American Eagle Outfitters (AEO) 8-K Announces Restatement Due to Lease Accounting

EXHIBIT 99.1

NEWS RELEASE

AMERICAN EAGLE

OUTFITTERS

Announces Restatement Due to Lease Accounting

Warrendale, PA, March 10, 2005 - American Eagle Outfitters, Inc. (NASDAQ: AEOS) today announced a restatement of prior period financial statements due to changes in its accounting practices related to leasing transactions.

As disclosed in its March 2, 2005 preliminary earnings release, the Company, like many other retailers, determined that its method of accounting for rent holidays and tenant allowances was not in accordance with the views expressed by the Securities and Exchange Commission regarding generally accepted accounting principles. As the Company previously stated, it believes that the earnings impact of these changes is not material to any given period. The primary impact of these changes on the Company's January 29, 2005 balance sheet is an increase to property and equipment and accounts receivable of approximately $67 million, as well as a corresponding increase to a deferred lease credit. The primary impact of these changes on the Company's January 31, 2004 balance sheet is an increase to property and equipment and accounts receivable of approximately $64 million, as well as a corresponding increase to a deferred lease credit.

Historically, the Company has recognized straight line rent expense for leases beginning on the store opening date. This had the effect of excluding the build-out period of its stores from the calculation of the period over which it expenses rent and recognizes construction allowances. The Company is now changing this practice to include the build-out period in our calculations of rent expense and construction allowance amortization.

Additionally, the Company is changing its classification of construction allowances on its consolidated financial statements to record them as deferred liabilities, which will be amortized as a reduction to rent expense. Furthermore, construction allowances will be presented within operating activities on its consolidated statements of cash flows. Historically, construction allowances have been classified on the Company's consolidated balance sheets as a reduction of property and equipment and the related amortization has been classified as a reduction to depreciation and amortization expense (over the lesser of the useful life or the life of the lease) on the consolidated statements of operations. The Company's consolidated statements of cash flows have historically reflected construction allowances as a reduction of capital expenditures within investing activities.

The Company, along with its independent auditors, has completed its review of the respective accounting policies. As a result, Management determined that a restatement of its consolidated balance sheets, statements of stockholders' equity, statements of operations and statements of cash flows is deemed necessary and that those previously issued financial statements should no longer be relied upon. The Company will file a Form 8-K reporting these restatements under Item 4.02 and will file its restated financial statements within its fiscal year 2004 Form 10-K filing as well as its fiscal year 2005 Form 10-Q filings. Additionally, the Company updated its consolidated financial results for the fourth quarter and year-to-date periods ended January 29, 2005 and January 31, 2004 as presented below to reflect these changes.

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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 778 AE stores in 49 states, the District of Columbia and Puerto Rico, and 69 AE stores in Canada. AE also operates via its Web business, www.ae.com, which offers additional sizes and styles of favorite AE merchandise.

AMERICAN EAGLE OUTFITTERS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
			January 29, 2005		January 31, 2004
			(Unaudited) (1)		(1)
ASSETS
	Cash, cash equivalents and short-term investments	$	589,607	$	337,812
	Merchandise inventory		137,991		120,586
	Other current assets		100,042		72,302
	Total current assets		827,640		530,700
	Property and equipment, net		353,213		340,955
	Goodwill, net		10,136		10,136
	Other assets, net		103,913		50,623
	Total Assets	$	1,294,902	$	932,414
LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable	$	76,344	$	71,330
	Accrued compensation and payroll taxes		36,008		14,409
	Accrued rent		45,089		40,668
	Accrued income and other taxes		33,926		28,669
	Unredeemed stored value cards and gift certificates		32,724		25,785
	Current portion of note payable		-		4,832
	Current portion of deferred lease credits		9,798		10,261
	Other current liabilities		19,376		13,025
	Total current liabilities		253,265		208,979
	Note payable		-		13,874
	Deferred lease credits		57,758		53,936
	Other non-current liabilities		20,393		18,248
	Total non-current liabilities		78,151		86,058
	Total stockholders' equity		963,486		637,377
	Total Liabilities and Stockholders' Equity	$	1,294,902	$	932,414
	Current Ratio		3.27		2.54

(1) Amounts as of January 29, 2005 and January 31, 2004 have been updated from those disclosed in the Company's preliminary earnings release dated March 2, 2005 to reflect the impact of certain lease accounting adjustments.

AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars and shares in thousands, except per share amounts)
		Three Months Ended				Twelve Months Ended
		January 29, 2005		January 31, 2004		January 29, 2005		January 31, 2004
		(Unaudited) (1)		(1)		(Unaudited) (1)		(1)
Net sales	$	674,024	$	490,580	$	1,881,241	$	1,435,436
Cost of sales, including certain buying, occupancy and warehousing expenses		341,647		299,800		1,003,433		885,939
Gross profit		332,377		190,780		877,808		549,497
Selling, general and administrative expenses		142,386		105,782		446,829		356,261
Depreciation and amortization		18,304		15,704		68,273		59,965
Operating income		171,687		69,294		362,706		133,271
Other income, net		3,343		469		4,129		2,016
Income before income taxes		175,030		69,763		366,835		135,287
Provision for income taxes		68,086		26,953		142,603		52,179
Income from continuing operations, net of tax		106,944		42,810		224,232		83,108
Loss from discontinued operations, net of income tax benefit		(6,027)		(7,816)		(10,889)		(23,486)
Net income	$	100,917	$	34,994	$	213,343	$	59,622
Basic per share amounts (post-split):
Income from continuing operations	$	0.73	$	0.30	$	1.55	$	0.59
Loss from discontinued operations		(0.04)		(0.05)		(0.08)		(0.17)
Net income per basic share	$	0.69	$	0.25	$	1.47	$	0.42
Diluted per share amounts (post-split):
Income from continuing operations	$	0.70	$	0.29	$	1.49	$	0.57
Loss from discontinued operations		(0.04)		(0.05)		(0.07)		(0.16)
Net income per diluted share	$	0.66	$	0.24	$	1.42	$	0.41
Weighted average common shares outstanding - basic (post-split)		147,094		142,358		145,150		142,226
Weighted average common shares outstanding - diluted (post-split)		153,402		144,502		150,244		144,414
Total gross square footage at end of period:						4,540,095		4,239,497
Store count at end of period:						846		805
(1) Amounts for the three and twelve months ended January 29, 2005 and January 31, 2004 have been updated from those disclosed in the Company's preliminary earnings release dated March 2, 2005 to reflect the impact of certain lease accounting adjustments.
Company Contacts: Laura Weil Judy Meehan 724-776-4857