock units granted during the thirty-nine weeks ended November 3, 2007 and October 28, 2006 was $50.7 million and $33.6 million, respectively.

The total fair value of restricted stock units vested during the thirty-nine weeks ended November 3, 2007 and October 28, 2006 was $13.9 million and $8.2 million, respectively.

As of November 3, 2007, there was $70.5 million of total unrecognized compensation cost, net of estimated forfeitures, related to non-vested restricted stock units. The unrecognized cost is expected to be recognized over a weighted-average period of 1.4 years.

3.		NET INCOME PER SHARE AND SHAREHOLDERS’ EQUITY

		Net income per share is computed in accordance with SFAS No. 128, “Earnings Per Share.” Net income per basic share is computed based on the weighted-average number of outstanding shares of Common Stock. Net income per diluted share includes the weighted-average effect of dilutive stock options and restricted stock units.

		Weighted-Average Shares Outstanding (in thousands):


	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	November 3, 2007			October 28, 2006			November 3, 2007			October 28, 2006
Shares of Common Stock issued		103,300			103,300			103,300			103,300
Treasury shares		(16,405	)		(15,194	)		(15,677	)		(15,318	)

Basic shares outstanding		86,895			88,106			87,623			87,982

Dilutive effect of stock options and restricted stock units		4,238			4,040			4,314			3,693

Diluted shares outstanding		91,133			92,146			91,937			91,675

Stock options to purchase approximately 18,000 and 119,000 shares of Common Stock during the thirteen week periods ended November 3, 2007 and October 28, 2006, respectively, and approximately 18,000 and 167,000 shares of Common Stock during the thirty-nine week periods ended November 3, 2007 and October 28, 2006, respectively, were outstanding, but were not included in the computation of net income per diluted share because the impact of such stock options would be anti-dilutive.

A&F repurchased approximately 2.6 million and 3.6 million shares of A&F’s Common Stock for the thirteen and thirty-nine weeks ended November 3, 2007, respectively. As of November 3, 2007, approximately 2.0 million shares were available for repurchase as part of the A&F Board of Directors’ August 2005 authorization to repurchase 6.0 million shares of A&F’s Common Stock.

A&F did not repurchase any shares of A&F’s Common Stock during Fiscal 2006.

On November 20, 2007, the Board of Directors authorized the repurchase of 10.0 million shares of A&F’s Common Stock. This authorization is in addition to the approximately 2.0 million shares of A&F’s Common Stock which remained available as of November 3, 2007 under the August 2005 repurchase authorization.

4.		INVESTMENTS

		Investments with original maturities greater than 90 days are accounted for in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and are classified accordingly by the Company at the time of purchase. As of November 3, 2007, the Company’s investments in marketable securities consisted primarily of investment grade municipal notes and bonds and investment grade auction rate securities, all classified as available-for-sale and reported at fair market value, with maturities that range from seven days to 40 years.

		The interest rates of auction rate securities reset through an auction process at predetermined periods ranging from seven to 49 days. Due to the frequent nature of the reset feature, the value of the investments at the balance sheet date approximates their fair market value; therefore, there are no realized or unrealized gains or losses associated with these marketable securities.

		The Company held $277.7 million and $447.8 million in marketable securities as of November 3, 2007 and February 3, 2007, respectively.

		The Company established an irrevocable rabbi trust (the “Rabbi Trust”) during the third quarter of Fiscal 2006, the purpose of which is to be a source of funds to match respective funding obligations to participants in the Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan and the Chief Executive Officer Supplemental Executive Retirement Plan. As of November 3, 2007, total assets held in the Rabbi Trust were $35.7 million, which included $17.9 million of available-for-sale municipal notes and bonds, trust-owned life insurance policies with a cash surrender value of $16.5 million and $1.3 million held in money market accounts. As of February 3, 2007, total assets held in the Rabbi Trust were $33.5 million, which included $18.3 million of money market accounts and $15.3 million related to the cash surrender value of trust-owned life insurance policies. The Rabbi Trust assets are consolidated in accordance with Emerging Issues Task Force Issue No. 97-14, “Accounting for Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi Trust and Invested,” and recorded at fair value in other assets on the Condensed Consolidated Balance Sheets and are restricted as to their use as noted above.

		Municipal notes and bonds may have early redemption provisions at predetermined prices. There were $0.4 million in realized losses for the thirteen and thirty-nine week periods ended November 3, 2007 and no realized gains or losses for the thirteen and thirty-nine week periods ended October 28, 2006. Net unrealized holding losses were approximately $0.8 million and $0.7 million as of November 3, 2007 and February 3, 2007, respectively.

5.		INVENTORIES

		Inventories are principally valued at the lower of average cost or market utilizing the retail method. The Company determines market value as the anticipated future selling price of the merchandise less a normal margin. Therefore, an initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost components of inventory on hand so as to maintain the already established cost-to-retail relationship. The inventory balance was $407.1 million, $427.4 million and $431.0 million at November 3, 2007, February 3, 2007 and October 28, 2006, respectively.

		The fiscal year is comprised of two principal selling seasons: Spring (the first and second fiscal quarters) and Fall (the third and fourth fiscal quarters). The Company classifies its inventory into three categories: spring fashion, fall fashion and basic. The Company reduces inventory valuation at the end of the first and third quarters to reserve for projected inventory markdowns required to sell through the current season inventory prior to the beginning of the following season. Additionally, the Company reduces inventory at season end by recording a markdown reserve that represents the estimated future selling price decreases necessary to sell through the remaining carryover fashion inventory for the season just passed. The markdown reserve was $36.9 million, $6.8 million and $28.5 million at November 3, 2007, February 3, 2007 and October 28, 2006, respectively. The inventory valuation at February 3, 2007 primarily reflects the estimated markdowns necessary to sell through fashion carryover inventory on hand at the end of the Fall season.

		Further, as part of inventory valuation, inventory shrink estimates, based on historical trends from actual physical inventories, are made that reduce the inventory value for lost or stolen items. The Company performs physical inventories throughout the year and adjusts the shrink reserve accordingly. The shrink reserve was $4.7 million, $7.7 million and $5.4 million at November 3, 2007, February 3, 2007 and October 28, 2006, respectively.

6.		PROPERTY AND EQUIPMENT, NET

		Property and equipment, net, consisted of (in thousands):


	November 3, 2007			February 3, 2007
Property and equipment, at cost	$	1,981,448		$	1,669,053
Accumulated depreciation and amortization		(694,842	)		(576,771	)

Property and equipment, net	$	1,286,606		$	1,092,282

7.		DEFERRED LEASE CREDITS

		Deferred lease credits are derived from payments received from landlords to partially offset store construction costs and are classified between current and long-term liabilities. The amounts, which are amortized over the life of the related leases, consisted of the following (in thousands):


	November 3, 2007			February 3, 2007
Deferred lease credits	$	465,795		$	423,390
Amortized deferred lease credits		(211,825	)		(184,024	)

Total deferred lease credits, net	$	253,970		$	239,366

8.		INCOME TAXES

		The provision for income tax is based on the current estimate of the annual effective tax rate adjusted to reflect the tax impact of discrete items. The effective tax rate for the thirteen weeks ended November 3, 2007 was 38.5% compared to 38.6% for the Fiscal 2006 comparable period. The effective tax rate for the thirty-nine weeks ended November 3, 2007 was 37.7% compared to 37.5% for the Fiscal 2006 comparable period.

		Cash payments of income taxes made during the thirteen weeks ended November 3, 2007 and October 28, 2006 were approximately $57.9 million and $46.8 million, respectively. Cash payments of income taxes made during the thirty-nine weeks ended November 3, 2007 and October 28, 2006 were approximately $188.2 million and $190.7 million, respectively.

		In June 2006, the FASB issued FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a Company’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

		In connection with the Company’s adoption of FIN 48 on February 4, 2007, a $2.8 million cumulative effect adjustment was recorded as a reduction to beginning of the year retained earnings. The Company’s unrecognized tax benefits as of February 4, 2007 (excluding interest and penalties) were $29.6 million, which were reclassified from current income taxes payable to other long- term liabilities. These amounts, if recognized, would affect the Company’s effective tax rate.

		The statute of limitations for income tax examinations by the Internal Revenue Service has expired for the fiscal years prior to the fiscal year ending January 29, 2005. The Company files income tax returns in various state, local and foreign jurisdictions with varying statute of limitations.

		The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company’s policy did not change as a result of adopting FIN 48. The total amount of interest and penalties accrued on February 4, 2007, the date of adoption, was $7.3 million.

		As of November 3, 2007, the amount of unrecognized tax benefits had not materially changed from the date of adoption of FIN 48. The Company does not expect material adjustments to the total amount of unrecognized tax benefits within the next 12 months, but the outcome of tax matters is uncertain and unforeseen results can occur.

