American Eagle Outfitters Reports Record EPS of $0.37 For Second Quarter 2007, a 19% Increase



    Provides Third Quarter EPS Guidance

    PITTSBURGH, August 21 /CNW/ - American Eagle Outfitters, Inc. (NYSE:  AEO)
today announced that earnings for the 13 weeks ended August 4, 2007 increased
19% to $0.37 per diluted share from $0.31 per diluted share for the 13 week
period ended July 29, 2006.

    "I am pleased that we achieved our 14th consecutive quarter of record
sales and earnings. Our strong second quarter results reflected sound
merchandise management and good expense control. We also made progress in the
quarter toward our key goals of building brands for growth, optimizing our
channels of distribution, and strengthening our operations for productivity
improvements and continued profitable growth," said Jim O'Donnell, Chief
Executive Officer.

    Second Quarter Results

    Total sales for the 13 weeks ended August 4, 2007 increased 17% to $703.2
million, compared to $602.3 million for the 13 week period ended July 29,
2006. Due to the 53rd week in fiscal 2006, second quarter comparable store
sales are compared to the 13 week period ended August 5, 2006. On this basis,
the company delivered a comparable store sales increase of 2%.

    Gross profit for the second quarter increased to $316.4 million from
$275.3 million. However, as a percent to sales, gross profit declined to 45.0%
from 45.7% last year. The merchandise margin declined 50 basis points as a
result of higher markdowns, partially offset by a strong initial mark-up.
Buying, occupancy and warehousing costs increased 20 basis points as a percent
to sales. This was driven primarily by rent expense relating to upcoming aerie
store openings, as well as start-up costs associated with transitioning
e-commerce fulfillment in-house.

    Second quarter selling, general and administrative expenses of $166.4
million were flat as a percent to sales at a rate of 23.7%. Within SG&A,
incentives and selling payroll leveraged, while expenditures related to
in-store improvements and professional services increased as a percent to
sales.

    Operating income for the quarter increased 12% to $122.7 million from
$109.3 million last year. As a percent to sales, operating income declined to
17.4%, compared to 18.2% last year.

    Net income increased 13% to $81.3 million, compared to $72.1 million last
year. As a percent to sales, net income was 11.6% compared to 12.0% last year.
Earnings per diluted share increased 19% to $0.37, compared to $0.31 last
year.

    Inventory

    Total merchandise inventories at the end of the second quarter were $321
million, an increase of $54 million compared to last year. AE brand inventory
(excluding e-commerce) increased 7% on a per square foot basis from a year
ago.

    Capital Expenditures

    For the second quarter of 2007, capital expenditures were approximately
$55 million. For fiscal year 2007, management continues to expect capital
expenditures to be in the range of $240 to $260 million, which includes new
and renovated stores, investments in information technology, the company's new
Pittsburgh headquarters and the completion of the expanded Kansas distribution
center.

    Stock Repurchase

    During the quarter, the company completed the repurchase of 3.7 million
shares of common stock for approximately $99.5 million. Year-to-date, the
company has repurchased 6.5 million shares for approximately $184.7 million.
After the second quarter activity, the company had 23.5 million shares
remaining under various authorizations.

    Real Estate

    In the second quarter, American Eagle opened six new AE stores and
remodeled 26 locations. Additionally, the company opened two new free-standing
aerie stores and one new MARTIN + OSA store. For 2007 the company is on-track
to increase square footage by approximately 10%. This includes approximately
32 new and 53 remodeled American Eagle stores, 14 MARTIN + OSA stores and
approximately 37 free-standing aerie stores.

    Third Quarter Guidance

    The Company is pleased with month-to-date August sales performance. At
this time, management is establishing third quarter earnings guidance of $0.47
to $0.48 per share, compared to $0.44 per share last year.

    Conference Call Information

    At 9:00 a.m. Eastern Time on August 21, 2007, the company's management
team will host a conference call to review the financial results. To listen to
the call, dial 1-877-601-0864 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 August 21, 2007 at 12:00 p.m. Eastern Time
through September 4, 2007. To listen to the replay, dial 1-800-642-1687 and
reference confirmation code 2285302#. 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 and MARTIN + OSA 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. AE's original collection
includes standards like jeans and graphic Ts as well as essentials like
accessories, outerwear, footwear, basics and swimwear. American Eagle
currently operates 852 stores in 50 states, the District of Columbia and
Puerto Rico, and 74 AE stores in Canada. American Eagle also operates ae.com,
which offers additional sizes and styles of favorite AE merchandise and ships
around the world. The American Eagle brand also includes a new collection of
dormwear and intimates, "aerie by American Eagle." aerie is available in
American Eagle stores across the country and at aerie.com. It includes bras,
undies, camis, hoodies, robes, boxers, sweats and leggings for the AE girl.
Designed to be sweetly sexy, comfortable and cozy, aerie offers AE customers a
new way to express their personal style everyday, from the dormroom to the
coffee shop to the classroom.

