AEO American Eagle Outfitters Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 04, 2024

 

 

AMERICAN EAGLE OUTFITTERS INC

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			1-33338	13-2721761
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
77 Hot Metal Street
Pittsburgh, Pennsylvania				15203-2329
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (412) 432-3300

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value		AEO		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

 

On December 4, 2024, American Eagle Outfitters, Inc. (the “Company”) issued a press release announcing, among other things, the Company’s financial results for the third quarter ended November 2, 2024. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02, including the accompanying Exhibits, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

This Current Report on Form 8-K (including the Exhibits hereto) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the year ended February 3, 2024, and in any subsequently-filed quarterly reports on Form 10-Q, which have been filed with the Securities and Exchange Commission and are available on our website and on the Securities and Exchange Commission’s website (www.sec.gov). The Company does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press release dated December 4, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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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.

			AMERICAN EAGLE OUTFITTERS, INC.
			(Registrant)
Date:	December 4, 2024	By:	/s/ Michael A. Mathias
			Michael A. Mathias Executive Vice President, Chief Financial Officer

 

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Exhibit 99.1

 

AEO Inc. Reports Third Quarter Growth Across Brands Reflecting Strong Execution on Powering Profitable Growth Plan

December 4, 2024

PITTSBURGH -- (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the third quarter fiscal 2024 ended November 2, 2024.

“Building on our positive performance in the first half of the year, third quarter results provide another proof point of the effectiveness of our Powering Profitable Growth Plan. Led by a strong back-to-school season, we achieved comparable sales growth across brands and channels, and delivered adjusted operating income at the high end of our guidance range,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

“We have entered the holiday season well positioned, with our leading brands offering high-quality merchandise, great gifts and an outstanding shopping experience across channels. Key selling periods have seen a positive customer response, yet we remain cognizant of potential choppiness during non-peak periods. The teams are focused on delivering the quarter and with our strong year-to-date performance, we remain confident in achieving our long-term strategic objectives,” he concluded.

 

Third Quarter 2024 Results:

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Inventory

Total ending inventory increased 5% to $804 million. Inventory is healthy and well positioned for the holiday season.

 

Shareholder Returns

In the third quarter, the company returned approximately $24 million in cash to shareholders through the quarterly cash dividend of $0.125 per share bringing year-to-date cash dividends to $73 million.

 

Additionally, during the first half of the year, the company repurchased 6 million shares for $131 million. The company continues to have 24 million shares remaining for repurchase under the current authorization.

 

Capital Expenditures

Capital expenditures totaled $61 million in the third quarter and $158 million year-to-date. For fiscal 2024, management expects capital expenditures in the range of $225 to $245 million.

 

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Restructuring and Impairment Charges

In the third quarter, the company recorded an $18 million impairment and restructuring charge, of which $6 million was non-cash. As part of its ongoing profit improvement initiatives, the company took additional actions to streamline its corporate cost structure. The company also changed its Hong Kong retail operation from company-owned to a licensed model.

 

Outlook

Fourth quarter comparable sales are expected to be up approximately 1%, with total revenue down 4% including a roughly $85 million impact from the combination of the retail calendar shift and one less selling week, as previously discussed. Operating income is expected to be in the range of $125 to $130 million. This incorporates currency pressure from the recent strengthening in the U.S. dollar, in addition to a $20 million drag from the retail calendar shift. SG&A is expected to leverage reflecting the company’s continued focus on driving efficiencies across key focus areas.

 

For the year, this implies comparable sales growth of approximately 3%, with total revenue up 1%, including the impact of one less selling week. Adjusted operating income is expected to be in the range of $428 to $433 million compared to adjusted operating income of $375 million in 2023, representing growth in the mid-teens.

FY24 Quarterly Impact of Retail Calendar

	1Q	2Q	3Q	4Q	FY24
Revenue Impact	+$15M	+$55M	-$45M	-$85M	-$60M

Webcast and Supplemental Financial Information

Management will host a conference call and real time webcast today at 4:30pm Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 or go to www.aeo-inc.com to access the webcast and audio replay. Additionally, a financial results presentation is posted on the company’s website.

* * * *

About American Eagle Outfitters, Inc.

