Over $95 million in adjusted operating income expected, well
above last year
Margin expansion from reduced promotions, greater full-priced
selling
High 20%’s Aerie revenue growth and strong digital momentum
driving results
American Eagle Outfitters (NYSE: AEO) today announced that the
company expects fourth quarter 2020 adjusted operating income to
exceed $95 million, excluding potential asset impairment and
restructuring charges*. This compares to reported operating income
of $0.5 million and adjusted operating income of $77 million last
year. Anticipated adjusted operating income growth is driven by
strong margins, reflecting reduced promotions, higher full-priced
selling and well-received holiday product assortments.
Fourth quarter revenue is expected to decrease in the low single
digits, due to store revenue declines from weak mall traffic, store
closures and reduced hours related to the pandemic. The digital
channel maintained strong momentum, with double-digit growth
expected across brands. Aerie’s fourth quarter revenue is expected
to increase in the high-20% range. American Eagle is expected to
decline in the low double-digit range, as a result of its higher
store penetration.
“I’m extremely proud of our performance during the fourth
quarter, which demonstrated strong growth to last year and
continued quarterly sequential improvement. Compelling holiday
product and marketing, combined with a disciplined approach to
promotional activity drove very strong margin results,” commented
Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief
Executive Officer. “The team continues to instill strong inventory
and expense management, and I believe we are well-positioned
as we head into 2021. Thanks to our talented, passionate and
dedicated associates for making our success this year
possible.”
In a separate press release issued this morning, AEO announced
its “Real Power. Real Growth.” strategic plan and introduced
long-term financial targets. The company will host a virtual
investor meeting beginning at 11 am Eastern time, which can be
accessed in the Investor Relations section on AEO’s website,
www.aeo-inc.com.
The company will release fourth quarter and fiscal 2020 results
on March 3, 2021 and will host a conference call to review
financial results on the same date.
Non-GAAP Measures
* The Company uses non-GAAP operating income, a non-GAAP
financial measure (“non-GAAP” or “adjusted”), to help us evaluate
our business, identify trends affecting our business, formulate
business plans and financial projections, and make strategic
decisions. This financial measure is not based on any standardized
methodology prescribed by U.S. generally accepted accounting
principles (“GAAP”) and is not necessarily comparable to similar
measures presented by other companies. Management believes that
this non-GAAP information is useful for an alternate presentation
of the company’s performance, when reviewed in conjunction with the
company’s GAAP financial statements. These amounts are not
determined in accordance with GAAP and therefore, should not be
used exclusively in evaluating the company’s business and
operations.
Our fourth quarter 2020 operating income expectation represents
non-GAAP operating income, excluding potential asset impairment and
restructuring charges. A reconciliation of the projected non-GAAP
operating income, which is a forward-looking non-GAAP financial
measure, to the most directly comparable GAAP financial measure, is
not provided because the Company is unable to provide such
reconciliation without unreasonable effort, due to the uncertainty
and inherent difficulty in predicting the occurrence and the
financial impact of non-GAAP adjustments.
GAAP operating income may include the impact of such items as
asset impairment and restructuring charges. Historically, the
Company has excluded these items from non-GAAP operating income.
The Company currently expects to exclude these items in future
disclosures of non-GAAP operating income, and may also exclude
other items that may arise (collectively, the “non-GAAP
adjustments”). The decisions and events that typically lead to the
recognition of non-GAAP adjustments are inherently unpredictable as
to if or when they may occur. For the same reasons, the Company is
unable to address the probable significance of the unavailable
information, which could be material to future results.
For information regarding reconciliation of non-GAAP operating
income to GAAP operating income for Fiscal 2019, please refer to
Exhibit 99.4 of the Company’s Form 8-K filed with the Securities
and Exchange Commission on January 21, 2021.
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® and Aerie® brands. Our purpose is to show the
world that there’s REAL power in the optimism of youth. The company
operates stores in the United States, Canada, Mexico, and Hong
Kong, and ships to 81 countries worldwide through its websites.
American Eagle and Aerie merchandise also is available at more than
200 international locations operated by licensees in 25 countries.
For more information, please visit www.aeo-inc.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This release and related statements by management contain
forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995), which represent our
expectations or beliefs concerning future events, including fourth
quarter 2020 results. All forward-looking statements made by the
company involve material risks and uncertainties and are subject to
change based on many important factors, some of which may be beyond
the company’s control. Words such as "estimate," "project," "plan,"
"believe," "expect," "anticipate," "intend," “potential,” and
similar expressions may identify forward-looking statements. Except
as may be required by applicable law, we undertake no obligation to
publicly update or revise any forward-looking statements whether as
a result of new information, future events or otherwise and even if
experience or future changes make it clear that any projected
results expressed or implied therein will not be realized. The
following factors, in addition to the risks disclosed in Item 1A.,
Risk Factors, of our Annual Report on Form 10-K for the fiscal year
ended February 1, 2020 and in our Quarterly Reports on Form 10-Q
for the fiscal quarters ended May 2, 2020, August 1, 2020, and
October 31, 2020, and in any other filings that we may make with
the Securities and Exchange Commission in some cases have affected,
and in the future could affect, the company's financial performance
and could cause actual results for the fourth quarter 2020 and
beyond to differ materially from those expressed or implied in any
of the forward-looking statements included in this release or
otherwise made by management: the negative impacts of the COVID-19
pandemic and related operational disruptions; the risk that the
company’s operating, financial and capital plans may not be
achieved; our inability to anticipate customer demand and changing
fashion trends and to manage our inventory commensurately;
seasonality of our business; our inability to achieve planned store
financial performance; our inability to react to raw material cost,
labor and energy cost increases; our inability to gain market share
in the face of declining shopping center traffic; our inability to
respond to changes in e-commerce and leverage omni-channel demands;
our inability to expand internationally; difficulty with our
international merchandise sourcing strategies; challenges with
information technology systems, including safeguarding against
security breaches; and global economic, public health, social,
political and financial conditions, and the resulting impact on
consumer confidence and consumer spending, as well as other changes
in consumer discretionary spending habits, which could have a
material adverse effect on our business, results of operations and
liquidity.
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version on businesswire.com: https://www.businesswire.com/news/home/20210121005208/en/
Olivia Messina 412-432-3300 LineMedia@ae.com
American Eagle Outfitters (NYSE:AEO)
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