AEO 8-K
American Eagle Outfitters Inc (AEO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(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:
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Trading |
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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 29, 2024, 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 4, 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 |
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Description |
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104 |
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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.
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AMERICAN EAGLE OUTFITTERS, INC. |
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(Registrant) |
Date: |
May 29, 2024 |
By: |
/s/ Michael A. Mathias |
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Michael A. Mathias |
Exhibit 99.1
AEO Inc. Reports First Quarter Fiscal 2024 Results Reflecting Strong Execution on Powering Profitable Growth Strategy
May 29, 2024
PITTSBURGH -- (BUSINESS WIRE) – 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:
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.
CONTACT:
Line Media
412-432-3300
AMERICAN EAGLE OUTFITTERS, INC. |
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CONSOLIDATED BALANCE SHEETS |
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(unaudited) |
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(In thousands) |
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May 4, 2024 |
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April 29, 2023 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
300,518 |
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$ |
117,841 |
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Merchandise inventory |
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681,062 |
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624,851 |
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Accounts receivable, net |
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230,934 |
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259,074 |
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Prepaid expenses and other |
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98,803 |
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127,735 |
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Total current assets |
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1,311,317 |
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1,129,501 |
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Operating lease right-of-use assets |
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1,123,649 |
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1,053,938 |
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Property and equipment, at cost, net of accumulated depreciation |
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703,551 |
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762,433 |
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Goodwill, net |
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225,253 |
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264,896 |
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Non-current deferred income taxes |
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89,332 |
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13,034 |
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Intangible assets, net |
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45,178 |
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92,399 |
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Other assets |
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58,937 |
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57,693 |
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Total assets |
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$ |
3,557,217 |
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$ |
3,373,894 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
225,480 |
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$ |
212,318 |
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Current portion of operating lease liabilities |
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303,603 |
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321,430 |
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Accrued compensation and payroll taxes |
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64,502 |
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43,550 |
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Unredeemed gift cards and gift certificates |
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57,373 |
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57,014 |
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Accrued income and other taxes |
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50,716 |
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13,812 |
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Other current liabilities and accrued expenses |
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71,655 |
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68,313 |
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Total current liabilities |
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773,329 |
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716,437 |
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Non-current liabilities: |
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Non-current operating lease liabilities |
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1,002,529 |
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987,048 |
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Long-term debt, net |
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— |
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30,225 |
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Other non-current liabilities |
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29,003 |
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21,168 |
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Total non-current liabilities |
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1,031,532 |
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1,038,441 |
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Commitments and contingencies |
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— |
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— |
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Stockholders’ equity: |
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Preferred stock |
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— |
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— |
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Common stock |
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2,496 |
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2,496 |
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Contributed capital |
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345,922 |
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324,396 |
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Accumulated other comprehensive loss |
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(15,722 |
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(26,777 |
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Retained earnings |
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2,267,785 |
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2,130,108 |
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Treasury stock |
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(848,125 |
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(811,207 |
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Total stockholders’ equity |
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1,752,356 |
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1,619,016 |
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Total liabilities and stockholders’ equity |
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$ |
3,557,217 |
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$ |
3,373,894 |
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Current Ratio |
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1.70 |
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1.58 |
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AMERICAN EAGLE OUTFITTERS, INC. |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Dollars and shares in thousands, except per share amounts) |
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(unaudited) |
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13 Weeks Ended |
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May 4, 2024 |
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April 29, 2023 |
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(In thousands) |
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(Percentage of revenue) |
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(In thousands) |
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(Percentage of revenue) |
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Total net revenue |
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$1,143,867 |
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100.0 |
% |
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$1,080,926 |
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100.0 |
% |
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Cost of sales, including certain buying, occupancy and warehouse expenses |
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679,628 |
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59.4 |
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667,747 |
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61.8 |
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Gross profit |
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464,239 |
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40.6 |
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413,179 |
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38.2 |
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Selling, general and administrative expenses |
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333,493 |
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29.2 |
