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): August 29, 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 August 29, 2024, American Eagle Outfitters, Inc. (the “Company”) issued a press release announcing, among other things, the Company’s financial results for the second quarter ended August 3, 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 August 29, 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:	August 29, 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 Record Second Quarter Revenue and Meaningful Operating Margin Expansion; Updates Full-Year Operating Income Outlook to the High-End of Prior Guidance

August 29, 2024

PITTSBURGH -- (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the second quarter fiscal 2024 ended August 3, 2024.

“Our Powering Profitable Growth strategy is off to a great start, locking in a strong first half and setting us on track to achieve the high end of our prior operating profit outlook for 2024. The second quarter marked our sixth consecutive quarter of record revenue and we successfully leveraged our cost base – advancing a number of strategic priorities to fuel growth across brands and channels and drive operating efficiencies,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

“I am pleased with the positive reception we’ve seen to our early Fall collections. Our winning formula of outstanding quality and style offered at a great value remains a cornerstone of our brands, positioning us perfectly for today’s consumers. In a dynamic macroeconomic environment, we will remain disciplined and focused on delivering profitable growth and long-term shareholder value,” he continued.

Second Quarter 2024 Results:

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Inventory

Total ending inventory increased 4% to $664 million. Inventory levels are healthy and well positioned for the balance of the season.

Shareholder Returns

In the second quarter, the company returned $120 million in cash to shareholders, bringing year-to-date returns to $180 million. This included 4.5 million shares repurchased in the second quarter for $96 million, bringing year-to-date repurchases to 6 million shares and $131 million. The company continues to have 24 million shares remaining for repurchase under the current authorization.

Additionally, the company paid a quarterly cash dividend of $0.125 per share, or approximately $24 million, bringing year-to-date cash dividends to $49 million.

Capital Expenditures

Capital expenditures totaled $61 million in the second quarter and $97 million year-to-date. For fiscal 2024, management continues to expect capital expenditures to approximate $200 to $250 million.

Outlook

For the third quarter, the company expects operating income to be in the range of $120 to $125 million. This reflects approximately $20 million of profit that shifted into the second quarter from the third quarter, due to the retail calendar. The company expects comparable sales to increase

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in the range of 3% to 4%, with total revenue flat to up slightly, also reflecting the impact from the retail calendar. SG&A is expected to leverage, with dollars down slightly, driven by efficiencies across key focus areas.

For the year, the company is updating its operating income outlook to $455 to $465 million, the high end of prior guidance. The company expects comparable sales to increase approximately 4%, with total revenue up 2% to 3%, including the impact from one less selling week, as previously discussed.

Webcast and Supplemental Financial Information

Management will host a conference call and real time webcast today at 11:00 am 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 offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle® and Aerie® brands. Our purpose is to show the world that there’s REAL power in the optimism of youth. The company operates stores in the United States, Canada, Mexico and Hong Kong and ships to approximately 80 countries worldwide through its websites. American Eagle and Aerie merchandise also is available at more than 300 international locations operated by licensees in approximately 30 countries. To learn more about AEO and the company’s commitment to Planet, People and Practices, please visit www.aeo-inc.com.

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, third 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,

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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; 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)
		August 3, 2024				July 29, 2023
Assets
Current assets:
Cash and cash equivalents		$	191,837			$	175,315
Merchandise inventory			663,659				636,972
Accounts receivable, net			231,750				271,333
Prepaid expenses and other			161,199				117,871
Total current assets			1,248,445				1,201,491
Operating lease right-of-use assets			1,153,354				1,038,505
Property and equipment, at cost, net of accumulated depreciation			722,193				758,736
Goodwill, net			225,213				264,964
Non-current deferred income taxes			87,245				21,990
Intangible assets, net			44,241				90,312
Other assets			59,625				55,909
Total assets		$	3,540,316			$	3,431,907
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	259,734			$	238,660
Current portion of operating lease liabilities			307,570				309,517
Accrued compensation and payroll taxes			55,441				74,509
Unredeemed gift cards and gift certificates			51,791				51,156
Accrued income and other taxes			41,631				17,372
Other current liabilities and accrued expenses			78,219				71,262
Total current liabilities			794,386				762,476
Non-current liabilities:
Non-current operating lease liabilities			1,015,455				970,862
Long-term debt, net			—				3,225
Other non-current liabilities			36,109				22,345
Total non-current liabilities			1,051,564				996,432
Commitments and contingencies			—				—
Stockholders’ equity:
Preferred stock			—				—
Common stock			2,496				2,496
Contributed capital			353,608				334,447
Accumulated other comprehensive loss			(39,271	)			(11,566	)
Retained earnings			2,320,348				2,158,294
Treasury stock			(942,815	)			(810,672	)
Total stockholders’ equity			1,694,366				1,672,999
Total liabilities and stockholders’ equity		$	3,540,316			$	3,431,907
Current Ratio			1.57				1.58

