American Eagle Outfitters, Inc. · NYSE:AEO
American Eagle Outfitters — Q1 2024 Earnings Presentation
38 slides from American Eagle Outfitters's earnings presentation, May 29, 2024
Slide 1: First Quarter 2024 Investor Presentation
FIRST QUARTER 2024 Investor Presentation
Slide 2: Safe Harbor Statement Under The Private Securities Litigation Reform Act Of 1995
Safe Harbor Statement Under The Private Securities Litigation Reform Act Of 1995 This presentation 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 be
Slide 3: Non-GAAP Measures
Non-GAAP Measures This presentation includes information on non-GAAP financial measures (“non-GAAP” or “adjusted”), including gross margin and adjusted operating income for fiscal 2023. These financial measures are not based on any standardized methodology prescribed by U.S. generally accepted accounti
Slide 4: Amplify, Optimize, Our Brands: Profitable Growth
Amplify Our Brands Profitable iivwsadeunam Growth Optimize eration AE Ounce
Slide 5: Authority in Casual Wear: Powerful Brands, World-Class Team
Authority World-Class Powerful Brands Quality Product Operating Leadership Capabilities Team in Casual Wear AE Ownc
Slide 6: Core and Emerging Brands
Fueled by our brands are designed to empower our customers to be their CORE BRANDS EMERGING BRANDS
Slide 7: First Quarter 2024 Results
First Quarter 2024 Results ● Record first quarter revenue of $1.1 billion rose 6% to last year ● Operating profit of $78 million exceeded guidance ● Aerie achieved all-time high first quarter revenue with comps up 6% ● American Eagle sequentially accelerated with comps up 7%
Slide 8: CEO Commentary on First Quarter Results
“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
Slide 9: Key Highlights and Inventory Data
Key Highlights (unaudited) FIRST QUARTER 2024 2023 TOTAL NET REVENUE CHANGE 6% 2% GROSS MARGIN 40.6% 38.2% SELLING, GENERAL & ADMINISTRATIVE EXPENSES 29.2% 28.9% OPERATING MARGIN* 6.8% 4.1% *Results are shown on an adjusted basis for the first quarter of 2023. See accompanying tables for a reconcilia
Slide 10: First Quarter Net Revenue
First Quarter Net Revenue (unaudited) Total Company Revenue Up 6%; Digital Revenue Up 12%; Stores Revenue Up 4% AMERICAN EAGLE AERIE TOTAL AEO $1,144M $1,081M $725M $671M $373M $359M 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 Net Revenue Up 8% YOY Net Revenue Up 6% YOY Net Revenue Up 4% YOY Comparable Sales Up 7
Slide 11: First Quarter Operating Income
First Quarter Operating Income (unaudited) Total Company Operating Income of $78 million AMERICAN EAGLE AERIE CORPORATE & OTHER(1) TOTAL AEO* Operating Margin Operating Margin Operating Margin 19.1% 16.5% 6.8% $139M -$120M -$122M $107M $78M $61M $57M $44M 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 (1)
Slide 12: Guidance
Guidance 2024: › +2-4% Revenue Growth › $445M to $465M Operating Income › SG&A Leverage › D&A ~$220M › Mid-to-High 20s Tax Rate › High-190s Share Count Second Quarter: › High-Single Digit Revenue Growth › $95M to $100M Operating Income › SG&A Leverage
Slide 13: Liquidity and Capital Allocation
Liquidity and Capital Allocation
Slide 14: Capital Allocation Priorities and Cash Returned to Shareholders
Capital Allocation Priorities 1 Investments to Fuel Brand Growth & Build Capabilities 2 Preserving Balance Sheet Strength 3 of dividends and share repurchases Direct Shareholder Returns through a combination * *Includes $619M in net credit available Cash Returned to Shareholders (unaudited) 13 weeks
Slide 15: Balance Sheet Summary
Balance Sheet Summary (unaudited) ASSETS (In thousands) May 4, 2024 February 3, 2024 April 29, 2023 Cash and cash equivalents $300,518 $354,094 $117,841 Short-term investments - 100,000 - Merchandise inventory 681,062 640,662 624,851 Accounts receivable, net 230,934 247,934 259,074 Prepaid expenses
Slide 16: Real Estate Highlights
Real Estate Highlights
Slide 17: 1Q Real Estate Summary
1Q Real Estate Summary (unaudited) Consolidated stores at beginning of period 1,182 Consolidated stores opened during the period AE Brand (1) 3 Aerie (incl. OFFL/NE) (2) 1 Todd Snyder - Unsubscribed - (1) AE Brand includes AE stand alone locations, AE/Aerie side-by side locations, AE/OFFL/NE side-by
Slide 18: Historical Quarterly Store Data by Brand
Historical Quarterly Store Data by Brand (unaudited) Store Counts Sqft By Brand AE SA Aerie SA Off/ine SA AE / Aerie SBS AE / Off/ine SBS AE / Aerie / Off/ine SBSBS Aerie / Off/ine SBS Total Stores (1) Aerie & AE Offline Weighted Weighted Weighted Weighted Weighted Weighted Weighted Weighted Weighte
Slide 19: Historical Financials
Historical Financials
Slide 20: Historical Financial Information - GAAP Basis
Historical Financial Information - GAAP Basis (unaudited) Fiscal 2023 Fiscal 2024 (In thousands, except per share amounts and store counts) 2019 2020 2021 2022** Q1 Q2 Q3 Q4* 2023** Q1 Total net revenue $4,308,212 $3,759,113 $5,010,785 $4,989,833 $1,080,926 $1,200,879 $1,301,055 $1,678,910 $5,261,77
Slide 21: Long-Term Strategy: Powering Profitable Growth
AE Oc Evie Powering “_. _ Profitable 2 > © Growth —Ssaaaum Long-Term Strategy © is
Slide 22: Long-Term Targets (adjusted basis)
(1) Results are shown on an adjusted basis. See accompanying tables for a reconciliation of GAAP to non-GAAP results.