9.		LONG-TERM DEBT

		On December 15, 2004, the Company entered into an amended and restated $250 million syndicated unsecured credit agreement (the “Credit Agreement”). The primary purposes of the Credit Agreement are for trade and stand-by letters of credit and working capital. The Credit Agreement has several borrowing options, including an option where interest rates are based on the agent bank’s “Alternate Base Rate,” and another using the London Interbank Offered Rate. The facility fees payable under the Credit Agreement are based on the leverage ratio of the Company’s total debt plus 600% of forward minimum rent commitments to consolidated earnings before interest, taxes, depreciation, amortization and rent for the trailing four fiscal quarter periods. The facility fees are projected to accrue at either 0.15% or 0.175% on the committed amounts per annum. The Credit Agreement contains limitations, subject to negotiated carve-outs, on indebtedness, liens, sale-leaseback transactions, significant corporate changes (including mergers and acquisition transactions with third parties), investments, restricted payments (including dividends and stock repurchases) and transactions with affiliates. The Credit Agreement has a maturity date of December 15, 2009. Letters of credit totaling approximately $91.1 million and $53.7 million were outstanding under the Credit Agreement on November 3, 2007 and February 3, 2007, respectively. No borrowings were outstanding under the Credit Agreement on November 3, 2007 or February 3, 2007.

10.		CONTINGENCIES

		A&F is a defendant in lawsuits arising in the ordinary course of business.

		On June 23, 2006, Lisa Hashimoto, et al. v. Abercrombie & Fitch Co. and Abercrombie & Fitch Stores, Inc., was filed in the Superior Court of the State of California for the County of Los Angeles. In that action, three plaintiffs allege, on behalf of a putative class of California store managers employed in Hollister and abercrombie stores, that they were entitled to receive overtime pay as “non-exempt” employees under California wage and hour laws. The complaint seeks injunctive relief, equitable relief, unpaid overtime compensation, unpaid benefits, penalties, interest and attorneys’ fees and costs. The defendants filed an answer to the complaint on August 21, 2006. The parties are engaging in discovery.

		On September 2, 2005, a purported class action, styled Robert Ross v. Abercrombie & Fitch Company, et al., was filed against A&F and certain of its officers in the United States District Court for the Southern District of Ohio on behalf of a purported class of all persons who purchased or acquired shares of A&F’s Common Stock between June 2, 2005 and August 16, 2005. In September and October of 2005, five other purported class actions were subsequently filed against A&F and other defendants in the same Court. All six securities cases allege claims under the federal securities laws, and seek unspecified monetary damages, as a result of a decline in the price of A&F’s Common Stock during the summer of 2005. On November 1, 2005, a motion to consolidate all of these purported class actions into the first-filed case was filed by some of the plaintiffs. A&F joined in that motion. On March 22, 2006, the motions to consolidate were granted, and these actions (together with the federal court derivative cases described in the following paragraph) were consolidated for purposes of motion practice, discovery and pretrial proceedings. A consolidated amended securities class action complaint (the “Complaint”) was filed on August 14, 2006. On October 13, 2006, all defendants moved to dismiss that Complaint. On August 9, 2007, the Court denied the motions to dismiss. On September 14, 2007, defendants filed answers denying the material allegations of the Complaint and asserting affirmative defenses.

		On September 16, 2005, a derivative action, styled The Booth Family Trust v. Michael S. Jeffries, et al., was filed in the United States District Court for the Southern District of Ohio, naming A&F as a nominal defendant and seeking to assert claims for unspecified damages against nine of A&F’s present and former directors, alleging various breaches of the directors’ fiduciary duty and seeking equitable and monetary relief. In the following three months (October, November and December of 2005), four similar derivative actions were filed (three in the United States District Court for the Southern District of Ohio and one in the Court of Common Pleas for Franklin County, Ohio) against present and former directors of A&F alleging various breaches of the directors’ fiduciary duty and seeking equitable and monetary relief. A&F is also a nominal defendant in each of the four later derivative actions. On November 4, 2005, a motion to consolidate all of the federal court derivative actions with the purported securities law class actions described in the preceding paragraph was filed. On March 22, 2006, the motion to consolidate was granted, and the federal court derivative actions were consolidated with the aforesaid purported securities law class actions for purposes of motion practice, discovery and pretrial proceedings. A consolidated amended derivative complaint was filed in the federal proceeding on July 10, 2006. A&F filed a motion to stay the consolidated federal derivative case and that motion was granted. The state court action was also stayed. On February 16, 2007, A&F announced its Board of Directors received a report of its Special Litigation Committee established by the Board to investigate and act with respect to claims asserted in certain previously disclosed derivative lawsuits brought against current and former directors and management, including Chairman and Chief Executive Officer Michael S. Jeffries. The Special Litigation Committee concluded that there is no evidence to support the asserted claims and directed the Company to seek dismissal of the derivative actions. On September 10, 2007, the Company moved to dismiss the federal derivative cases on the authority of the Special Litigation Committee report and on October 18, 2007, the state court stayed further proceedings until resolution of the consolidated federal derivative cases.

		In December 2005, the Company received a formal order of investigation from the SEC concerning trading in shares of A&F’s Common Stock. The SEC has requested information from A&F and certain of its current and former officers and directors. The Company and its personnel have cooperated fully with the SEC.

		Management intends to defend the aforesaid matters vigorously, as appropriate. Management is unable to assess the potential exposure of the aforesaid matters. However, management’s assessment of the Company’s current exposure could change in the event of the discovery of additional facts with respect to legal matters pending against the Company or determinations by judges, juries or other finders of fact that are not in accord with management’s evaluation of the claims.

11.		RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

		In September 2006, the FASB released SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 establishes a common definition for fair value under accounting principles generally accepted in the United States of America and also establishes a framework for measuring fair value and expands disclosure requirements about such fair value measurements. In November 2007, the FASB authorized its staff to draft a proposed FASB Staff Position (“Proposed FSP”) that would partially defer the effective date of SFAS No. 157 for one year for non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis. If the Proposed FSP is approved, SFAS No. 157 will be effective for the Company on February 3, 2008, for financial assets and liabilities carried at fair value and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis and on February 1, 2009, for non-recurring non-financial assets and liabilities that are recognized or disclosed at fair value. The Company is currently evaluating the potential impact of adopting SFAS No. 157 on the consolidated results of operations and consolidated financial condition.

In February 2007, the FASB released SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of SFAS No. 115” (“SFAS No. 159”). SFAS No. 159 permits companies to measure many financial instruments and certain other assets and liabilities at fair value on an instrument by instrument basis. SFAS No. 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that select different measurement attributes for similar types of assets and liabilities. SFAS No. 159 will be effective for the Company on February 3, 2008, for Fiscal 2008. The Company is currently evaluating the potential impact of adopting SFAS No. 159 on the consolidated results of operations and consolidated financial condition.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and
Shareholders of Abercrombie & Fitch Co.:

We have reviewed the accompanying condensed consolidated balance sheet of Abercrombie & Fitch Co. and its subsidiaries as of November 3, 2007, and the related condensed consolidated statements of net income and comprehensive income for the thirteen and thirty-nine week periods ended November 3, 2007 and October 28, 2006 and the condensed consolidated statements of cash flows for the thirty-nine week periods ended November 3, 2007 and October 28, 2006. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of February 3, 2007, and the related consolidated statements of net income and comprehensive income, of shareholders’ equity, and of cash flows for the year then ended (not presented herein), and in our report dated March 30, 2007, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of February 3, 2007, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

PricewaterhouseCoopers LLP
Columbus, Ohio
December 11, 2007


ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are designated in the financial statements and notes by the calendar year in which the fiscal year commences. All references herein to “Fiscal 2007” represent the 52-week fiscal year that will end on February 2, 2008, and to “Fiscal 2006” represent the 53-week fiscal year that ended February 3, 2007.

For purposes of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the thirteen and thirty-nine week periods ended November 3, 2007 are compared to the thirteen and thirty-nine week periods ended October 28, 2006, except for comparable store sales results, which compare the thirteen and thirty-nine week periods ended November 3, 2007 to the thirteen and thirty-nine week periods ended November 4, 2006.

The Company operates four brands: Abercrombie & Fitch, a fashion-oriented casual apparel business directed at 18 to 22 year-old collegiate men and women with a youthful lifestyle; abercrombie, a fashion-oriented casual apparel brand in the tradition of Abercrombie & Fitch style and quality, targeted at seven to 14 year-old boys and girls; Hollister, a West Coast-oriented lifestyle brand targeted at 14 to 17 year-old high school guys (“dudes”) and girls (“bettys”), at lower price points than Abercrombie & Fitch; and RUEHL, a fashion-oriented mix of traditional casual and trend fashion including high quality clothing, leather goods and lifestyle accessories, targeted at 22 to 35 year-old modern-minded, post-college consumers. In addition to predominantly mall-based store locations, Abercrombie & Fitch, abercrombie and Hollister also offer websites where products comparable to those carried at the stores can be purchased. RUEHL offers a website where handbags, cologne and perfume can be purchased.

RESULTS OF OPERATIONS

During the third quarter of Fiscal 2007, net sales increased 13% to $973.9 million from $863.4 million in the third quarter of Fiscal 2006. Operating income increased to $186.6 million in the third quarter of Fiscal 2007 from $162.8 million in the third quarter of Fiscal 2006. Net income increased to $117.6 million in the third quarter of Fiscal 2007 compared to $102.0 million in the third quarter of Fiscal 2006. Net income per diluted weighted-average share increased 16% to $1.29 in the third quarter of Fiscal 2007 compared to $1.11 in the third quarter of Fiscal 2006.

