American Eagle Outfitters, Inc. · NYSE:AEO
American Eagle Outfitters — Q3 2024 Earnings Presentation
41 slides from American Eagle Outfitters's earnings presentation, Dec 4, 2024
Slide 1: Third Quarter 2024 Investor Presentation
THIRD 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, operating income, net income and net income per diluted share. These financial measures are not based on any standardized methodology prescribed by U.S. generally
Slide 4: Amplify, Optimize, Our Brands
Amplify Our Brands Profitable iivwsadeunam Growth Optimize eration AE Ounce
Slide 5: Authority, World-Class Product, Powerful Brands
Authority World-Class Powerful Brands Quality Product Operating Leadership Capabilities Team in Casual Wear AE Ownc
Slide 6: Core Brands
Fueled by our brands are designed to empower our customers to be their CORE BRANDS
Slide 7: Third Quarter 2024 Results
Third Quarter 2024 Results ● Aerie achieved all-time high third quarter revenue with comps up 5%, following 12% reported comp growth last year ● American Eagle comps increased 3%, following 2% reported comp growth last year ● Operating Income was $106 million. Adjusted Operating Income of $124 milli
Slide 8: CEO Quote on Third Quarter Performance
“Building on our positive performance in the first half of the year, third quarter results provide another proof point of the effectiveness of our Powering Profitable Growth Plan. Led by a strong back-to-school, we achieved comparable sales growth across brands and channels, and adjusted operating i
Slide 9: 2024 Quarterly Impact of Retail Calendar
2024 Quarterly Impact of Retail Calendar Shift and One Less Selling Week (1) Reflects approximate year-over-year impact
Slide 10: Key Highlights and Inventory Data
Key Highlights (unaudited) THIRD QUARTER 2024 2023 TOTAL NET REVENUE CHANGE* -1% 5% COMPARABLE SALES GROWTH* 3% 5% GROSS MARGIN 40.9% 41.8% SELLING, GENERAL & ADMINISTRATIVE EXPENSES 27.3% 27.8% OPERATING MARGIN** 9.6% 9.6% *The shift in the retail calendar negatively impacted revenue by approximate
Slide 11: Third Quarter Net Revenue
Third Quarter Net Revenue (unaudited) Total Company Revenue Down 1%; Comparable Sales Up 3% AMERICAN EAGLE AERIE TOTAL AEO $1,301M $1,289M $857M $832M $410M $393M 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 Net Revenue Down 3% YOY Net Revenue Up 4% YOY Net Revenue Down 1% YOY Comparable Sales Up 3% YOY Comparable
Slide 12: Third Quarter Operating Income
Third Quarter Operating Income (unaudited) Total Company Adjusted Operating Income of $124 million AMERICAN EAGLE AERIE CORPORATE & OTHER(1) TOTAL AEO* Operating Margin Operating Margin Operating Margin 17.7% 21.7% 9.6% $184M $147M -$135M $125M $124M -$113M $89M $76M 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 3Q
Slide 13: Guidance
Guidance Fourth Quarter: › Approximately 1% Comp Growth › Revenue down 4% › $125M to $130M Operating Income › SG&A Leverage 2024: › Approximately 3% Comp Growth › Revenue up 1% › $428M to $433M Adjusted Operating Income › SG&A Leverage › D&A ~$215M › Mid-to-High 20s Tax Rate › High-190s Share Count
Slide 14: Liquidity and Capital Allocation
Liquidity and Capital Allocation
Slide 15: 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 $668M in net credit available Cash Returned to Shareholders (unaudited) 13 weeks
Slide 16: Balance Sheet Summary
Balance Sheet Summary (unaudited) ASSETS (In thousands) November 2, 2024 February 3, 2024 October 28, 2023 Cash and cash equivalents $ 160,195 $ 354,094 $ 240,940 Short-term investments — 100,000 — Merchandise inventory 804,256 640,662 769,315 Accounts receivable, net 214,114 247,934 239,374 Prepaid
Slide 17: Real Estate Highlights
Real Estate Highlights
Slide 18: 3Q Real Estate Summary
3Q Real Estate Summary (unaudited) Consolidated stores at beginning of period 1,178 Consolidated stores opened during the period AE Brand (1) 8 Aerie (incl. OFFL/NE) (2) 7 Todd Snyder 2 Unsubscribed (1) AE Brand includes AE stand alone locations, AE/Aerie side-by side locations, AE/OFFL/NE side-by-s
Slide 19: 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) AE Aerie & Offline Weighted Weighted Weighted Weighted Weighted Weighted Weighted Weighted Weighte
Slide 20: Historical Financials
Historical Financials
Slide 21: 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 Q3 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,
Slide 22: Powering Profitable Growth: Long-Term Strategy
AE Oc Evie Powering “_. _ Profitable 2 > © Growth —Ssaaaum Long-Term Strategy © is
Slide 23: Long-Term Targets (Adjusted Results)
(1) Results are shown on an adjusted basis.
