Core Insights - American Eagle Outfitters Inc. (AEO) has maintained its market niche and brand strength, driven by strong demand for its Aerie and American Eagle brands [1] - The company's profit improvement initiatives and cost reductions have positively impacted margins, with gross margin expanding by 240 basis points year over year and operating margin increasing to 6.8% [1][2] Financial Performance - AEO reported first-quarter fiscal 2024 earnings of 34 cents per share, doubling from 17 cents in the same quarter last year [2] - The company's shares have increased by 73.7% over the past year, outperforming the industry growth of 41.5% and the Retail-Wholesale sector's growth of 21.2% [2] Growth Strategies - AEO's growth vision includes the Real Power Real Growth and Powering Profitable Growth plans, focusing on real estate optimization, inventory management, and customer-centric initiatives [4] - The Powering Profitable Growth plan targets annual operating income growth in the mid to high-teens, aiming for over $570 million by the end of fiscal 2026, with a projected operating margin of 10% [4] Brand Expansion - The company is pursuing growth opportunities for the Aerie brand through market expansion and innovation [5] - AEO expects fiscal 2024 revenues to increase by 2-4% year over year, with operating income estimated between $445 million and $465 million [5] Future Outlook - AEO anticipates high-single-digit year-over-year revenue growth in the second quarter of fiscal 2024, including a $55 million positive impact from the retail calendar shift [5] - Projected operating income for the second quarter is between $95 million and $100 million [5] Cost Management - The company has experienced a 7% year-over-year increase in SG&A expenses for the first quarter of fiscal 2024, attributed to higher corporate compensation and incentives [6] - Management expects SG&A expense leverage in the second quarter due to profit improvement initiatives [6]

American Eagle Outfitters (AEO) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this teen clothing retailer have returned -11.6% over the past month versus the Zacks S&P 500 composite's +4.2% change. The Zacks Retail - Apparel and Shoes industry, to which American Eagle belongs, has gained 7.8% over this period. Now the key question is: Where could the st ...

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The sluggishness in retail sales signals it’s time to assess retail stocks to sell.U.S. retail figures came in flat last month compared to March, significantly behind analyst estimates. Moreover, retail sales, excluding automobiles and fuel, dipped 0.1%, while a notable 1.2% decline in online sales pointed to a pullback in consumer activity. This worrying trend points to deeper economic headwinds, impacting household budgets by eating into disposable income. Hence, these worrying indicators and ongoing fina ...

