AEO Inc. Reports First Quarter Fiscal 2025 Results
First quarter GAAP operating loss of
Second quarter operating income guidance of
On track to complete
“As we noted in our preliminary release, the first quarter was a challenging period for our business. While we are disappointed with the results, we are taking actions to better position the company and drive stronger performance in the upcoming quarters. Our brands remain resilient. The team is executing with urgency as we look to strengthen both the topline and profit flow-through,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.
First Quarter 2025 Results:
-
Total net revenue of
$1.1 billion 5% . Total comparable sales declined3% . -
Aerie comparable sales decreased
4% . American Eagle comparable sales declined2% . -
Gross profit was
$322 million 29.6% compared to40.6% last year.- Merchandise margins decreased 960 basis points, driven primarily by inventory writedowns and higher in-season markdowns, as well as increased product costs.
- Buying, Occupancy and Warehousing (BOW) expenses as a percentage of sales deleveraged 140 basis points.
-
Selling, general and administrative expense of
$339 million 2% and deleveraged 190 basis points as a percentage of sales. Lower compensation and incentives costs were offset by increased advertising. -
The operating loss was
$(85) million $(68) million $17 million -
Diluted loss per share was
$(0.36) $(0.29)
Inventory
Total ending inventory decreased
Shareholder Returns
On March 17, 2025, the company announced a
In addition to the ASR, the company also completed
Capital Expenditures
Capital expenditures totaled
Outlook
The company’s fiscal year 2025 outlook remains withdrawn in light of macro uncertainty and as management reviews forward plans in the context of first quarter results.
The second quarter outlook is as follows:
|
Second Quarter 2025 Outlook |
Revenue |
Down |
Comparable Sales |
Down |
Gross Margin |
Down YoY |
SG&A |
Dollars Flat YoY |
D&A |
Approximately |
Operating Income |
|
Tax Rate |
Approximately |
Weighted Average Share Count |
Approximately 175 million |
Webcast and Supplemental Financial Information
Management will host a conference call today at 4:30pm Eastern Time. To access the live webcast and audio replay, please click here. Additionally, a financial results presentation is posted in the Investor Relations section on AEO’s website, www.aeo-inc.com.
About American Eagle Outfitters, Inc.
American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer with a portfolio of beloved apparel brands including American Eagle, Aerie, OFFL/NE by Aerie, Todd Snyder and Unsubscribed. Rooted in optimism, inclusivity and authenticity, AEO’s brands empower every customer to celebrate their unique personal style by offering casual, comfortable, timeless outfitting and high-quality products that are made to last.
AEO Inc. operates stores in
Non-GAAP Measures
This press release includes operating income and earnings per share presented on an adjusted or non-GAAP basis, which are non-GAAP financial measures. These financial measures are not based on any standardized methodology prescribed by
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, the results for the second quarter of fiscal 2025. 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 1, 2025 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 fluctuations in customer demand and respond to changing consumer preferences and fashion trends and to manage our inventory commensurately; the 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 or attract customers to our stores; our inability to respond to changes in e-commerce and leverage omni-channel capabilities; our inability to execute on our key business priorities; our inability to expand internationally; difficulty with our international merchandise sourcing strategies; the impact import tariffs and other trade restrictions imposed by the
The use of the “company,” “AEO,” “we,” "us," and “our” in this release refers to American Eagle Outfitters, Inc.
