AMERICAN EAGLE OUTFITTERS, INC.
NASDAQ : AEOS

AMERICAN EAGLE OUTFITTERS, INC.

August 16, 2005 07:30 ET

American Eagle Outfitters Reports Record Second Quarter EPS from Continuing Operations of $0.37 versus $0.22 Last Year

WARRENDALE, Pa.--(CCNMatthews - Aug 16, 2005) -

Comparable Store Sales Increase 21.1%; Provides Third Quarter EPS Guidance

American Eagle Outfitters, Inc. (NASDAQ:AEOS) today announced its consolidated financial results for the second quarter ended July 30, 2005.

Second Quarter Ended July 30, 2005

-- Total sales increased 29.8% to $513.3 million from $395.4 million for the quarter ended July 31, 2004.

-- Comparable store sales increased 21.1% when compared to the corresponding period last year.

-- Gross profit as a percent to sales increased to 44.4% from 41.2% last year due to an improvement in merchandise margins and the leveraging of rent expense.

-- Operating income for the quarter increased to $86.0 million, or 16.8% as a percent to sales, from $51.0 million, or 12.9% as a percent to sales last year.

-- Net income for the quarter increased to $58.0 million, or $0.37 per share on a diluted basis, from net income of $29.3 million, or $0.20 per share on a diluted basis last year (which included a $0.02 loss from discontinued operations).

Year-to-Date for the Six Months Ended July 30, 2005

-- Total sales increased 32.9% to $967.3 million from $727.6 million for the six months ended July 31, 2004.

-- Comparable store sales increased 23.8% when compared to the same six month period last year.

-- Gross profit as a percent to sales increased to 46.5% from 42.8% last year due to the leveraging of rent expense and an improvement in merchandise margins.

-- Operating income for the period increased to $173.6 million, or 17.9% as a percent to sales, from $94.1 million, or 12.9% as a percent to sales last year.

-- Net income for the period increased to $113.3 million, or $0.72 per share on a diluted basis, from net income of $54.5 million, or $0.37 per share on a diluted basis last year (which included a $0.03 loss from discontinued operations).

Management also provided third quarter earnings guidance of $0.45 to $0.46 per share. This compares to earnings of $0.39 per share from continuing operations in the third quarter of last year.

At 9:00 a.m. Eastern Time, on August 16, 2005, the Company's management team will host a conference call to review the financial results. To listen to the call, dial 877-601-0864 at least ten minutes prior to the start of the call. The conference call will also be simultaneously broadcast over the Internet at www.ae.com. A replay will be available beginning August 16th at 12:00 p.m. Eastern Time through August 30th. To listen to the replay, dial 1-800-642-1687 and reference confirmation code 7296359#. An audio replay of the conference call will also be available at www.ae.com.

American Eagle Outfitters (NASDAQ: AEOS) is a leading lifestyle retailer that designs, markets and sells its own brand of relaxed, casual clothing for 15 to 25 year olds, providing high-quality merchandise at affordable prices. AE's collection includes modern basics like jeans, cargo pants and graphic T's as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 783 AE stores in 50 states, the District of Columbia and Puerto Rico, and 71 AE stores in Canada. AE also operates via its Web business, www.ae.com, which offers additional sizes and styles of favorite AE merchandise.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which represent our expectations or beliefs concerning future events, specifically regarding third quarter earnings. All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors beyond the Company's control. Such factors include, but are not limited to the risk that our third quarter sales, markdowns and/or earnings expectations may not be achieved, and those other risks described in the Company's filings with the Securities and Exchange Commission. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if future changes make it clear that projected results expressed or implied will not be realized.