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312,345 |
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28.9 |
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Impairment and restructuring charges |
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- |
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0.0 |
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21,275 |
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2.0 |
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Depreciation and amortization expense |
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52,910 |
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4.6 |
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56,728 |
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5.2 |
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Operating income |
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77,836 |
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6.8 |
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22,831 |
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2.1 |
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Interest (income) expense, net |
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(3,439) |
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(0.3) |
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690 |
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0.1 |
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Other (income), net |
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(1,396) |
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(0.1) |
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(3,311) |
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(0.3) |
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Income before income taxes |
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$82,671 |
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7.2 |
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$25,452 |
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2.3 |
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Provision for income taxes |
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14,919 |
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1.3 |
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6,999 |
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0.6 |
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Net income |
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$67,752 |
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5.9 |
% |
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$18,453 |
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1.7 |
% |
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Net income per basic share |
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$0.34 |
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$0.09 |
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Net income per diluted share |
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$0.34 |
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$0.09 |
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Weighted average common shares outstanding - basic |
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196,429 |
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194,487 |
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Weighted average common shares outstanding - diluted |
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201,310 |
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197,160 |
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GAAP to Non-GAAP Reconciliation |
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(Dollars in thousands, except per share amounts) |
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13 Weeks Ended |
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April 29, 2023 |
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Operating Income |
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Provision for Income Taxes |
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Net Income |
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Earnings per Diluted Share |
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GAAP Basis |
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$ |
22,831 |
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$ |
6,999 |
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$ |
18,453 |
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$ |
0.09 |
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% of Revenue |
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2.1 |
% |
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1.7% |
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Add: Impairment, restructuring and other charges (1) |
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$ |
21,275 |
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$ |
15,424 |
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$ |
0.08 |
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Tax effect of the above (2) |
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$ |
5,851 |
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Non-GAAP Basis |
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$ |
44,106 |
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$ |
12,850 |
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$ |
33,877 |
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$ |
0.17 |
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% of Revenue |
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4.1 |
% |
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3.1 |
% |
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The following footnotes relate to impairment, restructuring, and other charges recorded in the 13 weeks ended April 29, 2023:
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. |
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NET REVENUE BY SEGMENT |
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(unaudited) |
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13 Weeks Ended |
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(In thousands) |
May 4, 2024 |
April 29, 2023 |
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Net Revenue: |
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American Eagle |
$ |
724,744 |
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$ |
671,092 |
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Aerie |
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372,652 |
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359,082 |
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Other |
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54,984 |
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109,357 |
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Intersegment Elimination |
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(8,513 |
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(58,605 |
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Total Net Revenue |
$ |
1,143,867 |
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$ |
1,080,926 |
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AMERICAN EAGLE OUTFITTERS, INC. |
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STORE INFORMATION |
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(unaudited) |
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13 Weeks Ended |
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May 4, 2024 |
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Consolidated stores at beginning of period |
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1,182 |
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Consolidated stores opened during the period |
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AE Brand (1) |
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3 |
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Aerie (incl. OFFL/NE) (2) |
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1 |
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Todd Snyder |
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- |
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Unsubscribed |
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- |
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Consolidated stores closed during the period |
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AE Brand (1) |
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(8 |
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Aerie (incl. OFFL/NE) (2) |
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(4 |
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Unsubscribed |
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(1 |
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Total consolidated stores at end of period |
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1,173 |
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Stores by Brand |
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AE Brand (1) |
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846 |
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Aerie (incl. OFFL/NE) (2) |
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307 |
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Todd Snyder |
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15 |
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Unsubscribed |
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5 |
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Total consolidated stores at end of period |
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1,173 |
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Total gross square footage at end of period (in '000) |
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7,221 |
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International license locations at end of period (3) |
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315 |
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(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. |
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(2) Aerie (incl. OFFL/NE) includes Aerie stand alone locations, OFFL/NE stand alone locations, and Aerie/OFFL/NE side-by-side locations. |
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(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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