Due to seasonal variations in the retail industry, the results of operations for any current period are not necessarily indicative of the results expected for the full fiscal year or of future financial results. The seasonality of the Company’s operations may also lead to significant fluctuations in certain asset and liability accounts.

The following data represent the amounts shown in the Company’s statements of income for the thirteen and thirty-nine week periods ended November 3, 2007 and October 28, 2006, expressed as a percentage of net sales:


	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	November 3,			October 28,			November 3,			October 28,
	2007			2006			2007			2006
NET SALES		100.0	%		100.0	%		100.0	%		100.0	%

Cost of Goods Sold		33.8	%		34.2	%		33.1	%		33.3	%


GROSS PROFIT		66.2	%		65.8	%		66.9	%		66.7	%

Stores and Distribution Expense		36.5	%		35.7	%		39.6	%		38.4	%
Marketing, General and Administrative Expense		10.7	%		11.3	%		11.6	%		12.5	%
Other Operating Income, Net		(0.1	)%		(0.0	)%		(0.3	)%		(0.2	)%


OPERATING INCOME		19.2	%		18.9	%		16.0	%		16.0	%
Interest Income, Net		(0.5	)%		(0.4	)%		(0.5	)%		(0.4	)%


INCOME BEFORE INCOME TAXES		19.6	%		19.2	%		16.5	%		16.4	%
Provision for Income Taxes		7.6	%		7.4	%		6.2	%		6.2	%


NET INCOME		12.1	%		11.8	%		10.3	%		10.3	%

Financial Summary

The following summarized financial and statistical data compare the thirteen and thirty-nine week periods ended November 3, 2007 to the thirteen and thirty-nine week periods ended October 28, 2006, except for comparable store sales information, which compares the thirteen and thirty-nine week periods ended November 3, 2007 to the thirteen and thirty-nine week periods ended November 4, 2006. The financial and statistical information related to net sales reflects the impact of the calendar shift due to Fiscal 2006 being a 53-week fiscal year:


	Thirteen Weeks Ended									Thirty-Nine Weeks Ended
	November			October						November			October 28,
	3, 2007			28, 2006			% Change			3, 2007			2006			% Change

Net sales by brand (in thousands)	$	973,930		$	863,448			13	%	$	2,520,878		$	2,179,415			16	%
Abercrombie & Fitch	$	419,267		$	382,136			10	%	$	1,116,495		$	1,011,112			10	%
abercrombie	$	127,571		$	109,129			17	%	$	311,198		$	261,334			19	%
Hollister	$	414,488		$	364,034			14	%	$	1,058,586		$	886,396			19	%
RUEHL*	$	12,604		$	8,149			55	%	$	34,599		$	20,573			68	%

Increase (decrease) in comparable store sales**		1	%		5	%					(1	)%		4	%
Abercrombie & Fitch		3	%		1	%					(1	)%		(2	)%
abercrombie		3	%		8	%					1	%		15	%
Hollister		(1	)%		8	%					(3	)%		8	%
RUEHL		(7	)%		20	%					(3	)%		20	%

Retail sales increase attributable to new and remodeled stores, websites and catalogue***		12	%		17	%					17	%		16	%

Net retail sales per average store (in thousands)	$	905		$	916			(1	)%	$	2,416		$	2,339			3	%
Abercrombie & Fitch	$	1,057		$	1,002			5	%	$	2,827		$	2,659			6	%
abercrombie	$	599		$	610			(2	)%	$	1,538		$	1,463			5	%
Hollister	$	925		$	974			(5	)%	$	2,466		$	2,442			1	%
RUEHL*	$	689		$	798			(14	)%	$	2,058		$	1,949			6	%

Net retail sales per average gross square foot	$	128		$	129			(1	)%	$	340		$	331			3	%
Abercrombie & Fitch	$	120		$	114			5	%	$	320		$	303			6	%
abercrombie	$	132		$	139			(5	)%	$	342		$	333			3	%
Hollister	$	138		$	148			(7	)%	$	370		$	372			(1	)%
RUEHL*	$	74		$	89			(17	)%	$	220		$	218			1	%

Transactions per average retail store		12,968			13,326			(3	)%		37,510			37,153			1	%
Abercrombie & Fitch		12,188			12,540			(3	)%		35,368			35,956			(2	)%
abercrombie		8,362			8,625			(3	)%		23,426			22,819			3	%
Hollister		15,933			16,382			(3	)%		46,225			45,575			1	%
RUEHL*		8,174			8,986			(9	)%		26,033			22,858			14	%

Average retail transaction value	$	69.81		$	68.71			2	%	$	64.42		$	62.95			2	%
Abercrombie & Fitch	$	86.71		$	79.90			9	%	$	79.92		$	73.94			8	%
abercrombie	$	71.65		$	70.72			1	%	$	65.65		$	64.12			2	%
Hollister	$	58.05		$	59.48			(2	)%	$	53.35		$	53.57		nm
RUEHL	$	84.32		$	88.79			(5	)%	$	79.06		$	85.27			(7	)%

Average units per retail transaction		2.48			2.42			2	%		2.45			2.37			3	%
Abercrombie & Fitch		2.39			2.28			5	%		2.39			2.27			5	%
abercrombie		2.94			2.95		nm				2.90			2.82			3	%
Hollister		2.43			2.40			1	%		2.39			2.34			2	%
RUEHL		2.44			2.53			(4	)%		2.54			2.54		nm

Average unit retail sold	$	28.15		$	28.39			(1	)%	$	26.29		$	26.56			(1	)%
Abercrombie & Fitch	$	36.28		$	35.04			4	%	$	33.44		$	32.57			3	%
abercrombie	$	24.37		$	23.97			2	%	$	22.64		$	22.74		nm
Hollister	$	23.89		$	24.78			(4	)%	$	22.32		$	22.89			(2	)%
RUEHL	$	34.56		$	35.09			(2	)%	$	31.13		$	33.57			(7	)%


*		Net sales for RUEHL, and the related statistics, reflect the activity of 20 stores open as of November 3, 2007 and 11 stores open as of October 28, 2006. As a result, year-over-year comparisons may not be meaningful.

**		A store is included in comparable store sales when it has been open as the same brand 12 months or more and its square footage has not been expanded or reduced by more than 20% within the past year.

***		The retail sales increase in Fiscal 2007 also reflects the impact of the calendar shift due to Fiscal 2006 being a 53-week year.

CURRENT TRENDS AND OUTLOOK

During the third quarter of Fiscal 2007, the Company delivered year over year earnings growth which was primarily driven by increased sales across all brands, an increased gross profit rate, and a lower marketing, general and administrative expense rate. The increase in gross profit rate can be attributed to a higher initial mark up rate coupled with a lower merchandise shrink rate, partially offset by an increased markdown rate.

Currently, the Company is focused on expanding the Abercrombie and Fitch brand internationally and the Hollister brand both domestically and internationally. Expansion is currently planned in Canada for both the Abercrombie and Fitch and Hollister brands and in the United Kingdom for the Hollister brand. Construction is currently underway for the Abercrombie and Fitch flagship in Tokyo’s Ginza district, with a planned opening in late 2009. Opportunities are also being assessed for the Abercrombie and Fitch and Hollister brands in continental Europe and other international locations.

As a result of the historical success of the Company’s domestic brands, as well as the substantial success of the Abercrombie and Fitch’s and Hollister’s existing international store and internet business, the Company currently views international expansion as relatively low risk from a brand acceptance perspective. Canadian Abercrombie and Fitch and Hollister stores continue to generate three times the sales and operating margin dollars compared with the average United States store. The Abercrombie and Fitch New York flagship, which is heavily shopped by European tourists, is projected to surpass $100 million in total annual sales. The Abercrombie and Fitch London flagship continues to produce sales per selling square foot similar to that of the Abercrombie and Fitch New York flagship. Both the Hollister and Abercrombie and Fitch stores in Hawaii are among the top performing stores in the chain, driven by strong business from Japanese tourists. Finally, international direct-to-consumer sales increased by 75% from the third quarter of Fiscal 2006 in both Abercrombie and Fitch and Hollister.

In addition to expanding the Abercrombie and Fitch and Hollister brands, the Company launched the RUEHL website (www.RUEHL.com) in the third quarter of Fiscal 2007. The website offers handbags and fragrance for purchase and it allows customers to view a photo gallery of featured products, search for store locations and register to receive e-mail announcements. It is expected an assortment of men’s and women’s casual apparel, jeans, outerwear and gift cards will be offered through the RUEHL website in Spring 2008. Although the Company has made substantial progress in improving the gross margin, operating expense margin and store construction cost profile of RUEHL, the brand will not achieve profitability in the fourth quarter of Fiscal 2007, as previously anticipated, unless the sales trend exhibited in the third quarter improves significantly.

The Company’s plan to introduce its fifth concept with the opening of four stores in January 2008 remains on schedule.

