American Eagle Outfitters(US:AEO)2025-12-09 21:21Financial Performance - Total net revenue increased by 6% to $1.363 billion for the 13 weeks ended November 1, 2025, compared to $1.289 billion for the same period last year[155] - Gross profit for the same period was $552 million, reflecting a 5% year-over-year increase[155] - Operating income rose by 6% to $113 million, with an operating margin of 8.3%, up 10 basis points from the previous year[155] - Aerie revenue increased by 12% year-over-year, while American Eagle revenue grew by 3%[155] - Total comparable sales increased by 4%, compared to a 3% increase in the prior year[158] - Total net revenue for the 13 weeks ended November 1, 2025, was $1,362,701, representing a 6% increase from $1,289,094 for the same period last year[159] - American Eagle comparable sales increased by 1%, while Aerie comparable sales increased by 11%[160] - Gross profit increased by 5% year-over-year to $551,877, with a gross margin of 40.5%, down 40 basis points from the previous year[161] - Net income for the 13 weeks ended November 1, 2025, was $91,344, a 14% increase from $80,019, with net income per diluted share rising to $0.53 from $0.41[174] - Total net revenue for the 39 weeks ended November 1, 2025, was relatively flat, with digital revenue increasing by 2% and store revenue decreasing by 1%[175] - Total net revenue for the 39 weeks ended November 1, 2025, was $3,735,970, a slight increase of $11,957 or 0% compared to $3,724,010 for the same period in 2024[176] - Net income for the 39 weeks ended November 1, 2025, was $104,078, a decrease of $120,956 or 54% compared to $225,034 in 2024[195] - For the 39 weeks ended November 1, 2025, the company reported a net income of $104.1 million, with earnings per diluted share of $0.59 on a GAAP basis, and $117.2 million, with earnings per diluted share of $0.66 on a non-GAAP basis[199] Expenses and Margins - Selling, general and administrative (SG&A) expenses rose by 10% to $386,340, accounting for 28.4% of net revenue, an increase of 110 basis points[164] - Operating income increased by 6% to $112,574, with an operating margin of 8.3%, up 10 basis points from the previous year[168] - Interest expense increased to $2,144, compared to a net income of $(1,246) in the previous year, reflecting a 272% increase[171] - The provision for income taxes was $33,238, an 18% increase from $28,211, with an effective tax rate of 26.7%[173] - Gross profit decreased by $115,499, or 8%, to $1,374,260, primarily due to a $99 million decline in merchandise margin year-over-year[178] - Selling, general and administrative expenses increased by $37,152, or 4%, to $1,067,338, driven by planned investments in advertising[181] - Operating income decreased by $154,557, or 54%, to $130,477, primarily due to lower gross profit and higher SG&A expenses[186] - Interest expense increased by $9,258, or 171%, to $3,844, primarily due to increased borrowings on the Credit Facility[191] - The effective tax rate increased to 26.3% for the 39 weeks ended November 1, 2025, compared to 23.6% for the same period in 2024[194] Store Operations and Expansion - The number of stores at the end of the period was 1,190, with 8 new stores opened and 3 closed during the quarter[157] - International licensed retail stores increased to 368, up from 310 year-over-year[157] - The company had a total of 368 licensed retail stores and concessions operated by international licensing partners across approximately 30 countries as of November 1, 2025[206] - The company remodeled 35 stores and opened 26 new stores during the 39 weeks ended November 1, 2025[219] Shareholder Returns and Capital Expenditures - The company repurchased $231 million worth of shares, reducing diluted shares outstanding by approximately 12%[155] - The company repurchased approximately 2.0 million shares during the 39 weeks ended November 1, 2025, as part of its share repurchase program[221] - The company declared a quarterly cash dividend of $0.125 per share on September 16, 2025, which was paid on October 29, 2025[226] - Capital expenditures for the 39 weeks ended November 1, 2025, totaled $202.2 million, a 28% increase from $157.7 million in the same period of the previous year[218] - The company expects capital expenditures for Fiscal 2025 to be approximately $275 million to support expansion efforts and technology upgrades[218] Cash Flow and Other Income - The company reported a decrease in cash provided by operating activities, totaling $40.3 million, down from $93.0 million in the previous year[210] - Other income increased by $10,669, or 266%, to $(14,675), driven by a $13 million unrealized gain on equity method investments[192] - The company experienced an unrealized gain of $25 million included in accumulated other comprehensive income during the 39 weeks ended November 1, 2025, due to foreign exchange rate risk[229]