At AEO, our associates are curious and change-oriented, constantly looking for ways to improve the business and develop their skill sets.

In the spirit of being named one of America’s Most Innovative Companies, AEO’s Data Technology team recently hosted the first-ever Datapalooza – a friendly competition for associates looking to enhance their data analysis skills. Associates also learned more about building a data lakehouse on Google’s Cloud Platform by exploring new insights and business opportunities using open data sets.

Eight teams went head-to-head presenting their plans on how to make their project actionable. Judges reviewed and selected the winners based on business value, analytical approach and methodology, technology, innovation, realistic application, presentation and communication.

Here are the winners:

First Place: Heads in the Cloud

Analyzing customer choice productivity by store format to make better business decisions on the optimal assortment at a store.

Second Place: Hot Metal Data

Identify low vs. high spending customer behaviors, so to reinforce with low spending customers those same behaviors exhibited by high spending customers.

Third Place: Data Diggers

Identify opportunities to increase customer acquisition based on customer geography and performance of product categories unique to where they live.

Each winning team member received various prizes and an opportunity to present their ideas to leadership. In addition, the first place team will receive a special lunch with Google to brainstorm ways to turn their ideas into reality.

Congratulations to our teams on a successful Datapalooza!

By: Jean E. Palmieri | Link to article

The store is located in a historic brick townhouse that dates from 1877.

Todd Snyder has opened his first store in Chicago.

Dubbed “The Townhouse,” the store is located in the Armitage-Halsted Historic District in Lincoln Park on the ground floor of a Victorian-era brick townhouse built in 1877.

The store features pressed-metal cornices and original ornate window details on the exterior while inside, the space takes its inspiration from Snyder’s Liquor Store location in New York’s Tribeca neighborhood. Handcrafted wooden displays and board and batten walls are painted in olive, the brand’s trademark color. The focal point of the space is a custom built-in and fully stocked bar, complete with brass-accented glass vitrines and Carrera marble countertops. Overhead translucent drop globes and spot lighting hang from an exposed ceiling, and the floors are chevron-striped hardwood. 

The assortment features a wide offering of Snyder’s soft tailoring, workwear and streetwear along with third-party brands and collaborations from Champion sportswear, New Balance and Alden shoes, D.S. & Durga apothecary, Bennett Winch travel and accessories, as well as vintage watches and jewelry sourced from Foundwell, a New York-based company known for its rare timepieces. Custom and made-to-measure suits are also offered.

“Opening in Chicago is like a homecoming for me,” Snyder said. “Growing up in Iowa, Chicago was the ‘North Star’ of cities and I quickly developed a love for the arts, architecture and of course, the retail it had to offer. Since founding my brand in 2011, we’ve spent a lot of time growing Chicago to now be our fourth biggest e-commerce market, so when it was time to expand, this was a very essential market to finally plant physical roots and join the ranks of other premiere luxury brands here.” 

Snyder, whose brand is owned by American Eagle Outfitters, currently operates 11 stores and plans to open an additional four this year in Dallas, Washington, D.C., Miami and Atlanta.

By: Kristopher Fraser | Link to article

Two of Gen Z‘s favorite brands have teamed on a collection for denim and beauty lovers. American Eagle Outfitters and E.l.f. Cosmetics are launching unique makeup products with denim-inspired packaging.

When E.l.f. chief marketing officer Kory Marchisotto and American Eagle chief marketing officer Craig Brommers met more than two years ago, they instantly clicked.

“We quickly recognized the kindred spirits our brands shared and we shared as marketing officers,” Marchisotto said. “If you look at what both E.l.f. and American Eagle are capable of, we both shape youth culture and create endless opportunities for self-expression through personal style and color, whether it’s makeup at E.l.f. or clothes at American Eagle. Bringing our brands together was not only magic for our respective communities, but also a reflection of our combined vision or the best in denim, the bets in beauty and the best in culture.”

Brommers was excited at the prospect of collaborating with E.l.f. because he felt no other brand has done collaborations quite like they have in the past few years, especially in the cosmetics industry — this is American Eagle’s very first beauty collaboration.

