8-K

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)

May 26, 2021

AMERICAN EAGLE OUTFITTERS, INC.

(Exact name of Registrant as Specified in Its Charter)

Delaware	1-33338	13-2721761
(State or Other Jurisdiction<br><br><br>of Incorporation)	(Commission File Number)	(IRS Employer<br><br><br>Identification No.)
77 Hot Metal Street,<br><br><br>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 (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading<br><br><br>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. ☐

ITEM 2.02

Results of Operations and Financial Condition

On May 26, 2021, American Eagle Outfitters, Inc. (the “Company”) issued a press release announcing, among other things, the Company’s financial results for the first quarter ended May 1, 2021. A copy of this press release is attached hereto as Exhibit 99.1.<br><br><br>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.<br><br><br>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 January 30, 2021, 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<br><br><br>Number	Description
99.1	Press release dated May 26, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: May 26, 2021By: /s/ Michael A. Mathias

Michael A. Mathias

Executive Vice President, Chief Financial Officer

2

aeo-ex991_6.htm

Exhibit 99.1

American Eagle Outfitters Reports Record First Quarter Revenue and Operating Income, Exceeding Expectations with Positive Growth Across Brands -- Results Reflect Excellent Execution on the “Real Power. Real Growth.” Value Creation Plan

May 26, 2021

First quarter 2021 compared to first quarter 2019:

•	Business accelerated across brands, delivering all-time high first quarter revenue of $1.03 billion; and record operating income of $133 million, rising 177% from operating income of $48 million
•	Strong full-priced sales fueled gross margin expansion of 550 basis points to 42.2%
---	---
•	Aerie revenue rose 89%; operating income up 747% reflecting an operating margin of 23.5%
---	---
•	American Eagle revenue up slightly; operating income up 39% reflecting an operating margin of 20.8%
---	---
•	Digital momentum continued with revenue up 57% including Aerie up 158% and AE up 20%
---	---
•	Second quarter-to-date business momentum has accelerated
---	---

PITTSBURGH -- (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the first quarter ended May 1, 2021. Due to the significant impact COVID-19 had on fiscal 2020 financial results, first quarter fiscal 2021 results are compared to the first quarter of fiscal 2019, which management believes is a more meaningful comparison.

“Our first quarter results were truly outstanding and reflected excellent progress on our “Real Power. Real Growth.” value creation plan in addition to favorable external factors. Demand for Aerie’s product and powerful brand platform continued at a rapid pace, which drove significantly higher sales, margins, and profitability. The American Eagle initiatives to reignite the brand, optimize inventory, and reduce promotions resulted in a meaningful recovery in margins, with more runway ahead. I am extremely pleased with how our teams are executing across all functions, from our customer-facing priorities through our supply chain initiatives. We have been well positioned to meet higher demand for our products and have

exceled in managing all facets of our business. We remain poised for success, and our brands are stronger than ever. I believe we are on pace to deliver our 2023 operating profit target well ahead of schedule,” said Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

