EXHIBIT 99.1
NEWS RELEASE
AMERICAN EAGLE
OUTFITTERS
Reports Record Second Quarter EPS from Continuing Operations
of $0.37 versus $0.22 Last Year;
Comparable Store Sales Increase 21.1%;
Provides Third Quarter EPS Guidance
Warrendale, PA, August 16, 2005 - American Eagle Outfitters, Inc. (NASDAQ: AEOS) today announced its consolidated financial results for the second quarter ended July 30, 2005.
Second Quarter Ended July 30, 2005
- Total sales increased 29.8% to $513.3 million from $395.4 million for the quarter ended July 31, 2004.
- Comparable store sales increased 21.1% when compared to the corresponding period last year.
- Gross profit as a percent to sales increased to 44.4% from 41.2% last year due to an improvement in merchandise margins and the leveraging of rent expense.
- Operating income for the quarter increased to $86.0 million, or 16.8% as a percent to sales, from $51.0 million, or 12.9% as a percent to sales last year.
- Net income for the quarter increased to $58.0 million, or $0.37 per share on a diluted basis, from net income of $29.3 million, or $0.20 per share on a diluted basis last year (which included a $0.02 loss from discontinued operations).
Year-to-Date for the Six Months Ended July 30, 2005
- Total sales increased 32.9% to $967.3 million from $727.6 million for the six months ended July 31, 2004.
- Comparable store sales increased 23.8% when compared to the same six month period last year.
- Gross profit as a percent to sales increased to 46.5% from 42.8% last year due to the leveraging of rent expense and an improvement in merchandise margins.
- Operating income for the period increased to $173.6 million, or 17.9% as a percent to sales, from $94.1 million, or 12.9% as a percent to sales last year.
- Net income for the period increased to $113.3 million, or $0.72 per share on a diluted basis, from net income of $54.5 million, or $0.37 per share on a diluted basis last year (which included a $0.03 loss from discontinued operations).
Management also provided third quarter earnings guidance of $0.45 to $0.46 per share. This compares to earnings of $0.39 per share from continuing operations in the third quarter of last year.
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At 9:00 a.m. Eastern Time, on August 16, 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 August 16th at 12:00 p.m. Eastern Time through August 30th. To listen to the replay, dial 1-800-642-1687 and reference confirmation code 7296359#. An audio replay of the conference call will also be available at www.ae.com.
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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 T's as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 783 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.
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"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 third 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 third quarter sales, markdowns and/or earnings expectations may not be achieved, and those other risks described in 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 b e realized.
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AMERICAN EAGLE OUTFITTERS, INC. | ||||||
July 30, | January 29, | July 31, | ||||
(Unaudited) | (Unaudited) (Restated) | |||||
ASSETS | ||||||
Cash, cash equivalents and short-term investments | $ | 625,174 | $ | 589,607 | $ | 332,611 |
Merchandise inventory | 227,771 |
| 137,991 | 169,840 | ||
Other current assets | 97,646 |
| 100,042 |
| 91,267 | |
Total current assets | 950,591 |
| 827,640 |
| 593,718 | |
Property and equipment, net | 351,331 |
| 353,213 |
| 363,459 | |
Goodwill, net | 10,136 |
| 10,136 |
| 10,136 | |
Long-term investments | 125,568 | 84,416 | 26,151 | |||
Other assets, net | 26,314 |
| 18,254 |
| 26,952 | |
Total Assets | $ | 1,463,940 | $ | 1,293,659 | $ | 1,020,416 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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|
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Accounts payable | $ | 102,049 | $ | 76,344 | $ | 70,732 |
Accrued compensation and payroll taxes | 30,991 |
| 36,008 |
| 26,415 | |
Accrued rent | 47,268 |
| 45,089 |
| 40,107 | |
Accrued income and other taxes | 17,655 |
| 33,926 | 18,640 | ||
Unredeemed stored value cards and gift certificates | 19,111 | 32,724 | 15,388 | |||
Current portion of note payable | - |
| - |
| 4,832 | |
Current portion of deferred lease credits | 10,377 | 9,798 | 10,061 | |||
Other current liabilities | 12,673 |
| 16,152 |
| 12,967 | |
Total current liabilities | 240,124 |
| 250,041 |
| 199,142 | |
Note Payable | - |
| - |
| 11,469 | |
Deferred lease credits | 58,337 | 57,758 | 56,068 | |||
Other non-current liabilities | 29,227 |
| 22,374 |
| 23,963 | |
Total non-current liabilities | 87,564 |
| 80,132 |
| 91,500 | |
Total stockholders' equity | 1,136,252 |
| 963,486 |
| 729,774 | |
Total Liabilities and Stockholders' Equity | $ | 1,463,940 | $ | 1,293,659 | $ | 1,020,416 |
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Current Ratio | 3.96 |
| 3.31 |
| 2.98 | |
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AMERICAAN EGLE OUTFITTERS, INC. | ||||||||
Three Months Ended | Six Months Ended | |||||||
July 30, 2005 | July 31, 2004 | July 30, 2005 | July 31, 2004 | |||||
| (Restated) |
| (Restated) | |||||
Net sales | $ | 513,320 | $ | 395,402 | $ | 967,339 | $ | 727,632 |
Cost of sales, including certain buying, occupancy and warehousing expenses | 285,340 | 232,548 | 517,199 | 416,059 | ||||
Gross profit | 227,980 | 162,854 | 450,140 | 311,573 | ||||
Selling, general and administrative expenses | 123,362 | 94,951 | 239,898 | 184,801 | ||||
Depreciation and amortization | 18,581 | 16,886 | 36,683 | 32,624 | ||||
Operating income | 86,037 | 51,017 | 173,559 | 94,148 | ||||
Other income, net | 4,449 | 491 | 7,424 | 1,431 | ||||
Income before income taxes | 90,486 | 51,508 | 180,983 | 95,579 | ||||
Provision for income taxes | 32,452 | 19,926 | 67,765 | 36,996 | ||||
Income from continuing operations, net of tax | 58,034 | 31,582 | 113,218 | 58,583 | ||||
Income (loss) from discontinued operations, net of tax | (15) | (2,328) | 74 | (4,055) | ||||
Net income | $ | 58,019 | $ | 29,254 | $ | 113,292 | $ | 54,528 |
Basic per common share amounts: | ||||||||
Income from continuing operations | $ | 0.38 | $ | 0.22 | $ | 0.74 | $ | 0.41 |
Loss from discontinued operations | 0.00 | (0.02) | 0.00 | (0.03) | ||||
Net income per basic common share | $ | 0.38 | $ | 0.20 | $ | 0.74 | $ | 0.38 |
Diluted per common share amounts: | ||||||||
Income from continuing operations | $ | 0.37 | $ | 0.22 | $ | 0.72 | $ | 0.40 |
Loss from discontinued operations | 0.00 | (0.02) | 0.00 | (0.03) | ||||
Net income per diluted common share | $ | 0.37 | $ | 0.20 | $ | 0.72 | $ | 0.37 |
Weighted average common shares outstanding - basic | 153,943 | 144,502 | 152,763 | 143,756 | ||||
Weighted average common shares outstanding - diluted | 157,806 | 148,328 | 156,961 | 147,384 | ||||
Total gross square footage at end of period: | 4,631,461 | 4,390,790 | ||||||
Store count at end of period: | 854 | 825 |
Company Contacts:
Laura Weil
Judy Meehan
724-776-4857