Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 29, 2023 | Sep. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 29, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | AEO | |
Entity Registrant Name | American Eagle Outfitters, Inc. | |
Entity Central Index Key | 0000919012 | |
Current Fiscal Year End Date | --01-28 | |
Document Quarterly Report | true | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 197,483,532 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Security Exchange Name | NYSE | |
Entity File Number | 1-33338 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-2721761 | |
Entity Address, Address Line One | 77 Hot Metal Street | |
Entity Address, City or Town | Pittsburgh | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 15203-2329 | |
City Area Code | 412 | |
Local Phone Number | 432-3300 | |
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 175,315 | $ 170,209 | $ 98,214 |
Merchandise inventory | 636,972 | 585,083 | 687,046 |
Accounts receivable, net | 271,333 | 242,386 | 220,803 |
Prepaid expenses and other | 117,871 | 102,563 | 171,326 |
Total current assets | 1,201,491 | 1,100,241 | 1,177,389 |
Operating lease right-of-use assets | 1,038,505 | 1,086,999 | 1,210,285 |
Property and equipment, at cost, net of accumulated depreciation | 758,736 | 781,514 | 775,969 |
Goodwill | 264,964 | 264,945 | 271,406 |
Intangible assets,net | 90,312 | 94,536 | 98,651 |
Non-current deferred income taxes | 21,990 | 36,483 | 37,017 |
Other assets | 55,909 | 56,238 | 58,500 |
Total assets | 3,431,907 | 3,420,956 | 3,629,217 |
Current liabilities: | |||
Accounts payable | 238,660 | 234,340 | 198,645 |
Current portion of operating lease liabilities | 309,517 | 337,258 | 328,348 |
Unredeemed gift cards and gift certificates | 51,156 | 67,618 | 51,111 |
Accrued compensation and payroll taxes | 74,509 | 51,912 | 50,788 |
Accrued income and other taxes | 17,372 | 10,919 | 16,708 |
Other current liabilities and accrued expenses | 71,262 | 66,901 | 72,461 |
Total current liabilities | 762,476 | 768,948 | 718,061 |
Non-current liabilities: | |||
Non-current operating lease liabilities | 970,862 | 1,021,200 | 1,137,656 |
Long-term debt, net | 3,225 | 8,911 | 376,522 |
Other non-current liabilities | 22,345 | 22,734 | 24,055 |
Total non-current liabilities | 996,432 | 1,052,845 | 1,538,233 |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding | |||
Common stock, $0.01 par value; 600,000 shares authorized; 249,566 shares issued; 197,481, 195,064, and 187,312 shares outstanding, respectively | 2,496 | 2,496 | 2,496 |
Contributed capital | 334,447 | 341,775 | 380,959 |
Accumulated other comprehensive loss | (11,566) | (32,630) | (40,017) |
Retained earnings | 2,158,294 | 2,137,126 | 2,000,021 |
Treasury stock, at cost, 52,085, 54,502, and 62,254 shares, respectively | (810,672) | (849,604) | (970,536) |
Total stockholders' equity | 1,672,999 | 1,599,163 | 1,372,923 |
Total liabilities and stockholders’ equity | $ 3,431,907 | $ 3,420,956 | $ 3,629,217 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 | 0 |
Preferred stock, outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 | 600,000,000 |
Common stock, shares issued | 249,566,000 | 249,566,000 | 249,566,000 |
Common stock, shares outstanding | 197,481,000 | 195,064,000 | 187,312,000 |
Treasury stock, shares | 52,085,000 | 54,502,000 | 62,254,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Income Statement [Abstract] | ||||
Total net revenue | $ 1,200,879 | $ 1,198,124 | $ 2,281,805 | $ 2,253,161 |
Cost of sales, including certain buying, occupancy and warehousing expenses | 747,863 | 828,107 | 1,415,610 | 1,495,118 |
Gross profit | 453,016 | 370,017 | 866,195 | 758,043 |
Selling, general and administrative expenses | 331,872 | 307,832 | 644,217 | 606,587 |
Impairment, restructuring and other charges | 0 | 21,275 | ||
Depreciation and amortization expense | 55,854 | 48,171 | 112,582 | 95,540 |
Operating income | 65,290 | 14,014 | 88,121 | 55,916 |
Debt related charges | 60,066 | 60,066 | ||
Interest expense, net | 951 | 3,421 | 1,642 | 8,009 |
Other income, net | (2,150) | (1,839) | (5,461) | (6,283) |
Income (loss) before income taxes | 66,489 | (47,634) | 91,940 | (5,876) |
Provision (benefit) for income taxes | 17,919 | (5,168) | 24,918 | 4,850 |
Net income (loss) | $ 48,570 | $ (42,466) | $ 67,022 | $ (10,726) |
Basic net income (loss) per common share | $ 0.25 | $ (0.24) | $ 0.34 | $ (0.06) |
Diluted net income (loss) per common share | $ 0.25 | $ (0.24) | $ 0.34 | $ (0.06) |
Weighted average common shares outstanding - basic | 195,329 | 180,189 | 195,214 | 174,544 |
Weighted average common shares outstanding - diluted | 196,103 | 180,189 | 196,822 | 174,544 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 48,570 | $ (42,466) | $ 67,022 | $ (10,726) |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 15,211 | 298 | 21,064 | 828 |
Other comprehensive income | 15,211 | 298 | 21,064 | 828 |
Comprehensive income (loss) | $ 63,781 | $ (42,168) | $ 88,086 | $ (9,898) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Contributed Capital | Contributed Capital Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock | Accumulated Other Comprehensive Loss |
Beginning Balance at Jan. 29, 2022 | $ 1,423,672 | $ (48,856) | $ 2,496 | $ 636,355 | $ (67,686) | $ 2,203,772 | $ 18,830 | $ (1,378,106) | $ (40,845) |