Items offered in the collection include the Denim Daze eye shadow palette, the Perfect pHIT Lip Balm, the Get Cheeky clay mask and the Eyes Lips Jeans makeup bag. Marchisotto and Brommers are particularly proud of the makeup bag as it is a cosmetics pouch made from actual American Eagle jeans. Details of the makeup bag include pockets, jean flies and button closures, giving the true impression of being a pair of reworked jeans. Price points for the collection range from $8 to $24.

While the denim for the bag itself isn’t repurposed, Brommers said the denim used is still in line with American Eagle’s commitment to sustainability. In 2019, American Eagle laid out sustainability goals for 2023, including committing to recycling half of the water in its laundries, reducing water usage by 30 percent in its jeans, removing hazardous chemicals from wastewater, ensuring all cotton is sustainably sourced and recycling bras and jeans in stores.

“This was a perfect marriage of our two teams coming together,” Brommers said. “We brought our two superhero product development teams together, and they had an incredible brainstorming session to try and understand each other’s brands. Both teams stopped to think about what our customers want to see from us and what we are known for. Both American Eagle and E.l.f. used their innovative capabilities to custom this collaboration and bring together the beauty audience and iconic parts of the American Eagle brand.”

The launch of the products is supported by a “selfie to belfie” campaign in honor of the Get Cheeky clay mask, which is ideal for the face and butt. The campaign will include a specially penned song, a belfie kit and an invitation to post selfies and belfies on social media.

Both companies’ business strategies are proving to be successful among Gen Z. Earlier this month, American Eagle topped profit growth estimates. According to investment banking company Piper Sandler’s annual Gen Z survey of 14,500 U.S. teens, E.l.f. was the number-one makeup brand among the demographic.

“I think the reason E.l.f. has been able to propel itself among Gen Z is because we’re unafraid to take strong positions that Gen Z really cares about,” Marchisotto said. “One of the things we found is this generation wants to know who our CEO is. They want to know who our executive staff is. They really want to know what this company is they are buying from because they see shopping as a mirror image of their values. This generation wants to change the future every purchase they make.”

“Gen Z really wants that engage with brands that start with the mindset that they are a blank canvas,” Brommers said. “Gen Z wants to build themselves through individual expression at a moment in time. Both E.l.f. and American Eagle represent inclusivity, they represent individuality and they let customers engage with whoever they want to be. That’s why Gen Z loves us.”

The E.l.f. Cosmetics and American Eagle collection officially launches Thursday at 9 a.m. EST on elfcosmetics.com, ae.com and at American Eagle flagships.

Worldwide access to clean water is crucial. On AEO’s journey to build a better world, we’re proud that our associates have been longtime supporters of The Water Project – a nonprofit helping communities in sub-Saharan Africa gain access to clean, safe water.

Since 2016, AEO’s Production and Sourcing teams have committed to an annual giving campaign – in partnership with fellow associates, family, friends, and vendors -to help make clean water, hygiene and sanitation education available in Kenya. In total, the team has raised more than $213,000 for The Water Project in seven schools and nine communities. Using a variety of water solutions such as wells, rainwater harvesting, and protected natural springs, together the AEO community has made clean water possible for 7,561 people.

“What began as a small idea in 2016 to support those in need of clean drinking water has become an annual giving campaign for AEO associates at our New York Office and for our vendor partners,” said Sindi Rusiecki, Vice President – Production, AEO Inc. “Our teams have participated in many fundraising events, from bake sales to happy hours, in support of this worthy cause. It has been an eye-opening experience, to understand the difficulties these communities have accessing water and to realize the profound, life-changing impact we make together with every project we sponsor.”

As we aim to expand our work with suppliers around the world to take care of freshwater resources, we’re thrilled that a local Pakistan NGO – identified with the assistance of The Water Project – will implement clean water projects in 20 rural villages with the $59,000 raised through our 2022 campaign. These projects will provide improved access to drinking water, sanitation training, and education regarding personal and domestic hygiene through the installation of shallow wells with twin water hand pumps and the provision of bar soap to 400 families.