| AMERICAN EAGLE OUTFITTERS, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (unaudited) | ||||||||
| (In thousands) | May 3, 2025 | May 4, 2024 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
87,853 |
|
$ |
300,518 |
|
||
| Merchandise inventory |
|
645,062 |
|
|
681,062 |
|
||
| Accounts receivable, net |
|
228,561 |
|
|
230,934 |
|
||
| Prepaid expenses |
|
103,466 |
|
|
72,973 |
|
||
| Other current assets |
|
23,082 |
|
|
25,830 |
|
||
| Total current assets |
|
1,088,024 |
|
|
1,311,317 |
|
||
| Operating lease right-of-use assets |
|
1,471,705 |
|
|
1,123,649 |
|
||
| Property and equipment, at cost, net of accumulated depreciation |
|
765,594 |
|
|
703,551 |
|
||
| Goodwill, net |
|
225,225 |
|
|
225,253 |
|
||
| Non-current deferred income taxes |
|
78,483 |
|
|
89,332 |
|
||
| Intangible assets, net |
|
41,549 |
|
|
45,178 |
|
||
| Other assets |
|
96,774 |
|
|
58,937 |
|
||
| Total assets | $ |
3,767,354 |
|
$ |
3,557,217 |
|
||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
247,994 |
|
$ |
225,480 |
|
||
| Current portion of operating lease liabilities |
|
319,626 |
|
|
303,603 |
|
||
| Accrued compensation and payroll taxes |
|
58,380 |
|
|
64,502 |
|
||
| Unredeemed gift cards and gift certificates |
|
63,282 |
|
|
57,373 |
|
||
| Accrued income and other taxes |
|
23,114 |
|
|
50,716 |
|
||
| Other current liabilities and accrued expenses |
|
75,261 |
|
|
71,655 |
|
||
| Total current liabilities |
|
787,657 |
|
|
773,329 |
|
||
| Non-current liabilities: | ||||||||
| Non-current operating lease liabilities |
|
1,337,489 |
|
|
1,002,529 |
|
||
| Long-term debt, net |
|
110,000 |
|
|
— |
|
||
| Other non-current liabilities |
|
57,992 |
|
|
29,003 |
|
||
| Total non-current liabilities |
|
1,505,481 |
|
|
1,031,532 |
|
||
| Commitments and contingencies |
|
— |
|
|
— |
|
||
| Stockholders’ equity: | ||||||||
| Preferred stock |
|
— |
|
|
— |
|
||
| Common stock |
|
2,496 |
|
|
2,496 |
|
||
| Contributed capital |
|
365,326 |
|
|
345,922 |
|
||
| Accumulated other comprehensive loss |
|
(42,105 |
) |
|
(15,722 |
) |
||
| Retained earnings |
|
2,361,273 |
|
|
2,267,785 |
|
||
| Treasury stock |
|
(1,212,774 |
) |
|
(848,125 |
) |
||
| Total stockholders’ equity |
|
1,474,216 |
|
|
1,752,356 |
|
||
| Total liabilities and stockholders’ equity | $ |
3,767,354 |
|
$ |
3,557,217 |
|
||
| Current |
|
1.38 |
|
|
1.70 |
|
||
| AMERICAN EAGLE OUTFITTERS, INC. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Dollars and shares in thousands, except per share amounts) | |||||||||||||||
| (unaudited) | |||||||||||||||
| 13 Weeks Ended | |||||||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||||||
| (In thousands) | (Percentage of revenue) |
(In thousands) | (Percentage of revenue) |
||||||||||||
| Total net revenue | $ |
1,089,599 |
|
100.0 |
% |
$ |
1,143,867 |
|
100.0 |
% |
|||||
| Cost of sales, including certain buying, occupancy and warehouse expenses |
|
767,178 |
|
70.4 |
|
|
679,628 |
|
59.4 |
||||||
| Gross profit |
|
322,421 |
|
29.6 |
|
|
464,239 |
|
40.6 |
|
|||||
| Selling, general and administrative expenses |
|
338,786 |
|
31.1 |
|
|
333,493 |
|
29.2 |
|
|||||
| Impairment and restructuring charges |
|
17,119 |
|
1.6 |
|
|
- |
|
0.0 |
|
|||||
| Depreciation and amortization expense |
|
51,697 |
|
4.7 |
|
|
52,910 |
|
4.6 |
|
|||||
| Operating (loss) income |
|
(85,181 |
) |
(7.8 |
) |
|
77,836 |
|
6.8 |
|
|||||
| Interest (income), net |
|
(219 |
) |
(0.0 |
) |
|
(3,439 |
) |
(0.3 |
) |
|||||
| Other (income), net |