Beginning Balance (in shares) at Jan. 29, 2022 | 168,699 | ||||||||
Stock awards | 22,658 | 22,658 | |||||||
Repurchase of common stock from employees | (9,579) | (9,579) | |||||||
Repurchase of common stock from employees (in shares) | (566) | ||||||||
Reissuance of treasury stock | 916 | (23,958) | (1,097) | 25,971 | |||||
Reissuance of treasury stock (in shares) | 1,523 | ||||||||
Accelerated share repurchase | (200,000) | (200,000) | |||||||
Accelerated share repurchase, (in shares) | (17,023) | ||||||||
Exchange of Convertible Senior Notes | 258,777 | (187,894) | (144,507) | 591,178 | |||||
Exchange of Convertible Senior Notes (in shares) | 34,679 | ||||||||
Net income (loss) | (10,726) | (10,726) | |||||||
Other comprehensive income | 828 | 828 | |||||||
Cash dividends declared and dividend equivalents | (64,767) | 1,484 | (66,251) | ||||||
Ending Balance at Jul. 30, 2022 | $ 1,372,923 | $ 2,496 | 380,959 | 2,000,021 | (970,536) | (40,017) | |||
Ending Balance (in shares) at Jul. 30, 2022 | 187,312,000 | 187,312 | |||||||
Beginning Balance at Apr. 30, 2022 | $ 1,383,006 | $ 2,496 | 562,973 | 2,224,113 | (1,366,261) | (40,315) | |||
Beginning Balance (in shares) at Apr. 30, 2022 | 169,421 | ||||||||
Stock awards | 8,504 | 8,504 | |||||||
Repurchase of common stock from employees | (1,408) | (1,408) | |||||||
Repurchase of common stock from employees (in shares) | 113 | ||||||||
Reissuance of treasury stock | 588 | (3,452) | (1,915) | 5,955 | |||||
Reissuance of treasury stock (in shares) | 348 | ||||||||
Accelerated share repurchase | (200,000) | (200,000) | |||||||
Accelerated share repurchase, (in shares) | (17,023) | ||||||||
Exchange of Convertible Senior Notes | 258,777 | (187,894) | (144,507) | 591,178 | |||||
Exchange of Convertible Senior Notes (in shares) | 34,679 | ||||||||
Net income (loss) | (42,466) | (42,466) | |||||||
Other comprehensive income | 298 | 298 | |||||||
Cash dividends declared and dividend equivalents | (34,376) | 828 | (35,204) | ||||||
Ending Balance at Jul. 30, 2022 | $ 1,372,923 | $ 2,496 | 380,959 | 2,000,021 | (970,536) | (40,017) | |||
Ending Balance (in shares) at Jul. 30, 2022 | 187,312,000 | 187,312 | |||||||
Beginning Balance at Jan. 28, 2023 | $ 1,599,163 | $ 2,496 | 341,775 | 2,137,126 | (849,604) | (32,630) | |||
Beginning Balance (in shares) at Jan. 28, 2023 | 195,064,000 | 195,064 | |||||||
Stock awards | $ 24,984 | 24,984 | |||||||
Repurchase of common stock from employees | (10,396) | (10,396) | |||||||
Repurchase of common stock from employees (in shares) | (748) | ||||||||
Reissuance of treasury stock | 1,409 | (27,481) | (3,330) | 32,220 | |||||
Reissuance of treasury stock (in shares) | 2,066 | ||||||||
Exchange of Convertible Senior Notes | 8,690 | (6,281) | (2,137) | 17,108 | |||||
Exchange of Convertible Senior Notes (in shares) | 1,099 | ||||||||
Net income (loss) | 67,022 | 67,022 | |||||||
Other comprehensive income | 21,064 | 21,064 | |||||||
Cash dividends declared and dividend equivalents | (39,371) | 1,016 | (40,387) | ||||||
Contributions from non-controlling interests | 434 | 434 | |||||||
Ending Balance at Jul. 29, 2023 | $ 1,672,999 | $ 2,496 | 334,447 | 2,158,294 | (810,672) | (11,566) | |||
Ending Balance (in shares) at Jul. 29, 2023 | 197,481,000 | 197,481 | |||||||
Beginning Balance at Apr. 29, 2023 | $ 1,619,016 | $ 2,496 | 324,396 | 2,130,108 | (811,207) | (26,777) | |||
Beginning Balance (in shares) at Apr. 29, 2023 | 197,450 | ||||||||
Stock awards | 10,334 | 10,334 | |||||||
Repurchase of common stock from employees | (83) | (83) | |||||||
Repurchase of common stock from employees (in shares) | (8) | ||||||||
Reissuance of treasury stock | 183 | (287) | (148) | 618 | |||||
Reissuance of treasury stock (in shares) | 39 | ||||||||
Net income (loss) | 48,570 | 48,570 | |||||||
Other comprehensive income | 15,211 | 15,211 | |||||||
Cash dividends declared and dividend equivalents | (19,746) | 490 | (20,236) | ||||||
Contributions from non-controlling interests | (486) | (486) | |||||||
Ending Balance at Jul. 29, 2023 | $ 1,672,999 | $ 2,496 | $ 334,447 | $ 2,158,294 | $ (810,672) | $ (11,566) | |||
Ending Balance (in shares) at Jul. 29, 2023 | 197,481,000 | 197,481 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared and dividend equivalents, Per share | $ 0.1 | $ 0.18 | $ 0.2 | $ 0.36 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | ||
Operating activities: | |||
Net income (loss) | $ 67,022 | $ (10,726) | |
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||
Depreciation and amortization | 115,296 | 98,057 | |
Share-based compensation | 25,355 | 22,946 | |
Deferred income taxes | 14,492 | 22,533 | |
Loss on impairment of assets | 10,759 | [1] | 0 |
Loss on exchange of Convertible Senior Notes | 55,687 | ||
Changes in assets and liabilities: | |||
Merchandise inventory | (62,702) | (133,689) | |
Accounts Receivable | (29,143) | 65,928 | |
Operating lease assets | 124,825 | 142,446 | |
Operating lease liabilities | (160,051) | (159,272) | |
Other assets | 20,509 | (68,966) | |
Accounts payable | 3,899 | (33,226) | |
Accrued compensation and payroll taxes | 22,389 | (91,141) | |
Accrued and other liabilities | (4,759) | (15,874) | |
Net cash provided by (used for) operating activities | 147,891 | (102,093) | |
Investing activities: | |||
Capital expenditures for property and equipment | (91,959) | (127,858) | |