Our associates share AEO’s passion for giving back and we’re proud of our people and vendor partners for making a REAL and lasting impact in communities throughout the world.

Learn more about The Water Project here.

By: Karen Kadilak | Link to article

Over 25 models take their turns on the runway at Ross Park Mall

Colton Vazquez and Luccia Harpalani have traveled the country as models. On Saturday, they rocked the runway at Ross Park Mall as part of the Down Syndrome Association of Pittsburgh’s first fashion show.

Celebrating World Down Syndrome Day — it’s actually March 21 — they were joined by 25 other models, all outfitted in spring looks by American Eagle and Aerie. A dance party followed the show.

The Aerie Real Foundation, whose mission is to build confidence in women, foster an inclusive community and protect the planet, recently approved a $10,000 grant to support the association’s programs.

Macee Peterson, 15, got the show started, She is the daughter of Meredith Peterson, executive director of the Down Syndrome Association of Pittsburgh, who said the goal of the fashion show was to raise awareness of individuals with Down syndrome and their families.

World Down Syndrome Day, which has been officially observed by the United Nations since 2012, is held on the 21st day of the third month to signify the triplication, or trisomy, of the 21st chromosome, which causes Down syndrome. That extra chromosome causes varying degrees of intellectual and physical disability and associated medical issues.

Vazquez, 23, a Duquesne University senior from Forest Hills, sported tropical shorts and a beach shirt from American Eagle’s beach line and an OBX hat.

“I love to be on stage any chance I get,” he said. “I like dressing up and going out for a night on the town. I like the college vibe.”

A professional model, Vazquez said he does not practice his walk, preferring to get energy from the crowd. He has appeared in three fashion shows and on billboards, including four times on one in New York City’s Times Square.

He is is studying theater and performance at Duquesne and is the first student with intellectual disabilities to live on campus. He said Saturday’s show was his first one in a while.

“Being in college, I haven’t had a chance in a long time,” he said.

Vazquez said he was thrilled to meet Madeline Stuart, the world’s first professional model with Down syndrome, the last time he was in New York.

Harpalani, 18, a Pine-Richland High School senior, wore a spring dress and sandals from American Eagle.

“She likes working with clothes and loves putting together outfits and looking cute,” said Jennifer Harpalani, her mother.

The Pine-Richland cheerleader is taking modeling lessons and working with an agency in Washington, D.C. She walked the runway recently there for World Top Model USA-DMV.

In September, Harpalani will represent designers during New York Fashion Week and in July, she will appear at Orlando Swim Week in Florida.

Singers Taylor Swift and Ariana Grande are inspirations, her mother said.

“She admires Taylor Swift and her music, but also her style,” Jennifer Harpalani said. “She likes Ariana Grande as well, and enjoyed seeing her outfits on ‘The Voice’ TV show.

Each of the models received cheers and applause as they walked, strutted and sometimes leaped on the runway. Afterward, the models celebrated with their friends and family. Olivia Reiser,14, received flowers and posed proudly with her grandmother, Sue Bond, and her mother, Laureen Reiser.

Peterson said she had been thinking of a fashion show to mark World Down Syndrome Day for years.

“In planning, I wanted it to be in a public space, free and open to all…. I posed the idea to our board president, Abby Vernon (an Aerie vice president) and, in brainstorming, she pitched the idea to her team last summer and they were in.”

Peterson said she wanted families who have younger children with Down syndrome to see adults thriving. Biographies of models on display highlighted their college, competitive employment and community activities.

“As a leader in the Down syndrome community and a parent of a teen with Down syndrome, I strive to advocate for the acceptance of all abilities and embrace everyone’s uniqueness,” she said.

Photo Credit: Dave Hochendoner Photography

WWD In Partnership with Berns Communications Group | Link to article

The executives honored on this year’s list of Most Inspirational Women Leaders share a common characteristic: they are all exceptionally adept at turning their personal passions into business success.