Slide 23: Amplify American Eagle
Amplify AMERICAN EAGLE Powering Profitable Growth e Continue to Lead in Jeans ¢ Complete the Outfit - Tops e Expand into Adjacencies e Modernize Fleet e Enhance Inventory Allocation
Slide 24: Amplify Aerie's Powerful Brand Platform
Amplify Aerie’s Powerful Brand Platform ● Win in Intimates & Lounge ● Establish Authority in Activewear ● Market expansion ● Acquire New Customers
Slide 25: Optimize Operations
Optimize Operations Powering Profitable Growth Stores Openings + Remodels Al + RFID for Inventory Productivity Supply Chain Transform for Agility and Efficiency Digital Grow Through KPI Focus Marketing Optimize for Greater Returns
Slide 26: Powering Profitable Growth
Powering J
Slide 27: Long-Term Revenue Drivers
Long-Term Revenue Drivers Comp Growth > Amplifying Core Assortment > Category Adjacencies > Customer Growth > AE Fleet Remodels > Digital Acceleration > Improved Operating Capabilities > Mexico/Int'l Growth Aerie/OFFLINE Fleet Expansion > Targeting 100 new stores ; 2026 > 30-35 new stores per year T
Slide 28: Long-Term Operating Income Target (adjusted basis)
(1) Results are shown on an adjusted basis. See accompanying tables for a reconciliation of GAAP to non-GAAP results.
Slide 29: SG&A as a % of Total Revenue
SG&A AS A % OF TOTAL REVENUE 24.3% 23.9% 26.0% 24.4% 2018 2019 2020 2021 27.2% 2023 2026 TARGET Leverage Drivers: > MeN SI EY.
Slide 30: Long-Term Targets (adjusted basis)
(1) Results are shown on an adjusted basis. See accompanying tables for a reconciliation of GAAP to non-GAAP results.
Slide 31: 2014-2023 Capital Allocation: $1.7B Returns to Shareholders
2014-2023 CAPIT. LOCATION $1.7B RETURNS TO SHAREHOLDERS
Slide 32: AEO's Value Creation Model
Slide 33: Appendix
Slide 34: Results by Segment
Results by Segment (Dollars in Thousands) (unaudited) 13 Weeks Ended May 4, 2024 April 29, 2023 Net Revenue: American Eagle $724,744 $671,092 Aerie 372,652 359,082 Other 54,984 109,357 Intersegment Elimination (8,513) (58,605) Total Net Revenue $1,143,867 $1,080,926 Operating Income: American Eagle
Slide 35: Statement of Operations Summary - GAAP Basis
Statement of Operations Summary-GAAP Basis (unaudited) 13 Weeks Ended (In thousands) May 4, 2024 % of Revenue April 29, 2023 % of Revenue Total net revenue $ 1,143,867 100.0% $ 1,080,926 100.0% Cost of sales, including certain buying, occupancy and warehousing expenses 679,628 59.4% 667,747 61.8% Gr
Slide 36: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 13 Weeks ended April 29, 2023 Operating Income Tax Net Diluted Earnings (in thousands, except per share amounts) Income Expense Income per Share GAAP Basis $22,831 $6,999 $18,453 $0.09 % of Revenue 2.1% 1.7% Add: Impairment, restructuring, and other charges⁽¹⁾ $21,275
Slide 37: GAAP to Non-GAAP Reconciliation, Fiscal 2023
GAAP to Non-GAAP Reconciliation Fiscal 2023 (in thousands) Gross Profit Gross Margin Operating Income Operating Margin GAAP basis $2,024.6 38.5% $222.7 4.2% Impairment and restructuring charges: Quiet Platforms $- $119.6 International $11.0 $21.9 U.S. and Canada $- $- Corporate $- $11.2 Non-GAAP bas
Slide 38: Legend of Numerical Guidance
Legend of Numerical Guidance Description % Range Flat 0.00% Slight 0.1-0.9% Low Single Digits 1.0-3.3% Mid Single Digits 3.4-6.6% High Single Digits 6.7-9.9% Low Double Digits 10.0-12.9% Low Teens 13.0-13.3% Mid Teens 13.4-16.6% High Teens 16.7-19.9% Low Twenties 20.0-23.3% Mid Twenties 23.4-26.6% H
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