American Eagle Outfitters Reports EPS of $0.45 for Third Quarter 2007



    Provides November Sales Update and Fourth Quarter EPS Guidance

    Declares Quarterly Dividend

    PITTSBURGH, November 27 /CNW/ - American Eagle Outfitters, Inc.
(NYSE:  AEO) today announced that earnings for the 13 weeks ended November 3,
2007 increased 2% to $0.45 per diluted share from $0.44 per diluted share for
the 13 week period ended October 28, 2006.

    "In the third quarter we delivered a strong operating margin of 20.3%
even though sales were below our original plan. These results reflected the
benefits from operational improvements, expense management and technologies
that have become inherent in our business over the past several years. We are
committed to driving future growth by building a portfolio of brands, while at
the same time delivering a strong return on investment and profit
improvements," said Jim O'Donnell, Chief Executive Officer.

    November Sales Update and Fourth Quarter Guidance

    The company's November month-to-date comp store sales are slightly
positive. Management was pleased with the Thanksgiving weekend driven by
positive traffic trends. At this time, the company is establishing fourth
quarter earnings guidance of $0.67 to $0.70 per share, compared to $0.66 per
share last year.

    Third Quarter Results

    Total sales for the 13 weeks ended November 3, 2007 increased 7% to
$744.4 million compared to $696.3 million for the 13 week period ended October
28, 2006. Due to the 53rd week in fiscal 2006, third quarter comparable store
sales are compared to the 13 week period ended November 4, 2006. On this
basis, the company delivered a comparable store sales increase of 2%.

    Gross profit for the third quarter increased to $352.9 million, or 47.4%
as a percent to sales, down from 49.5% last year. Merchandise margin declined
as a result of higher markdowns, partially offset by lower product and
transportation costs. Buying, occupancy and warehousing costs increased as a
percent to sales. This was driven primarily by rent expense relating to the
opening of 60 stores in the second half of the year compared to 32 stores last
year.

    Third quarter selling, general and administrative expenses of $174.2
million leveraged 110 basis points as a rate to sales to 23.4%. Within SG&A,
total compensation, professional fees and supplies leveraged, while
advertising increased as a percent to sales. As a rate to sales, essentially
all other operating expenses were flat to last year.

    Operating income for the quarter decreased to $150.9 million from $152.5
million last year. As a percent to sales, operating income declined to 20.3%
compared to 21.9% last year.

    Net income decreased 2% to $99.4 million compared to $100.9 million last
year. As a percent to sales net income was 13.4% compared to 14.5% last year.

    Inventory

    Total merchandise inventories at the end of the third quarter were $393.1
million, an increase of $44.4 million compared to last year. Inventory
(excluding e-commerce) decreased 3% on a per square foot basis from a year
ago. Looking ahead, the company expects the fourth quarter ending inventory to
be down in the low single-digits.

    Capital Expenditures

    Through the end of the third quarter, year-to-date capital expenditures
were approximately $190.5 million. For fiscal year 2007, management expects
capital expenditures to be approximately $250 million. Of this amount, around
one half relates to new and remodeled stores, 20% relates to home office,
another 20% relates to distribution centers and the remaining 10% relates to
IT initiatives. For fiscal year 2008, management expects capital expenditures
to be in the range of $250 to $275 million. This supports a minimum of 10%
square footage growth through the opening of approximately 135 new and 50
remodeled stores, primarily relating to AE and aerie. The 2008 capital spend
also includes substantial and critical investments in supply chain, store
technology and infrastructure to support AEO direct and new concept growth.

    Stock Repurchase Program

    During the quarter, the company completed the repurchase of 2.4 million
shares of common stock for approximately $58.5 million. Subsequent to the
third quarter, the company repurchased an additional 1.0 million shares for
$21.5 million. Including the subsequent repurchase, year-to-date, the company
has repurchased 9.9 million shares for approximately $264.7 million, leaving
20.1 million shares authorized for repurchase.

    Real Estate

    In the third quarter, American Eagle opened 14 new AE stores and
remodeled 13 locations. Additionally, the company opened 27 new free-standing
aerie stores and five new MARTIN + OSA stores. For 2007, the company is
on-track to increase square footage by 10%. This includes approximately 30 new
and 53 remodeled American Eagle stores, approximately 36 free-standing aerie
stores and 14 MARTIN + OSA stores. In fiscal 2008, the company expects to grow
square footage by an additional 10%, due primarily to new and remodeled AE
stores and new aerie stores.