In honor of International Women’s Day, WWD and Berns Communications Group are proud to celebrate 2023’s Most Inspirational Women Leaders. We compiled this year’s list by asking last year’s honorees to nominate a woman whose leadership and mentorship consistently inspire those around them.

When we look at the careers of these extraordinary women, one clear theme emerges: these are leaders who leverage their personal passions to drive the growth of their businesses. They are also highly invested in their personal brand equity – which makes their leadership not only authentic, but effective.

Other common qualities of their leadership and management styles include the ability to actively listen and a penchant for taking risks and trying the untried. This is a group of true innovators who embrace challenges – fully knowing that it is the only way to grow and learn.

While these leaders represent some of the most respected names in global retail, Stacy Berns, President of Berns Communications Group, said that “each of these women is motivated by a larger sense of purpose and passion that extends well beyond the boundaries of a particular company. We’re honored to celebrate these amazing women who continually inspire us by channeling their personal passions into greater business success.”

“Whether it is making diversity and inclusion a top priority at their company or engaging with customers one on one to truly understand their needs, these are leaders who also take ‘leading by example’ to a new level,” said Arthur Zaczkiewicz, Executive Editor of Strategic Content Development at WWD. “These are also leaders who embrace change and have learned that it’s okay not to be perfect.”

For example, when Winnie Park, CEO of Forever 21 and Board Director at Dollar Tree Stores, Sound Point Acquisition Corp. and Monica + Andy, was asked what career advice she would give her 20-year-old self if she could go back in time, she said she would stress “progress over perfection.”

“Putting up the ‘perfection façade’ is isolating and it only hurts you in the long run – plus it can suck the fun out of work,” Park said. “By freeing yourself and embracing your imperfections, you get to work alongside other perfectly imperfect people. That’s where success is made, through learning and collaboration.”

When asked the same question, Christiane Pendarvis, Co-President and Chief Merchandising and Design Officer at Savage X Fenty, said she’d tell her younger self to be bolder “and less of a rule follower. The worst response someone can give you is no and if they do, you are no worse off than before you asked. So, ask questions and challenge the rules.”

Welcoming input from colleagues, customers and business partners is also a key leadership trait. When asked what leadership skills young women need to succeed today, Jennifer Foyle, President, Executive Creative Director of AE & Aerie, said the ability to actively listen while practicing empathy is key.

“Being open to feedback and ideas from everyone around you – and I mean everyone – is what keeps you grounded and motivated,” Foyle said. “We all carry our own unique experiences and perspectives. You can learn a lot from each other when you take a genuine interest in the differences that have brought you together.”

Most Inspirational Women Leaders of 2023

Liz Bacelar Executive Director, Global Tech Innovation, The Estée Lauder Companies

Gina Boswell Chief Executive Officer, Bath & Body Works, Inc.

Emma Butler CEO & Founder, Liberare

Mary Dillon President and CEO, Foot Locker, Inc.

Nata Dvir Chief Merchandising Officer, Macy’s

Shai Eisenman Founder & CEO, Bubble Skincare

Jennifer Ford Owner and Founder, PremiumGoods. Houston

Jennifer Foyle President, Executive Creative Director, AE & Aerie

Emily Gittins Co-Founder and CEO, Archive

Jill Granoff Managing Partner, Eurazeo; CEO, Eurazeo Brands

Emma Grede CEO & Co-Founder, Good American; Founding Partner, SKIMS; Co-Founder, Safely

Bahja Johnson Head of Equality
& Belonging, Gap Inc.