|
(351 |
) |
(0.0 |
) |
|
(1,396 |
) |
(0.1 |
) |
|||||
| (Loss) income before income taxes | $ |
(84,611 |
) |
(7.8 |
) |
$ |
82,671 |
|
7.2 |
|
|||||
| (Benefit) provision for income taxes |
|
(19,712 |
) |
(1.8 |
) |
|
14,919 |
|
1.3 |
|
|||||
| Net (loss) income | $ |
(64,899 |
) |
(6.0 |
)% |
$ |
67,752 |
|
5.9 |
% |
|||||
| Basic net (loss) income per common share | $ |
(0.36 |
) |
$ |
0.34 |
|
|||||||||
| Diluted net (loss) income per common share | $ |
(0.36 |
) |
$ |
0.34 |
|
|||||||||
| Weighted average common shares outstanding - basic |
|
179,548 |
|
|
196,429 |
|
|||||||||
| Weighted average common shares outstanding - diluted |
|
179,548 |
|
|
201,310 |
|
|||||||||
| AMERICAN EAGLE OUTFITTERS, INC. | ||||||||
| NET REVENUE BY SEGMENT | ||||||||
| (unaudited) | ||||||||
| 13 Weeks Ended | ||||||||
| (In thousands) | May 3, 2025 | May 4, 2024 | ||||||
| Net Revenue: | ||||||||
| American Eagle | $ |
693,865 |
|
$ |
724,744 |
|
||
| Aerie |
|
359,788 |
|
|
372,652 |
|
||
| Other |
|
43,970 |
|
|
54,984 |
|
||
| Intersegment Elimination |
|
(8,024 |
) |
|
(8,513 |
) |
||
| Total Net Revenue | $ |
1,089,599 |
|
$ |
1,143,867 |
|
||
| AMERICAN EAGLE OUTFITTERS, INC. | ||
| STORE INFORMATION | ||
| (unaudited) | ||
| 13 Weeks Ended | ||
| May 3, 2025 | ||
| Consolidated stores at beginning of period | 1,172 |
|
| Consolidated stores opened during the period | ||
| AE Brand (1) | 1 |
|
| Aerie (incl. OFFL/NE) (2) | 3 |
|
| Todd |
1 |
|
| Unsubscribed | 1 |
|
| Consolidated stores closed during the period | ||
| AE Brand (1) | (2 |
) |
| Aerie (incl. OFFL/NE) (2) | - |
|
| Unsubscribed | - |
|
| Total consolidated stores at end of period | 1,176 |
|
| Stores by Brand | ||
| AE Brand (1) | 828 |
|
| Aerie (incl. OFFL/NE) (2) | 321 |
|
| Todd |
20 |
|
| Unsubscribed | 7 |
|
| Total consolidated stores at end of period | 1,176 |
|
| Total gross square footage at end of period (in '000) | 7,232 |
|
| International license locations at end of period (3) | 363 |
|
| (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. | ||
| (2) Aerie (incl. OFFL/NE) includes Aerie stand alone locations, OFFL/NE stand alone locations, and Aerie/OFFL/NE side-by-side locations. | ||
| (3) International licensed retail stores are not included in the consolidated store data or the total gross square footage calculation. | ||
| AMERICAN EAGLE OUTFITTERS, INC. | ||||||||||||||||
| GAAP to Non-GAAP Reconciliation | ||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||
(unaudited) |
||||||||||||||||
| 13 Weeks Ended | ||||||||||||||||
| May 3, 2025 | ||||||||||||||||
| Operating Loss | Benefit for Income Taxes |
Net Loss | Earnings per Diluted Share |
|||||||||||||
| GAAP Basis | $ |
(85,181 |
) |
$ |
(19,712 |
) |
$ |
(64,899 |
) |
$ |
(0.36 |
) |
||||
| % of Revenue |
|
(7.8 |
)% |
|
(6.0 |
)% |
||||||||||
| Add: Impairment and restructuring charges (1) |
|
17,119 |
|
|
13,131 |
|
|
0.07 |
|
|||||||
| Tax effect of the above (2) | $ |
3,988 |
|
|||||||||||||
| Non-GAAP Basis | $ |
(68,062 |
) |
$ |
(15,724 |
) |
$ |
(51,768 |
) |
$ |
(0.29 |
) |
||||
| % of Revenue |
|
(6.2 |
)% |
|
(4.8 |
)% |
||||||||||
The following footnotes relate to impairment and restructuring charges recorded in the 13 weeks ended May 3, 2025: |
||||||||||||||||
|
||||||||||||||||
(1) The Company recorded |
||||||||||||||||
(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. |
||||||||||||||||
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Source: American Eagle Outfitters, Inc.