First Quarter 2021 Results Compared to the First Quarter of 2019

•	Total net revenue increased $148 million, or 17% to $1.03 billion, compared to $0.89 billion in the first quarter of 2019.
•	Aerie revenue increased 89% to $297 million. American Eagle revenue increased slightly to $728 million.
---	---
•	AEO’s digital revenue increased 57%.  Store revenue was flat, due to COVID-19 related traffic pressure and store closures in Canada. US store revenue increased in the quarter.
---	---
•	Gross profit of $436 million rose 34% from $325 million in the first quarter of 2019. Gross margin expanded 550 basis points to 42.2% from 36.7%. The increase reflected significantly higher merchandise margins across brands, primarily due to higher full-priced sales, lower promotions and inventory optimization initiatives.  Lower rent expense also benefited gross margin for the quarter. This was partly offset by higher delivery and distribution center costs, due to increased digital mix and higher shipment costs, as well as increased performance-based incentive compensation.
---	---
•	Selling, general and administrative expense leveraged 40 basis points as a rate to sales, due to strong revenue growth. The dollar increase of $34 million from 2019, was due to performance-based incentive compensation, an increase in corporate salaries and higher variable selling expenses, partly offset by lower travel expense.
---	---
•	Depreciation and amortization expense of $38 million decreased $7 million from $45 million in the first quarter of 2019, leveraging 140 basis points, due to strong revenue growth, asset impairments, as well as lower capital spending in 2020.
---	---
•	Operating income of $133 million compared to operating income of $48M and adjusted operating income of $49 million in the first quarter of 2019.  On an adjusted basis, the operating margin expanded 730 basis points to 12.9%, the highest rate since 2007. Aerie’s operating income increased 747% to $70 million from $8 million reflecting a 23.5% operating margin.  American Eagle operating income increased 39% to $151 million compared to $109 million reflecting a 20.8% operating margin
---	---
•	Average diluted shares outstanding were 207 million compared to 174 million in first quarter 2019.  The increase primarily reflected 34 million shares of unrealized dilution associated with the company’s convertible notes.
---	---
•	EPS of $0.46 this year compared to EPS of $0.23 in the first quarter of 2019.  Adjusted EPS of $0.48 this year excluded $0.02 of non-cash interest expense on the company’s convertible notes.  Adjusted EPS of $0.24 in first quarter of 2019 excluded $0.01 of restructuring charges.
---	---

Inventory

Total consolidated ending inventory at cost increased $11 million or 2% to $467 million compared to 2019. The increase was due to higher inventory for Aerie to support strong demand, assortment expansion and

new store growth.  For the American Eagle brand, inventory declined due to inventory optimization initiatives and lower clearance levels.

Capital Expenditures

In the first quarter of 2021, capital expenditures totaled $37 million. For fiscal 2021, the company expects capital expenditures to be in the range of $250 to $275 million, prioritizing strategic customer-facing and supply chain investments.

Cash Flow and Balance Sheet

The company ended the period with total cash and short-term investments of $792 million, an increase from $350 million in first quarter 2019.  The quarter-end cash balance included $406 million in proceeds from the April 2020 convertible notes offering.

Conference Call and Supplemental Financial Information

Today, management will host a conference call and real time webcast at 4:30 p.m. 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.

Non-GAAP Measures

This press release includes information on non-GAAP financial measures (“non-GAAP” or “adjusted”), including consolidated adjusted operating income and earnings per share, excluding non-GAAP items. 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, as it helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude in such non-GAAP measures. Accordingly, we believe that adjusted operating income provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making.

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.

* * * *

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 81 countries worldwide through its websites. American Eagle and Aerie merchandise also

is available at more than 200 international locations operated by licensees in 33 countries. For more information, 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 our expectations or beliefs concerning future events, including second quarter 2021 results. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on many important factors, some of which may be beyond the company’s control. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," “potential,” and similar expressions may identify forward-looking statements. 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 January 30, 2021 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 for fiscal 2021 and beyond 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 negative impacts of the COVID-19 pandemic and related operational disruptions; 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.

CONTACT:

