American Eagle Outfitters, Inc. · NYSE:AEO
American Eagle Outfitters — Q2 2024 Earnings Presentation
35 slides from American Eagle Outfitters's earnings presentation, Aug 29, 2024
Slide 1: Second Quarter 2024 Investor Presentation
SECOND 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: Amplify Our Brands, Optimize Operations
Amplify Our Brands Profitable iivwsadeunam Growth Optimize eration AE Ounce
Slide 4: Authority in Casual Wear, Powerful Brands
Authority World-Class Powerful Brands Quality Product Operating Leadership Capabilities Team in Casual Wear AE Ownc
Slide 5: Our Core Brands
Fueled by our brands are designed to empower our customers to be their CORE BRANDS
Slide 6: Second Quarter 2024 Results
Second Quarter 2024 Results ● Record second quarter revenue of $1.3 billion rose 8% to last year ● Operating profit of $101 million, up 55% to last year ● Aerie achieved all-time high second quarter revenue with comps up 4% ● American Eagle continued to see strong momentum, with comps increasing 5% ●
Slide 7: Management Commentary on Powering Profitable Growth
“Our Powering Profitable Growth strategy is off to a great start, locking in a strong first half and setting us on track to achieve the high end of our prior operating profit outlook for 2024. The second quarter marked our sixth consecutive quarter of record revenue and we successfully leveraged our
Slide 8: Key Highlights and Inventory Data
Key Highlights (unaudited) SECOND QUARTER 2024 2023 TOTAL NET REVENUE CHANGE 8% 0% GROSS MARGIN 38.6% 37.7% SELLING, GENERAL & ADMINISTRATIVE EXPENSES 26.7% 27.6% OPERATING MARGIN 7.8% 5.4% Inventory Data (unaudited) (In thousands) August 3, 2024 July 29, 2023 ENDING INVENTORY $663,659 $636,972 ENDI
Slide 9: Second Quarter Net Revenue
Second Quarter Net Revenue (unaudited) Total Company Revenue Up 8%; Digital Revenue Up 12%; Stores Revenue Up 7% AMERICAN EAGLE AERIE TOTAL AEO $1,291M $1,201M $828M $767M $416M $380M 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 Net Revenue Up 8% YOY Net Revenue Up 8% YOY Net Revenue Up 9% YOY Comparable Sales Up
Slide 10: Second Quarter Operating Income
Second Quarter Operating Income (unaudited) Total Company Operating Income of $101 million, up 55% to last year AMERICAN EAGLE AERIE CORPORATE & OTHER(1) TOTAL AEO Operating Margin Operating Margin Operating Margin 17.5% 16.8% 7.8% $145M $129M -$121M -$113M $101M $70M $65M $57M 2Q23 2Q24 2Q23 2Q24 2
Slide 11: Guidance
Guidance 2024: › Approximately 4% Comp Growth › 2-3% Revenue Growth › $455M to $465M Operating Income › SG&A Leverage › D&A ~$220M › Mid-to-High 20s Tax Rate › High-190s Share Count Third Quarter: › 3-4% Comp Growth › Revenue flat to up slightly › $120M to $125M Operating Income › SG&A Down Slightly
Slide 12: Liquidity and Capital Allocation
Liquidity and Capital Allocation
Slide 13: 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 $631M in net credit available Cash Returned to Shareholders (unaudited) 13 weeks
Slide 14: Balance Sheet Summary
Balance Sheet Summary (unaudited) ASSETS (In thousands) August 3, 2024 February 3, 2024 July 29, 2023 Cash and cash equivalents $ 191,837 $ 354,094 $ 175,315 Short-term investments — 100,000 — Merchandise inventory 663,659 640,662 636,972 Accounts receivable, net 231,750 247,934 271,333 Prepaid expe
Slide 15: Real Estate Highlights
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Slide 16: 2Q Real Estate Summary
2Q Real Estate Summary (unaudited) Consolidated stores at beginning of period 1,173 Consolidated stores opened during the period AE Brand (1) 3 Aerie (incl. OFFL/NE) (2) 9 Todd Snyder 2 (1) AE Brand includes AE stand alone locations, AE/Aerie side-by side locations, AE/OFFL/NE side-by-side locations
Slide 17: Historical Quarterly Store Data by Brand
Historical Quarterly Store Data by Brand (unaudited) Store Counts Sqft By Brand Aerie & 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) AE Offline Weighted Weighted Weighted Weighted Weighted Weighted Weighted Weighted Weighte
Slide 18: Historical Financials
Historical Financials AE Ounce
Slide 19: 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 Q2 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
Slide 20: Long-Term Strategy: Powering Profitable Growth
AE Oc Evie Powering “_. _ Profitable 2 > © Growth —Ssaaaum Long-Term Strategy © is
Slide 21: Results Shown on an Adjusted Basis
(1) Results are shown on an adjusted basis.
Slide 22: 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 23: 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 24: 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 25: Powering Profitable Growth
Powering J
Slide 26: 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 27: Results Shown on an Adjusted Basis
(1) Results are shown on an adjusted basis.
Slide 28: 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 29: Results Shown on an Adjusted Basis
(1) Results are shown on an adjusted basis.
Slide 30: 2014-2023 Capital Allocation: Returns to Shareholders
2014-2023 CAPIT. LOCATION $1.7B RETURNS TO SHAREHOLDERS
Slide 31: AEO's Value Creation Model
Slide 32: Appendix
Appendix
Slide 33: Results by Segment
Results by Segment (Dollars in Thousands) (unaudited) 13 weeks ended 26 weeks ended August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Net Revenue: American Eagle $ 827,638 $ 767,018 $ 1,552,382 $ 1,438,110 Aerie 415,646 380,413 788,298 739,495 Other 57,457 108,318 112,441 217,675 Intersegmen
Slide 34: Statement of Operations Summary - GAAP Basis
Statement of Operations Summary-GAAP Basis (unaudited) 13 Weeks Ended (In thousands) August 3, 2024 % of Revenue July 29, 2023 % of Revenue Total net revenue $1,291,058 100.0% $1,200,879 100.0% Cost of sales, including certain buying, occupancy and warehousing expenses 792,162 61.4% 747,863 62.3% Gr
Slide 35: 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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