Slide 24: Amplify American Eagle: Powering Profitable Growth
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 25: 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 26: 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 27: Powering Profitable Growth
Powering J
Slide 28: 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 29: Operating Income Targets (Adjusted Results)
(1) Results are shown on an adjusted basis.
Slide 30: 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 31: Long-Term Targets (Adjusted Results)
(1) Results are shown on an adjusted basis.
Slide 32: 2014-2023 Capital Allocation: $1.7B Returns to Shareholders
2014-2023 CAPIT. LOCATION $1.7B RETURNS TO SHAREHOLDERS
Slide 33: AEO's Value Creation Model
Slide 34: Appendix
Appendix
Slide 35: Results by Segment
Results by Segment (Dollars in Thousands) (unaudited) 13 weeks ended 39 weeks ended November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023 Net Revenue: American Eagle $ 831,914 $ 857,378 $ 2,384,295 $ 2,295,487 Aerie 410,442 393,042 1,198,741 1,132,537 Other 56,562 111,805 169,002 329,4
Slide 36: Statement of Operations Summary-GAAP Basis
Statement of Operations Summary-GAAP Basis (unaudited) 13 Weeks Ended (In thousands) November 2, 2024 % of Revenue October 28, 2023 % of Revenue Total net revenue $1,289,094 100.0% $1,301,055 100.0% Cost of sales, including certain buying, occupancy and warehousing expenses 762,470 59.1% 757,258 58.
Slide 37: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 13 Weeks Ended November 2, 2024 Income Tax Operating Income Net Income Earnings per Diluted Share (in thousands, except per share amounts) Expense GAAP Basis $ 106,089 $ 28,211 $ 80,019 $ 0.41 % of Revenue 8.2% 6.2% Add: Impairment, restructuring, and other charges¹ $
Slide 38: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 39 Weeks Ended November 2, 2024 Income Tax Operating Income Net Income Earnings per Diluted Share (in thousands, except per share amounts) Expense GAAP Basis $ 285,034 69,420 $ 225,034 $ 1.14 % of Revenue 7.7% 6.0% Add: Impairment, restructuring, and other charges¹ 17
Slide 39: GAAP to Non-GAAP Reconciliation: Fiscal 2024 Guidance
GAAP to Non-GAAP Reconciliation Fiscal 2024 Guidance Operating Income (in millions) Low End High End GAAP Basis $ 410 $ 415 Add: Impairment, restructuring, and other charges¹ $ 18 $ 18 Non-GAAP Basis $ 428 $ 433 (1) During the 13 weeks ended November 2, 2024, the Company recorded restructuring costs
Slide 40: GAAP to Non-GAAP Reconciliation: Fiscal 2023
GAAP to Non-GAAP Reconciliation Fiscal 2023 (in millions) 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
Slide 41: 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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