Angela Lean Senior Business Program Lead, Accessible Employee Experience, Microsoft

Sharon Leite Chief Executive Officer, Ideal Image

Kory Marchisotto Chief Marketing Officer, e.l.f. Beauty; President, Keys Soulcare

Jane Hamilton Nielsen COO & CFO, Ralph Lauren Corporation

Cristina Nuñez Co-Founder & General Partner, True Beauty Ventures

Winnie Park CEO, Forever 21; Board Director, Dollar Tree Stores, Sound Point Acquisition Corp., Monica + Andy

Christiane Pendarvis Co-President and Chief Merchandising and Design Officer, Savage X Fenty

Babba Rivera Founder & CEO, Ceremonia

Kim Seymour Chief Human Resources Officer, Etsy

Sally Susman Chief Corporate Affairs Officer, Executive Vice President, Pfizer

Paige Thomas Former President and CEO, Saks OFF 5TH

Janet Wang GM of Tmall Luxury Pavilion and Vice President of B2C Retail, Alibaba Group

Theresa Watts Senior Vice President Human Resources, Diversity, Equity and Inclusion, True Religion Brand Jeans

Janey Whiteside Partner & CEO, Consello Growth and Business Development

By: Evan Clark | Link to article

After a year of inventory control, the retailer is cautious, but looking forward to a breather that will help it streamline and drive profitability.

American Eagle Outfitters Inc. moved quickly to rein in inventories last year — helping the retailer hold its own against some tough fourth-quarter comparisons and giving it some breathing room to fine tune in 2023.  

AEO’s fourth-quarter net income increased 8.3 percent to $54.6 million from $50.4 million, while adjusted earnings per share tallied 37 cents, coming in 7 cents ahead of the 30 cents projected by analysts. 

Revenues for the three months ended Jan. 28 slipped 0.8 percent to $1.5 billion from $1.51 billion a year earlier — better than the 1.8 percent decline analysts had penciled in against what was the company’s best fourth-quarter sales on record. Quiet Platforms, the company’s supply chain business, added 1 percentage point to revenue growth, while revenues from the brands declined 2 percent.

AEO ended the quarter with inventory up 6 percent by dollars and up 4 percent by units. 

Mike Mathias, executive vice president and chief financial officer, told WWD in an interview that AEO was able to control price promotions — despite a glut of industry-wide sale signs — because of its push to realign inventories earlier in the year. 

“Last March…we saw the Q1 trend and said, ‘OK, our backhalf plans need to be adjusted now across inventory, expense and capital,” Mathias said. “We took very quick action.” 

That turned out to be a key move — and one AEO learned over the pandemic. 

“If you think about what we did last March, it was definitely flexing muscles that we built in March of 2020,” he said, referring to the early days of the pandemic, when the retail world more or less shut down. “That was the ultimate battle test. We and others now have this muscle to pivot when needed and do it more quickly than ever before. And I think that what 2020 forced us to do, it forced us to build that capability.”

The company has had to flex that muscle more often than it would have liked over the past few years, but Mathias said this year was starting off with something closer to normal. 

“The thing we can’t control is the health of the consumer,” the CFO said. “That’s the uncertainty that we and everyone else retail still has.”

He also said 2023 seems ready to give AEO a chance to “breathe” and “find efficiencies across the business now that we don’t have specific things to tackle, like supply chain, freight costs.”

“Our challenge from here is building a better model to flow through that revenue to the bottom line,” he said. He called it, “a significant project in 2023.”

The growth in the fourth quarter continued to come from Aerie, which saw revenues rise 8 percent to $464 million in the quarter, while the American Eagle business saw its top line decline 8 percent to $962 million. 

For the full year, the company’s net income decreased 70 percent to $125.1 million as sales dipped 0.4 percent to $5 billion. 

This year, AEO is looking for revenues to range from flat to up in the low-single digits while operating income increases to a range of $270 million to $310 million, up from the $269 million logged in 2022. 

“Looking ahead, I am encouraged by several positives,” said Jay Schottenstein, executive chairman and chief executive officer, in a statement. “Our inventory levels are healthy. The global supply chain has stabilized, restoring agility to our operations with a more normalized cost environment. Our brands are poised to deliver innovation and quality to our customers and to benefit from emerging fashion trends. Yet, our visibility into the macro remains limited and we are taking a cautious view on 2023. We will stay disciplined, maintain sharp control over expenses and seek ongoing efficiencies to drive shareholder returns.”

