EXHIBIT 99.1
AMERICAN EAGLE
OUTFITTERS
Reports Fourth Quarter and Fiscal 2003 Earnings
Warrendale, PA, February 26, 2004 - American Eagle Outfitters, Inc. (NASDAQ: AEOS) today announced its consolidated financial results for the fourth quarter and year ended January 31, 2004. The Company also stated that consolidated February month-to-date comparable store sales have increased in the mid-teens.
Fourth Quarter Ended January 31, 2004
- Total sales increased 5.2% to $517.3 million from $491.6 million for the quarter ended February 1, 2003.
- Sales for the fourth quarter 2003 included $26.7 million from the Bluenotes/Thriftys operation, compared to $22.2 million for the corresponding period last year.
- Sales for the fourth quarter 2003 included $21.6 million from the Company's Direct business, which includes our e-commerce business as well as our catalog, compared to $18.9 million for the corresponding period last year. (The Company's Direct business is not included in our comparable store sales calculation.)
- Comparable store sales for the American Eagle Outfitters stores declined 5.1% for the quarter ended January 31, 2004.
- Consolidated comparable store sales, which include American Eagle and Bluenotes/Thriftys stores, declined 4.7% when compared to the corresponding period last year.
- Reported net income for the quarter decreased to $35.4 million, or $0.49 per share on a diluted basis. Reported net income includes a non-cash goodwill impairment charge of $6.1 million, or $0.08 per share on a diluted basis, related to Bluenotes remaining goodwill.
- Adjusted net income* for the quarter, which excludes a non-cash goodwill impairment charge, increased to $41.5 million, or $0.57 per share on a diluted basis, from net income of $38.9 million, or $0.54 per share on a diluted basis last year.
Year-to-Date for the Twelve Months Ended January 31, 2004
- Total sales increased 3.9% to $1.520 billion from $1.463 billion for the twelve months ended February 1, 2003.
- Sales for the twelve months included $84.5 million from the Bluenotes/Thriftys operation, compared to $80.2 million for the corresponding period last year.
- Sales for the twelve months included $54.6 million from the Company's Direct business, which includes our e-commerce business as well as our catalog, compared to $45.6 million for the corresponding period last year. (The Company's Direct business is not included in our comparable store sales calculation.)
- Comparable store sales for the American Eagle Outfitters stores declined 6.6% when compared to the same twelve month period last year.
- Consolidated comparable store sales, which include American Eagle and Bluenotes/Thriftys stores, declined 6.7% when compared to the corresponding period last year.
- Reported net income for the year-to-date period decreased to $60.0 million, or $0.83 per share on a diluted basis. Reported net income includes non-cash goodwill impairment charges of $14.1 million, or $0.20 per share on a diluted basis.
- Adjusted net income* for the year-to-date period, which excludes non-cash goodwill impairment charges, decreased to $74.1 million, or $1.03 per share on a diluted basis from net income of $88.7 million, or $1.22 per share on a diluted basis last year.
* A complete definition and discussion of the Company's use of non-GAAP measures, identified by an asterisk (*), is located below.
* * * *
At 9:00 a.m. EST, on February 26, 2004, 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 February 26th at noon EST through March 9th. To listen to the replay, dial 1-800-642-1687 and reference confirmation code #4809611. An audio replay of the conference call will also be available at www.ae.com until May 13, 2004.
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. AE's Canadian subsidiary, Bluenotes/Thriftys, targets a slightly younger demographic, offering a more urban/suburban, denim-driven collection for 12 to 22 year-olds. American Eagle Outfitters currently operates 740 AE stores in 49 states, the District of Columbia and Puerto Rico, 65 AE stores in Canada, and 110 Bluenotes/Thriftys stores in Canada. AE also operates via its Web business, www.ae.com, which offers additional sizes and styles of favorite AE merchandise.
Non-GAAP Measure Disclosure
The following definitions are provided for the two non-GAAP (Generally Accepted Accounting Principles) measures used by the Company in this release. The two measures are adjusted net income and adjusted diluted earnings per share. Each use is indicated by an asterisk*. We do not intend for these two non-GAAP measures to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently.
Adjusted Financial Results
In this release, adjusted net income and adjusted diluted EPS each exclude the non-cash goodwill impairment charges of $6.1 million, or $0.08 per share, and $14.1 million or $0.20 per share, for the fourth quarter and year-to-date periods ended January 31, 2004, respectively, related to our Bluenotes operation. We believe that these adjusted measures provide investors with an important perspective on the current underlying operating performance of our businesses by isolating and excluding the impact of the non-cash impairment charges related to our acquisition of the Bluenotes business in fiscal 2000.
- Adjusted net income: In this release, we define "adjusted net income" to start with GAAP net income and then add back the $6.1 million and $14.1 million Bluenotes non-cash goodwill impairment charges for the fourth quarter and year-to-date periods ended January 31, 2004, respectively. The table below shows a reconciliation between GAAP net income and adjusted net income.