Other investing activities | (6,492) | (529) | |
Net cash used for investing activities | (98,451) | (128,387) | |
Financing activities: | |||
Proceeds from revolving line of credit | 30,000 | 307,700 | |
Principal payments on revolving line of credit | (27,000) | ||
Net proceeds from stock options exercised | 1,095 | 1,369 | |
Repurchase of common stock from employees | (10,396) | (9,579) | |
Cash dividends paid | (39,371) | (64,767) | |
Principal paid in connection with exchange of Convertible Senior Notes due 2025 | (136,077) | ||
Accelerated share repurchase | (200,000) | ||
Other financing activities | (742) | (739) | |
Net cash used for financing activities | (46,414) | (105,297) | |
Effect of exchange rates changes on cash | 2,080 | (779) | |
Net change in cash and cash equivalents | 5,106 | (336,556) | |
Cash and cash equivalents - beginning of period | 170,209 | 434,770 | |
Cash and cash equivalents - end of period | $ 175,315 | $ 98,214 | |
[1] $ 10.8 million of impairment of supply chain technology assets due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 48,570 | $ (42,466) | $ 67,022 | $ (10,726) |
Insider Trading Arrangements
Insider Trading Arrangements | 6 Months Ended |
Jul. 29, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | (c) During the 13 weeks ended July 29, 2023, no director or Section 16 officer of the Company adopted or terminated a " Rule 10b5-1 trading arrangement" or " non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K. |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Interim Financial Statements
Interim Financial Statements | 6 Months Ended |
Jul. 29, 2023 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | 1. Interim Financial Statements The accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the “Company", “we”, and “our”), a Delaware corporation, at July 29, 2023 and July 30, 2022 and for the 13 and 26 week periods ended July 29, 2023 and July 30, 2022 have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Certain notes and other information have been condensed or omitted from the interim Consolidated Financial Statements presented in this Quarterly Report. Therefore, these Consolidated Financial Statements should be read in conjunction with our Fiscal 2022 Form 10-K. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and those described in the notes that follow) considered necessary for a fair presentation have been included. The existence of subsequent events has been evaluated through the filing date of this Quarterly Report. The Company operates under the American Eagle ® ("AE") and Aerie ® brands. We also operate Todd Snyder New York ("Todd Snyder"), a premium menswear brand, and Unsubscribed, which focuses on consciously made slow fashion. Founded in 1977, the Company is a leading multi-brand specialty retailer that operates more than 1,000 retail stores in the U.S. and internationally, online through our digital channels at www.ae.com and www.aerie.com, www.toddsnyder.com, www.unsubscribed.com and more than 200 international store locations managed by third-party operators. Through its portfolio of brands, the Company offers high quality, on-trend clothing, accessories, and personal care products at affordable prices. We sell directly to consumers through our retail channel, which includes our stores and concession-based shop-within-shops. We operate stores in the U.S., Canada, Mexico, Hong Kong and Japan. We also have license agreements with third parties to operate American Eagle and Aerie stores throughout Asia, Europe, India, Latin America, and the Middle East. The Company's online business, AEO Direct, ships to approximately 80 countries worldwide. Quiet Platforms is a logistics company that operates a network of in-market fulfillment centers, locating products closer to need, creating inventory efficiencies, cost benefits and affordable same-day and next-day delivery options for customers and stores to help us manage costs and improve service. Historically, our operations have been seasonal, with a large portion of total net revenue and operating income occurring in the third and fourth fiscal quarters, reflecting increased demand during the back-to-school and year-end holiday selling seasons, respectively. Our quarterly results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons, the number and timing of new store openings, the acceptability of seasonal merchandise offerings, the timing and level of markdowns, store closings and remodels, competitive factors, weather and general economic and political conditions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 29, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and consolidated entities where the Company's ownership percentage is less than 100 %. Non-controlling interests are included as a component of contributed capital within the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity and was not material for any period presented. All intercompany transactions and balances have been eliminated in consolidation. At July 29, 2023 , the Company operated in two reportable segments, American Eagle and Aerie. Fiscal Year Our fiscal year is a 52- or 53-week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2023” refers to the 53-week period that will end on February 3, 2024. “Fiscal 2022” refers to the 52-week period ended January 28, 2023 . Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (“ASU 2020-06”), which simplifies the accounting for convertible debt instruments. The new guidance eliminates two of the three models in Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share (“EPS”) calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted ASU 2020-06 at the beginning of Fiscal 2022 using the modified retrospective method. Refer to Note 5 and Note 8 to the Consolidated Financial Statements for additional information regarding EPS and long-term debt, respectively. Foreign Currency Translation In accordance with ASC 830, Foreign Currency Matters , the Company translates assets and liabilities denominated in foreign currencies into U.S. dollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. The Company translates revenues and expenses denominated in foreign currencies into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currency transactions are included in the consolidated results of operations, whereas related translation adjustments are reported as an element of other comprehensive income (loss) in accordance with ASC 220, Comprehensive Income . We are exposed to the impact of foreign exchange rate risk primarily through our Canadian and Mexican operations where the functional currency is the Canadian dollar and Mexican peso, respectively. The impact of all other foreign currencies is currently immaterial to our consolidated financial results. During the 13 and 26 weeks ended July 29, 2023 , an unrealized gain of $ 15.2 million and $ 21.1 million, respectively, was included in other comprehensive income, which were primarily related to the fluctuations of the USD to Mexican peso and USD to Canadian dollar exchange rates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents. Accounts Receivable The Company maintains an allowance for doubtful accounts for estimated losses from the failure of certain of our customers to make required payments for products or services delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical and expected future receivables, reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company’s reserves have approximated actual experience. Merchandise Inventory Merchandise inventory is valued at the lower of average cost or net realizable value, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the merchandise has transferred to the Company. The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends. Property and Equipment Property and equipment is recorded on the basis of cost with depreciation computed utilizing the straight-line method over the asset’s estimated useful life. The useful lives of our major classes of assets are as follows: Buildings 25 years Leasehold improvements Lesser of 10 years or the term of the lease Fixtures and equipment Information technology Five year s Three to five year s As of July 29, 2023 , the weighted average remaining useful life of our assets was approximately six years . In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company’s management evaluates the value of leasehold improvements, store fixtures, and operating lease right-of-use ("ROU") assets associated with retail stores. The Company evaluates long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income within the Consolidated Statements of Operations. Our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values. The significant assumption used in our fair value analysis is forecasted revenue. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected. When the Company closes, remodels, or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense. There were no long-lived asset impairment charges recorded during the 13 weeks ended July 29, 2023 or July 30, 2022. During the 26 weeks ended July 29, 2023 , the Company recorded impairment of property and equipment of $ 10.8 million. No long-lived asset impairment charges were recorded during the 26 weeks ended July 30, 2022 . Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property and equipment and refer to Note 13 to the Consolidated Financial Statements for additional information regarding the impairment of these assets. Goodwill and Intangible Assets The Company’s goodwill is primarily related to the acquisition of Quiet Logistics, in Fiscal 2021, as well as its importing operations and Canadian business, and represents the excess of cost over fair value of net assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other , the Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge is recorded in the period of the evaluation based on that difference. As a result of the Company's annual goodwill impairment test as of January 28, 2023 , the Company concluded that its goodwill was no t impaired. No indicators of impairment were present during the 13 or 26 weeks ended July 29, 2023 and July 30, 2022. Definite-lived intangible assets are initially recorded at fair value, with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s definite-lived intangible assets, which consist primarily of trademark assets, are generally amortized over 10 to 15 years. The Company evaluates definite-lived intangible assets for impairment in accordance with ASC 360 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows is less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No definite-lived intangible asset impairment charges were recorded during the 13 or 26 weeks ended