The Company ended the third quarter of Fiscal 2007 with a decrease in inventory per square foot, at cost, of approximately 15% compared to the third quarter of Fiscal 2006. The Company expects the fourth quarter of Fiscal 2007 inventory per square foot, at cost, to decrease at a rate equal to or slightly higher than that in the third quarter. Those results reflect a continued reduction in inventory levels, primarily in the basic inventory category.

The Company continues to make progress on numerous information technology initiatives. Specifically, major implementations in planning, merchandising and allocation systems over the next year should generate efficiencies and process improvements to enhance the ability to effectively execute the Company’s growth strategy.

THIRD QUARTER RESULTS

Net Sales

Net sales for the third quarter of Fiscal 2007 were $973.9 million, an increase of 13% over net sales of $863.4 million during the third quarter of Fiscal 2006. The net sales increase was attributed to a combination of the net addition of 102 stores, including the Abercrombie & Fitch London flagship, a 48% increase in the direct-to-consumer business and a 1% increase in comparable store sales, partially offset by the impact of the calendar shift due to Fiscal 2006 being a 53-week fiscal year.

Abercrombie & Fitch comparable store sales increased 3% with men’s comparable store sales increasing by a high single-digit and women’s comparable store sales decreasing by a low single-digit. At abercrombie, comparable store sales increased 3% with boys and girls posting low single-digit increases. In Hollister, comparable store sales decreased 1% with dudes posting a high single-digit increase and bettys declining by a mid single-digit. RUEHL comparable store sales decreased 7% with women’s comparable store sales decreasing by a high single-digit and men’s comparable store sales decreasing by a low double-digit.

Domestically, comparable store sales were strongest in the Northeast region and the tax-free holiday impacted states of Florida and Texas. Comparable store sales were weakest in the West and Midwest regions.

Net direct-to-consumer merchandise sales through the Company’s websites and catalogue for the third quarter of Fiscal 2007 were $61.3 million, an increase of 48% over Fiscal 2006 third quarter net sales of $41.3 million. Shipping and handling revenue for the third quarter of Fiscal 2007 was $9.2 million compared to $5.9 million for the corresponding period in Fiscal 2006. The total direct-to-consumer business accounted for 7.2% of net sales in the third quarter of Fiscal 2007 compared to 5.5% in the third quarter of Fiscal 2006. This increase was driven by store expansion, both domestically and internationally, improved in-stock inventory availability and increased sales as a result of a targeted e-mail marketing strategy and improved website functionality.

Gross Profit

Gross profit for the third quarter of Fiscal 2007 was $645.0 million compared to $568.2 million for the comparable period in Fiscal 2006. The gross profit rate (gross profit divided by net sales) for the third quarter of Fiscal 2007 was 66.2%, up 40 basis points from the third quarter of Fiscal 2006 rate of 65.8%. The increase in the gross profit rate was primarily driven by a higher initial markup (“IMU”) rate and a lower merchandise shrink rate, partially offset by a higher markdown rate.

Stores and Distribution Expense

Stores and distribution expense for the third quarter of Fiscal 2007 was $355.8 million compared to $308.5 million for the comparable period in Fiscal 2006. For the third quarter of Fiscal 2007, the stores and distribution expense rate (stores and distribution expense divided by net sales) was 36.5% compared to 35.7% in the third quarter of Fiscal 2006. The increase in the rate resulted primarily from increased store-related expenses, including minimum wage and store manager salary increases, as well as higher store fixed costs and store packaging expenses. Direct-to-consumer order processing expenses were also higher as a percentage of total Company sales compared with last year due to the sales growth rate of direct-to-consumer sales exceeding the sales growth rate of the total Company.

Distribution center productivity, as measured in units processed per labor hour (“UPH”), increased by 13% during the third quarter of Fiscal 2007 as compared to the third quarter of Fiscal 2006, reflecting greater efficiencies in operating the second distribution center.

Marketing, General and Administrative Expense

Marketing, general and administrative expense during the third quarter of Fiscal 2007 was $104.0 million compared to $97.2 million during the same period in Fiscal 2006. For the third quarter of Fiscal 2007, the marketing, general and administrative expense rate (marketing, general and administrative expense divided by net sales) was 10.7% compared to 11.3% for the third quarter of Fiscal 2006. The decrease in the rate was primarily due to reductions in travel, in-store marketing expenses and the use of outside services.

Other Operating Income, Net

Third quarter other operating income for Fiscal 2007 was $1.3 million compared to $0.3 million for the third quarter of Fiscal 2006. The increase relates to favorable foreign currency gains resulting from remeasurement of foreign inter-company loans and foreign held cash accounts for the Company’s Swiss and United Kingdom operations in compliance with Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation” (“SFAS No. 52”).

Operating Income

Operating income for the third quarter of Fiscal 2007 increased to $186.6 million from $162.8 million in the third quarter of Fiscal 2006, an increase of 15%. The operating income rate (operating income divided by net sales) was 19.2% for the third quarter of Fiscal 2007 compared to 18.9% for the third quarter of Fiscal 2006.

Interest Income, Net and Income Tax Expense

Third quarter net interest income was $4.6 million in Fiscal 2007 compared to $3.3 million in the third quarter of Fiscal 2006. The increase in net interest income was due to higher interest rates and higher investment balances during the third quarter of Fiscal 2007 compared to the third quarter of Fiscal 2006.

The effective tax rate for the thirteen weeks ended November 3, 2007 was 38.5% as compared to 38.6% for the Fiscal 2006 comparable period.

Net Income and Net Income per Share

Net income for the third quarter of Fiscal 2007 was $117.6 million versus $102.0 million for the third quarter of Fiscal 2006, an increase of 15%. Net income per diluted weighted-average share outstanding for the third quarter of Fiscal 2007 was $1.29 versus $1.11 for the same period of Fiscal 2006.

YEAR-TO-DATE RESULTS

Net Sales

Year-to-date net sales in Fiscal 2007 were $2.521 billion, an increase of 16% over net sales of $2.179 billion for the comparable period of Fiscal 2006. The net sales increase was attributed to the combination of the net addition of 102 stores, including the Abercrombie & Fitch London flagship, a 51% increase in the direct-to-consumer business and the calendar shift due to Fiscal 2006 being a 53-week fiscal year, partially offset by a 1% decrease in comparable store sales.

Year-to-date comparable store sales by brand were as follows: Abercrombie & Fitch decreased 1%, abercrombie increased 1%, Hollister decreased 3% and RUEHL posted a 3% decrease. The female business in each concept continued to be more significant than the male business. Year-to-date, womens, bettys and girls represented over 60% of net sales for each of their corresponding brands.

Net direct-to-consumer merchandise sales through the Company’s websites and catalogue for the year-to-date period of Fiscal 2007 were $150.3 million, an increase of 51% over the Fiscal 2006 comparable period net sales of $99.3 million. Shipping and handling revenue for the corresponding periods was $23.5 million in Fiscal 2007 and $15.2 million in Fiscal 2006. The total direct-to-consumer business accounted for 6.9% of net sales for the Fiscal 2007 year-to-date period compared to 5.3% in the Fiscal 2006 year-to-date period. This increase was driven by store expansion, both domestically and internationally, improved website functionality, improved in-stock inventory availability and increased sales due to a targeted e-mail marketing strategy.

Gross Profit

Year-to-date gross profit in Fiscal 2007 was $1.686 billion compared to $1.453 billion for the comparable period in Fiscal 2006. The gross profit rate for the year-to-date period of Fiscal 2007 was 66.9%, up 20 basis points compared to the Fiscal 2006 year-to-date rate of 66.7%. The increase in the gross profit rate was driven primarily by a higher IMU rate, partially offset by a higher markdown rate.

Stores and Distribution Expense

Stores and distribution expense for the Fiscal 2007 year-to-date period was $998.4 million compared to $837.3 million for the comparable period in Fiscal 2006. The stores and distribution expense rate was 39.6% compared to 38.4% in the corresponding period of Fiscal 2006. The increase in the rate resulted primarily from store payroll, including minimum wage and store manager salary increases, higher store fixed costs and store packaging and supply expenses.

Distribution center productivity, as measured in UPH, increased by 8% during the year-to-date period of Fiscal 2007 as compared to the corresponding period of Fiscal 2006, reflecting greater efficiencies obtained in the second distribution center during Fiscal 2007. With the two distribution centers fully operational, the Company expects the UPH level to continue to increase for the remainder of Fiscal 2007.

Marketing, General and Administrative Expense

Marketing, general and administrative expense for the Fiscal 2007 year-to-date period was $292.6 million compared to $272.2 million during the same period in Fiscal 2006. The marketing, general and administrative expense rate was 11.6% compared to 12.5% for the year-to-date period of Fiscal 2006. The decrease in the rate was primarily due to reductions in the use of outside services, travel, and in-store marketing expenses, partially offset by increases in home office payroll expense.

Other Operating Income, Net

Year-to-date other operating income for Fiscal 2007 was $8.7 million compared to $5.4 million for the comparable period of Fiscal 2006. The increase was primarily related to gift cards for which the Company has determined the likelihood of redemption to be remote and gains related to foreign currency transactions. The comparable year-to-date period in Fiscal 2006 included other operating income related to insurance reimbursements for a fire-damaged store and a store damaged by Hurricane Katrina.

