- Record first quarter revenue of $1.1 billion, rising 6% to
last year
- Operating profit of $78 million exceeded guidance
- Aerie achieved all-time high first quarter revenue with
comps up 6%
- American Eagle sequentially accelerated, with comps
increasing 7%
American Eagle Outfitters, Inc. (NYSE: AEO) today announced
financial results for the first quarter fiscal 2024 ended May 4,
2024.
“Our strong first quarter results underscore the power of our
iconic brand portfolio and demonstrate great progress on our
Powering Profitable Growth strategy. We achieved record revenue,
amplifying American Eagle’s and Aerie’s leading market positions
and opportunity in casual apparel. We continued to offer exciting
merchandise collections and customer activations, providing
compelling in-store and digital shopping experiences. This,
combined with actions to optimize our operations and drive
efficiencies across the organization, contributed to meaningful
profit expansion, which was ahead of expectations,” commented Jay
Schottenstein, AEO’s Executive Chairman of the Board and Chief
Executive Officer.
“As I look forward, I remain confident in our ability to deliver
on our plans for 2024 and beyond. We have significant runway across
our brands and we continue to execute with discipline as we drive
our business to deliver sustained, profitable growth and returns to
shareholders,” he continued.
First Quarter 2024 Results compared to First Quarter 2023
Results:
- First quarter 2024 results are presented for the 13 weeks ended
May 4, 2024 compared to the 13 weeks ended April 29, 2023.
Comparable sales metrics are presented for the 13 weeks ended May
4, 2024 compared to the 13 weeks ended May 6, 2023.
- Total net revenue of $1.1 billion rose 6%.
- Store revenue rose 4%. Digital revenue increased 12%.
- Aerie revenue of $373 million rose 4%, with comp sales up 6%.
American Eagle revenue of $725 million increased 8%, with comp
sales growing 7%.
- Gross profit of $464 million increased 12%, reflecting a gross
margin rate of 40.6%, expanding 240 basis points. Margin expansion
was driven by strong inventory management, the company’s shift to a
more profitable clearance strategy, lower product and
transportation costs and leverage on expenses including rent,
delivery, and distribution and warehousing.
- Selling, general and administrative expense of $333 million was
up 7%. This was roughly in-line with sales growth and consistent
with our guidance.
- Operating income of $78 million, compared to GAAP operating
income of $23 million and adjusted operating income of $44 million
last year. Compared to last year’s adjusted result, operating
income increased 76% and the operating margin of 6.8% expanded 270
basis points.
- Diluted earnings per share of $0.34. Average diluted shares
outstanding were 201 million.
Inventory
Total ending inventory increased 9% to $681 million, with units
up 10%. Ending inventory includes higher end of season merchandise
due to the company’s shift to a more profitable clearance strategy.
Inventory levels are healthy and well positioned to fuel growth
initiatives.
Shareholder Returns
In the first quarter, the company returned approximately $60
million in cash to shareholders.
This included the repurchase of 1.5 million shares for
approximately $35 million. The company continues to have 28.5
million shares remaining for repurchase under the current
authorization.
Additionally, the company paid a quarterly cash dividend of
$0.125 per share, or approximately $25 million.
Capital Expenditures
Capital expenditures totaled $36 million in the first quarter.
For fiscal 2024, management continues to expect capital
expenditures to approximate $200 to $250 million.
Outlook
For fiscal 2024, management continues to expect operating income
in the range of $445 to $465 million. This reflects revenue up 2 to
4% to last year, including an approximately one point headwind from
one less selling week due to the retail calendar shift.
For the second quarter, management expects operating income in
the range of $95 to $100 million. This reflects revenue up
high-single digits, including an approximately $55 million positive
impact from the retail calendar shift.
Webcast and Supplemental Financial Information
Management will host a conference call and real time webcast
today at 4:30 pm 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.
Non-GAAP Measures
This release includes information on non-GAAP financial measures
(“non-GAAP” or “adjusted”), including adjusted operating income for
first quarter fiscal 2023. These financial measures are 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 tables included in this release reconcile the GAAP financial
measures to the non-GAAP financial measures discussed above.
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, second 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; 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.
AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED BALANCE
SHEETS (unaudited) (In thousands) May 4, 2024 April 29, 2023
Assets Current assets: Cash and cash equivalents
$
300,518
$
117,841
Merchandise inventory
681,062
624,851
Accounts receivable, net
230,934
259,074
Prepaid expenses and other
98,803
127,735
Total current assets
1,311,317
1,129,501
Operating lease right-of-use assets
1,123,649
1,053,938
Property and equipment, at cost, net of accumulated depreciation
703,551
762,433
Goodwill, net
225,253
264,896
Non-current deferred income taxes
89,332
13,034
Intangible assets, net
45,178
92,399
Other assets
58,937
57,693
Total assets
$
3,557,217
$
3,373,894
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable
$
225,480
$
212,318
Current portion of operating lease liabilities
303,603
321,430
Accrued compensation and payroll taxes
64,502
43,550
Unredeemed gift cards and gift certificates
57,373
57,014
Accrued income and other taxes
50,716
13,812
Other current liabilities and accrued expenses
71,655
68,313
Total current liabilities
773,329
716,437
Non-current liabilities: Non-current operating lease liabilities
1,002,529
987,048
Long-term debt, net
—
30,225
Other non-current liabilities
29,003
21,168
Total non-current liabilities
1,031,532
1,038,441
Commitments and contingencies
—
—
Stockholders’ equity: Preferred stock
—
—
Common stock
2,496
2,496
Contributed capital
345,922
324,396
Accumulated other comprehensive loss
(15,722
)
(26,777
)
Retained earnings
2,267,785
2,130,108
Treasury stock
(848,125
)
(811,207
)
Total stockholders’ equity
1,752,356
1,619,016
Total liabilities and stockholders’ equity
$
3,557,217
$
3,373,894
Current Ratio
1.70
1.58
AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS
OF OPERATIONS (Dollars and shares in thousands, except per
share amounts) (unaudited) 13 Weeks Ended May 4, 2024 April 29,
2023 (In thousands) (Percentage ofrevenue) (In thousands)
(Percentage ofrevenue) Total net revenue
$
1,143,867
100.0
%
$
1,080,926
100.0
%
Cost of sales, including certain buying, occupancy and warehouse
expenses
679,628
59.4
667,747
61.8
Gross profit
464,239
40.6
413,179
38.2
Selling, general and administrative expenses
333,493
29.2
312,345
28.9
Impairment and restructuring charges
-
0.0
21,275
2.0
Depreciation and amortization expense
52,910
4.6
56,728
5.2
Operating income
77,836
6.8
22,831
2.1
Interest (income) expense, net
(3,439
)
(0.3 )
690
0.1
Other (income), net
(1,396
)
(0.1 )
(3,311
)
(0.3 )
Income before income taxes
$
82,671
7.2
$
25,452
2.3
Provision for income taxes
14,919
1.3
6,999
0.6
Net income
$
67,752
5.9
%
$
18,453
1.7
%
Net income per basic share
$
0.34
$
0.09
Net income per diluted share
$
0.34
$
0.09
Weighted average common shares outstanding - basic
196,429
194,487
Weighted average common shares outstanding - diluted
201,310
197,160
AMERICAN EAGLE OUTFITTERS, INC. GAAP to Non-GAAP
Reconciliation (Dollars in thousands, except per share amounts)
13 Weeks Ended April 29, 2023
OperatingIncome Provision
forIncome Taxes NetIncome Earnings perDiluted
Share GAAP Basis
$
22,831
$
6,999
$
18,453
$
0.09
% of Revenue
2.1
%
1.7
%
Add: Impairment, restructuring and other charges (1)
$
21,275
$
15,424
$
0.08
Tax effect of the above (2)
$
5,851
Non-GAAP Basis
$
44,106
$
12,850
$
33,877
$
0.17
% of Revenue
4.1
%
3.1
%
The following footnotes relate to impairment, restructuring, and
other charges recorded in the 13 weeks ended April 29, 2023:
(1) $21.3 million of charges related to Quiet Platforms
restructuring:
- $10.8 million of long-term asset impairment primarily related
to technology, which is no longer a part of the long-term
strategy
- $5.6 million of severance based on this revised strategy
- $4.9 million of contract related charges
All impairments were recorded due to insufficient prospective
cash flows to support the asset value.
(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.
AMERICAN EAGLE OUTFITTERS, INC. NET REVENUE BY
SEGMENT (unaudited) 13 Weeks Ended (In thousands) May 4, 2024
April 29, 2023 Net Revenue: American Eagle
$
724,744
$
671,092
Aerie
372,652
359,082
Other
54,984
109,357
Intersegment Elimination
(8,513
)
(58,605
)
Total Net Revenue
$
1,143,867
$
1,080,926
AMERICAN EAGLE OUTFITTERS, INC. STORE INFORMATION
(unaudited) 13 Weeks Ended May 4, 2024 Consolidated stores at
beginning of period
1,182
Consolidated stores opened during the period AE Brand (1)
3
Aerie (incl. OFFL/NE) (2)
1
Todd Snyder
-
Unsubscribed
-
Consolidated stores closed during the period AE Brand (1)
(8
)
Aerie (incl. OFFL/NE) (2)
(4
)
Unsubscribed
(1
)
Total consolidated stores at end of period
1,173
Stores by Brand AE Brand (1)
846
Aerie (incl. OFFL/NE) (2)
307
Todd Snyder
15
Unsubscribed
5
Total consolidated stores at end of period
1,173
Total gross square footage at end of period (in '000)
7,221
International license locations at end of period (3)
315
(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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version on businesswire.com: https://www.businesswire.com/news/home/20240529020707/en/
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