American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer with a portfolio of beloved apparel brands including American Eagle, Aerie, OFFL/NE by Aerie, Todd Snyder and Unsubscribed. Rooted in optimism, inclusivity and authenticity, AEO’s brands empower every customer to celebrate their unique personal style by offering casual, comfortable, timeless outfitting and high-quality products that are made to last.

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AEO Inc. operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the company operates a robust e-commerce business across its brands. For more information, visit aeo-inc.com.

Non-GAAP Measures

This press release includes operating income and net income and net income per diluted share presented on an adjusted or non-GAAP basis, which are non-GAAP financial measures. These financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance when reviewed in conjunction with our GAAP Consolidated Financial Statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. The tables included in this release reconcile the GAAP financial measures to the non-GAAP financial measures discussed above for the 13 weeks and 39 weeks ended November 2, 2024, Fiscal 2024 and Fiscal 2023.

 

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

This release and related statements by management contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which represent management’s expectations or beliefs concerning future events, including, without limitation, fourth fiscal quarter and annual fiscal 2024 results. Words such as “outlook,” "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," “may,” “potential,” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements made by the company are inherently uncertain because they are based on assumptions and expectations concerning future events and are subject to change based on many important factors, some of which may be beyond the company’s control. Except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise and even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. The following factors, in addition to the risks disclosed in Item 1A., Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 and in any other filings that we may make with the Securities and Exchange Commission, in some cases have affected, and in the future could affect, the company's financial performance and could cause actual results to differ materially from those expressed or implied in any of the forward-looking statements included in this release or otherwise made by management: the risk that the company’s operating, financial and capital plans may not be achieved; our inability to anticipate customer demand and changing fashion trends and to manage our inventory commensurately;

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seasonality of our business; our inability to achieve planned store financial performance; our inability to react to raw material cost, labor and energy cost increases; our inability to gain market share in the face of declining shopping center traffic; our inability to respond to changes in e-commerce and leverage omni-channel demands; our inability to expand internationally; difficulty with our international merchandise sourcing strategies; challenges with information technology systems, including safeguarding against security breaches; and global economic, public health, social, political and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, which could have a material adverse effect on our business, results of operations and liquidity.

 

The use of the “company,” “AEO,” “we,” "us," and “our” in this release refers to American Eagle Outfitters, Inc.

CONTACT:

Line Media

412-432-3300

LineMedia@ae.com

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
		November 2, 2024				October 28, 2023
Assets
Current assets:
Cash and cash equivalents		$	160,195			$	240,940
Merchandise inventory			804,256				769,315
Accounts receivable, net			214,114				239,374
Prepaid expenses			118,773				81,423
Other current assets			38,810				22,366
Total current assets			1,336,148				1,353,418
Operating lease right-of-use assets			1,237,741				995,023
Property and equipment, at cost, net of accumulated depreciation			745,988				742,793
Goodwill, net			225,196				264,825
Non-current deferred income taxes			88,092				20,791
Intangible assets, net			43,371				88,201
Other assets			59,596				55,735
Total assets		$	3,736,132			$	3,520,786
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	283,471			$	300,031
Current portion of operating lease liabilities			293,006				294,898
Accrued compensation and payroll taxes			90,289				96,484
Unredeemed gift cards and gift certificates			50,161				47,676
Accrued income and other taxes			38,468				19,255
Other current liabilities and accrued expenses			95,620				72,887
Total current liabilities			851,015				831,231
Non-current liabilities:
Non-current operating lease liabilities			1,098,197				927,019
Other non-current liabilities			40,322				24,247
Total non-current liabilities			1,138,519				951,266
Commitments and contingencies			—				—
Stockholders’ equity:
Preferred stock			—				—
Common stock			2,496				2,496
Contributed capital			359,348				343,695
Accumulated other comprehensive loss			(49,872	)			(32,865	)
Retained earnings			2,376,077				2,234,761
Treasury stock			(941,451	)			(809,798	)
Total stockholders’ equity			1,746,598				1,738,289
Total liabilities and stockholders’ equity		$	3,736,132			$	3,520,786
Current Ratio			1.57				1.63

 

 

 

 

 