July 29, 2023 or July 30, 2022. Refer to Note 7 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets. Construction Allowances As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally comprised of cash amounts. The Company records a receivable and an adjustment to the operating lease ROU asset at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized as part of the single lease cost over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the lessor. Self-Insurance Liability The Company uses a combination of insurance and self-insurance mechanisms for certain losses related to employee medical benefits and worker’s compensation. Costs for self-insurance claims filed and claims incurred but not reported are accrued based on known claims and historical experience. Management believes that it has adequately reserved for its self-insurance liability, which is capped by stop-loss contracts with insurance companies. However, any significant variation of future claims from historical trends could cause actual results to differ from the accrued liability. Leases The Company leases all store premises, the Canadian distribution center in Mississauga, Ontario, regional distribution facilities, some of its office space and certain information technology and office equipment. These leases are generally classified as operating leases. Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes and certain other expenses. When measuring operating lease ROU assets and operating lease liabilities, the Company only includes cash flows related to options to extend or terminate leases once those options are executed. Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities. When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset. For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less. Co-branded and Private Label Credit Cards The Company offers a co-branded credit card and a private-label credit card under the AE and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (the “Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this funding as we fulfill our performance obligations under the Agreement. This revenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations. Customer Loyalty Program The Company offers a highly digitized loyalty program called Real Rewards by American Eagle and Aerie (the “Program”). The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited. Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The portion of the sales revenue attributed to the reward points is deferred and recognized when the reward is redeemed or when the points expire, using the relative stand-alone selling price method. Additionally, reward points earned using the co-branded credit card on non-AE or Aerie purchases are accounted for in accordance with ASC 606. As the points are earned, a current liability is recorded for the estimated cost of the reward, and the impact of adjustments is recorded in revenue. The Company defers a portion of the sales revenue attributed to the loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. Long-Term Debt In April 2020, the Company issued $ 415 million aggregate principal amount of convertible senior notes due 2025 (the "2025 Notes"). Prior to the adoption of ASU 2020-06 in Fiscal 2022, the 2025 Notes were accounted for under the cash conversion model, which is one of the models eliminated by ASU 2020-06. The adoption of ASU 2020-06 resulted in the 2025 Notes being accounted for as a single balance in long-term debt, rather than being accounted for as separate debt and equity components. In June 2022, the Company entered into an amended and restated credit agreement (the “Credit Agreement”). The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $ 700 million, subject to customary borrowing base limitations (the "Credit Facility"). The Credit Facility expires on June 24, 2027 . Refer to Note 8 to the Consolidated Financial Statements for additional information regarding Long-Term Debt. Income Taxes The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statements carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits, may materially impact the Company’s effective income tax rate. The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. The calculation of deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance, requires management to make estimates and assumptions. The Company believes that its estimates and assumptions are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income (loss). Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes. Revenue Recognition The Company recognizes revenue pursuant to ASC 606. Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets. Revenue is recorded net of estimated and actual sales returns and promotional price reductions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined using historical average return percentages. The presentation on a gross basis of the sales return reserve consists of a separate right of return asset and liability. These amounts are recorded within (i) prepaid expenses and other and (ii) other current liabilities and accrued expenses, respectively, on the Consolidated Balance Sheets. Revenue is not recorded on the issuance of gift cards. A current liability is recorded upon issuance, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on gift card breakage, determined through historical redemption trends. Revenue on unredeemed gift cards, based on an estimate of the amounts that will not be redeemed ("gift card breakage"), is recorded in proportion to actual gift cards redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. During the 13 weeks ended July 29, 2023 and July 30, 2022 , the Company recorded approximately $ 1.8 million and $ 2.2 million, respectively, of revenue related to gift card breakage. During the 26 weeks ended July 29, 2023 and July 30, 2022 , the Company recorded $ 4.2 million and $ 4.9 million, respectively, of revenue related to gift card breakage. The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned and collection is probable. The Company defers a portion of the sales revenue attributed to loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. Refer to the Customer Loyalty Program caption above for additional information. Revenue associated with Quiet Platforms is recognized as the services are performed. Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, “merchandise costs”), Quiet Platforms' costs to service its customers and buying, occupancy and warehousing costs and services. Design costs are related to the Company's Design Center operations and include compensation, travel and entertainment, supplies and samples for our design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory is sold. Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel and entertainment for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operation. Gross profit is the difference between total net revenue and cost of sales. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. SG&A expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. SG&A expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales. Additionally, SG&A expenses do not include rent and utilities related to our stores, operating costs of our distribution centers, and shipping and handling costs related to our e-commerce operations, all of which are included in cost of sales. Debt Related Charges Debt related charges consist primarily of a $ 55.7 million induced conversion expense on the exchange of the 2025 Notes, along with certain other costs related to actions we took to strengthen our capital structure during the 13 weeks ended July 30, 2022. Refer to Note 8 to the Consolidated Financial Statements for additional information regarding the Company's 2025 Notes. Interest Expense, Net Interest expense, net primarily consists of interest expense related to the Company’s 2025 Notes and borrowings under our five-year, syndicated, asset-based revolving credit facilities, partially offset by interest income from cash and cash equivalents. Other Income, Net Other income, net consists primarily of foreign currency fluctuations and changes in other non-operating items. Non-controlling interest was not material for any period presented and is included within other income, net. Segment Information The Company has identified two operating segments (American Eagle and Aerie brand) that also represent our reportable segments and reflect the Chief Operating Decision Maker's (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder and Unsubscribed brands and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they are presented under the Other caption. For additional information regarding the Company’s segment and geographic information, refer to Note 12 to the Consolidated Financial Statements. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 6 Months Ended |
Jul. 29, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents The following table summarizes the fair market values for the Company’s cash and cash equivalents, which are recorded in the Consolidated Balance Sheets: (In thousands) July 29, January 28, July 30, Cash and cash equivalents: Cash $ 174,927 $ 84,960 $ 98,111 Interest bearing deposits 388 85,249 103 Total cash and cash equivalents $ 175,315 $ 170,209 $ 98,214 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 29, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements ASC 820, Fair Value Measurement Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. Financial Instruments Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 — Quoted prices in active markets. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s cash equivalents and short-term investments are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 3 to the Consolidated Financial Statements for additional information regarding cash equivalents. Fair Value Measurements at July 29, 2023 (In thousands) Carrying Amount Quoted Market Prices Significant Other Significant Cash and cash equivalents: Cash $ 174,927 $ 174,927 $ — $ — Interest bearing deposits 388 388 — — Total cash and cash equivalents $ 175,315 $ 175,315 $ — $ — Long-Term Debt As of July 29, 2023 and July 30, 2022 , the fair value of the Company's outstanding borrowings under its Credit Facility, of $ 3.0 million and $ 307.7 million, respectively, in outstanding borrowings under its Credit Facility approximated the carrying value. In April 2020, the Company issued $ 415 million aggregate principal amount of 2025 Notes. As of July 29, 2023, the Company's 2025 Notes have been fully redeemed. The fair value of the Company's 2025 Notes was not required to be measured at fair value on a recurring basis. Upon issuance, the fair value of the 2025 Notes was measured