Operating Income

For the Fiscal 2007 year-to-date period, operating income was $403.4 million compared to $349.3 million for the Fiscal 2006 comparable period, an increase of 15%. The operating income rate for the Fiscal 2007 year-to-date period was 16.0%, which was flat to the Fiscal 2006 comparable period.

Interest Income, Net and Income Tax Expense

Year-to-date net interest income for Fiscal 2007 was $12.5 million compared to $9.2 million for the Fiscal 2006 comparable period. The increase in net interest income was due to higher interest rates during the first three quarters of Fiscal 2007 and a higher available investment balance during the second and third quarters of Fiscal 2007 when compared to the Fiscal 2006 comparable period.

The effective tax rate for the thirty-nine weeks ended November 3, 2007 was 37.7% as compared to 37.5% for the Fiscal 2006 comparable period. The effective tax rates for both year-to-date periods of Fiscal 2007 and Fiscal 2006 reflect the favorable impact from the settlement of tax audits.

Net Income and Net Income per Share

For the Fiscal 2007 year-to-date period, net income was $258.9 million compared to $224.0 million for the comparable period in Fiscal 2006, an increase of 16%. Fiscal 2007 year-to-date net income per diluted weighted-average share outstanding was $2.82 versus $2.44 for the comparable period of Fiscal 2006.

FINANCIAL CONDITION

Liquidity and Capital Resources

Cash provided by operating activities provides the resources to support operations, including projected growth, seasonal requirements and capital expenditures. A summary of the Company’s working capital position and capitalization follows (in thousands):


	November 3, 2007		February 3, 2007

Working capital	$	426,358	$	581,451

Capitalization:
Shareholders’ equity	$	1,405,718	$	1,405,297

Operating Activities

Net cash provided by operating activities, the Company’s primary source of liquidity, totaled $414.9 million for the thirty-nine weeks ended November 3, 2007 versus $269.5 million for the comparable period in Fiscal 2006. Cash was provided primarily by current year net income, adjusted for non-cash items including depreciation and amortization, amortization of deferred lease credits and share-based compensation charges, collection of lessor construction allowances, a reduction primarily in basic category inventory levels and an increase in accounts payable and accrued expenses. Uses of cash consisted primarily of decreases in income taxes payable due to payments during the quarter.

Investing Activities

Cash inflows from investing activities were generated by sales of marketable securities. Cash outflows for investing activities were for purchases of marketable securities and capital expenditures (see the discussion in “Capital Expenditures and Lessor Construction Allowances”) primarily related to new store construction, store remodels, the purchase of an airplane and other various store, home office and distribution center projects. As of November 3, 2007, the Company held $277.7 million of marketable securities with original maturities of greater than 90 days.

Financing Activities

Financing activities for the thirty-nine week period ended November 3, 2007 consisted primarily of $287.9 million used for the repurchase of treasury stock during the first and third quarters of Fiscal 2007, $46.3 million used for the payment of three $0.175 per share quarterly dividends paid on March 27, 2007, June 26, 2007 and September 25, 2007 and $35.9 million in proceeds received in connection with stock option exercises.

The Company has $250 million available (less outstanding letters of credit) under its Credit Agreement, as described in Note 9 of the Notes to Condensed Consolidated Financial Statements, to support operations. Trade letters of credit totaling approximately $86.5 million and $48.8 million were outstanding on November 3, 2007 and February 3, 2007, respectively. No loans were outstanding on November 3, 2007 or February 3, 2007.

Standby letters of credit totaling approximately $4.6 million and $4.9 million were outstanding on November 3, 2007 and February 3, 2007, respectively. The standby letters of credit are set to expire primarily during the fourth quarter of Fiscal 2008. The beneficiary, a merchandise supplier, has the right to draw upon the standby letters of credit if the Company declares bankruptcy. To date, the beneficiary has not drawn upon the standby letters of credit.

Off-Balance Sheet Arrangements

As of November 3, 2007, the Company did not have any off-balance sheet arrangements.

Contractual Obligations

The Company’s contractual obligations consist primarily of letters of credit outstanding, operating leases, purchase orders for merchandise inventory and other agreements to purchase goods and services that are legally binding and that require minimum quantities to be purchased. These contractual obligations impact the Company’s short- and long-term liquidity and capital resource needs. There have been no material changes in the Company’s contractual obligations since February 3, 2007, other than those which occur in the normal course of business (primarily changes in the Company’s merchandise inventory-related purchases and lease obligations, which fluctuate throughout the year as a result of the seasonal nature of the Company’s operations) and changes resulting from the adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Tax – An Interpretation of FASB Statement No. 109 (“FIN 48”), as described in Note 8 of the Notes to Condensed Consolidated Financial Statements.

Third Quarter Store Count and Gross Square Feet

Store count and gross square footage by brand for the thirteen weeks ended November 3, 2007 and October 28, 2006, respectively, were as follows:


Store Activity	Abercrombie & Fitch			abercrombie		Hollister		RUEHL		Total
August 4, 2007		362			186		419		17		984
New		—			12		15		3		30

Remodels/Conversions (net activity)		1			—		—		—		1
Closed		(1	)		—		—		—		(1	)


November 3, 2007		362			198		434		20		1,014


Gross Square Feet (thousands)
August 4, 2007		3,197			839		2,799		159		6,994
New		—			61		107		26		194
Remodels/Conversions (net activity)		10			—		—		—		10
Closed		(10	)		—		—		—		(10	)


November 3, 2007		3,197			900		2,906		185		7,188

Average Store Size		8,831			4,545		6,696		9,250		7,089


Store Activity	Abercrombie & Fitch		abercrombie		Hollister		RUEHL		Total
July 29, 2006		351		164		355		10		880
New		4		7		17		1		29
Remodels/Conversions (net activity)		3		—		—		—		3
Closed		—		—		—		—		—


October 28, 2006		358		171		372		11		912


Gross Square Feet (thousands)
July 29, 2006		3,085		719		2,329		89		6,222
New		30		34		119		11		194
Remodels/Conversions (net activity)		23		—		2		—		25
Closed		—		—		—		—		—


October 28, 2006		3,138		753		2,450		100		6,441

Average Store Size		8,765		4,404		6,586		9,091		7,063

Year-To-Date Store Count and Gross Square Feet

Store count and gross square footage by brand for the thirty-nine weeks ended November 3, 2007 and October 28, 2006, respectively, were as follows:


Store Activity	Abercrombie & Fitch			abercrombie		Hollister		RUEHL			Total
February 3, 2007		360			177		393		14			944
New		4			21		41		5			71
Remodels/Conversions (net activity)		1			—		—		1	⁽¹⁾		2
Closed		(3	)		—		—		—			(3	)


November 3, 2007		362			198		434		20			1,014


Gross Square Feet (thousands)
February 3, 2007		3,171			788		2,604		130			6,693
New		47			105		302		46			500
Remodels/Conversions (net activity)		6			7		—		9	⁽¹⁾		22
Closed		(27	)		—		—		—			(27	)


November 3, 2007		3,197			900		2,906		185			7,188

Average Store Size		8,831			4,545		6,696		9,250			7,089

⁽¹⁾ Includes one RUEHL store reopened after being closed temporarily due to fire.


Store Activity	Abercrombie & Fitch			abercrombie			Hollister			RUEHL		Total
January 29, 2006		361			164			318			8		851
New		5			11			49			3		68
Remodels/Conversions (net activity)		(3	)⁽²⁾		—			5	⁽²⁾		—		2
Closed		(5	)		(4	)		—			—		(9	)


October 28, 2006		358			171			372			11		912


Gross Square Feet (thousands)
January 29, 2006		3,157			716			2,083			69		6,025
New		37			53			330			31		451
Remodels/Conversions (net activity)		(16	)		—			37			—		21
Closed		(40	)		(16	)		—			—		(56	)


October 28, 2006		3,138			753			2,450			100		6,441

Average Store Size		8,765			4,404			6,586			9,091		7,063

⁽²⁾ Includes one Abercrombie & Fitch and one Hollister store reopened after hurricane damage.

Capital Expenditures and Lessor Construction Allowances

Capital expenditures totaled $303.1 million and $302.9 million for the thirty-nine week periods ended November 3, 2007 and October 28, 2006, respectively. Additionally, the non-cash accrual for construction in progress increased $23.4 million for the thirty-nine week period ended November 3, 2007 compared to an increase of $53.3 million for the thirty-nine week period ended October 28, 2006. Capital expenditures related primarily to new store construction, remodels and other store related projects. The balance of capital expenditures in Fiscal 2006 and Fiscal 2007 related to various home office and distribution center projects and, in Fiscal 2007, the purchase of an airplane.

Lessor construction allowances are an integral part of the decision-making process for assessing the viability of new store leases. In making the decision whether to invest in a store location, the Company calculates the estimated future return on its investment based on the cost of construction, less any construction allowances to be received from the landlord. For the thirty-nine week periods ended November 3, 2007 and October 28, 2006, the Company received $29.8 million and $32.9 million in construction allowances, respectively.

