American Eagle Outfitters (AEO) 8-K Reports 38% Increasein First Quarter Adjusted Epsand 18% Sales Growth

EXHIBIT 99.1

AMERICAN EAGLE OUTFITTERS

REPORTS 38% INCREASEIN FIRST QUARTER ADJUSTED EPSAND 18% SALES GROWTH

PITTSBURGH—May 23, 2012—American Eagle Outfitters, Inc. (NYSE:AEO) today announced earnings of $0.20 per diluted share for the first quarter ended April 28, 2012, compared to $0.14 per diluted share for the comparable quarter last year. Adjusted earnings for the quarter were $0.22 per diluted share, which excludes the operating results for 77kids, compared to adjusted earnings of $0.16 per diluted share last year. Please see the following tables for a complete reconciliation of GAAP to non-GAAP results for all periods presented.

Robert Hanson, chief executive officer stated, “I’m extremely pleased by our performance this quarter and appreciate the team’s accomplishments. We remain focused on delivering continued improvements in the near term, while fortifying our core brands and capabilities to pursue incremental profitable growth and consistent returns to shareholders.”

GAAP First Quarter Results

• Net sales increased 18% to $719 million, compared to $610 million last year.

• Comparable store sales, including AE Direct, increased 17%, compared to a 7% decrease last year.

• Gross profit increased 18% to $273 million, or 37.9% as a rate to sales, compared to $232 million, or 38.0% as a rate to sales, last year. Higher product costs, driven by the spike in cotton and incremental incentive costs, adversely affected the merchandise margin. This was offset by a 220 basis point improvement in buying, occupancy and warehousing due to strong sales.

• Selling, general and administrative expense of $183 million improved 60 basis points to 25.4%, as a rate to sales, compared to 26.0% last year.

• Operating income of $57 million increased 49%, compared to $38 million last year. The operating margin rate of 8.0% compared to 6.3% last year.

• Other income of $4 million primarily relates to a settlement recovery from auction rate securities.

• EPS of $0.20 compared to $0.14 last year, a 43% increase.

Non-GAAP First Quarter Results

The following discussion of first quarter results excludes the operating results for the 77kids brand.

• Net sales increased 18% to $709 million, compared to $603 million last year.

• Comparable store sales, including AE Direct, increased 17%, compared to a 7% decrease last year.

• Gross profit increased 18% to $275 million. The gross margin rate of 38.8% was flat to last year. Higher product costs, driven by the spike in cotton and incremental incentive costs, adversely affected the merchandise margin. This was offset by a 220 basis point improvement in buying, occupancy and warehousing due to strong sales.

• Selling general and administrative expense of $179 million improved 60 basis points to 25.2%, compared to 25.8% last year.

• Operating income increased 46% to $64 million. The operating margin expanded to 9.1% compared to 7.3% last year.

• EPS of $0.22 compared to $0.16 last year, a 38% increase.

77kids Update

On May 18, 2012, the company announced plans to exit its children’s business, 77kids, which includes 22 stores and the online business. The company is currently exploring options for the business, which include a full or partial disposition of assets to a third party.

In fiscal 2011, the brand generated an after-tax loss of approximately $24 million on sales of $40 million. The company anticipates charges associated with the disposition of 77kids to be taken primarily in the second and third quarters of 2012, which will be disclosed as plans are finalized.

AEO Direct

In the first quarter, online sales increased 22%, compared to a 3% increase last year. The company’s online business includes ae.com, aerie.com and 77kids.com.

Inventory

Total merchandise inventories at the end of the first quarter were $377 million vs. $332 million last year. At cost per foot, inventory is up 14% compared to last year. Second quarter ending inventory cost per foot is expected to be up in the mid single digits.

Capital Expenditures

For the first quarter, capital expenditures were $25 million, compared to $38 million last year. For fiscal 2012, the company continues to expect capital expenditures to be approximately $100 million.