Olivia Messina

412-432-3300

~~LineMedia@ae.com~~

AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
ASSETS
Cash and cash equivalents		716,679			855,769			304,671
Short-term investments		75,000			29,956			45,000
Merchandise inventory		466,698			421,729			456,160
Accounts receivable		149,056			106,751			73,836
Prepaid expenses and other		88,347			144,733			70,936
Total current assets		1,495,780			1,558,938			950,603
Property and equipment, net		627,967			667,258			744,670
Operating lease right-of-use assets		1,130,743			1,292,769			1,444,225
Intangible assets, including goodwill		69,696			51,973			57,221
Non-current deferred income taxes		45,995			25,612			20,951
Other assets		30,485			33,561			37,683
Total Assets		3,400,666			3,630,111			3,255,353
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable		231,932			177,124			231,760
Current portion of operating lease liabilities		297,561			328,366			266,819
Accrued compensation and payroll taxes		87,488			21,622			29,425
Other current liabilities and accrued expenses		56,498			61,451			54,622
Unredeemed gift cards and gift certificates		50,754			48,503			42,025
Accrued income taxes and other		20,250			2,405			25,146
Dividends payable		-			22,756			-
Total current liabilities		744,483			662,227			649,797
Non-current operating lease liabilities		1,126,165			1,303,296			1,328,663
Long-term debt, net		329,718			642,972			-
Other non-current liabilities		24,737			24,633			35,142
Total non-current liabilities		1,480,620			1,970,901			1,363,805
Commitments and contingencies		-			-			-
Preferred stock		-			-			-
Common stock		2,496			2,496			2,496
Contributed capital		648,434			646,350			570,443
Accumulated other comprehensive loss		(37,810	)		(55,050	)		(35,354	)
Retained earnings		1,951,496			1,826,413			2,028,627
Treasury stock		(1,389,053	)		(1,423,226	)		(1,324,461	)
Total stockholders' equity		1,175,563			996,983			1,241,751
Total Liabilities and Stockholders' Equity		3,400,666			3,630,111			3,255,353
Current Ratio		2.01			2.35			1.46

All values are in US Dollars.

AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)
(unaudited)
				% of						% of						% of
				Revenue						Revenue						Revenue
Total net revenue		1,034,614			100.0	%		551,692			100.0	%		886,290			100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		598,424			57.8	%		523,386			94.9	%		561,369			63.3	%
Gross profit		436,190			42.2	%		28,306			5.1	%		324,921			36.7	%
Selling, general and administrative expenses		264,492			25.6	%		188,197			34.1	%		230,741			26.0	%
Impairment and restructuring charges		-			0.0	%		155,619			28.2	%		1,543			0.2	%
Depreciation and amortization expense		38,271			3.7	%		42,730			7.7	%		44,791			5.1	%
Operating income (loss)		133,427			12.9	%		(358,240	)		-64.9	%		47,846			5.4	%
Interest expense (income), net		8,506			0.8	%		146			0.1	%		(1,954	)		-0.2	%
Other (income) expense, net		(1,860	)		-0.2	%		2,983			0.5	%		(2,228	)		-0.3	%
Income (Loss) before income taxes		126,781			12.3	%		(361,369	)		-65.5	%		52,028			5.9	%
Provision (Benefit) from income taxes		31,318			3.1	%		(104,207	)		-18.9	%		11,276			1.3	%
Net income (loss)		95,463			9.2	%		(257,162	)		-46.6	%		40,752			4.6	%
Net income (loss) per basic share		0.57						(1.54	)					0.24
Net income (loss) per diluted share		0.46						(1.54	)					0.23
Weighted average common shares outstanding - basic		167,257						166,781						172,598
Weighted average common shares outstanding - diluted		206,562						166,781						174,703

All values are in US Dollars.

AMERICAN EAGLE OUTFITTERS, INC.
GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands, except per share amounts)
(unaudited)
		13 Weeks Ended
	May 1, 2021
			Interest Expense, net			Diluted Earnings per Common Share
GAAP Basis			$	8,506		$	0.46
% of Revenue				0.8	%
Less: Convertible debt^(1):^				(4,429	)		0.02
				(4,429	)		0.02
Non-GAAP Basis			$	4,077		$	0.48
% of Revenue				0.4	%
(1) Amortization of the non-cash discount on the Company's convertible notes
AMERICAN EAGLE OUTFITTERS, INC.
---	---	---	---	---
GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands, except per share amounts)
(unaudited)
			Diluted Earnings per Common Share
GAAP Basis	47,846		$	0.23
% of Revenue	5.4	%
Add: Restructuring Charges(1):	1,543			0.01
Non-GAAP Basis	49,389		$	0.24
% of Revenue	5.6	%
(1) - 1.5 million for pre-tax corporate restructuring charges, primarily consisting of severance and closure costs for our company-owned and operated stores in China

All values are in US Dollars.