During Fiscal 2007, the Company anticipates capital expenditures between $395 million and $405 million. Approximately $220 million of this amount is to be allocated to new store construction and full store remodels. Approximately $60 million is expected to be allocated to refresh existing stores. A typical store refresh includes new floors, sound systems and fixture replacements at Abercrombie & Fitch and abercrombie stores. Additionally, the store refresh at Hollister will include the addition of video walls and fixtures. Approximately $35 million was allocated to the acquisition of an airplane. The Company is planning approximately $85 million in capital expenditures at the home office related to new office buildings, information technology investments and new direct-to-consumer distribution and logistics systems.

By the end of Fiscal 2007, the Company plans to increase gross square footage by approximately 10% over Fiscal 2006, primarily through the addition of approximately six new Abercrombie & Fitch stores, 25 new abercrombie stores, 58 new Hollister stores, seven new RUEHL stores, and four stores of the Company’s new concept.

During Fiscal 2007, the Company expects the average construction cost per square foot, net of construction allowances, for new stores to be approximately $140, $171, $131 and $261 per store for Abercrombie & Fitch, abercrombie, Hollister and RUEHL, respectively. The RUEHL construction cost per square foot, net of construction allowances, excludes one standard U.S. RUEHL store that the Company believes is not representative of the costs the Company expects to incur for the remaining RUEHL stores planned in Fiscal 2007. The Company has developed a new single level, smaller square footage store prototype for RUEHL. This prototype will be utilized for the remainder of Fiscal 2007 store openings. The Company expects that this will lower the total construction cost per RUEHL store.

The Company expects initial inventory purchases for the stores to average approximately $0.4 million, $0.2 million, $0.3 million and $0.5 million per store for Abercrombie & Fitch, abercrombie, Hollister and RUEHL, respectively.

The Company expects that substantially all future capital expenditures will be funded with cash from operations and landlord construction allowances. In addition, the Company has $250 million available (less outstanding letters of credit) under its Credit Agreement to support operations.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Since actual results may differ from those estimates, the Company revises its estimates and assumptions as new information becomes available.

The Company’s significant accounting policies can be found in Note 2 of the Notes to Consolidated Financial Statements contained in “Item 8. Financial Statements and Supplementary Data” of A&F’s Annual Report on Form 10-K for Fiscal 2006 filed on March 30, 2007. The Company believes that the following policies are the most critical to the portrayal of the Company’s financial condition and results of operations.

Revenue Recognition — The Company recognizes retail sales at the time the customer takes possession of the merchandise and purchases are paid for, primarily with either cash or credit card. Direct-to-consumer sales are recorded upon customer receipt of merchandise. Amounts relating to shipping and handling billed to customers in a sales transaction are classified as revenue and the related direct shipping and handling costs are classified as stores and distribution expense. Associate discounts are classified as a reduction of revenue. The Company reserves for sales returns through estimates based on historical experience and various other assumptions that management believes to be reasonable. The sales return reserve was $9.0 million, $8.9 million and $7.7 million at November 3, 2007, February 3, 2007 and October 28, 2006, respectively.

The Company’s gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a liability at the time a gift card is sold. The liability remains on the Company’s books until the earlier of redemption (recognized as revenue) or when the Company determines the likelihood of redemption is remote (recognized as other operating income). The Company determines the probability of the gift card being redeemed to be remote based on historical redemption patterns and at these times recognizes the remaining balance as other operating income. At November 3, 2007 and February 3, 2007, the gift card liability on the Company’s condensed Consolidated Balance Sheets was $40.8 million and $65.0 million, respectively. The Company is not required by law to escheat the value of unredeemed gift cards to the states in which it operates.

Inventory Valuation — Inventories are principally valued at the lower of average cost or market utilizing the retail method. The Company determines market value as the anticipated future selling price of the merchandise less a normal margin. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost components of inventory on hand so as to maintain the already established cost-to-retail relationship. At first and third fiscal quarter end, the Company reduces inventory value by recording a markdown reserve that represents the estimated future anticipated selling price decreases necessary to sell-through the current season inventory. At second and fourth fiscal quarter end, the Company reduces inventory value by recording a markdown reserve that represents the estimated future selling price decreases necessary to sell-through any remaining carryover inventory from the season just passed.

Additionally, as part of inventory valuation, an inventory shrink estimate based on historical trends is made each period that reduces the value of inventory for lost or stolen items. The Company performs physical inventories throughout the year and adjusts the shrink reserve accordingly.

Inherent in the retail method calculation are certain significant judgments and estimates including, among others, markdowns and shrinkage, which could significantly impact the ending inventory valuation at cost as well as the resulting gross margins. An increase or decrease in the inventory shrink estimate of 10% would not have a material impact on the Company’s results of operations. Management believes this inventory valuation method is appropriate since it preserves the cost-to-retail relationship in ending inventory.

Property and Equipment — Depreciation and amortization of property and equipment are computed for financial reporting purposes on a straight-line basis, using service lives ranging principally from 30 years for buildings; the lesser of the useful life of the asset, which ranges from four to 15 years, or the life of the lease for leasehold improvements; and three to 20 years for other property and equipment. The cost of assets sold or retired and the related accumulated depreciation or amortization are removed from the accounts with any resulting gain or loss included in net income. Maintenance and repairs are charged to expense as incurred. Major remodels and improvements that extend service lives of the assets are capitalized. Long-lived assets are reviewed at the store level periodically for impairment or whenever events or changes in circumstances indicate that full recoverability of net assets through future cash flows is in question. Factors used in the evaluation include, but are not limited to, management’s plans for future operations, recent operating results and projected cash flows.

Income Taxes — Income taxes are calculated in accordance with SFAS No. 109, “Accounting for Income Taxes,” (“SFAS No. 109”) which requires the use of the asset and liability method. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using current enacted tax rates in effect for the years in which those temporary differences are expected to reverse. Inherent in the measurement of deferred balances are certain judgments and interpretations of enacted tax law and published guidance with respect to applicability to the Company’s operations. A valuation allowance was provided in Fiscal 2006 for losses related to the start-up costs associated with operations in foreign countries. No changes have been made to this valuation allowance in the third quarter of Fiscal 2007. No other valuation allowances have been provided for deferred tax assets because management believes that it is more likely than not that the full amount of the net deferred tax assets will be realized in the future. The effective tax rate utilized by the Company reflects management’s judgment of the expected tax liabilities within the various taxing jurisdictions.

In June 2006, the FASB issued FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS No. 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of tax expense.

The provision for income taxes is based on the current estimate of the annual effective tax rate adjusted to reflect the tax impact of items discrete to the quarter. The Company records tax expense or benefit that does not relate to ordinary income in the current fiscal year discretely in the period in which it occurs pursuant to the requirements of Accounting Principles Board (“APB”) Opinion No. 28, “Interim Financial Reporting” and FIN 18, “Accounting for Income Taxes in Interim Periods — an Interpretation of APB Opinion No. 28.” Examples of such types of discrete items include, but are not limited to, changes in estimates of the outcome of tax matters related to prior years, provision-to-return adjustments, tax-exempt income and the settlement of tax audits.

Foreign Currency Translation - The majority of the Company’s international operations use local currencies as the functional currency. In accordance with SFAS No. 52, assets and liabilities denominated in foreign currencies were translated into U.S. dollars (the reporting currency) at the exchange rate prevailing at the balance sheet date. Equity accounts denominated in foreign currencies were translated into U.S. dollars at historical exchange rates. Revenues and expenses denominated in foreign currencies were translated into U.S. dollars at the monthly average exchange rate for the period. Gains and losses resulting from foreign currency transactions are included in the results of operations, whereas related translation adjustments from intercompany loans of a long-term investment nature are reported as an element of other comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income.”

Contingencies — In the normal course of business, the Company must make continuing estimates of potential future legal obligations and liabilities, which requires the use of management’s judgment on the outcome of various issues. Management may also use outside legal advice to assist in the estimating process. However, the ultimate outcome of various legal issues could differ from management estimates, and adjustments may be required. The Company accrues for expense items associated with its legal obligations including outstanding bills, expected defense costs and, if appropriate, settlements. Accruals are made for personnel, general litigation and intellectual property cases.

Equity Compensation Expense — The Company’s equity compensation expense related to stock options is estimated using the Black-Scholes option-pricing model to determine the fair value of the stock option grants, which requires the Company to estimate the expected term of stock option grants and expected future stock price volatility over the expected term. Estimates of the expected term, which represents the expected period of time the Company believes the stock options will be outstanding, are based on historical experience. Estimates of the expected future stock price volatility are based on the volatility of A&F’s Common Stock for the most recent historical period equal to the expected term of the stock option. The Company calculates the historic volatility as the annualized standard deviation of the differences in the natural logarithms of the weekly stock closing price, adjusted for stock splits and dividends.

The fair value calculation under the Black-Scholes valuation model is particularly sensitive to changes in the expected term and volatility assumptions. Increases in the expected term or volatility will result in a higher fair valuation of stock option grants. Assuming all other assumptions disclosed in “Note 2. Share-Based Compensation” of the Notes to Condensed Consolidated Financial Statements, being equal, a 10% increase in the expected term would yield a 5% increase in the Black-Scholes valuation, while a 10% increase in volatility would yield a 7% increase in the Black-Scholes valuation. The Company believes that changes in the expected term and volatility would not have a material effect on the Company’s results since the number of stock options granted during the periods presented was not material.