    The company introduced MARTIN + OSA, a new sportswear concept targeting
25 to 40 year-old women and men. MARTIN + OSA carries apparel, accessories and
footwear, using denim and sport inspiration to design fun and sport back into
sportswear. MARTIN + OSA currently operates 10 stores. For additional
information and updates, visit 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
third quarter sales and earnings, 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 third
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)



                                       August 4,   February 3,  July 29,
                                         2007         2007        2006
                                      -----------  ----------  -----------
                                      (Unaudited)              (Unaudited)

    ASSETS
     Cash, cash equivalents and
      short-term investments         $    634,605 $  827,113  $    814,090
     Merchandise inventory                321,263    263,644       267,392
     Other current assets                 135,330    111,651        87,750
                                      -----------  ----------  -----------
        Total current assets            1,091,198  1,202,408     1,169,232
                                      -----------  ----------  -----------
     Property and equipment, net          552,218    481,645       404,390
     Goodwill, net                          9,950      9,950         9,950
     Long-term investments                125,120    251,644       117,291
     Other assets, net                     69,029     45,991        39,240
                                      -----------  ----------  -----------
        Total Assets                 $  1,847,515 $1,991,638  $  1,740,103
                                      -----------  ----------  -----------

    LIABILITIES AND STOCKHOLDERS'
     EQUITY
     Accounts payable                $    146,431 $  171,150  $    175,934
     Accrued compensation and payroll
      taxes                                35,099     58,371        26,542
     Accrued rent                          56,259     57,543        49,954
     Accrued income and other taxes        13,290     91,934        38,934
     Unredeemed stored value cards
      and gift certificates                30,093     54,554        25,371
     Current portion of deferred
      lease credits                        12,787     12,803        10,402
     Other current liabilities             19,307     18,263        15,026
                                      -----------  ----------  -----------
        Total current liabilities         313,266    464,618       342,163
                                      -----------  ----------  -----------
     Deferred lease credits                64,472     65,114        60,036
     Other non-current liabilities         94,939     44,594        44,516
                                      -----------  ----------  -----------
        Total non-current liabilities     159,411    109,708       104,552
                                      -----------  ----------  -----------
        Total stockholders' equity      1,374,838  1,417,312     1,293,388
                                      -----------  ----------  -----------
        Total Liabilities and
         Stockholders' Equity        $  1,847,515 $1,991,638  $  1,740,103
                                      -----------  ----------  -----------

     Current Ratio                           3.48       2.59          3.42


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

                                                 13 Weeks Ended
                                       -----------------------------------
                                       August 4,   % of   July 29,  % of
                                         2007     Sales     2006    Sales
                                       -----------------  ----------------

     Net sales                        $  703,189  100.0% $  602,326 100.0%
     Cost of sales, including certain
      buying, occupancy and
      warehousing expenses               386,742   55.0%    327,065  54.3%
                                       -----------------  ----------------
     Gross profit                        316,447   45.0%    275,261  45.7%
     Selling, general and
      administrative expenses            166,386   23.7%    142,772  23.7%
     Depreciation and amortization        27,375    3.9%     23,237   3.8%
                                       -----------------  ----------------
     Operating income                    122,686   17.4%    109,252  18.2%
     Other income, net                     8,766    1.3%      8,969   1.5%
                                       -----------------  ----------------
     Income before income taxes          131,452   18.7%    118,221  19.7%
     Provision for income taxes           50,108    7.1%     46,122   7.7%
                                       -----------------  ----------------
     Net income                       $   81,344   11.6% $   72,099  12.0%
                                       -----------------  ----------------

     Net income per basic common share$     0.37         $     0.32

     Net income per diluted common
      share                           $     0.37         $     0.31

     Weighted average common shares
      outstanding - basic                217,790            223,805
     Weighted average common shares
      outstanding - diluted              222,044            229,211


                                                 26 Weeks Ended
                                       -----------------------------------
                                       August 4,  % of    July 29, % of
                                         2007     Sales     2006    Sales
                                       -----------------  ----------------

     Net sales                        $1,315,575  100.0% $1,124,754 100.0%
     Cost of sales, including certain
      buying, occupancy and
      warehousing expenses               700,669   53.3%    595,124  52.9%
                                       -----------------  ----------------
     Gross profit                        614,906   46.7%    529,630  47.1%
     Selling, general and
      administrative expenses            323,375   24.5%    277,441  24.6%
     Depreciation and amortization        52,857    4.0%     44,671   4.0%
                                       -----------------  ----------------
     Operating income                    238,674   18.2%    207,518  18.5%
     Other income, net                    20,067    1.5%     17,065   1.5%
                                       -----------------  ----------------
     Income before income taxes          258,741   19.7%    224,583  20.0%
     Provision for income taxes           98,627    7.5%     88,328   7.9%
                                       -----------------  ----------------
     Net income                       $  160,114   12.2% $  136,255  12.1%
                                       -----------------  ----------------

     Net income per basic common share$     0.73         $     0.61

     Net income per diluted common
      share                           $     0.71         $     0.60

     Weighted average common shares
      outstanding - basic                219,409            223,260
     Weighted average common shares
      outstanding - diluted              223,943            228,610


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

     Total gross square footage at end
      of period:                       5,350,468          4,911,192

     Store count at end of period:           928                883
    ----------------------------------------------------------------------
    




For further information:

For further information: American Eagle Outfitters Inc. Judy Meehan,
412-432-3300 OR Financial Media Contact Berns Communications Group Stacy Berns
or Melissa Jaffin, 212-994-4660

Organization Profile

AMERICAN EAGLE OUTFITTERS, INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890