AEO Reports Fourth Quarter Profit Ahead of Expectations, Demonstrating Continued Profit Improvement. Declared Quarterly Cash Dividend at $0.10 per share.

• Achieved second highest fourth quarter revenue in company history
• Adjusted operating profit of $96 million increased to last year and 2019
• Delivered strong free cash flow and declared a quarterly cash dividend of $0.10 per share
• Aerie posted all-time high fourth quarter revenue and operating profit
• American Eagle demonstrated a sequential improvement in revenue trends with operating profit up to 2019

March 1, 2023

PITTSBURGH — (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the fourth quarter and full year fiscal 2022 ended January 28, 2023.

“I am proud of how our teams navigated through unanticipated macro challenges this year, which pressured top line demand as we lapped record strength in 2021. In response, we took aggressive actions early in the year on inventory and spending to strengthen margins and increase free cash flow.  We saw meaningful improvements as the year progressed.  We ended 2022 in a healthy financial position and I’m pleased to reinstate our quarterly cash dividend,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

“Looking ahead, I am encouraged by several positives. Our inventory levels are healthy. The global supply chain has stabilized, restoring agility to our operations with a more normalized cost environment. Our brands are poised to deliver innovation and quality to our customers and to benefit from emerging fashion trends. Yet, our visibility into the macro remains limited and we are taking a cautious view on 2023. We will stay disciplined, maintain sharp control over expenses and seek ongoing efficiencies to drive shareholder returns.”

Fourth Quarter 2022 Results:

• Total net revenue of $1.5 billion was down 1% to the fourth quarter of 2021. Our supply chain business, Quiet Platforms, contributed approximately 1 percentage point to revenue growth. Brand revenue declined 2%, exceeding company expectations for a mid-single digit decline.
• Aerie revenue of $464 million rose 8% versus fourth quarter 2021. Comp sales declined 2% versus fourth quarter 2021. American Eagle revenue of $962 million declined 8% versus fourth quarter 2021 Comp sales declined 9% versus fourth quarter 2021.
• Consolidated store revenue was flat. Total digital revenue declined 9%. Compared to pre-pandemic fourth quarter 2019, store revenue increased 5% and digital revenue increased 19%.
• Gross profit of $507 million increased approximately 4% compared to $489 million in the fourth quarter of 2021 and reflected a gross margin rate of 33.9% compared to 32.4% last year. This exceeded company expectations for the high-end of 32-33% due to lower than anticipated promotions. Stronger merchandise margins reflected lower product and transportation costs with a partial offset from higher markdowns. Lower compensation and delivery costs also had a positive impact on margins offset by higher distribution and warehousing costs and higher rent. Quiet Platforms was an 80 basis point reduction to gross margin as that business continues to scale.
• Selling, general and administrative expense of $351 million was flat to last year and in-line with guidance. SG&A increased 30 basis points as a rate to sales versus fourth quarter 2021.
• GAAP operating income was $74 million. Non-GAAP operating income of $96 million, reflected a 6.4% margin. This excluded $18 million of impairment and restructuring charges primarily related to stores. The company also incurred a $4 million impairment and restructuring charge due to the closing of Quiet Platform’s Jacksonville facility, which was replaced by a higher productivity location in Atlanta. Quiet Platforms generated a $17 million GAAP operating loss in the period, or a $13 million loss excluding the aforementioned charge.
• GAAP diluted EPS of $0.28. Non-GAAP diluted EPS of $0.37 excludes $0.09 of impairment and restructuring charges.
• Average diluted shares outstanding were 197 million including approximately 4 million shares of unrealized dilution associated with the company’s convertible notes.