Recently Issued Accounting Pronouncements

In September 2006, the FASB released SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 establishes a common definition for fair value under accounting principles generally accepted in the United States of America and also establishes a framework for measuring fair value and expands disclosure requirements about such fair value measurements. In November 2007, the FASB authorized its staff to draft a proposed FASB Staff Position (“ Proposed FSP”) that would partially defer the effective date of SFAS No. 157 for one year for non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis. If the Proposed FSP is approved, SFAS No. 157 will be effective for the Company on February 3, 2008, for financial assets and liabilities carried at fair value and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis and on February 1, 2009, for non-recurring non-financial assets and liabilities that are recognized or disclosed at fair value. The Company is currently evaluating the potential impact of adopting SFAS No. 157 on the consolidated results of operations and consolidated financial condition.

In February 2007, the FASB released SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of SFAS No. 115” (“SFAS No. 159”). SFAS No. 159 permits companies to measure many financial instruments and certain other assets and liabilities at fair value on an instrument by instrument basis. SFAS No. 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that select different measurement attributes for similar types of assets and liabilities. SFAS No. 159 will be effective for the Company on February 3, 2008, for Fiscal 2008. The Company is currently evaluating the potential impact of adopting SFAS No. 159 on the consolidated results of operations and consolidated financial condition.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by the Company, its management or spokespeople involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond its 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 Fiscal 2006 filed on March 30, 2007, in some cases have affected and in the future could affect the Company’s financial performance and could cause actual results for Fiscal 2007 and beyond to differ materially from those expressed or implied in any of the forward-looking statements included in this Quarterly Report on Form 10-Q or otherwise made by management or spokespeople:

	-		changes in consumer spending patterns and consumer preferences;

	-		the impact of competition and pricing pressures;

	-		disruptive weather conditions affecting consumers’ ability to shop;

	-		unseasonal weather conditions affecting consumer preferences;

	-		availability and market prices of key raw materials;

	-		ability of manufacturers to comply with applicable laws, regulations and ethical business practices;

	-		currency and exchange risks and changes in existing or potential duties, tariffs or quotas;

	-		availability of suitable store locations on appropriate terms;

	-		ability to develop innovative, high-quality new merchandise in response to changing fashion trends;

	-		loss of services of skilled senior executive officers;

	-		ability to hire, train and retain qualified associates; and

	-		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.

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 Quarterly Report on Form 10-Q 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.


ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company maintains its cash equivalents in financial instruments with original maturities of 90 days or less. The Company also holds investments in marketable securities, which consist primarily of investment grade municipal notes and bonds and investment grade auction rate securities, all classified as available-for-sale with original maturities greater than 90 days. These securities are consistent with the investment objectives contained within the investment policy established by A&F’s Board of Directors. The basic objectives of the investment policy are the preservation of capital, maintaining sufficient liquidity to meet operating requirements and maximizing net after-tax yield.

Despite the underlying long-term maturity of auction rate securities, from the investor’s perspective, such securities are priced and subsequently traded as short-term investments because of the interest rate reset feature. Interest rates are reset through an auction process at predetermined periods ranging from seven to 49 days. The risk of a failed auction exists; however, the Company believes the risk is minimal based on the infrequent nature of such an event and the Company’s historical experience. As of November 3, 2007, the Company held approximately $277.7 million in available-for-sale auction rate securities, classified as marketable securities.

The Company established an irrevocable rabbi trust (the “Rabbi Trust”) during the third quarter of Fiscal 2006, the purpose of which is to be a source of funds to match respective funding obligations to participants in the Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan and the Chief Executive Officer Supplemental Executive Retirement Plan. As of November 3, 2007, total assets held in the Rabbi Trust were $35.7 million, which included $17.9 million of available-for-sale municipal notes and bonds, trust-owned life insurance policies with a cash surrender value of $16.5 million and $1.3 million held in money market accounts. The Rabbi Trust assets are consolidated in accordance with Emerging Issues Task Force Issue No. 97-14, "Accounting for Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi Trust and Invested,” and recorded at fair value in other assets on the Condensed Consolidated Balance Sheet and are restricted as to their use as noted above.

There were $0.4 million in realized losses for the thirteen and thirty-nine week periods ended November 3, 2007 and no realized gains or losses for the thirteen and thirty-nine week periods ended October 28, 2006. Net unrealized holding losses were approximately $0.8 million as of November 3, 2007.

The Company does not enter into financial instruments for trading purposes.

As of November 3, 2007, the Company had no long-term debt outstanding. Future borrowings would bear interest at negotiated rates and would be subject to interest rate risk.

The Company has exposure to changes in currency exchange rates associated with foreign currency transactions, including inter-company transactions. Such foreign currency transactions are denominated in Euros, Canadian Dollars, Japanese Yen, Swiss Francs and British Pounds. The Company has established a program that primarily utilizes foreign currency forward contracts to partially offset the risks associated with the effects of certain foreign currency exposures. Under this program, increases or decreases in foreign currency exposures are partially offset by gains or losses on forward contracts, to mitigate the impact of foreign currency transaction gains or losses. The Company does not use forward contracts to engage in currency speculation.

All outstanding foreign currency forward contracts are marked to market at the end of each fiscal period. The Company’s ultimate realized gain or loss with respect to foreign currency fluctuations will depend on the foreign currency exchange rate changes and other factors in effect as the contracts mature.

The Company’s market risk profile as of November 3, 2007 has not changed significantly since February 3, 2007.


ITEM 4.		CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

A&F maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that A&F files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Chairman and Chief Executive Officer of A&F and the Executive Vice President and Chief Financial Officer of A&F, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

A&F’s management, including the Chairman and Chief Executive Officer of A&F and the Executive Vice President and Chief Financial Officer of A&F, evaluated the effectiveness of A&F’s design and operation of its disclosure controls and procedures as of the end of the fiscal quarter ended November 3, 2007. Based upon that evaluation, the Chairman and Chief Executive Officer of A&F and the Executive Vice President and Chief Financial Officer concluded that A&F’s disclosure controls and procedures were effective at a reasonable level of assurance as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control Over Financial Reporting

There were no changes in A&F’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during A&F’s fiscal quarter ended November 3, 2007 that materially affected, or are reasonably likely to materially affect, A&F’s internal control over financial reporting.


PART II.		OTHER INFORMATION


ITEM 1.		LEGAL PROCEEDINGS

A&F is a defendant in lawsuits arising in the ordinary course of business.

On June 23, 2006, Lisa Hashimoto, et al. v. Abercrombie & Fitch Co. and Abercrombie & Fitch Stores, Inc., was filed in the Superior Court of the State of California for the County of Los Angeles. In that action, three plaintiffs allege, on behalf of a putative class of California store managers employed in Hollister and abercrombie stores, that they were entitled to receive overtime pay as “non-exempt” employees under California wage and hour laws. The complaint seeks injunctive relief, equitable relief, unpaid overtime compensation, unpaid benefits, penalties, interest and attorneys’ fees and costs. The defendants filed an answer to the complaint on August 21, 2006. The parties are engaging in discovery. On December 10, 2007 the defendants reached an agreement in principle with plaintiffs’ counsel to settle those claims in the action which are alleged to have arisen before April 30, 2004. The agreement in principle is subject to integration into a written agreement, notice, hearing, and court approval before it can become effective. The agreement in principle does not affect claims which are alleged to have arisen in the period commencing on April 30, 2004.

On September 2, 2005, a purported class action, styled Robert Ross v. Abercrombie & Fitch Company, et al., was filed against A&F and certain of its officers in the United States District Court for the Southern District of Ohio on behalf of a purported class of all persons who purchased or acquired shares of A&F’s Common Stock between June 2, 2005 and August 16, 2005. In September and October of 2005, five other purported class actions were subsequently filed against A&F and other defendants in the same Court. All six securities cases allege claims under the federal securities laws, and seek unspecified monetary damages, as a result of a decline in the price of A&F’s Common Stock during the summer of 2005. On November 1, 2005, a motion to consolidate all of these purported class actions into the first-filed case was filed by some of the plaintiffs. A&F joined in that motion. On March 22, 2006, the motions to consolidate were granted, and these actions (together with the federal court derivative cases described in the following paragraph) were consolidated for purposes of motion practice, discovery and pretrial proceedings. A consolidated amended securities class action complaint (the “Complaint”) was filed on August 14, 2006. On October 13, 2006, all defendants moved to dismiss that Complaint. On August 9, 2007, the Court denied the motions to dismiss. On September 14, 2007, defendants filed answers denying the material allegations of the Complaint and asserting affirmative defenses.