Real Estate

In the first quarter, total square footage increased slightly, reflecting seven store openings, offset by seven store closures, and 21 remodels and refurbishments. For additional first quarter 2012 actual and fiscal 2012 projected real estate information, see the accompanying table.

Cash and Investments

The company ended the quarter with total cash and short-term investments of $722 million compared to $605 million last year.

Future Outlook

Assuming low to mid-single digit comparable store sales growth for the year, the company expects annual adjusted EPS of $1.16 to $1.22 compared to adjusted EPS of $0.97 last year. For the second quarter the company expects adjusted EPS of $0.13 to $0.15, assuming mid single digit comparable store sale growth. This compares to adjusted EPS of $0.13 last year. Guidance excludes operating results and exit charges related to 77kids in addition to other potential restructuring charges.

Conference Call and Supplemental Financial Information

Today management will host a conference call and real time webcast at 9:00 a.m. Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 or go towww.ae.com to access the webcast and audio replay. Also, a financial results presentation is posted on the company’s website.

* * * *

About American Eagle Outfitters, Inc.

American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle Outfitters^®, Aerie^® and 77kids^® brands. The company operates more than 1,000 stores in North America, and ships to 77 countries worldwide through its websites. American Eagle Outfitters and Aerie merchandise also is available at approximately 35 international franchise stores in 12 countries. For more information, please visitwww.ae.com.

“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 second quarter and fiscal 2012 results. 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 the company’s operating, financial and capital plans may not be achieved and the risks described in the Risk Factor Section of the company’s Form 10-K and Form 10-Q filed 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 be realized.

CONTACT:	American Eagle Outfitters Inc.
	Judy Meehan, 412-432-3300

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	April 28, 2012			January 28, 2012			April 30, 2011
	(unaudited)						(unaudited)
ASSETS
Cash and cash equivalents	$	713,443		$	719,545		$	474,668
Short-term investments		8,587			25,499			130,513
Merchandise inventory		376,688			378,426			331,588
Accounts receivable		37,472			40,310			31,464
Prepaid expenses and other		75,433			74,947			84,687
Deferred income taxes		48,358			48,761			49,023
Total current assets		1,259,981			1,287,488			1,101,943
Property and equipment, net		572,104			582,162			641,907
Intangible assets, net		39,556			39,832			40,454
Goodwill		11,544			11,469			11,710
Non-current deferred income taxes		16,579			13,467			10,030
Other assets		16,688			16,384			26,294
Total Assets	$	1,916,452		$	1,950,802		$	1,832,338
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	133,861		$	183,783		$	155,183
Accrued compensation and payroll taxes		21,970			42,625			14,915
Accrued rent		76,550			76,921			70,873
Accrued income and other taxes		14,333			20,135			12,242
Unredeemed gift cards and gift certificates		30,783			44,970			29,187
Current portion of deferred lease credits		14,945			15,066			15,981
Other current liabilities and accrued expenses		25,779			21,901			24,566
Total current liabilities		318,221			405,401			322,947
Deferred lease credits		73,350			71,880			79,131
Non-current accrued income taxes		31,806			35,471			40,310
Other non-current liabilities		22,544			21,199			23,486
Total non-current liabilities		127,700			128,550			142,927
Commitments and contingencies		—			—			—
Preferred stock		—			—			—
Common stock		2,496			2,496			2,496
Contributed capital		567,700			552,797			543,393
Accumulated other comprehensive income		30,532			28,659			33,573
Retained earnings		1,774,205			1,771,464			1,716,173
Treasury stock		(904,402	)		(938,565	)		(929,171	)
							��
Total stockholders’ equity		1,470,531			1,416,851			1,366,464
Total Liabilities and Stockholders’ Equity	$	1,916,452		$	1,950,802		$	1,832,338
Current Ratio		3.96			3.18			3.41

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in thousands, except per share amounts)

(unaudited)

