EXHIBIT 99.1
NEWS RELEASE
AMERICAN EAGLE
OUTFITTERS
Reports Record Third Quarter EPS of $0.47
versus $0.39 from Continuing Operations Last Year;
Comparable Store Sales Increase 13.6%;
Provides Fourth Quarter EPS Guidance
Warrendale, PA, November 15, 2005 - American Eagle Outfitters, Inc. (NASDAQ: AEOS) today announced its consolidated financial results for the third quarter ended October 29, 2005.
Third Quarter Ended October 29, 2005
Total sales increased 20.5% to $577.7 million from $479.6 million for the quarter ended October 30, 2004.
Comparable store sales increased 13.6%, compared to a 26.8% comparable store sales increase for the corresponding period last year.
Gross profit for the quarter increased to $269.4 million, or 46.6% as a percent to sales, from $233.9 million, or 48.8% as a percent to sales last year. The decline in gross profit as a percent to sales compared to last year was due primarily to a lower merchandise margin, partially offset by the leveraging of rent expense.
Operating income for the quarter increased to $113.3 million, or 19.6% as a percent to sales, from $96.9 million, or 20.2% as a percent to sales last year.
Net income for the quarter increased to $73.3 million, or $0.47 per share on a diluted basis, from net income of $57.9 million, or $0.38 per share on a diluted basis last year (which included a $0.01 loss from discontinued operations).
Year-to-Date for the Nine Months Ended October 29, 2005
Total sales increased 28.0% to $1.545 billion from $1.207 billion for the nine months ended October 30, 2004.
Comparable store sales increased 19.8%, compared to a 17.5% comparable store sales increase for the same nine month period last year.
Gross profit for the period increased to $719.5 million, or 46.6% as a percent to sales, from $545.4 million, or 45.2% as a percent to sales last year. The increase in gross profit as a percent to sales compared to last year was due primarily to the leveraging of rent expense.
Operating income for the period increased to $286.9 million, or 18.6% as a percent to sales, from $191.0 million, or 15.8% as a percent to sales last year.
Net income for the period increased to $186.6 million, or $1.19 per share on a diluted basis, from net income of $112.4 million, or $0.75 per share on a diluted basis last year (which included a $0.04 loss from discontinued operations).
During the quarter, the Company completed the repurchase of 6.0 million shares of common stock for approximately $139 million, which were available under the Company's repurchase program authorization.
Management indicated that it expects fourth quarter earnings per share to be in the range of $0.73 to $0.75. This compares to earnings of $0.70 per share from continuing operations in the fourth quarter of last year.
* * * *
At 9:00 a.m. Eastern Standard Time, on November 15, 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 November 15th at 12:00 p.m. Eastern Standard Time through November 29th. To listen to the replay, dial 800-642-1687 and reference confirmation code 9827606#. 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 Ts as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 797 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. The company plans to open MARTIN + OSA, a new sportswear concept targeting 25 to 40 year old women and men, in the fall of 2006. For additional information and updates visit www.martinandosa.com.
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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 fourth 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 fourth quarter sales, markdowns and/or earnings expectations may not be achieved, and those other risks described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of 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 for ward-looking statements even if future changes make it clear that projected results expressed or implied will not be realized.
