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Share Name | Share Symbol | Market | Type |
---|---|---|---|
American Eagle Outfitters Inc | NYSE:AEO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.82 | 3.46% | 24.52 | 24.63 | 23.79 | 24.10 | 2,979,811 | 01:00:00 |
Third Quarter 2021 Highlights Compared to Third Quarter 2020
American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the third quarter ended October 30, 2021.
“As strong demand for our merchandise and brands continues, I’m very pleased to report another quarter of record revenue and profit. The work on our Real Power. Real Growth. value creation plan is driving meaningful improvements to our profitability through real estate and inventory optimization; omni-channel and customer focus; and our supply chain initiatives. The power of our brands, operations and talent are clearly evident and we are intensely focused on ensuring these strengths continue to take AEO to new heights,” said Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.
“This quarter, we took an important next step in our supply chain transformation with the planned acquisition of Quiet Logistics to ensure ongoing efficiencies and procure a state-of-the-art logistics platform with meaningful growth potential. With our customer-first focus, the teams did a great job bringing in goods to meet strong demand this holiday season. I am extremely proud of the team’s ability to execute with precision at a time of volatility and am confident that we will exceed $600 million of operating income for the year, well above the $550 million 2023 target,” Jay continued.
Third Quarter 2021 Results
Inventory Total consolidated ending inventory at cost increased 32% to $740 million compared to a 13% decline last year. The increase was partially driven by higher air freight due to global supply chain disruptions.
Capital Expenditures In the third quarter of 2021, capital expenditures totaled $58 million, and year to date totaled $144 million. For fiscal 2021, the company now expects capital expenditures to be at the low end of our prior guidance range of $250 to $275 million.
Cash Flow and Balance Sheet The company ended the period with total cash of $741 million. This compares to $692 million in third quarter 2020.
Shareholder Returns The company’s third quarter cash dividend of $30 million was paid during the quarter.
Conference Call and Supplemental Financial Information Today, management will host a conference call and real time webcast at 9:30 a.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 fourth quarter and annual fiscal 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.
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
October 30,
January 30,
October 31,
2021
2021
2020
ASSETS Cash and cash equivalents $ 740,668 $ 850,477 $ 692,356 Merchandise inventory 739,808 405,445 559,961 Accounts receivable, net 228,461 146,102 124,560 Prepaid expenses and other 66,593 120,619 130,909 Total current assets 1,775,530 1,522,643 1,507,786 Property and equipment, at cost, net of accumulated depreciation 665,408 623,808 650,397 Operating lease right-of-use assets 1,148,108 1,155,965 1,243,311 Intangible assets net, including goodwill 69,332 70,332 50,864 Non-current deferred income taxes 57,753 33,045 12,774 Other assets 33,884 29,013 33,083 Total Assets $ 3,750,015 $ 3,434,806 $ 3,498,215 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 314,561 $ 255,912 $ 304,552 Current portion of operating lease liabilities 299,693 328,624 346,321 Accrued compensation and payroll taxes 123,588 142,272 117,736 Other current liabilities and accrued expenses 56,090 55,343 47,587 Unredeemed gift cards and gift certificates 42,070 62,181 39,794 Accrued income taxes and other 33,570 14,150 15,503 Dividends payable - - 22,843 Total current liabilities 869,572 858,482 894,336 Non-current operating lease liabilities 1,123,681 1,148,742 1,196,755 Long-term debt, net 336,249 325,290 321,081 Other non-current liabilities 23,816 15,627 17,846 Total non-current liabilities 1,483,746 1,489,659 1,535,682 Commitments and contingencies - - - Preferred stock - - - Common stock 2,496 2,496 2,496 Contributed capital 627,264 663,718 655,891 Accumulated other comprehensive loss (39,049 ) (40,748 ) (44,673 ) Retained earnings 2,185,393 1,868,613 1,865,370 Treasury stock (1,379,407 ) (1,407,414 ) (1,410,887 ) Total stockholders' equity 1,396,697 1,086,665 1,068,197 Total Liabilities and Stockholders' Equity $ 3,750,015 $ 3,434,806 $ 3,498,215 Current Ratio 2.04 1.77 1.69AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)