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section outlines forward-looking statements based on management's beliefs and cautions that results may differ due to risks - Fiscal 2024 plans include opening approximately **5-15 American Eagle stores** and **25-40 Aerie/OFFLINE stores**, remodeling **80-90 stores**, and potentially closing **10-20 American Eagle stores**[9](index=9&type=chunk) - Key risks that could impact future results include macroeconomic conditions, fashion trends, competition, and supply chain issues[9](index=9&type=chunk)[10](index=10&type=chunk) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Presents consolidated financial statements showing a 6% revenue increase and a significant rise in net income to $67.8 million [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | May 4, 2024 | February 3, 2024 | April 29, 2023 | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $300,518 | $354,094 | $117,841 | | Merchandise inventory | $681,062 | $640,662 | $624,851 | | Total current assets | $1,311,317 | $1,433,350 | $1,129,501 | | Total assets | $3,557,217 | $3,557,909 | $3,373,894 | | **Liabilities & Equity** | | | | | Total current liabilities | $773,329 | $891,172 | $716,437 | | Total liabilities | $1,804,861 | $1,821,150 | $1,754,878 | | Total stockholders' equity | $1,752,356 | $1,736,759 | $1,619,016 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (in thousands, except per share data) | Metric | 13 Weeks Ended May 4, 2024 | 13 Weeks Ended April 29, 2023 | | :--- | :--- | :--- | | Total net revenue | $1,143,867 | $1,080,926 | | Gross profit | $464,239 | $413,179 | | Impairment, restructuring and other charges | $0 | $21,275 | | Operating income | $77,836 | $22,831 | | Net income | $67,752 | $18,453 | | Diluted net income per common share | $0.34 | $0.09 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | 13 Weeks Ended May 4, 2024 | 13 Weeks Ended April 29, 2023 | | :--- | :--- | :--- | | Net cash (used for) operating activities | $(38,111) | $(8,216) | | Net cash provided by (used for) investing activities | $59,221 | $(46,020) | | Net cash (used for) provided by financing activities | $(74,214) | $1,908 | | Net change in cash and cash equivalents | $(53,576) | $(52,368) | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company operates two reportable segments: **American Eagle** and **Aerie**, with other operations grouped under 'Other'[27](index=27&type=chunk)[78](index=78&type=chunk)[114](index=114&type=chunk) - No impairment charges were recorded in the current quarter, unlike the **$21.3 million** charge in the prior-year quarter[119](index=119&type=chunk)[120](index=120&type=chunk)[149](index=149&type=chunk) - The effective income tax rate decreased to **18.0%** from 27.5% in the prior year, due to tax benefits on share-based payments[111](index=111&type=chunk)[157](index=157&type=chunk) - As of May 4, 2024, the company had **no outstanding long-term debt**[93](index=93&type=chunk)[98](index=98&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 performance to its growth plan, resulting in a 6% revenue increase and 241% operating income surge [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Brand Revenue Performance (13 Weeks Ended May 4, 2024 vs. Prior Year) | Brand | Revenue (in thousands) | % Change YoY | | :--- | :--- | :--- | | American Eagle | $724,744 | +8% | | Aerie | $372,652 | +4% | - Total net revenue increased **6% to $1.144 billion**, with comparable sales up 7%[140](index=140&type=chunk) - Gross profit rose **12% to $464.2 million**, and the gross margin rate expanded by **240 basis points to 40.6%**[137](index=137&type=chunk)[145](index=145&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **7% to $333.5 million**[148](index=148&type=chunk) - Operating income increased **241% to $77.8 million** from $22.8 million in the prior year[151](index=151&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - The company ended the quarter with **$300.5 million in cash** and no outstanding borrowings under its credit facility[167](index=167&type=chunk)[168](index=168&type=chunk) - Capital expenditures were **$36.2 million** for the quarter, with a full-year projection of **$200 million to $250 million**[176](index=176&type=chunk) - The company returned **$24.6 million in dividends** and **$34.9 million in share repurchases** to shareholders[171](index=171&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk exposure from foreign exchange fluctuations has not materially changed since Fiscal 2023 - The primary market risk is foreign exchange rate risk from Canadian and Mexican operations, with no material change in the risk profile[183](index=183&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management concluded that disclosure controls and procedures were **effective** as of the end of the quarter[185](index=185&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter[186](index=186&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company does not expect current legal proceedings to have a material adverse effect on its financial condition - The company does not expect the resolution of currently pending legal matters to have a **material adverse effect**[187](index=187&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been **no material changes** to the company's risk factors as disclosed in the Fiscal 2023 Form 10-K[189](index=189&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details its repurchase of 1.5 million shares under a new 30 million share repurchase authorization Issuer Purchases of Equity Securities (13 Weeks Ended May 4, 2024) | Period | Total Shares Purchased | Average Price Paid | Shares Purchased as Part of Public Program | | :--- | :--- | :--- | :--- | | Month 1 | 101,013 | $22.48 | 0 | | Month 2 | 1,208,269 | $23.11 | 846,451 | | Month 3 | 721,572 | $23.55 | 653,549 | | **Total** | **2,030,854** | **$23.30** | **1,500,000** | - A new share repurchase program for **30 million shares** was authorized, with **28.5 million shares** remaining available[178](index=178&type=chunk)[190](index=190&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including stock award agreements and CEO/CFO certifications - Filed exhibits include forms of stock award agreements, CEO/CFO certifications, and XBRL data files[196](index=196&type=chunk)

American Eagle Outfitters, Inc. (AEO) reported first-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate, while revenues lagged the same. Top and bottom lines increased year over year, driven by brand strength and gains from progress on its Powering Profitable Growth strategy.The company’s first-quarter fiscal 2024 earnings of 34 cents per share doubled from adjusted earnings per share of 17 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of ...