AMERICAN EAGLE OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
|
| | October 29,
2005 | | January 29,
2005 | | October 30,
2004 |
| | | (Unaudited) | | | | (Unaudited) (Restated) |
ASSETS | | | | | | |
Cash, cash equivalents and short-term investments | $ | 556,375 | $ | 589,607 | $ | 384,640 |
Merchandise inventory | | 253,476 | | 137,991 | | 204,972 |
Other current assets | | 106,692 | | 100,042 | | 95,298 |
Total current assets | | 916,543 | | 827,640 | | 684,910 |
Property and equipment, net | | 351,855 | | 353,213 | | 375,042 |
Goodwill, net | | 10,136 | | 10,136 | | 10,136 |
| Long-term investments | | 123,461 | | 84,416 | | 34,155 |
Other assets, net | | 26,588 | | 18,254 | | 25,355 |
Total Assets | $ | 1,428,583 | $ | 1,293,659 | $ | 1,129,598 |
| | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
Accounts payable | $ | 104,386 | $ | 76,344 | $ | 84,303 |
Accrued compensation and payroll taxes | | 48,732 | | 36,008 | | 39,985 |
Accrued rent | | 49,473 | | 45,089 | | 42,164 |
Accrued income and other taxes | | 17,257 | | 33,926 | | 27,646 |
| Unredeemed stored value cards and gift certificates | | 19,065 | | 32,724 | | 15,451 |
| Current portion of deferred lease credits | | 10,422 | | 9,798 | | 10,147 |
Other current liabilities | | 15,858 | | 16,152 | | 12,489 |
Total current liabilities | | 265,193 | | 250,041 | | 232,185 |
| Deferred lease credits | | 64,021 | | 57,758 | | 58,678 |
Other non-current liabilities | | 29,667 | | 22,374 | | 24,960 |
Total non-current liabilities | | 93,688 | | 80,132 | | 83,638 |
Total stockholders' equity | | 1,069,702 | | 963,486 | | 813,775 |
Total Liabilities and Stockholders' Equity | $ | 1,428,583 | $ | 1,293,659 | $ | 1,129,598 |
| | | | | | |
Current Ratio | | 3.46 | | 3.31 | | 2.95 |
| | | | | | | |
* * * *
AMERICAAN EGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)
(Unaudited) |
| | Three Months Ended | | Nine Months Ended |
| | October 29, 2005 | | October 30, 2004 | | October 29, 2005 | | October 30, 2004 |
| | | | | (Restated) | | | | (Restated) |
| | | | | | | | |
Net sales | $ | 577,665 | $ | 479,585 | $ | 1,545,004 | $ | 1,207,217 |
Cost of sales, including certain buying, occupancy and warehousing expenses | | 308,298 | | 245,727 | | 825,497 | | 661,786 |
Gross profit | | 269,367 | | 233,858 | | 719,507 | | 545,431 |
Selling, general and administrative expenses | | 137,324 | | 119,642 | | 377,222 | | 304,443 |
Depreciation and amortization | | 18,746 | | 17,345 | | 55,429 | | 49,969 |
Operating income | | 113,297 | | 96,871 | | 286,856 | | 191,019 |
Other income (expense), net | | 4,083 | | (645) | | 11,507 | | 786 |
Income before income taxes | | 117,380 | | 96,226 | | 298,363 | | 191,805 |
Provision for income taxes | | 44,023 | | 37,521 | | 111,788 | | 74,517 |
Income from continuing operations, net of tax | | 73,357 | | 58,705 | | 186,575 | | 117,288 |
Income (loss) from discontinued operations, net of tax | | (37) | | (807) | | 37 | | (4,862) |
Net income | $ | 73,320 | $ | 57,898 | $ | 186,612 | $ | 112,426 |
| | | | | | | | |
Basic per common share amounts: | | | | | | | | |
Income from continuing operations | $ | 0.48 | $ | 0.40 | $ | 1.22 | $ | 0.81 |
Loss from discontinued operations | | - | | - - | | - | | (0.03) |
Net income per basic common share | $ | 0.48 | $ | 0.40 | $ | 1.22 | $ | 0.78 |
| | | | | | | | |
Diluted per common share amounts: | | | | | | | | |
Income from continuing operations | $ | 0.47 | $ | 0.39 | $ | 1.19 | $ | 0.79 |
Loss from discontinued operations | | - | | (0.01) | | - | | (0.04) |
Net income per diluted common share | $ | 0.47 | $ | 0.38 | $ | 1.19 | $ | 0.75 |
| | | | | | | | |
Weighted average common shares outstanding - basic | | 152,776 | | 146,004 | | 152,767 | | 144,506 |
Weighted average common shares outstanding - diluted | | 155,987 | | 151,570 | | 156,658 | | 148,937 |
Total gross square footage at end of period: | | | | | | 4,719,741 | | 4,489,606 |
Store count at end of period: | | | | | | 864 | | 839 |
| Company Contact: | Financial Media Contact: |
| Judy Meehan | Berns Communications Group |
| 724-776-4857 | Stacy Berns/Melissa Jaffin |
| | 212-994-4660 |