(unaudited)
GAAP Basis
13 Weeks Ended
October 30,
% of
October 31,
% of
2021
Revenue
2020
Revenue
Total net revenue $1,274,078
100.0
%
$1,031,617
100.0
%
Cost of sales, including certain buying, occupancy and warehousing expenses709,554
55.7
%
616,840
59.8
%
Gross profit564,524
44.3
%
414,777
40.2
%
Selling, general and administrative expenses313,890
24.6
%
273,297
26.5
%
Restructuring and COVID-19 related charges-
0.0
%
6,955
0.6
%
Depreciation and amortization expense40,947
3.2
%
38,974
3.8
%
Operating income (loss)209,687
16.5
%
95,551
9.3
%
Interest expense, net8,612
0.7
%
7,924
0.8
%
Other (income), net(3,130
)
-0.2
%
(2,223
)
-0.2
%
Income (loss) before income taxes204,205
16.0
%
89,850
8.7
%
Provision (benefit) from income taxes51,981
4.1
%
31,742
3.1
%
Net income (loss) $152,224
11.9
%
$58,108
5.6
%
Net income (loss) per basic share $0.91
$
0.35
Net income (loss) per diluted share $
0.74
$
0.32
Weighted average common shares outstanding - basic
167,637
166,185
Weighted average common shares outstanding - diluted
205,013
184,397
GAAP Basis
39 Weeks Ended
October 30,
% of
October 31,
% of
2021
Revenue
2020
Revenue
Total net revenue $3,502,848
100.0
%
$2,466,819
100.0
%
Cost of sales, including certain buying, occupancy and warehousing expenses1,999,743
57.1
%
1,758,537
71.3
%
Gross profit1,503,105
42.9
%
708,282
28.7
%
Selling, general and administrative expenses872,320
24.9
%
685,206
27.8
%
Impairment, restructuring and COVID-19 related charges-
0.0
%
177,186
7.1
%
Depreciation and amortization expense119,674
3.4
%
120,818
4.9
%
Operating income (loss)511,111
14.6
%
(274,928
)
-11.1
%
Interest expense, net26,038
0.7
%
16,617
0.7
%
Other (income), net(6,354
)
-0.2
%
(793
)
0.0
%
Income (loss) before income taxes491,427
14.1
%
(290,752
)
-11.8
%
Provision (benefit) from income taxes122,226
3.6
%
(77,943
)
-3.2
%
Net income (loss) $369,201
10.5
%
$(212,809
)
-8.6
%
Net income (loss) per basic share $2.20
$
(1.28
)
Net income (loss) per diluted share $1.78
$
(1.28
)
Weighted average common shares outstanding - basic168,062
166,385
Weighted average common shares outstanding - diluted
207,032
166,385
AMERICAN EAGLE OUTFITTERS, INC.
GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands, except per share amounts)
(unaudited)
13 Weeks Ended
October 30, 2021
Interest Expense,
net
Net Income
Diluted Earnings
per Common Share
GAAP Basis$
8,612
$
152,224
$
0.74
% of Revenue
0.7%
11.9%
Less: Convertible debt (1):
4,569
3,330
0.02
Non-GAAP Basis$
4,043
$
155,554
$
0.76
% of Revenue
0.3%
12.2%
(1)
Amortization of the non-cash discount on the Company's convertible notesAMERICAN EAGLE OUTFITTERS, INC.
GAAP TO NON-GAAP RECONCILIATION
(Dollars in thousands, except per share amounts)
(unaudited)
13 Weeks Ended
October 31, 2020
Operating Income
Interest
Expense, net
Net Income
Diluted Earnings
per Common Share
GAAP Basis$
95,551
$
7,924
$
58,108
$
0.32
% of Revenue
9.3%
0.8%
5.6%
Add: Incremental COVID-19 related expenses and restructuring (1):
6,955
-
4,500
0.02
Less: Convertible debt (2):
-
4,113
2,657
0.01
Non-GAAP Basis$
102,506
$
3,811
$
65,265
$
0.35
% of Revenue
9.9%
0.4%
6.2%
(1)
$7.0 million incremental COVID-19 related expenses and restructuring charges: - $6.0 million of incremental COVID-19 related expenses consisting of personal protective equipment and supplies for our associates and customers - $1.0 million of corporate severance charges(2)
Amortization of the non-cash discount on the Company's convertible notesAMERICAN EAGLE OUTFITTERS, INC.
