AMERICAN EAGLE OUTFITTERS, INC.
NASDAQ : AEOS

AMERICAN EAGLE OUTFITTERS, INC.

November 15, 2005 07:30 ET

American Eagle Outfitters Reports Record Third Quarter EPS of $0.47 versus $0.39 from Continuing Operations Last Year

WARRENDALE, Pa.--(CCNMatthews - Nov 15, 2005) -

American Eagle Outfitters, Inc. (NASDAQ:AEOS):

Comparable Store Sales Increase 13.6%; Provides Fourth Quarter EPS Guidance

American Eagle Outfitters, Inc. (NASDAQ:AEOS) today announced its consolidated financial results for the third quarter ended October 29, 2005.

Third Quarter Ended October 29, 2005

-- Total sales increased 20.5% to $577.7 million from $479.6 million for the quarter ended October 30, 2004.

-- Comparable store sales increased 13.6%, compared to a 26.8% comparable store sales increase for the corresponding period last year.

-- Gross profit for the quarter increased to $269.4 million, or 46.6% as a percent to sales, from $233.9 million, or 48.8% as a percent to sales last year. The decline in gross profit as a percent to sales compared to last year was due primarily to a lower merchandise margin, partially offset by the leveraging of rent expense.

-- Operating income for the quarter increased to $113.3 million, or 19.6% as a percent to sales, from $96.9 million, or 20.2% as a percent to sales last year.

-- Net income for the quarter increased to $73.3 million, or $0.47 per share on a diluted basis, from net income of $57.9 million, or $0.38 per share on a diluted basis last year (which included a $0.01 loss from discontinued operations).

Year-to-Date for the Nine Months Ended October 29, 2005

-- Total sales increased 28.0% to $1.545 billion from $1.207 billion for the nine months ended October 30, 2004.

-- Comparable store sales increased 19.8%, compared to a 17.5% comparable store sales increase for the same nine month period last year.

-- Gross profit for the period increased to $719.5 million, or 46.6% as a percent to sales, from $545.4 million, or 45.2% as a percent to sales last year. The increase in gross profit as a percent to sales compared to last year was due primarily to the leveraging of rent expense.

-- Operating income for the period increased to $286.9 million, or 18.6% as a percent to sales, from $191.0 million, or 15.8% as a percent to sales last year.

-- Net income for the period increased to $186.6 million, or $1.19 per share on a diluted basis, from net income of $112.4 million, or $0.75 per share on a diluted basis last year (which included a $0.04 loss from discontinued operations).

During the quarter, the Company completed the repurchase of 6.0 million shares of common stock for approximately $139 million, which were available under the Company's repurchase program authorization.

Management indicated that it expects fourth quarter earnings per share to be in the range of $0.73 to $0.75. This compares to earnings of $0.70 per share from continuing operations in the fourth quarter of last year.

At 9:00 a.m. Eastern Standard Time, on November 15, 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 November 15th at 12:00 p.m. Eastern Standard Time through November 29th. To listen to the replay, dial 800-642-1687 and reference confirmation code 9827606#. 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 Ts as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 797 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. The company plans to open MARTIN + OSA, a new sportswear concept targeting 25 to 40 year old women and men, in the fall of 2006. For additional information and updates visit www.martinandosa.com.

"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 fourth 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 fourth quarter sales, markdowns and/or earnings expectations may not be achieved, and those other risks described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of 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)

October 29, January 29, October 30,
2005 2005 2004
----------- ----------- -----------
(Unaudited) (Unaudited)
(Restated)
ASSETS
Cash, cash equivalents and
short-term investments $ 556,375 $ 589,607 $ 384,640
Merchandise inventory 253,476 137,991 204,972
Other current assets 106,692 100,042 95,298
----------- ----------- -----------
Total current assets 916,543 827,640 684,910
----------- ----------- -----------
Property and equipment, net 351,855 353,213 375,042
Goodwill, net 10,136 10,136 10,136
Long-term investments 123,461 84,416 34,155
Other assets, net 26,588 18,254 25,355
----------- ----------- -----------
Total Assets $ 1,428,583 $ 1,293,659 $ 1,129,598
----------- ----------- -----------
----------- ----------- -----------

LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $ 104,386 $ 76,344 $ 84,303
Accrued compensation and
payroll taxes 48,732 36,008 39,985
Accrued rent 49,473 45,089 42,164
Accrued income and
other taxes 17,257 33,926 27,646
Unredeemed stored value
cards and gift
certificates 19,065 32,724 15,451
Current portion of deferred
lease credits 10,422 9,798 10,147
Other current
liabilities 15,858 16,152 12,489
----------- ----------- -----------
Total current
liabilities 265,193 250,041 232,185
----------- ----------- -----------
Deferred lease credits 64,021 57,758 58,678
Other non-current
liabilities 29,667 22,374 24,960
----------- ----------- -----------
Total non-current
liabilities 93,688 80,132 83,638
----------- ----------- -----------
Total stockholders'
equity 1,069,702 963,486 813,775
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $ 1,428,583 $ 1,293,659 $ 1,129,598
----------- ----------- -----------
----------- ----------- -----------

Current Ratio 3.46 3.31 2.95


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

Three Months Ended Nine Months Ended
------------------------ -------------------------
October 29, October 30, October 29, October 30,
2005 2004 2005 2004
----------- ----------- ----------- ------------
(Restated) (Restated)

Net sales $ 577,665 $ 479,585 $ 1,545,004 $ 1,207,217
Cost of sales,
including
certain buying,
occupancy and
warehousing
expenses 308,298 245,727 825,497 661,786
----------- ----------- ----------- ------------
Gross profit 269,367 233,858 719,507 545,431
Selling, general
and
administrative
expenses 137,324 119,642 377,222 304,443
Depreciation and
amortization 18,746 17,345 55,429 49,969
----------- ----------- ----------- ------------
Operating income 113,297 96,871 286,856 191,019
Other income
(expense), net 4,083 (645) 11,507 786
----------- ----------- ----------- ------------
Income before
income taxes 117,380 96,226 298,363 191,805
Provision for
income taxes 44,023 37,521 111,788 74,517
----------- ----------- ----------- ------------
Income from
continuing
operations,
net of tax 73,357 58,705 186,575 117,288
Income (loss)
from
discontinued
operations,
net of tax (37) (807) 37 (4,862)
----------- ----------- ----------- ------------
Net income $ 73,320 $ 57,898 $ 186,612 $ 112,426
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------

Basic per common
share amounts:
Income from
continuing
operations $ 0.48 $ 0.40 $ 1.22 $ 0.81
Loss from
discontinued
operations - - - (0.03)
----------- ----------- ----------- ------------
Net income per
basic common
share $ 0.48 $ 0.40 $ 1.22 $ 0.78
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------

Diluted per
common share
amounts:
Income from
continuing
operations $ 0.47 $ 0.39 $ 1.19 $ 0.79
Loss from
discontinued
operations - (0.01) - (0.04)
----------- ----------- ----------- ------------
Net income per
diluted common
share $ 0.47 $ 0.38 $ 1.19 $ 0.75
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------

Weighted average
common shares
outstanding -
basic 152,776 146,004 152,767 144,506
Weighted average
common shares
outstanding -
diluted 155,987 151,570 156,658 148,937

----------------------------------------------------------------------

Total gross
square footage
at end of
period: 4,719,741 4,489,606

Store count at
end of period: 864 839
----------------------------------------------------------------------



Contact Information

  • American Eagle Outfitters, Inc.
    Judy Meehan, 724-776-4857
    or
    Financial Media Contact
    Berns Communications Group
    Stacy Berns or Melissa Jaffin, 212-994-4660