    Dividend Declaration

    On November 20th, the company's Board of Directors declared a quarterly
cash dividend of $0.10 per share payable on January 11, 2008 to stockholders
of record at the close of business on December 28, 2007.

    Conference Call Information

    At 9:00 a.m. Eastern Time on November 27, 2007, the company's management
team will host a conference call to review the financial results. To listen to
the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 five to
seven minutes prior to the scheduled start time. The conference call will also
be simultaneously broadcast over the Internet at www.ae.com or
www.streetevents.com. Anyone unable to listen to the call can access a replay
beginning November 27, 2007 at 12:00 p.m. Eastern Time through December 11,
2007. To listen to the replay, dial 1-877-660-6853, or internationally dial
1-201-612-7415, and reference account 3055 and confirmation code 261121. An
audio replay of the conference call will also be available at www.ae.com.

    About American Eagle Outfitters:

    American Eagle Outfitters, Inc. (NYSE:  AEO) is a leading retailer that
operates under the American Eagle Outfitters(R) and MARTIN + OSA(TM) brands.

    American Eagle Outfitters designs, markets and sells its own brand of
laidback, current clothing targeting 15 to 25 year-olds, providing
high-quality merchandise at affordable prices. The original collection
includes standards like jeans and graphic Ts as well as essentials like
accessories, outerwear, footwear, basics and swimwear. American Eagle
currently operates 855 stores in 50 states, the District of Columbia and
Puerto Rico, and 75 AE stores in Canada. American Eagle also operates
ae.com(R), which offers additional sizes and styles of favorite AE(R)
merchandise and ships to more than forty countries around the world. The
American Eagle(R) brand also includes a Dormwear(R) collection, aerie(TM),
which is available in 38 standalone stores, American Eagle stores and at
aerie.com. The collection includes bras, undies, camis, hoodies, robes,
boxers, sweats and leggings for the AE girl. Designed to be sweetly sexy,
comfortable and cozy, the aerie brand offers AE customers a new way to express
their personal style everyday, from the dormroom to the coffee shop to the
classroom.

    MARTIN + OSA, a concept targeting 28 to 40 year-old women and men, offers
refined casual clothing and accessories, designed to be valuable,
irresistible, inspiring, authentic and adventurous. MARTIN + OSA currently
operates 19 stores. For additional information and updates, visit
www.martinandosa.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
fourth quarter sales and earnings, inventory, real estate, aerie and MARTIN +
OSA. 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
fourth quarter sales, markdowns and/or earnings expectations may not be
achieved, real estate, aerie and MARTIN + OSA growth may not occur as planned
and those other risks described in the Risk Factor Section of the Company's
Form 10-K for the year ended February 3, 2007 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.

    
                       AMERICAN EAGLE OUTFITTERS, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Dollars in thousands)



                                     November 3,  February 3,  October 28,
                                        2007         2007         2006
                                     -----------  -----------  -----------
                                     (Unaudited)               (Unaudited)

    ASSETS
     Cash and cash equivalents      $   104,877  $    59,737  $   121,216
     Short-term investments             535,905      767,376      636,711
     Merchandise inventory              393,068      263,644      348,631
     Accounts and note receivable        33,603       26,045       25,762
     Prepaid expenses and other          39,468       33,720       34,414
     Deferred income taxes               48,935       51,886       46,188
                                     -----------  -----------  -----------
        Total current assets          1,155,856    1,202,408    1,212,922
                                     -----------  -----------  -----------
     Property and equipment, net        597,948      481,645      440,868
     Goodwill, net                       11,722        9,950        9,950
     Long-term investments              146,244      251,644      146,140
     Non-current deferred income
      taxes                              50,401       30,340       22,210
     Other assets, net                   20,652       15,651       12,292
                                     -----------  -----------  -----------
        Total Assets                $ 1,982,823  $ 1,991,638  $ 1,844,382
                                     -----------  -----------  -----------