On September 16, 2005, a derivative action, styled The Booth Family Trust v. Michael S. Jeffries, et al., was filed in the United States District Court for the Southern District of Ohio, naming A&F as a nominal defendant and seeking to assert claims for unspecified damages against nine of A&F’s present and former directors, alleging various breaches of the directors’ fiduciary duty and seeking equitable and monetary relief. In the following three months (October, November and December of 2005), four similar derivative actions were filed (three in the United States District Court for the Southern District of Ohio and one in the Court of Common Pleas for Franklin County, Ohio) against present and former directors of A&F alleging various breaches of the directors’ fiduciary duty and seeking equitable and monetary relief. A&F is also a nominal defendant in each of the four later derivative actions. On November 4, 2005, a motion to consolidate all of the federal court derivative actions with the purported securities law class actions described in the preceding paragraph was filed. On March 22, 2006, the motion to consolidate was granted, and the federal court derivative actions have been consolidated with the aforesaid purported securities law class actions for purposes of motion practice, discovery and pretrial proceedings. A consolidated amended derivative complaint was filed in the federal proceeding on July 10, 2006. A&F filed a motion to stay the consolidated federal derivative case and that motion was granted. The state court action was also stayed. On February 16, 2007, A&F announced its Board of Directors received a report of its Special Litigation Committee established by the Board to investigate and act with respect to claims asserted in certain previously disclosed derivative lawsuits brought against current and former directors and management, including Chairman and Chief Executive Officer Michael S. Jeffries. The Special Litigation Committee has concluded that there is no evidence to support the asserted claims and directed the Company to seek dismissal of the derivative actions. On September 10, 2007, the Company moved to dismiss the federal derivative cases on the authority of the Special Litigation Committee report and on October 18, 2007, the state court stayed further proceedings until resolution of the consolidated federal derivative cases.

In December 2005, the Company received a formal order of investigation from the SEC concerning trading in shares of A&F’s Common Stock. The SEC has requested information from A&F and certain of its current and former officers and directors. The Company and its personnel have cooperated fully with the SEC.

Management intends to defend the aforesaid matters vigorously, as appropriate. Management is unable to quantify the potential exposure of the aforesaid matters. However, management’s assessment of the Company’s current exposure could change in the event of the discovery of additional facts with respect to legal matters pending against the Company or determinations by judges, juries or other finders of fact that are not in accord with management’s evaluation of the claims.


ITEM 1A.		RISK FACTORS

The Company’s risk factors as of November 3, 2007 have not changed materially from those disclosed in A&F’s Annual Report on Form 10-K for Fiscal 2006 filed on March 30, 2007.


ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information regarding the purchase of shares of the Common Stock of A&F made by or on behalf of A&F or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, during each fiscal month of the quarterly period ended November 3, 2007:


					Total Number of		Maximum Number of
					Shares Purchased as		Shares that May Yet
					Part of Publicly		be Purchased under
	Total Number of		Average Price Paid		Announced Plans or		the Plans or
Period	Shares Purchased		per Share⁽¹⁾		Programs⁽²⁾		Programs⁽³⁾
August 5 through September 1, 2007		1,775,100	$	78.98		1,775,100		2,898,400
September 2 through October 6, 2007		869,200	$	79.01		869,200		2,029,200
October 7 through November 3, 2007		—	$	—		—		2,029,200

Total		2,644,300	$	78.99		2,644,300		2,029,200


⁽¹⁾		The average price paid per share includes broker commissions.

⁽²⁾		Shares were purchased pursuant to the August 15, 2005 authorization by A&F’s Board of Directors to repurchase 6.0 million shares of A&F’s Common Stock announced by A&F on August 16, 2005.

⁽³⁾		The number shown represents, as of the end of each period, the maximum number of shares of Common Stock that may yet be purchased under A&F’s stock repurchase authorization announced on August 16, 2005. The shares may be purchased from time to time, depending on market conditions.

On November 21, 2007, A&F announced that on November 20, 2007, the A&F Board of Directors authorized the repurchase of 10.0 million shares of A&F’s Common Stock. This authorization is in addition to the approximately 2.0 million shares of A&F’s Common Stock which remained available as of November 3, 2007 under the authorization announced on August 16, 2005.

ITEM 6. EXHIBITS

(a) Exhibits


3.1		Amended and Restated Certificate of Incorporation of A&F as filed with the Delaware Secretary of State on August 27, 1996, incorporated herein by reference to Exhibit 3.1 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended November 2, 1996 (File No. 001-12107).

3.2		Certificate of Designation of Series A Participating Cumulative Preferred Stock of A&F as filed with the Delaware Secretary of State on July 21, 1998, incorporated herein by reference to Exhibit 3.2 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 30, 1999 (File No. 001-12107).

3.3		Certificate of Decrease of Shares Designated as Class B Common Stock as filed with the Delaware Secretary of State on July 30, 1999, incorporated herein by reference to Exhibit 3.3 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended July 31, 1999 (File No. 001-12107).

3.4		Amended and Restated Bylaws of A&F (reflecting amendments through May 20, 2004), incorporated herein by reference to Exhibit 3.7 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2004 (File No. 001-12107).

4.1		Rights Agreement, dated as of July 16, 1998, between A&F and First Chicago Trust Company of New York, as Rights Agent, incorporated herein by reference to Exhibit 1 to A&F’s Registration Statement on Form 8-A dated and filed July 21, 1998 (File No. 001-12107).

4.2		Amendment No. 1 to Rights Agreement, dated as of April 21, 1999, between A&F and First Chicago Trust Company of New York, as Rights Agent, incorporated herein by reference to Exhibit 2 to A&F’s Amendment No. 1 to Form 8-A dated April 23, 1999 and filed April 26, 1999 (File No. 001-12107).

4.3		Certificate of adjustment of number of Rights associated with each share of Class A Common Stock, dated May 27, 1999, incorporated herein by reference to Exhibit 4.6 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended July 31, 1999 (File No. 001-12107).

4.4		Appointment and Acceptance of Successor Rights Agent, effective as of the opening of business on October 8, 2001, between A&F and National City Bank, incorporated herein by reference to Exhibit 4.6 to A&F’s Quarterly Report on Form 10-Q for the quarterly period ended August 4, 2001 (File No. 001-12107).

10.1		Credit Agreement, dated as of November 14, 2002, as amended and restated as of December 15, 2004, among Abercrombie & Fitch Management Co., as Borrower, A&F, as Guarantor, the Lenders party thereto, National City Bank, as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, and National City Bank and J.P. Morgan Securities Inc., as Co-Lead Arrangers and Joint Bookrunners, incorporated herein by reference to Exhibit 4.1 to A&F’s Current Report on Form 8-K dated and filed December 21, 2004 (File No. 001-12107).

10.2		Guarantee Agreement, dated as of November 14, 2002, as amended and restated as of December 15, 2004, among A&F, each direct and indirect domestic subsidiary of A&F other than Abercrombie & Fitch Management Co., and National City Bank, as Administrative Agent, incorporated herein by reference to Exhibit 4.2 to A&F’s Current Report on Form 8-K dated and filed December 21, 2004 (File No. 001-12107).

10.3		First Amendment dated as of June 22, 2005, to the Credit Agreement, dated as of November 14, 2002, as amended and restated as of December 15, 2004, among Abercrombie & Fitch Management Co., as


		Borrower, A&F, as Guarantor, the Lenders party thereto, and National City Bank, as Administrative Agent, incorporated herein by reference to Exhibit 4.1 to A&F’s Current Report on Form 8-K dated and filed June 22, 2005 (File No. 001-12107).

10.4		Form of Stock Option Agreement (Nonstatutory Stock Option) for Associates under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 6, 2006, incorporated herein by reference to Exhibit 10.33 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 28, 2006 (File 001-12107).

10.5		Form of Restricted Stock Unit Award Agreement for Associates under the Abercrombie & Fitch Co. 2005 Long-Term Incentive Plan on or after March 6, 2006, incorporated herein by reference to Exhibit 10.34 to A&F’s Annual Report on Form 10-K for the fiscal year ended January 28, 2006 (File No. 001-12107).

10.10		Trust Agreement, dated as of October 16, 2006, between A&F and Wilmington Trust Company, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed October 17, 2006 (File No. 001-12107).

10.11		Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan, incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K dated and filed June 18, 2007 (File No. 001-12107).

10.12		Form of Stock Option Agreement to be used to evidence the grant of nonstatutory stock options to employees of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan after August 21, 2007, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed August 27, 2007 (File No. 001-12107).

10.13		Form of Restricted Stock Unit Award Agreement to be used to evidence the grant of restricted stock units to employees of A&F and its subsidiaries under the Abercrombie & Fitch Co. 2007 Long-Term Incentive Plan after August 21, 2007, incorporated herein by reference to Exhibit 10.2 to A&F’s Current Report on Form 8-K dated and filed August 27, 2007 (File No. 001-12107).

10.14		Abercrombie & Fitch Co. Incentive Compensation Performance Plan, incorporated herein by reference to Exhibit 10.1 to A&F’s Current Report on Form 8-K dated and filed June 18, 2007 (File No. 001-12107).

15		Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Inclusion of Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers LLP.*

31.1		Certification by Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2		Certification by Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


*		Filed herewith.

SIGNATURES

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 thereunto duly authorized.



	ABERCROMBIE & FITCH CO.

Date: December 11, 2007	By	/s/ MICHAEL W. KRAMER

	Michael W. Kramer
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Authorized Officer)

EXHIBIT INDEX


Exhibit No.		Document

15		Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Inclusion of Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers LLP.

31.1		Certification by Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification by Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.