RESULTS BY SEGMENT
(Dollars in thousands)
(unaudited)
American Eagle
Aerie
Corporate(1)
Total(2)
13 weeks ended October 30, 2021 Total net revenue$
940,992
$
315,049
$
18,037
$
1,274,078
Operating income (loss)
$
261,225
$
52,021
$
(103,559
)
$
209,687
Capital Expenditures
$
13,298
$
24,867
$
20,036
$
58,201
13 weeks ended October 31, 2020 Total net revenue
$
775,961
$
246,748
$
8,908
$
1,031,617
Operating income (loss)
$
155,259
$
35,738
$
(95,446
)
$
95,551
Restructuring and COVID-19 related charges
$
-
$
-
$
6,955
$
6,955
Adjusted operating income (loss)
$
155,259
$
35,738
$
(88,491
)
$
102,506
Capital Expenditures
$
10,488
$
6,399
$
14,302
$
31,189
American Eagle
Aerie
Corporate(1)
Total(2)
39 weeks ended October 30, 2021 Total net revenue$
2,513,700
$
947,851
$
41,297
$
3,502,848
Operating income (loss)
$
611,650
$
191,341
$
(291,880
)
$
511,111
Capital Expenditures
$
36,093
$
48,164
$
60,148
$
144,405
39 weeks ended October 31, 2020 Total net revenue
$
1,791,042
$
653,240
$
22,537
$
2,466,819
Operating income (loss)
$
1,113
$
47,011
$
(323,052
)
$
(274,928
)
Impairment, restructuring, and COVID-19 related charges$
90,926
$
18,215
$
68,045
$
177,186
Adjusted operating income (loss)
$
92,039
$
65,226
$
(255,007
)
$
(97,742
)
Capital Expenditures$
25,361
$
23,807
$
43,423
$
92,591
(1)
Corporate includes revenue and operating results of the Todd Snyder and Unsubscribed brands, and AirTerra, 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 items, which are not allocated to our reportable segments: - For the 13 weeks ended October 30, 2021, interest expense, net or $8.6 million and other (income), net of ($3.1) million. For the 39 weeks ended October 30, 2021, interest expense, net of $26.0 million and other (income), net of ($6.4) million. - For the 13 weeks ended October 31, 2020, interest expense, net of $7.9 million and other (income), net of ($2.2) million. For the 39 weeks ended October 31, 2020, interest expense, net of $16.6 million and other (income), net of ($0.8) million.AMERICAN EAGLE OUTFITTERS, INC.
STORE INFORMATION
(unaudited)
Third Quarter
YTD Third Quarter
2021
2021
Consolidated stores at beginning of period1,090
1,078
Consolidated stores opened during the period AE Brand3
14
Aerie stand-alone (incl. OFFLINE) (3)25
43
Todd Snyder0
1
Unsubscribed2
3
AE771
1
Consolidated stores closed during the period AE Brand0
(18)
Aerie stand-alone (incl. OFFLINE)0
(1)
Total consolidated stores at end of period1,121
1,121
AE Brand897
Aerie stand-alone (incl. OFFLINE) (3)216
Aerie side-by-side (incl. OFFLINE) (2)(4)187
Todd Snyder3
Unsubscribed4
AE771
Stores remodeled and refurbished during the period2
13
Total gross square footage at end of period (in '000)6,924
6,924
International license locations at end of period (1)256
256
Aerie Openings Aerie stand-alone (incl. OFFLINE) (3)25
43
Aerie side-by-side (incl. OFFLINE) (2)(4)4
9
Total Aerie Openings29
52
(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. OFFLINE side-by-side stores, when attached to an Aerie Brand store, are included in the Aerie Brand store count.(3)
Aerie stand-alone stores include 3 OFFLINE openings during the period and 4 OFFLINE openings YTD, with 8 OFFLINE stores in the consolidated totals.(4)
Aerie side-by-side stores include 4 OFFLINE openings during the period and YTD, with 5 OFFLINE stores in the consolidated totals.
View source version on businesswire.com: https://www.businesswire.com/news/home/20211123005507/en/
Olivia Messina 412-432-3300 LineMedia@ae.com
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