Comparable Sales Rose 5%, Marking 19 Consecutive Quarters of Growth

American Eagle Comps Rose 2%, Aerie Increased 20%

PITTSBURGH — (BUSINESS WIRE) — American Eagle Outfitters, Inc. (NYSE: AEO) today reported EPS of $0.48 for the quarter ended November 2, 2019, compared to $0.48 for the quarter ended November 3, 2018.

Jay Schottenstein, AEO’s Chairman and Chief Executive Officer commented, “Strong top line performance across brands and channels led to our 19th consecutive quarter of comparable sales growth and record third quarter revenue.  In a tough environment, we reported EPS in line with our guidance.  We continued to deliver on our strategic pillars, with Aerie and American Eagle Jeans demonstrating strong sales and profit growth.  Softer demand in certain AE apparel categories led to higher markdowns and has persisted into the fourth quarter.  The team has been working hard to quickly course correct, and our focus is squarely on continuing to capitalize on the strength of our brands, accelerating the growth of Aerie, and creating shareholder value.”

Third Quarter 2019 Results

• Total net revenue increased $63 million, or 6% to a record $1.07 billion compared to $1.00 billion last year.
• Consolidated comparable sales increased 5%, following an 8% comparable sales increase last year, and were positive across both store and digital channels.
• By brand, American Eagle’s comparable sales increased 2%, following a 5% increase last year. Aerie’s comparable sales increased 20%, building on a 32% increase last year and marking the 20th consecutive quarter of double-digit sales growth.
• Gross profit rose 2% to $407 million from $399 million. The gross margin rate of 38.2% compared to 39.8% last year.  The decline primarily reflected increased markdowns.
• Selling, general and administrative expense of $259 million increased 4% from $248 million last year, reflecting higher store salaries and professional fees, partly offset by lower incentive expense. As a rate to revenue, SG&A improved to 24.3% compared to 24.8% last year.
• Depreciation expense increased 6% to $45 million from $42 million last year and was 4.2% as a rate to revenue, flat to last year.
• Operating income of $103 million compared to $109 million last year. As a rate to revenue, operating income of 9.7% compared to 10.8% last year.
• Other income of $3 million compared to $4 million last year. The decrease is primarily attributable to a benefit from a vendor settlement recorded last year.
• EPS of $0.48 was flat to last year.

Inventory

Total ending inventories at cost increased 9% to $647 million.  The increase largely reflects inventory to support strong demand for AE Jeans, including new styles and expanded sizes.  New store openings, primarily for Aerie, also contributed to the increase.

Capital Expenditures

In the third quarter, capital expenditures totaled $58 million, primarily related to store remodeling projects and new openings, with the balance to support the digital business and corporate IT.  On a year-to-date basis, capital expenditures have totaled $150 million.  We continue to expect annual capital expenditures to be in the range of $200 to $215 million.

Shareholder Returns, Cash and Investments

During the third quarter, the company returned $55 million to shareholders through cash dividends and share repurchases.  We paid cash dividends of $23 million and repurchased 2.0 million shares for $32 million.  Year to date, we have repurchased a total of 6.3 million shares for a total of $112 million and have 35.4 million shares remaining under the current authorization.  We ended the third quarter with total cash and investments of $265 million.

Store Information

During the quarter, the company opened 6 American Eagle stores, ending with 945 American Eagle stores, including 170 Aerie side-by-side locations.  Additionally, the company opened 12 Aerie stand-alone stores and closed 1, ending with 142 Aerie stand-alone stores.  Internationally, the company ended the quarter with 241 licensed stores compared to 223 last year.  For additional store information, see the accompanying table.

Fourth Quarter Outlook

Management expects fourth quarter 2019 EPS to be in the range of $0.34 to $0.36, with comparable sales approximately flat.  This guidance excludes potential asset impairment and restructuring charges.  Last year, the company reported EPS of $0.43 for the fourth quarter.

Conference Call and Supplemental Financial Information

Today, management will host a conference call and real time webcast at 9:00 a.m. Eastern Time.  To listen to the call, dial 1-877 407-0789 or 1-201 689-8562 (international) and provide the Conference ID 13695188 or go to http://investors.ae.com to access the webcast and audio replay.  Additionally, a financial results presentation is posted on the company’s website.

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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 more than 1,000 stores in the United States, Canada, Mexico, China 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 24 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 2019 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 the company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019 and in any subsequently-filed Quarterly Reports on Form 10-Q filed 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 fourth quarter 2019 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 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 changes in global economic 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

Join the company ranked by Glassdoor as one of the best places to work during the holiday season

Hiring events to be hosted in all stores in the U.S. and Canada on October 20, 2019

PITTSBURGH–(BUSINESS WIRE)–American Eagle Outfitters, Inc. (NYSE: AEO) today announced plans to hire nearly 10,000 part-time seasonal brand ambassadors to join its American Eagle (AE) and Aerie store teams. A hiring event in the U.S. and Canada will take place at AE and Aerie stores on Sunday, October 20, 2019 from 11:00 AM – 4:00 PM, in local time zones.