AMERICAN EAGLE OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

July 30, January 29, July 31,
2005 2005 2004
----------- ----------- -----------
(Unaudited) (Unaudited)
(Restated)
ASSETS
Cash, cash equivalents and
short-term investments $ 625,174 $ 589,607 $ 332,611
Merchandise inventory 227,771 137,991 169,840
Other current assets 97,646 100,042 91,267
----------- ----------- -----------
Total current assets 950,591 827,640 593,718
----------- ----------- -----------
Property and equipment, net 351,331 353,213 363,459
Goodwill, net 10,136 10,136 10,136
Long-term investments 125,568 84,416 26,151
Other assets, net 26,314 18,254 26,952
----------- ----------- -----------
Total Assets $ 1,463,940 $ 1,293,659 $ 1,020,416
----------- ----------- -----------
----------- ----------- -----------

LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $ 102,049 $ 76,344 $ 70,732
Accrued compensation and
payroll taxes 30,991 36,008 26,415
Accrued rent 47,268 45,089 40,107
Accrued income and other
taxes 17,655 33,926 18,640
Unredeemed stored value cards
and gift certificates 19,111 32,724 15,388
Current portion of note
payable - - 4,832
Current portion of deferred
lease credits 10,377 9,798 10,061
Other current liabilities 12,673 16,152 12,967
----------- ----------- -----------
Total current
liabilities 240,124 250,041 199,142
----------- ----------- -----------
Note payable - - 11,469
Deferred lease credits 58,337 57,758 56,068
Other non-current liabilities 29,227 22,374 23,963
----------- ----------- -----------
Total non-current
liabilities 87,564 80,132 91,500
----------- ----------- -----------
Total stockholders' equity 1,136,252 963,486 729,774
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $ 1,463,940 $ 1,293,659 $ 1,020,416
----------- ----------- -----------
----------- ----------- -----------

Current Ratio 3.96 3.31 2.98


AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)
(Unaudited)

Three Months Ended Six Months Ended
---------------------- ----------------------
July 30, July 31, July 30, July 31,
2005 2004 2005 2004
---------- ---------- ---------- ----------
(Restated) (Restated)

Net sales $ 513,320 $ 395,402 $ 967,339 $ 727,632
Cost of sales,
including certain
buying, occupancy and
warehousing expenses 285,340 232,548 517,199 416,059
---------- ---------- ---------- ----------
Gross profit 227,980 162,854 450,140 311,573
Selling, general and
administrative
expenses 123,362 94,951 239,898 184,801
Depreciation and
amortization 18,581 16,886 36,683 32,624
---------- ---------- ---------- ----------
Operating income 86,037 51,017 173,559 94,148
Other income, net 4,449 491 7,424 1,431
---------- ---------- ---------- ----------
Income before income
taxes 90,486 51,508 180,983 95,579
Provision for income
taxes 32,452 19,926 67,765 36,996
---------- ---------- ---------- ----------
Income from continuing
operations, net of tax 58,034 31,582 113,218 58,583
Income (loss) from
discontinued
operations, net of tax (15) (2,328) 74 (4,055)
---------- ---------- ---------- ----------
Net income $ 58,019 $ 29,254 $ 113,292 $ 54,528
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Basic per common share
amounts:
Income from continuing
operations $ 0.38 $ 0.22 $ 0.74 $ 0.41
Loss from discontinued
operations 0.00 (0.02) 0.00 (0.03)
---------- ---------- ---------- ----------
Net income per basic
common share $ 0.38 $ 0.20 $ 0.74 $ 0.38
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Diluted per common
share amounts:
Income from continuing
operations $ 0.37 $ 0.22 $ 0.72 $ 0.40
Loss from discontinued
operations 0.00 (0.02) 0.00 (0.03)
---------- ---------- ---------- ----------
Net income per diluted
common share $ 0.37 $ 0.20 $ 0.72 $ 0.37
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Weighted average
common shares
outstanding - basic 153,943 144,502 152,763 143,756
Weighted average
common shares
outstanding - diluted 157,806 148,328 156,961 147,384

----------------------------------------------------------------------
Total gross square
footage at end of
period: 4,631,461 4,390,790

Store count at end of
period: 854 825
----------------------------------------------------------------------



Contact Information

  • American Eagle Outfitters, Inc.
    Laura Weil or Judy Meehan, 724-776-4857