	13 Weeks Ended
	April 28, 2012		% of Sales			April 30, 2011		% of Sales
Net sales	$	719,093		100.0	%	$	609,562		100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		446,430		62.1	%		377,801		62.0	%
Gross profit		272,663		37.9	%		231,761		38.0	%
Selling, general and administrative expenses		182,605		25.4	%		158,491		26.0	%
Depreciation and amortization		32,798		4.5	%		34,880		5.7	%
Operating income		57,260		8.0	%		38,390		6.3	%
Other income, net		3,507		0.5	%		4,512		0.7	%
Income before income taxes		60,767		8.5	%		42,902		7.0	%
Provision for income taxes		21,070		3.0	%		14,577		2.4	%
Net income	$	39,697		5.5	%	$	28,325		4.6	%
Net income per basic common share	$	0.20				$	0.15
Net income per diluted common share	$	0.20				$	0.14
Weighted average common shares outstanding—basic		194,890					194,683
Weighted average common shares outstanding—diluted		197,252					196,633

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

	13 Weeks Ended
	April 28, 2012			April 30, 2011
Operating activities:
Net income	$	39,697		$	28,325
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		33,323			35,534
Share-based compensation		21,299			2,506
Provision for deferred income taxes		(2,772	)		8,708
Tax benefit from share-based payments		4,422			256
Excess tax benefit from share-based payments		(2,643	)		(139	)
Foreign currency transaction gain		(145	)		(219	)
Changes in assets and liabilities:
Merchandise inventory		2,345			(28,674	)
Accounts receivable		2,865			5,445
Prepaid expenses and other		(347	)		(30,327	)
Other assets		(426	)		(2,400	)
Accounts payable		(46,852	)		(7,301	)
Unredeemed gift cards and gift certificates		(14,260	)		(11,960	)
Deferred lease credits		1,203			(174	)
Accrued compensation and payroll taxes		(20,687	)		(20,110	)
Accrued income and other taxes		(9,498	)		(18,749	)
Accrued liabilities		5,154			90
Total adjustments		(27,019	)		(67,514	)
Net cash provided by (used for) operating activities	$	12,678		$	(39,189	)
Investing activities:
Capital expenditures for property and equipment		(24,831	)		(37,744	)
Acquisition of intangible assets		(220	)		(33,151	)
Purchase of available-for-sale securities		(3,051	)		(111,199	)
Sale of available-for-sale securities		20,119			48,887
Net cash used for investing activities	$	(7,983	)	$	(133,207	)
Financing activities:
Payments on capital leases		(941	)		(756	)
Repurchase of common stock from employees		(4,100	)		(2,181	)
Net proceeds from stock options exercised		12,165			2,539
Excess tax benefit from share-based payments		2,643			139
Cash dividends paid		(21,524	)		(21,430	)
Net cash used for financing activities	$	(11,757	)	$	(21,689	)
Effect of exchange rates on cash		960			1,160
Net decrease in cash and cash equivalents	$	(6,102	)	$	(192,925	)
Cash and cash equivalents—beginning of period		719,545			667,593
Cash and cash equivalents—end of period	$	713,443		$	474,668

AMERICAN EAGLE OUTFITTERS, INC.

COMPARABLE STORE SALES RESULTS BY BRAND

(unaudited)

	First Quarter Comparable Store Sales
	2012			2011
American Eagle Outfitters, Inc.(1)		17	%		-7	%
AE Brand		17	%		-8	%
aerie		20	%		-7	%
AEO Direct(1)		22	%		3	%

(1) AEO Direct is comprised of ae.com, aerie.com and 77kids.com. AEO Direct is included in consolidated comparable store sales.

AMERICAN EAGLE OUTFITTERS, INC.

REAL ESTATE INFORMATION

(unaudited)

	First Quarter Fiscal 2011		Fiscal 2012 Guidance
Consolidated stores at beginning of period		1,090		1,090
Consolidated stores opened during the period
AE Brand		6		15
77kids		1		1
Consolidated stores closed during the period
AE Brand and aerie		(7)		(20) —(30)
77kids		—		(22)
Total consolidated stores at end of period		1,090		1,054 —1,064
Stores remodeled and refurbished during the period		21		55 — 65
Total gross square footage at end of period		6,414,420		Not Provided
International franchise stores at end of period (1)		34		52

(1) International franchise stores are not included in the consolidated store data or the total gross square footage calculation.