Ranked by Glassdoor as one of the top three places to work during the holidays, AE and Aerie are recruiting enthusiastic brand ambassadors who love our brands and are committed to driving a successful holiday shopping season. Our seasonal team members will have the opportunity to acquire new skills and take on meaningful responsibilities, including guest engagement, product expertise and will flex between the sales floor, fitting room, cash and wrap, and stockroom. Part-time associates receive a 40% merchandise discount and access to a rewards app to redeem individualized prizes and merchandise.

“American Eagle and Aerie brand ambassadors are essential in delivering an exceptional customer experience, and their passion for our brands directly impacts our success throughout the year. We encourage our seasonal talent to learn valuable skills that will make them successful in whatever careers they choose. We hope they will grow with our dynamic brands as we believe everyone has a real opportunity to succeed at AEO,” commented Stacy Siegal, Executive Vice President – General Counsel, AEO Inc. “We offer competitive pay and rewards—and what makes us truly special is our people. Our associates support each other, our customers and the communities where we operate.”

Interested candidates are encouraged to apply online at www.aeo-inc.com, prior to attending the hiring event at their local store. For more information on employment opportunities and all things AEO Inc., follow us on LinkedIn.

Company launches genderless wellness collection to meet young people’s evolving wellness and personal care needs

PITTSBURGH — (BUSINESS WIRE) — American Eagle Outfitters, Inc. (NYSE: AEO) today announced the launch of MOOD, a wellness and personal care product line offered exclusively at American Eagle stores and online. The genderless collection features a broad range of personal care products, bath essentials and aromatherapy with six unique scents for the mind and body. MOOD’s inaugural collection will include one hundred percent hemp-derived CBD products for bath and body.

“Inspired by our customers and their interest in this exciting new category, we see this as a perfect extension of the AE brand. MOOD is designed to help everyone, especially young people, live a better quality of life,” commented Chad Kessler, American Eagle Global Brand President. “The first collection is just the beginning of a more expansive product line and what we see as a meaningful long-term growth opportunity.”

• A collection of 45 genderless personal care products, the line includes body lotion, hand cream, face oil, aromatherapy oil, pillow mist, muscle balm and lip salve. Bath essentials such as bath bomb, sugar scrub and foaming face wash nourish the skin. Nutrient-rich products lock in moisture and replenish skin from head to toe, no matter the mood.
• Six scents for the mind, body and identity:
• Chill– enriched with warm vanilla for those grrr moments.
• Energized– includes mandarin nectar to help when feeling tired.
• Focused– enhanced with a citrus twist to beat the yawn.
• Refreshed– made with cool coconut to aid with burnout.
• Soothed– infused with fresh eucalyptus to calm.
• zZz– incorporates soft lavender to combat restlessness.
• The product formulas were created exclusively for AEO Inc. by Green Growth Brands (CSE: GGB, OTCQB:GGBXF). All GGB’s CBD products are sourced from U.S.-based, licensed hemp processors and are Farm Bill 2018 compliant. GGB rigorously tests all of its CBD products and such products are compliant with applicable requirements under the U.S. FDA, Health Canada, and EU Cosmetic Regulations, as well as the California Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). GGB sells and distributes topical CBD products only in jurisdictions that permit such sale.

The campaign features unscripted interviews from real kids talking about the pressure of everyday life and the self-care routines that help manage it. The playful and colorful campaign brings the spirit of MOOD to life.

MOOD has the opportunity to grow beyond the first collection. Follow along @mymood and share your MOOD using the hashtag #moodwellness.

The company is launching on Oct. 1 a line of affordable, CBD personal-care and bath products exclusively at American Eagle stores.

By Obi Anyanwu | Link to article

American Eagle is looking to help teens and young adults combat stressors and practice self-care with the launch of Mood, the company’s new wellness and personal care product line, on Oct. 1.

Teens are becoming more vocal about the stress in their lives, whether it be their grades, friendships, family life and social media. A poll from social network After School found that 45 percent of high school students feel they’re stressed “all the time” due primarily to their relationships and teachers. Pew Research Center released a survey in February that found that teens between the ages 13 and 17 believe anxiety and depression is a major problem among people their age.

“Kids are definitely stressed out today between social media and doing well in school and in sports and we want kids to feel encouraged to reset and feel calm and ready to go,” said Chad Kessler, American Eagle global brand president. “We see so much research and feedback that kids feel stressed and need to relax and reenergize. CBD is an ingredient that people are seeing as a way to do that.”

CBD, which is short for cannabidiol, a natural substance found in cannabis plants, is being used by adults for relaxation, stress/anxiety relief, sleep or muscle and joint pain relief, according to the Harris Poll, and as an ingredient in skin-care and beauty products.

The new line is targeted to AE’s core consumer: teens and young adults between the ages of 15 and 25. Real kids had unscripted interviews about pressure and self-care routines with the brand for its campaign. Every product in the affordable range — prices go from $7.95 to $19.95 —  is an exclusive formula that comes in recyclable packaging, which is in line with the company’s sustainability initiative.

Though people use CBD oil or eat gummies for their ailments and anxieties, Kessler said Mood will stay away from edibles, and will eventually move away from CBD.

“CBD seems to be gaining traction and coming more into the mainstream,” said Kessler, “but we’ll have CBD and non-CBD.”

He added about the products, “Everything we do is about the customer. We really tried to make sure the products represent value. At this point our current plans is to keep Mood exclusive to American Eagle and we’re excited to see how the brand can grow.”