    LIABILITIES AND STOCKHOLDERS'
     EQUITY
     Accounts payable               $   207,481  $   171,150  $   213,049
     Accrued compensation and
      payroll taxes                      35,003       58,371       46,716
     Accrued rent                        58,731       57,543       52,033
     Accrued income and other taxes      41,324       91,934       32,261
     Unredeemed gift cards and gift
      certificates                       30,355       54,554       25,672
     Current portion of deferred
      lease credits                      12,861       12,803       10,408
     Other current liabilities           17,357       18,263       18,987
                                     -----------  -----------  -----------
        Total current liabilities       403,112      464,618      399,126
                                     -----------  -----------  -----------
     Deferred lease credits              68,393       65,114       65,174
     Non-current accrued income
      taxes                              52,256            0            0
     Other non-current liabilities       44,138       44,594       47,295
                                     -----------  -----------  -----------
        Total non-current
         liabilities                    164,787      109,708      112,469
                                     -----------  -----------  -----------
     Commitments and contingencies            0            0            0
     Preferred stock                          0            0            0
     Common stock                         2,481        2,461        2,453
     Contributed capital                486,576      453,418      433,524
     Accumulated other
      comprehensive income               42,037       21,714       26,025
     Retained earnings                1,482,907    1,302,345    1,171,184
     Treasury Stock                    (599,077)    (362,626)    (300,399)
                                     -----------  -----------  -----------
        Total stockholders' equity    1,414,924    1,417,312    1,332,787
                                     -----------  -----------  -----------
        Total Liabilities and
         Stockholders' Equity       $ 1,982,823  $ 1,991,638  $ 1,844,382
                                     -----------  -----------  -----------

     Current Ratio                         2.87         2.59         3.04
    

    
                       AMERICAN EAGLE OUTFITTERS, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
         (Dollars and shares in thousands, except per share amounts)
                                 (Unaudited)

                                                13 Weeks Ended
                                    --------------------------------------
                                    November 3,  % of   October 28,  % of
                                       2007     Sales      2006     Sales
                                    ------------------  ------------------

    Net sales                      $    744,443 100.0% $    696,290 100.0%
    Cost of sales, including
     certain buying, occupancy and
     warehousing expenses               391,526  52.6%      351,966  50.5%
    Gross profit                        352,917  47.4%      344,324  49.5%
    Selling, general and
     administrative expenses            174,161  23.4%      170,431  24.5%
    Depreciation and amortization        27,867   3.7%       21,392   3.1%
                                    ------------------  ------------------
    Operating income                    150,889  20.3%      152,501  21.9%
    Other income, net                     6,905   0.9%        9,080   1.3%
                                    ------------------  ------------------
    Income before income taxes          157,794  21.2%      161,581  23.2%
    Provision for income taxes           58,368   7.8%       60,636   8.7%
                                    ------------------  ------------------
    Net income                     $     99,426  13.4% $    100,945  14.5%
                                    ------------------  ------------------

    Net income per basic common
     share                         $       0.46        $       0.45

    Net income per diluted common
     share                         $       0.45        $       0.44

    Weighted average common shares
         outstanding - basic            214,719             222,797
    Weighted average common shares
         outstanding - diluted          218,786             228,401


                                                39 Weeks Ended
                                    --------------------------------------
                                    November 3,  % of   October 28,  % of
                                       2007     Sales      2006     Sales
                                    ------------------  ------------------

    Net sales                      $  2,060,018 100.0% $  1,821,044 100.0%
    Cost of sales, including
     certain buying, occupancy and
     warehousing expenses             1,092,195  53.0%      947,090  52.0%
    Gross profit                        967,823  47.0%      873,954  48.0%
    Selling, general and
     administrative expenses            497,536  24.2%      447,872  24.6%
    Depreciation and amortization        80,724   3.9%       66,062   3.6%
                                    ------------------  ------------------
    Operating income                    389,563  18.9%      360,020  19.8%
    Other income, net                    26,972   1.3%       26,144   1.4%
                                    ------------------  ------------------
    Income before income taxes          416,535  20.2%      386,164  21.2%
    Provision for income taxes          156,995   7.6%      148,964   8.2%
                                    ------------------  ------------------
    Net income                     $    259,540  12.6% $    237,200  13.0%
                                    ------------------  ------------------

    Net income per basic common
     share                         $       1.19        $       1.06

    Net income per diluted common
     share                         $       1.17        $       1.04

    Weighted average common shares
         outstanding - basic            217,933             222,888
    Weighted average common shares
         outstanding - diluted          222,312             228,276

    ----------------------------------------------------------------------

    Total gross square footage at
     end of period:                   5,618,474           5,064,771

    Store count at end of period:           974                 883

    ----------------------------------------------------------------------
    




For further information:

For further information: American Eagle Outfitters Inc. Judy Meehan,
412-432-3300

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AMERICAN EAGLE OUTFITTERS, INC.

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