AMERICAN EAGLE OUTFITTERS, INC.

GAAP TO NON-GAAP RECONCILIATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in thousands, except per share amounts)

(unaudited)

	First Quarter Fiscal 2012
	American Eagle Outfitters, Inc. (GAAP Basis)					77kids (1)			American Eagle Outfitters, Inc. (Non-GAAP Basis)
			% of Sales								% of Sales
Net sales	$	719,093		100.0	%	$	10,398		$	708,695		100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		446,430		62.1	%		12,648			433,782		61.2	%
Gross profit (loss)		272,663		37.9	%		(2,250	)		274,913		38.8	%
Selling, general and administrative expenses		182,605		25.4	%		4,066			178,539		25.2	%
Depreciation and amortization		32,798		4.5	%		732			32,066		4.5	%
Operating income (loss)		57,260		8.0	%		(7,048	)		64,308		9.1	%
Other income, net		3,507		0.5	%		—			3,507		0.5	%
Income (loss) before income taxes		60,767		8.5	%		(7,048	)		67,815		9.6	%
Provision (benefit) for income taxes		21,070		3.0	%		(2,710	)		23,780		3.4	%
Net income (loss)	$	39,697		5.5	%	$	(4,338	)	$	44,035		6.2	%
Net income (loss) per basic common share	$	0.20				$	(0.02	)	$	0.22
Net income (loss) per diluted common share	$	0.20				$	(0.02	)	$	0.22
Weighted average common shares outstanding—basic		194,890					194,890			194,890
Weighted average common shares outstanding—diluted		197,252					197,252			197,252

	First Quarter Fiscal 2011
	American Eagle Outfitters, Inc. (GAAP Basis)					77kids (1)			American Eagle Outfitters, Inc. (Non-GAAP Basis)
			% of Sales								% of Sales
Net sales	$	609,562		100.0	%	$	6,478		$	603,084		100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		377,801		62.0	%		8,536			369,265		61.2	%
Gross profit (loss)		231,761		38.0	%		(2,058	)		233,819		38.8	%
Selling, general and administrative expenses		158,491		26.0	%		3,239			155,252		25.8	%
Depreciation and amortization		34,880		5.7	%		444			34,436		5.7	%
Operating income (loss)		38,390		6.3	%		(5,741	)		44,131		7.3	%
Other income, net		4,512		0.7	%		—			4,512		0.7	%
Income (loss) before income taxes		42,902		7.0	%		(5,741	)		48,643		8.0	%
Provision (benefit) for income taxes		14,577		2.4	%		(2,195	)		16,772		2.7	%
Net income (loss)	$	28,325		4.6	%	$	(3,546	)	$	31,871		5.3	%
Net income (loss) per basic common share	$	0.15				$	(0.02	)	$	0.17
Net income (loss) per diluted common share	$	0.14				$	(0.02	)	$	0.16
Weighted average common shares outstanding—basic		194,683					194,683			194,683
Weighted average common shares outstanding—diluted		196,633					196,633			196,633

(1) Represents 77kids store and online business operating results, as well as home office and other costs directly attributable to 77kids operations.

AMERICAN EAGLE OUTFITTERS, INC.

