American Eagle Outfitters, Inc. · NYSE:AEO
American Eagle Outfitters — Q2 2023 Earnings Presentation
26 slides from American Eagle Outfitters's earnings presentation, Sep 6, 2023
Slide 1: Second Quarter 2023 Investor Presentation
SECOND QUARTER 2023 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 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 concern
Slide 3: Second Quarter Fiscal 2023 Results
Second Quarter Fiscal 2023 Results Record second quarter revenue of $1.2 billion, up slightly to last year. Operating profit of $65 million, up significantly, with growth across brands. Aerie posted all-time high second quarter revenue. American Eagle continued to see a sequential improvement in rev
Slide 4: Management commentary on second quarter results
“I am pleased to report second quarter revenue and operating profit that exceeded our expectations. Demand picked up in June and July reflecting brand strength and on trend collections that are resonating well with customers, supported by exciting new marketing campaigns. It’s encouraging to see pos
Slide 5: Key Highlights and Inventory Data (unaudited)
Key Highlights (unaudited) SECOND QUARTER 2023 2022 TOTAL NET REVENUE CHANGE 0% 0% GROSS MARGIN 37.7% 30.9% SELLING, GENERAL & ADMINISTRATIVE EXPENSES 27.6% 25.7% OPERATING MARGIN 5.4% 1.2% Inventory Data (unaudited) (in thousands) July 29, 2023 July 30, 2022 ENDING INVENTORY $636,972 $687,046 ENDIN
Slide 6: Second Quarter Net Revenue
Second Quarter Net Revenue Total Company Revenue Up Slightly; Stores Revenue Up 4%; Digital Revenue Down 7% AMERICAN EAGLE AERIE TOTAL AEO $1,201M $778M $1,198M $767M $380M $372M 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 Net Revenue Down 1% YOY Net Revenue Up 2% YOY Net Revenue Up Slightly YOY
Slide 7: Second Quarter Operating Income
Second Quarter Operating Income Total Company Operating Income of $65M, with growth across brands AMERICAN EAGLE AERIE CORPORATE AND OTHER1 TOTAL AEO Operating Margin Operating Margin Operating Margin 16.8% 15.1% 5.4% $129M -$121M $109M -$107M $65M $57M $14M $12M 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 2Q22 2
Slide 8: Outlook
Outlook For the year, management expects revenue to be up low single digits to last year, compared to prior guidance for revenue in the range of flat to down low single digits. Operating income is expected to be in the range of $325 to $350 million, up from prior guidance of $250 to $270 million. Th
Slide 9: Results by Segment (Dollars in Thousands) (unaudited)
Results by Segment (Dollars in Thousands) (unaudited) (1) The Todd Snyder brand, Unsubscribed brand, and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they are presented under the Other caption.
Slide 10: Statement of Operations Summary-GAAP Basis (unaudited)
Statement of Operations Summary-GAAP Basis (unaudited)
Slide 11: Liquidity and Capital Allocation
Liquidity and Capital Allocation
Slide 12: Liquidity and Capital Allocation Priorities
2Q23 LIQUIDITY Capital Allocation Priorities 1 Investments to Fuel Aerie’s Growth & Build Capabilities $763M* $175M 2 Preserving Balance Sheet Strength Cash & Cash Equivalents Total Available Liquidity 3 of dividends and share repurchases Direct Shareholder Returns through a combination *Includes $5
Slide 13: Balance Sheet Summary (unaudited)
Balance Sheet Summary (unaudited)
Slide 14: Real Estate Highlights
Real Estate Highlights
Slide 15: 2Q Real Estate Summary (unaudited)
2Q Real Estate Summary (unaudited) Consolidated stores at beginning of period 1,180 Consolidated stores opened during the period AE BRAND(2) 2 Aerie (incl. OFFL/NE)(3) 3 Todd Snyder 2 Consolidated stores closed during the period (1) International license locations are not included in the consolidate
Slide 16: Historical Quarterly Store Data by Brand (unaudited)
Historical Quarterly Store Data by Brand (unaudited) STORE COUNTS SQFT BY BRAND (1) Total Stores includes Todd Snyder and Unsubscribed
Slide 17: AE North America Store Footprint
AE North America Store Footprint 84 net store closures since FY19, reflecting a 9% reduction in sq. footage NORTH AMERICAN STORES FY19 FY20 FY21 FY22 2Q23 931 892 867 846 847 Weighted Average Square Footage* FY19 FY20 FY21 FY22 2Q23 5,984 5,904 5,692 5,562 5,441 North America includes stores in the
Slide 18: Historical Financials
Historical jh Financials |} 9”
Slide 19: Historical Financial Information - GAAP Basis
Historical Financial Information - GAAP Basis Fiscal 2022 Fiscal 2023 (1) In Q1 2022, the Company adopted ASU 2020-06 under the modified retrospective method, which requires the Company to utilize the "if-converted" method of calculating diluted EPS. (2) Comparable sales includes results from Todd S
Slide 20: Historical Operating Income Reconciliation
Historical Operating Income Reconciliation (1) In fiscal 2022, the Company recorded impairment charges of $20.6 million primarily related to store property and equipment and operating lease ROU assets. In fiscal 2021, the Company recorded impairment charges of $11.9 million primarily related to stor
Slide 21: REAL Power. REAL Growth. Value Creation Plan
REAL Power. REAL Growth. Value Creation Plan
Slide 22: Our brands empower customers to be their real, authentic selves
Fueled by optimism, our brands are designed to empower our customers to be their real, authentic selves.
Slide 23: Customer Centric Omni Channel Retailer With Strong Digital Presence
Customer Centric Omni Channel Retailer With Strong Digital Presence $5.0B $5.0B* Digital 13% 6-Year CAGR $4.3B $1.8B $1.7B $4.0B $3.8B $1.3B $3.8B $3.6B $1.1B COVID IMPACTED $1.0B $0.8B $0.8B $1.7B $3.1B $3.0B $2.9B $2.9B $3.0B $2.8B $2.8B $2.1B 2016 2017 2018 2019 2020 2021 2022 DIRECT REVENUE STOR
Slide 24: Value Creation Plan
Value Creation Plan • Grow Aerie to $2 Billion+ in Revenue • Drive Sustained Profitable Growth at American Eagle • Leverage Customer-Focused Capabilities • Strengthen ROI Discipline • Power of People, Culture and Purpose
Slide 25: Aerie and American Eagle Roadmaps to Sustained Profitable Growth
Aerie’s Roadmap to Drive Sustained Profitable $2 Billion+ in Revenue Growth at American Eagle 1 Winning in Intimates & Lounge 1 Refresh Brand DNA 2 Activewear Product Extension 2 Complete The Outfit 3 Market Expansion 3 Optimize Inventory 4 New Customer Acquisition 4 Right-Size Store Footprint
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