Fiscal Year 2022 Results:

• Total net revenue of $5.0 billion was flat to fiscal year 2021. Our supply chain business, Quiet Platforms, contributed approximately 3 percentage points to revenue growth. Brand revenue declined approximately 3%.
• Aerie revenue of $1.5 billion rose 9% from fiscal year 2021 on top of 39% growth last year. American Eagle revenue of $3.3 billion declined 8% from fiscal year 2021 following a 30% increase last year. Compared to the pre-pandemic fiscal year 2019 base, Aerie revenue increased 88% and AE revenue declined 6%.
• Consolidated store revenue declined 2%. Total digital revenue declined 7%. Compared to the pre-pandemic fiscal year 2019 base, revenue was up across channels.
• Gross profit of $1.7 billion decreased 12% from fiscal year 2021 and reflected a gross margin rate of 35.0% compared to 39.7% last year. Lower merchandise margins primarily reflected higher markdowns. Higher distribution and warehousing costs and higher rent also pressured margins, partially offset by lower compensation. Quiet Platforms was a 70 basis point reduction to the gross margin as that business continues to scale.
• Selling, general and administrative expense increased 100 basis points as a rate to sales versus fiscal year 2021 due to higher store and corporate salaries, higher professional services, higher advertising and higher travel expenses, with a partial offset from lower incentive compensation.
• GAAP Operating income was $247 million. Non-GAAP operating income of $269 million, reflected a 5.4% operating margin. This excluded approximately $22 million in charges in the fourth quarter, as described above. Quiet Platforms generated a $47 million GAAP operating loss in the period, or a $43 million loss excluding the $4 million impairment and restructuring charge as described above.
• Average diluted shares outstanding were 205 million compared to 207 million in fiscal year 2021.
• GAAP EPS of $0.64. Non-GAAP EPS of $0.97 excludes $0.33 of debt-related, impairment and restructuring charges.

Inventory

Total ending inventory at cost increased 6% to $585 million compared to $553 million last year, with units up 4%. Inventory is current, with AE and Aerie inventory across the US and Canada down in the high single digits to last year, consistent with guidance. The consolidated increase reflects earlier than expected deliveries as the supply chain continues to normalize and increases related to Mexico and the Todd Snyder brand, where we are experiencing growth well into the double digits.

Capital Expenditures

Capital expenditures totaled $61 million in the fourth quarter and $260 million for full year fiscal 2022, down significantly from initial plans entering the year. For 2023, management expects capital expenditures to approximate $150 to $190 million.

Balance Sheet and Shareholder Returns

In fiscal 2022, the company exchanged $403 million of the outstanding principal amount of its senior convertible notes due 2025, simplifying and strengthening the capital structure. At the end of the year, the company had $9 million in aggregate principal amount of the notes outstanding. In connection with the exchange transactions, the company completed a $200 million accelerated share repurchase program.

Separately, the company paid two quarterly cash dividends in the first half of 2022, amounting to approximately $65 million. After initiating a temporary pause in September, the Board of Directors has reinstated a quarterly cash dividend at $0.10 per share. The dividend was declared on February 28, 2023 and is payable on April 21, 2023 to stockholders of record at the close of business on April 6, 2023.

Outlook

Entering 2023, our brands are strong and inventory is healthy. The global supply chain continues to normalize, providing improved costs and greater agility. Additionally, the company remains focused on reducing expenses. Yet, given limited visibility into the macro environment and overall consumer spending behavior, the company is taking a cautious view.

For the first quarter, management’s outlook reflects revenue in the range of flat to up low-single digits with operating income approximately flat to last year.

For the full-year, management’s outlook reflects revenue in the range of flat to up low-single digits with operating income in the range of $270 to $310 million, compared to adjusted operating income of $269 million in 2022.

Conference Call and Supplemental Financial Information

Management will host a conference call and real time webcast today 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, net income, net income per diluted share and free cash flow, 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 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 press release reconcile the GAAP financial measures to the non-GAAP financial measures discussed above.

* * * *

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, Hong Kong and Japan, and ships to approximately 80 countries worldwide through its websites. American Eagle and Aerie merchandise also is available at more than 260 international locations operated by licensees in approximately 30 countries. In 2022, AEO released its first annual Building a Better World report, which outlines two decades of ESG achievements through the company’s Planet, People and Practices initiatives.  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 first quarter and annual fiscal 2023 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 29, 2022 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 2023 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.