GAAP TO NON-GAAP RECONCILIATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in thousands, except per share amounts)

(unaudited)

	Fiscal 2011
	American Eagle Outfitters, Inc. (GAAP Basis)						77kids (1)			Non-GAAP Items (2)			American Eagle Outfitters, Inc. (Non-GAAP excluding 77kids and Other Non-GAAP Items)
				% of Sales											% of Sales
Net sales	$	3,159,818			100.0	%	$	39,753		$	—		$	3,120,065		100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		2,031,477	��		64.3	%		56,006			—			1,975,471		63.3	%
Gross profit (loss)		1,128,341			35.7	%		(16,253	)		—			1,144,594		36.7	%
Selling, general and administrative expenses		735,828			23.3	%		17,705			5,536			712,587		22.9	%
Loss on impairment of assets		20,730			0.7	%		1,552			19,178			—		0.0	%
Depreciation and amortization		140,647			4.4	%		2,689			—			137,958		4.4	%
Operating income (loss)		231,136			7.3	%		(38,199	)		(24,714	)		294,049		9.4	%
Other income (expense), net		5,874			0.2	%		—			(677	)		6,551		0.2	%
Income (loss) before income taxes		237,010			7.5	%		(38,199	)		(25,391	)		300,600		9.6	%
Provision (benefit) for income taxes		85,305			2.7	%		(14,625	)		(9,725	)		109,655		3.5	%
Net income (loss)	$	151,705			4.8	%	$	(23,574	)	$	(15,666	)	$	190,945		6.1	%
Net income (loss) per basic common share	$	0.78					$	(0.12	)	$	(0.08	)	$	0.98
Net income (loss) per diluted common share	$	0.77					$	(0.12	)	$	(0.08	)	$	0.97
Weighted average common shares outstanding—basic		194,445						194,445			194,445			194,445
Weighted average common shares outstanding—diluted		196,314						196,314			196,314			196,314

	Fiscal 2010
	American Eagle Outfitters, Inc. (GAAP Basis)						77kids (1)			Non-GAAP Items (3)			American Eagle Outfitters, Inc. (Non-GAAP excluding 77kids and Other Non-GAAP Items)
				% of Sales												% of Sales
Net sales	$	2,967,559			100.0	%	$	22,265		$	—		$	2,945,294			100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		1,796,600			60.5	%		33,457			—			1,763,143			59.9	%
Gross profit (loss)		1,170,959			39.5	%		(11,192	)		—			1,182,151			40.1	%
Selling, general and administrative expenses		713,197			24.0	%		10,273			—			702,924			23.9	%
Depreciation and amortization		140,501			4.8	%		826			—			139,675			4.8	%
Operating income (loss)		317,261			10.7	%		(22,291	)		—			339,552			11.4	%
Realized loss on sale of investment securities		(24,426	)		-0.8	%		—			(24,201	)		(225	)		0.0	%
Other income, net		2,249			0.0	%		—			—			2,249			0.1	%
Income (loss) before income taxes		295,084			9.9	%		(22,291	)		(24,201	)		341,576			11.5	%
Provision (benefit) for income taxes		113,150			3.8	%		(8,494	)		—			121,644			4.0	%
Net income (loss)	$	181,934			6.1	%	$	(13,797	)	$	(24,201	)	$	219,932			7.5	%
Net income (loss) per basic common share	$	0.91					$	(0.07	)	$	(0.12	)	$	1.10
Net income (loss) per diluted common share	$	0.90					$	(0.07	)	$	(0.12	)	$	1.09
Weighted average common shares outstanding—basic		199,979						199,979			199,979			199,979
Weighted average common shares outstanding—diluted		201,818						201,818			201,818			201,818

(1) Represents 77kids store and online business operating results, as well as home office and other costs directly attributable to 77kids operations.

(2) Non-GAAP items for Fiscal 2011 consist of $19.2 million of pre-tax store asset impairment charges for the AE and aerie brand and $6.2 million of pre-tax executive transition costs.

(3) Non-GAAP items for Fiscal 2010 consist of a $24.2 million loss on sale of investment securities for which no tax benefit was realized.