 

 

 

 

 

 

 

 

 

 

 

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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
		August 3, 2024					July 29, 2023
		(In thousands)		(Percentage of revenue)			(In thousands)		(Percentage of revenue)
Total net revenue		$1,291,058		100.0	%		$1,200,879		100.0	%
Cost of sales, including certain buying, occupancy and warehouse expenses		792,162		61.4			747,863		62.3
Gross profit		498,896		38.6			453,016		37.7
Selling, general and administrative expenses		345,313		26.7			331,872		27.6
Depreciation and amortization expense		52,474		4.1			55,854		4.7
Operating income		101,109		7.8			65,290		5.4
Interest (income) expense, net		(730)		(0.1)			951		0.1
Other (income), net		(1,715)		(0.1)			(2,150)		(0.2)
Income before income taxes		$103,554		8.0			$66,489		5.5
Provision for income taxes		26,290		2.0			17,919		1.5
Net income		$77,264		6.0	%		$48,570		4.0	%
Net income per basic share		$0.40					$0.25
Net income per diluted share		$0.39					$0.25
Weighted average common shares outstanding - basic		193,661					195,329
Weighted average common shares outstanding - diluted		197,757					196,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; Dollars and shares in thousands, except per share amounts)
		GAAP Basis
		26 Weeks Ended
		August 3, 2024									July 29, 2023
		(In thousands)				(Percentage of revenue)					(In thousands)				(Percentage of revenue)
Total net revenue		$	2,434,925			100.0			%		$	2,281,805				100.0		%
Cost of sales, including certain buying, occupancy and warehouse expenses			1,471,791				60.5					1,415,610				62.0
Gross profit			963,134				39.5					866,195				38.0
Selling, general and administrative expenses			678,806				27.9					644,217				28.2
Impairment, restructuring, and other charges			-				0.0					21,275				1.0
Depreciation and amortization expense			105,384				4.3					112,582				4.9
Operating income			178,944				7.3					88,121				3.9
Interest (income) expense, net			(4,168	)			(0.2	)				1,642				0.1
Other (income), net			(3,111	)			(0.1	)				(5,461	)			(0.2	)
Income before income taxes		$	186,223				7.6				$	91,940				4.0
Provision for income taxes			41,209				1.6					24,918				1.1
Net income		$	145,014				6.0		%		$	67,022				2.9		%
Net income per basic share		$	0.74								$	0.34
Net income per diluted share		$	0.73								$	0.34
Weighted average common shares outstanding - basic			195,048									195,214
Weighted average common shares outstanding - diluted			199,406									196,822

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
NET REVENUE BY SEGMENT
(Unaudited; Dollars in thousands)
	13 Weeks Ended								26 Weeks Ended
	August 3, 2024				July 29, 2023				August 3, 2024				July 29, 2023
Net Revenue:
American Eagle	$	827,638			$	767,018			$	1,552,382			$	1,438,110
Aerie		415,646				380,413				788,298				739,495
Other		57,457				108,318				112,441				217,675
Intersegment Elimination		(9,683	)			(54,870	)			(18,196	)			(113,475	)
Total Net Revenue	$	1,291,058			$	1,200,879			$	2,434,925			$	2,281,805

 

 

 

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AMERICAN EAGLE OUTFITTERS, INC.
STORE INFORMATION
(Unaudited)
	13 Weeks Ended				26 Weeks Ended
	August 3, 2024				August 3, 2024
Consolidated stores at beginning of period		1,173				1,182
Consolidated stores opened during the period
AE Brand (1)		3				6
Aerie (incl. OFFL/NE) (2)		9				10
Todd Snyder		2				2
Unsubscribed		-				-
Consolidated stores closed during the period
AE Brand (1)		(6	)			(14	)
Aerie (incl. OFFL/NE) (2)		(3	)			(7	)
Unsubscribed		-				(1	)
Total consolidated stores at end of period		1,178				1,178
Stores by Brand
AE Brand (1)		843
Aerie (incl. OFFL/NE) (2)		313
Todd Snyder		17
Unsubscribed		5
Total consolidated stores at end of period		1,178
Total gross square footage at end of period (in '000)		7,240				7,240
International license locations at end of period (3)		313				313
(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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Non-GAAP Measures

 

This press release includes information on non-GAAP financial measures (“non-GAAP” or “adjusted”), including consolidated adjusted operating income, excluding non-GAAP items. This financial measure is not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“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. Management believes that this non-GAAP information is useful for an alternate presentation of the company’s performance, when reviewed in conjunction with the company’s 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 the company’s business and operations. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

 

The following table reconciles the GAAP financial measures to the non-GAAP financial measures discussed above. 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.

 

AMERICAN EAGLE OUTFITTERS, INC.
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	%

 

 

 

 

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v3.24.2.u1

Document And Entity Information	Aug. 29, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 29, 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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