using two approaches that consider market related conditions, including market benchmark rates and a secondary market quoted price, and is therefore within Level 2 of the fair value hierarchy. Refer to Note 8 to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements. Non-Financial Assets The Company’s non-financial assets, which include intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur and the Company is required to evaluate the non-financial asset for impairment, a resulting impairment would require that the non-financial asset be recorded at the estimated fair value. The fair value is determined by estimating the amount and timing of net future cash flows and discounting them using a risk-adjusted rate of interest. The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. There were no long-lived asset impairment charges recorded during the 13 weeks ended July 29, 2023 or July 30, 2022. During the 26 weeks ended July 29, 2023 , the Company recorded impairment of property and equipment of $ 10.8 million. No long-lived asset impairment charges were recorded during the 26 weeks ended July 30, 2022. Refer to Note 13 to the Consolidated Financial Statements for additional information on impairment, restructuring and other charges. The fair value of the Company's ROU assets was based upon market rent assumptions. The Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. The Company last performed an annual goodwill impairment test using Level 3 inputs as defined in ASC 820 as of January 28, 2023. As a result of the Company's annual goodwill impairment test, the Company concluded that its goodwill was not impaired. No indicators of impairment were present during the 13 or 26 weeks ended July 29, 2023 and July 30, 2022 . |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jul. 29, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 5. Earnings per Share The following is a reconciliation between basic and diluted weighted average shares outstanding: 13 Weeks Ended 26 Weeks Ended (In thousands) July 29, July 30, July 29, July 30, Numerator: Net income (loss) and numerator for basic EPS $ 48,570 $ ( 42,466 ) $ 67,022 $ ( 10,726 ) Add: Interest expense, net of tax, related to the 2025 Notes (1) - — 58 — Numerator for diluted EPS $ 48,570 $ ( 42,466 ) $ 67,080 $ ( 10,726 ) Denominator: Denominator for basic EPS - weighted average shares 195,329 180,189 195,214 174,544 Add: Dilutive effect of the 2025 Notes (1) (2) — — 417 — Add: Dilutive effect of stock options and non-vested restricted stock (3) 774 — 1,191 — Denominator for diluted EPS - adjusted weighted average shares 196,103 180,189 196,822 174,544 Anti-dilutive shares (4) 509 29,221 397 38,763 (1) During the 26 weeks ended July 30, 2022 , the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculated diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06. (2) For the 13 and 26 weeks ended July 30, 2022 , there were 25.3 million and 36.8 million potentially dilutive shares from the Company's 2025 Notes, respectively, that were excluded from the dilutive earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. (3) For the 13 and 26 weeks ended July 30, 2022 , there were 3.9 million and 1.9 million potentially dilutive equity awards, respectively, that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. (4) For both periods presented, anti-dilutive shares relate to stock options and unvested restricted stock. Refer to Notes 8 and 9 to the Consolidated Financial Statements for additional information regarding the 2025 Notes and share-based compensation, respectively. On June 3, 2022, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with JPMorgan Chase Bank ("JPM"). Pursuant to the terms of the ASR Agreement, on June 3, 2022, the Company paid $ 200.0 million in cash and received an initial delivery of 13.4 million shares of its common stock on June 3, 2022. At final settlement, on July 28, 2022, an additional 3.7 million shares were received. The cumulative repurchase under the ASR Agreement was 17.0 million shares repurchased at an average price per share of $ 11.75 . The aforementioned shares have been recorded as treasury stock. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jul. 29, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment Property and equipment consists of the following: July 29, January 28, July 30, (In thousands) 2023 2023 2022 Property and equipment, at cost $ 2,772,496 $ 2,707,061 $ 2,603,212 Less: Accumulated depreciation and impairment ( 2,013,760 ) ( 1,925,547 ) ( 1,827,243 ) Property and equipment, net $ 758,736 $ 781,514 $ 775,969 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 6 Months Ended |
Jul. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | 7. Goodwill and Intangible Assets, net Goodwill and definite-lived intangible assets, net consist of the following: July 29, January 28, July 30, (In thousands) 2023 2023 2022 Goodwill, gross $ 269,160 $ 269,141 $ 275,602 Accumulated impairment (1) ( 4,196 ) ( 4,196 ) ( 4,196 ) Goodwill, net $ 264,964 $ 264,945 $ 271,406 (1) Accumulated impairment includes $ 1.7 million recorded in Fiscal 2019 and $ 2.5 million recorded in Fiscal 2016 . July 29, January 28, July 30, (In thousands) 2023 2023 2022 Intangible assets, at cost $ 146,577 $ 146,228 $ 145,765 Accumulated amortization ( 56,265 ) ( 51,692 ) ( 47,114 ) Intangible assets, net $ 90,312 $ 94,536 $ 98,651 |