77KIDS

HISTORICAL STATEMENTS OF OPERATIONS (1)

(Dollars and shares in thousands, except per share amounts)

(unaudited)

	Fiscal 2011 Quarterly Periods Ended
	April 30, 2011			% of Sales			July 30, 2011			% of Sales			October 29, 2011			% of Sales			January 28, 2012			% of Sales
Net sales	$	6,478			100.0	%	$	6,583			100.0	%	$	12,407			100.0	%	$	14,285			100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		8,536			131.8	%		10,700			162.5	%		15,695			126.5	%		21,075			147.5	%
Gross profit		(2,058	)		-31.8	%		(4,117	)		-62.5	%		(3,288	)		-26.5	%		(6,790	)		-47.5	%
Selling, general and administrative expenses		3,239			50.0	%		3,986			60.6	%		4,896			39.5	%		5,584			39.1	%
Loss on impairment of assets		—			0.0	%		—			0.0	%		—			0.0	%		1,552			10.9	%
Depreciation and amortization		444			6.8	%		678			10.3	%		784			6.3	%		783			5.5	%
Operating loss		(5,741	)		-88.6	%		(8,781	)		-133.4	%		(8,968	)		-72.3	%		(14,709	)		-103.0	%
Other income, net		—			0.0	%		—			0.0	%		—			0.0	%		—			0.0	%
Loss before income taxes		(5,741	)		-88.6	%		(8,781	)		-133.4	%		(8,968	)		-72.3	%		(14,709	)		-103.0	%
Benefit for income taxes		(2,195	)		-33.9	%		(3,358	)		-51.0	%		(3,444	)		-27.8	%		(5,628	)		-39.4	%
Net loss	$	(3,546	)		-54.7	%		(5,423	)		-82.4	%		(5,524	)		-44.5	%		(9,081	)		-63.6	%
Net loss per basic common share	$	(0.02	)				$	(0.03	)				$	(0.03	)				$	(0.05	)
Net loss per diluted common share	$	(0.02	)				$	(0.03	)				$	(0.03	)				$	(0.05	)
Weighted average common shares outstanding—basic		194,683						194,909						194,378						193,798
Weighted average common shares outstanding—diluted		196,633						196,578						195,985						195,913

	Fiscal 2010 Quarterly Periods Ended
	May 1,			% of			July 31,			% of			October 30,			% of			January 29,			% of
	2010			Sales			2010			Sales			2010			Sales			2011			Sales
Net sales	$	3,342			100.0	%	$	2,761			100.0	%	$	6,658			100.0	%	$	9,504			100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		4,769			142.7	%		4,363			158.0	%		9,769			146.7	%		14,556			153.2	%
Gross profit		(1,427	)		-42.7	%		(1,602	)		-58.0	%		(3,111	)		-46.7	%		(5,052	)		-53.2	%
Selling, general and administrative expenses		1,578			47.2	%		1,752			63.5	%		3,509			52.7	%		3,434			36.1	%
Depreciation and amortization		71			2.1	%		98			3.5	%		270			4.1	%		387			4.1	%
Operating loss		(3,076	)		-92.0	%		(3,452	)		-125.0	%		(6,890	)		-103.5	%		(8,873	)		-93.4	%
Other income, net		—			0.0	%		—			0.0	%		—			0.0	%		—			0.0	%
Loss before income taxes		(3,076	)		-92.0	%		(3,452	)		-125.0	%		(6,890	)		-103.5	%		(8,873	)		-93.4	%
Benefit for income taxes		(1,169	)		-35.0	%		(1,304	)		-47.2	%		(2,630	)		-39.5	%		(3,391	)		-35.7	%
Net loss	$	(1,907	)		-57.2	%		(2,148	)		-77.8	%		(4,260	)		-64.0	%		(5,482	)		-57.7	%
Net loss per basic common share	$	(0.01	)				$	(0.01	)				$	(0.02	)				$	(0.03	)
Net loss per diluted common share	$	(0.01	)				$	(0.01	)				$	(0.02	)				$	(0.03	)
Weighted average common shares outstanding—basic		207,718						201,764						195,590						194,878
Weighted average common shares outstanding—diluted		210,285						203,153						197,323						196,789

(1) Represents 77kids store and online business operating results, as well as home office and other costs directly attributable to 77kids operations.