AMERICAN EAGLE OUTFITTERS, INC.
RESULTS BY SEGEMENT
(Dollars in thousands)
(unaudited)
			Aerie			Corporate^(1)^			Total^(2)^
Total net revenue	727,702		$	297,487		$	9,425		$	1,034,614
Operating Income (loss)	151,232		$	69,978		$	(87,783	)	$	133,427
% of revenue	20.8	%		23.5	%					12.9	%
Capital expenditures	13,439		$	10,819		$	12,548		$	36,806
			Aerie			Corporate^(1)^			Total^(2)^
Total net revenue	390,250		$	154,981		$	6,461		$	551,692
Operating Income (loss)	(213,749	)	$	(19,129	)	$	(125,362	)	$	(358,240	)
% of revenue	-54.8	%		-12.3	%					-64.9	%
Impairment and restructuring charges	90,926		$	18,215		$	46,478		$	155,619
Adjusted Operating Income (loss)	(122,823	)	$	(914	)	$	(78,884	)	$	(202,621	)
% of revenue	-31.5	%		-0.6	%					-36.7	%
Capital expenditures	8,099		$	8,788		$	17,023		$	33,910
			Aerie			Corporate^(1)^			Total^(2)^
Total net revenue	724,613		$	157,035		$	4,642		$	886,290
Operating Income (loss)	109,080		$	8,265		$	(69,499	)	$	47,846
% of revenue	15.1	%		5.3	%					5.4	%
Impairment and restructuring charges	-		$	-		$	1,543		$	1,543
Adjusted Operating Income (loss)	109,080		$	8,265		$	(67,956	)	$	49,389
% of revenue	15.1	%		5.3	%					5.6	%
Capital expenditures	18,551		$	11,575		$	6,447		$	36,573
(1) Corporate includes revenue and operating results of the Todd Snyder and Unsubscribed brands, which are not material to disclose as separate reportable segments. Corporate operating costs represents certain costs that are not directly attributable to another reportable segment.
(2) The difference between Total Operating Income (loss) and Income (loss) before Taxes includes the following, which are not allocated to our reportable segments:<br>       -   Interest expense (income), net of 8.5M in Fiscal 2021, 0.1M in Fiscal 2020 and (2.0M)<br>           in Fiscal 2019<br>       -   Other (income) expense, net of (1.9M) in Fiscal 2021, 3.0M in Fiscal 2020 and (2.2M)<br>           in Fiscal 2019

All values are in US Dollars.

AMERICAN EAGLE OUTFITTERS, INC.
STORE INFORMATION
(unaudited)
	First Quarter
	2021
Consolidated stores at beginning of period		1,078
Consolidated stores opened during the period
AE Brand		4
Aerie stand-alone^(3)^		6
Unsubscribed		1
Consolidated stores closed during the period
AE Brand		(14	)
Aerie stand-alone		(1	)
Total consolidated stores at end of period		1,074
AE Brand		891
Aerie stand-alone^(3)^		179
Aerie side-by-side^(2)^		178
Unsubscribed		2
Todd Snyder		2
Stores remodeled and refurbished during the period		3
Total gross square footage at end of period (in '000)		6,816
International license locations at end of period ^(1)^		236
Aerie Openings
Aerie stand-alone^(3)^		6
Total Aerie side-by-side stores ^(2)^		0
Total Aerie Openings		6
(1) International license locations are not included in the consolidated store data or the total gross square footage calculation.
(2) Aerie side-by-side and Offline side-by-side stores are included in the AE Brand store count as they are considered part of the AE Brand store to which they are attached.
(3) Aerie stand-alone stores include 1 OFFLINE opening during the period and 5 OFFLINE stores in the consolidated totals