 

 

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; Dollars and shares in thousands, except per share amounts)
		GAAP Basis
		13 Weeks Ended
		November 2, 2024					October 28, 2023
		(In thousands)		(Percentage of revenue)			(In thousands)		(Percentage of revenue)
Total net revenue		$1,289,094		100.0	%		$1,301,055		100.0	%
Cost of sales, including certain buying, occupancy and warehouse expenses		762,470		59.1			757,258		58.2
Gross profit		526,624		40.9			543,797		41.8
Selling, general and administrative expenses		351,380		27.3			361,992		27.8
Impairment, restructuring and other charges		17,561		1.4			—		0.0
Depreciation and amortization expense		51,594		4.0			56,444		4.4
Operating income		106,089		8.2			125,361		9.6
Interest (income), net		(1,246)		(0.1)			(2,871)		(0.2)
Other (income), net		(895)		(0.1)			(3,984)		(0.3)
Income before income taxes		$108,230		8.4			$132,216		10.1
Provision for income taxes		28,211		2.2			35,516		2.7
Net income		$80,019		6.2	%		$96,700		7.4	%
Net income per basic share		$0.42					$0.50
Net income per diluted share		$0.41					$0.49
Weighted average common shares outstanding - basic		191,630					195,343
Weighted average common shares outstanding - diluted		195,782					198,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; Dollars and shares in thousands, except per share amounts)
		GAAP Basis
		39 Weeks Ended
		November 2, 2024									October 28, 2023
		(In thousands)				(Percentage of revenue)					(In thousands)				(Percentage of revenue)
Total net revenue		$	3,724,019			100.0			%		$	3,582,859				100.0		%
Cost of sales, including certain buying, occupancy and warehouse expenses			2,234,260				60.0					2,172,867				60.6
Gross profit			1,489,759				40.0					1,409,992				39.4
Selling, general and administrative expenses			1,030,186				27.7					1,006,210				28.1
Impairment, restructuring, and other charges			17,561				0.4					21,275				0.6
Depreciation and amortization expense			156,978				4.2					169,026				4.7
Operating income			285,034				7.7					213,481				6.0
Interest (income), net			(5,414	)			(0.1	)				(1,229	)			0.0
Other (income), net			(4,006	)			(0.1	)				(9,446	)			(0.3	)
Income before income taxes		$	294,454				7.9				$	224,156				6.3
Provision for income taxes			69,420				1.9					60,434				1.7
Net income		$	225,034				6.0		%		$	163,722				4.6		%
Net income per basic share		$	1.16								$	0.84
Net income per diluted share		$	1.14								$	0.83
Weighted average common shares outstanding - basic			193,908									195,467
Weighted average common shares outstanding - diluted			198,201									197,969

 

 

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
NET REVENUE BY SEGMENT
(Unaudited; Dollars in thousands)
	13 Weeks Ended								39 Weeks Ended
	November 2, 2024				October 28, 2023				November 2, 2024				October 28, 2023
Net Revenue:
American Eagle	$	831,914			$	857,378			$	2,384,295			$	2,295,487
Aerie		410,442				393,042				1,198,741				1,132,537
Other		56,562				111,805				169,002				329,480
Intersegment Elimination		(9,824	)			(61,170	)			(28,019	)			(174,645	)
Total Net Revenue	$	1,289,094			$	1,301,055			$	3,724,019			$	3,582,859