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For the quarter ended April 2024, American Eagle Outfitters (AEO) reported revenue of $1.14 billion, up 5.8% over the same period last year. EPS came in at $0.34, compared to $0.17 in the year-ago quarter.The reported revenue represents a surprise of -0.34% over the Zacks Consensus Estimate of $1.15 billion. With the consensus EPS estimate being $0.28, the EPS surprise was +21.43%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to det ...

Financial Data and Key Metrics Changes - First quarter revenue reached $1.1 billion, a record for the company, reflecting a 6% increase year-over-year, driven by a 7% increase in comparable sales growth [11][22] - Operating income was $78 million, representing a 76% increase from last year's adjusted operating income of $44 million, with an operating margin rise of 270 basis points to 6.8% [22][13] - Gross profit dollars increased by 12% to $464 million, with gross margin expanding by 240 basis points to 40.6%, marking the second highest rate since 2008 [22][13] Business Line Data and Key Metrics Changes - American Eagle brand saw an 8% revenue growth, fueled by a 7% increase in comparable sales, with notable strength in women's tops, dresses, skirts, and jeans [15][12] - Aerie achieved a record revenue quarter with a 4% increase year-over-year, driven by a 6% increase in comparable sales, while excluding swim, comps were up 11% [17][12] - The operating margin for Aerie increased by 70 basis points to 16.5%, with strong performance in corset dressing and Activewear [17][12] Market Data and Key Metrics Changes - The company reported strong growth across both digital and store channels, with digital revenue experiencing a double-digit increase [12][15] - Aerie's performance was impacted by swim trends, which were challenging in the spring season, but the brand remains confident in its growth trajectory [17][36] Company Strategy and Development Direction - The new strategic plan, "Powering Profitable Growth," aims for steady growth and an operating margin target of 10% by 2026 [8][9] - The company focuses on three strategic pillars: amplifying brands, optimizing operations, and executing with financial discipline [10][9] - Investments in brand awareness and assortment expansion are expected to drive future growth, particularly in the Activewear and soft dressing categories [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing a strong cash position and healthy balance sheet with $300 million in cash and no debt [13][22] - The company is on track to meet its full-year guidance for revenue and operating income, with expectations for continued momentum into the second quarter [13][28] - Management noted that the retail calendar shift positively impacted revenue, particularly in the back-to-school season [28][27] Other Important Information - The company returned approximately $60 million to shareholders through dividends and share repurchases [13] - Capital expenditures totaled $36 million, with expectations for full-year spending in the range of $200 million to $250 million [26] Q&A Session Summary Question: Current demand trends and confidence in comping - Management highlighted strong early trends in American Eagle, particularly in women's assortments, and expressed confidence in back-to-school offerings [31] Question: SG&A performance and outlook - SG&A for Q1 was in line with guidance, with expectations for mid-single-digit growth in Q2 and a plan for SG&A dollars to decrease in the back half of the year [32][50] Question: Impact of swim on Aerie's performance - Swim contributed a high single-digit impact on Aerie's performance in the first half, with expectations for improvement in the back half [36][17] Question: Channel sales performance - Aerie's comp was up 6%, with digital and store channels performing similarly, while American Eagle saw high-teens growth in digital [39] Question: Aerie intimates weakness and market trends - Intimates comprise about a third of Aerie's business, with management noting a pivot in customer preferences towards Activewear and sports bras [73][70]

Company Performance - American Eagle Outfitters (AEO) reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, and up from $0.17 per share a year ago, representing an earnings surprise of 21.43% [1] - The company posted revenues of $1.14 billion for the quarter ended April 2024, slightly missing the Zacks Consensus Estimate by 0.34%, compared to $1.08 billion in the same quarter last year [1] - Over the last four quarters, American Eagle has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [1] Stock Performance - American Eagle shares have increased approximately 13% since the beginning of the year, outperforming the S&P 500's gain of 11.2% [2] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $1.28 billion, and for the current fiscal year, it is $1.72 on revenues of $5.43 billion [4] Industry Outlook - The Retail - Apparel and Shoes industry, to which American Eagle belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook [5] - Another company in the same industry, Zumiez, is expected to report a quarterly loss of $1.14 per share, reflecting a year-over-year change of -18.8%, with revenues anticipated to be $171.48 million, down 6.2% from the previous year [5][6]