- Adjusted diluted EPS: In this release, we define "adjusted diluted EPS" to start with GAAP diluted EPS and then add back the $0.08 per share and $0.20 per share Bluenotes non-cash goodwill impairment charges for the fourth quarter and year-to-date periods ended January 31, 2004, respectively. The table below shows a reconciliation between GAAP diluted EPS and adjusted diluted EPS.
| Non-GAAP Financial Measures: | | | | | | | | |
| Reconciliation of GAAP Net Income and Diluted EPS to Adjusted Net Income and Diluted EPS | | | | |
| | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | January 31,
2004 | | February 1,
2003 | | January 31,
2004 | | February 1,
2003 |
| | | | | | | | |
Reported GAAP Net Income | $ | 35,354 | $ | 38,876 | $ | 60,000 | $ | 88,735 |
Non-Cash Goodwill Impairment Charge | | 6,118 | | - | | 14,118 | | - | Adjusted Net Income | $ | 41,472 | $ | 38,876 | $ | 74,118 | $ | 88,735 |
| | | | | | | | |
Reported GAAP Diluted EPS | $ | 0.49 | $ | 0.54 | $ | 0.83 | $ | 1.22 |
Non-Cash Goodwill Impairment Charge | | 0.08 | | - | | 0.20 | | - |
Adjusted Diluted EPS | $ | 0.57 | $ | 0.54 | $ | 1.03 | $ | 1.22 |
AMERICAN EAGLE OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
|
| | January 31,
2004 | | February 1,
2003 |
ASSETS | | | | |
Cash, cash equivalents and short-term investments | $ | 337,812 | $ | 241,573 |
Merchandise inventory | | 120,586 | | 124,708 |
Other current assets | | 67,225 | | 60,445 |
Total current assets | | 525,623 | | 426,726 |
Property and equipment, net | | 278,689 | | 267,479 |
Goodwill, net | | 10,136 | | 23,614 |
Other assets, net | | 50,623 | | 23,520 |
Total Assets | $ | 865,071 | $ | 741,339 |
| | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
Accounts payable | $ | 71,330 | $ | 50,608 |
Accrued compensation and payroll taxes | | 14,409 | | 13,001 |
Accrued rent | | 30,985 | | 28,476 |
Accrued income and other taxes | | 28,669 | | 12,655 |
| Unredeemed stored value cards and gift certificates | | 25,785 | | 22,837 |
Current portion of note payable | | 4,832 | | 4,225 |
Other current liabilities | | 13,025 | | 9,784 |
Total current liabilities | | 189,035 | | 141,586 |
Note Payable | | 13,874 | | 16,356 |
Other non-current liabilities | | 18,492 | | 5,915 |
Total non-current liabilities | | 32,366 | | 22,271 |
Total stockholders' equity | | 643,670 | | 577,482 |
Total Liabilities and Stockholders' Equity | $ | 865,071 | $ | 741,339 |
| | | | |
Current Ratio | | 2.78 | | 3.01 |
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts) |
| | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | January 31,
2004 | | February 1,
2003 | | January 31,
2004 | | February 1,
2003 |
| | (Unaudited)
| | (Unaudited)
| | | | |
Net sales | $ | 517,255 | $ | 491,554 | $ | 1,519,968 | $ | 1,463,141 |
Cost of sales, including certain buying, | | | | | | | | |
occupancy and warehousing expenses | | 322,449 | | 315,136 | | 965,716 | | 920,643 |
Gross profit | | 194,806 | | 176,418 | | 554,252 | | 542,498 |
Selling, general and administrative expenses | | 112,875 | | 101,614 | | 379,289 | | 350,752 |
Depreciation and amortization | | 14,729 | | 13,247 | | 56,281 | | 50,661 |
| Goodwill impairment loss | | 6,118 | | - | | 14,118 | | - |
Operating income | | 61,084 | | 61,557 | | 104,564 | | 141,085 |
Other income, net | | 383 | | 1,387 | | 2,021 | | 2,528 |
Income before income taxes | | 61,467 | | 62,944 | | 106,585 | | 143,613 |
Provision for income taxes | | 26,113 | | 24,068 | | 46,585 | | 54,878 |
Net income | $ | 35,354 | $ | 38,876 | $ | 60,000 | $ | 88,735 |
| | | | | | | | |
Basic income per common share | $ | 0.50 | $ | 0.55 | $ | 0.84 | $ | 1.24 |
Diluted income per common share | $ | 0.49 | $ | 0.54 | $ | 0.83 | $ | 1.22 |
| | | | | | | | |
Weighted average common shares outstanding - basic | | 71,179 | | 71,132 | | 71,113 | | 71,709 |
Weighted average common shares outstanding - diluted | | 72,251 | | 72,034 | | 72,207 | | 72,783 |
Total gross square footage at end of period: | | | | | | | | |
| | | | | | | | |
American Eagle Outfitters Stores | | | | | | 4,239,497 | | 3,817,442 |
Bluenotes/Thriftys Stores | | | | | | 351,732 | | 353,270 |
Store count at end of period: | | | | | | | | |
| | | | | | | | |
American Eagle Outfitters Stores | | | | | | 805 | | 753 |
Bluenotes/Thriftys Stores | | | | | | 110 | | 111 |
Company Contacts:
Laura Weil
Judy Meehan
724-776-4857