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
STORE INFORMATION
(Unaudited)
	13 Weeks Ended				39 Weeks Ended
	November 2, 2024				November 2, 2024
Consolidated stores at beginning of period		1,178				1,182
Consolidated stores opened during the period
AE Brand (1)		8				14
Aerie (incl. OFFL/NE) (2)		7				17
Todd Snyder		2				4
Consolidated stores closed during the period
AE Brand (1)		(6	)			(20	)
Aerie (incl. OFFL/NE) (2)		(3	)			(10	)
Unsubscribed		—				(1	)
Total consolidated stores at end of period		1,186				1,186
Stores by Brand
AE Brand (1)		845
Aerie (incl. OFFL/NE) (2)		317
Todd Snyder		19
Unsubscribed		5
Total consolidated stores at end of period		1,186
Total gross square footage at end of period (in '000)		7,282				7,282
International license locations at end of period (3)		310				310
(1) AE Brand includes AE stand alone locations, AE/Aerie side-by side locations, AE/OFFL/NE side-by-side locations, and AE/Aerie/OFFL/NE side-by-side locations.
(2) Aerie (incl. OFFL/NE) includes Aerie stand alone locations, OFFL/NE stand alone locations, and Aerie/OFFL/NE side-by-side locations.
(3) International license locations (retail stores and concessions) are not included in the consolidated store data or the total gross square footage calculation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
		13 Weeks Ended
		November 2, 2024
		Operating Income				Provision for Income Taxes				Net Income				Earnings per Diluted Share
GAAP Basis		$	106,089			$	28,211			$	80,019			$	0.41
% of Revenue			8.2	%							6.2	%
Add: Impairment, restructuring and other charges (1)		$	17,561							$	12,983			$	0.07
Tax effect of the above (2)						$	4,578
Non-GAAP Basis		$	123,650			$	32,789			$	93,002			$	0.48
% of Revenue			9.6	%							7.3	%

 

The following footnotes relate to the impairment, restructuring, and other charges recorded in the 13 weeks ended November 2, 2024:

 

(1) The Company recorded restructuring costs of $10.7 million related to employee severance, as well as impairment and restructuring costs of $6.8 million related to the pending sale of its Hong Kong retail operations to a third party buyer.

 

(2) The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and an adjusted non-GAAP basis.

 

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GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
		39 Weeks Ended
		November 2, 2024
		Operating Income				Provision for Income Taxes				Net Income				Earnings per Diluted Share
GAAP Basis		$	285,034			$	69,420			$	225,034			$	1.14
% of Revenue			7.7	%							6.0	%
Add: Impairment, restructuring and other charges (1)		$	17,561							$	12,983			$	0.06
Tax effect of the above (2)						$	4,578
Non-GAAP Basis		$	302,595			$	73,998			$	238,017			$	1.20
% of Revenue			8.1	%							6.4	%

 

The following footnotes relate to the impairment, restructuring, and other charges recorded in the 39 weeks ended November 2, 2024:

 

(1) The Company recorded restructuring costs of $10.7 million related to employee severance, as well as impairment and restructuring costs of $6.8 million related to the pending sale of its Hong Kong retail operations to a third party buyer.

 

(2) The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and an adjusted non-GAAP basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GAAP to Non-GAAP Reconciliation
Fiscal 2024 Guidance
(Dollars in millions)
	Operating
	Income
	Low End			High End
GAAP Basis	$	410		$	415
Add: Impairment, Restructuring and Other Charges(1)	$	18		$	18
Non-GAAP Basis	$	428		$	433

 

(1) During the 13 weeks ended November 2, 2024, the Company recorded restructuring costs of $10.7 million related to employee severance, as well as impairment and restructuring costs of $6.8 million related to the pending sale of its Hong Kong retail operations to a third party buyer.

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GAAP to Non-GAAP Reconciliation
53 Weeks Ended February 3, 2024
(Dollars in thousands)
		Operating
		Income
GAAP Basis		$	222,717
% of Revenue			4.2	%
Add: Impairment, Restructuring and Other Charges		$	152,645
Non-GAAP Basis		$	375,362
% of Revenue			7.1	%

 

The Fiscal 2023 adjustments relate to certain inventory provisions, asset impairments, restructuring and other charges recognized in relation to Quiet Platforms, as well as the company’s international and corporate operations. Please refer to Note 16. “Impairment, Restructuring and Other Charges,” to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2024 for further information on the nature of these amounts.

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v3.24.3

Document And Entity Information	Dec. 04, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 04, 2024
Entity Registrant Name	AMERICAN EAGLE OUTFITTERS INC
Entity Central Index Key	0000919012
Entity Emerging Growth Company	false
Entity File Number	1-33338
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-2721761
Entity Address, Address Line One	77 Hot Metal Street
Entity Address, City or Town	Pittsburgh
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15203-2329
City Area Code	(412)
Local Phone Number	432-3300
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	AEO
Security Exchange Name	NYSE

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