Long-Term Debt, Net
Long-Term Debt, Net | 6 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net | 8. Long-Term Debt, Net Our long-term debt consisted of the following at July 29, 2023, January 28, 2023, and July 30, 2022: (In thousands) July 29, January 28, July 30, 2025 Notes principal $ — $ 8,791 $ 69,601 Less: unamortized discount — 105 779 2025 Notes, net $ — $ 8,686 $ 68,822 Credit Facility borrowings $ 3,000 $ — $ 307,700 2025 Notes In April 2020, the Company issued $ 415 million aggregate principal amount of 2025 Notes in a private placement to qualified institutional buyers in reliance on Rule 144A under the Securities Act. The 2025 Notes had a stated interest rate of 3.75 %, payable semi-annually . The Company used the net proceeds from the issuance for general corporate purposes. The Company redeemed all of the remaining 2025 Notes during the 13 weeks ended April 29, 2023. See "-Note Exchanges" and "-Early Redemption" below. The Company did not have the right to redeem the 2025 Notes prior to April 17, 2023 . On or after April 17, 2023 and prior to the fortieth scheduled trading day immediately preceding the maturity date, the Company could redeem all or any portion of the 2025 Notes, at its option, for cash, if the last reported sale price of our common stock had been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period. Note Exchanges In June and December 2022, the Company entered into separate privately negotiated exchange agreements with certain holders of the 2025 Notes, to exchange $ 403.2 million in aggregate principal amount of the 2025 Notes for a combination of cash and shares of the Company's common stock, plus payment of accrued and unpaid interest (together, the "Note Exchanges"). In June 2022, the Company exchanged $ 342.4 million in aggregate principal amount of the 2025 Notes. The Company paid cash of $ 136.1 million to redeem a principal amount of the 2025 Notes with a carrying value of $ 339.2 million and issued approximately 34.7 million shares of the Company's common stock. In connection with these transactions, the Company recognized a pre-tax inducement charge of approximately $ 55.7 million during the 13 weeks ended July 30, 2022, which was recorded within debt-related charges on the Consolidated Statements of Operations. In December 2022, the Company exchanged $ 60.8 million in aggregate principal amount of the 2025 Notes for shares of the Company's common stock, plus payment of accrued and unpaid interest. The Company issued approximately 7.6 million shares of the Company's common stock with a carrying value of $ 60.4 million. In connection with these transactions, the Company recognized a pre-tax inducement charge of approximately $ 4.7 million during the 13 weeks ended January 28, 2023, which was recorded within debt-related charges on the Consolidated Statements of Operations. Early Redemption On February 10, 2023, the Company issued a notice of optional redemption for all of its remaining outstanding 2025 Notes, notifying holders that, among other things, it had elected to exercise its right to redeem any and all of the outstanding 2025 Notes on April 17, 2023 (the "Early Redemption"). Subsequent to this notice, and prior to April 17, 2023, the 2025 Note holders redeemed a total of $ 8.8 million aggregate principal amount for a combined 1.1 million shares of the Company's common stock. Following the Note Exchanges and Early Redemption, the aggregate principal amount of the 2025 Notes had been fully redeemed. Interest expense for the 2025 Notes was: 13 Weeks Ended 26 Weeks Ended (In thousands) July 29, July 30, July 29, July 30, Accrued interest for interest payments $ — $ 2,008 $ 70 $ 5,914 Amortization of discount — 255 10 782 Total interest expense $ — $ 2,263 $ 80 $ 6,696 Refer to Note 2 and Note 5 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06. Revolving Credit Facility In June 2022, the Company entered into an amended and restated Credit Agreement. The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $ 700 million, subject to customary borrowing base limitations. The Credit Facility expires on June 24, 2027 . Before amendment and restatement, the Company's previous credit agreement provided senior secured asset-based revolving credit for loans and letters of credit up to $ 400 million and was scheduled to expire on January 30, 2024 . All obligations under the Credit Facility are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by certain assets of the Company and certain subsidiaries. As of July 29, 2023, the Company was in compliance with the terms of the Credit Agreement and had $ 3.0 million in outstanding borrowings and $ 7.7 million outstanding in stand-by letters of credit. As of July 30, 2022 , the Company had $ 307.7 million in outstanding borrowings under the Credit Agreement. Borrowings under the Credit Facility accrue interest at the election of the Company at an adjusted secured overnight financing rate ("SOFR") rate of SOFR plus 0.10 % plus an applicable margin (ranging from 1.125 % to 1.375 %) or an alternate base rate plus an applicable margin (ranging from 0.125 % to 0.375 %), with each such applicable margin being based on average borrowing availability under the Credit Facility. Interest is payable quarterly and at the end of each applicable interest period. The weighted average interest rate for borrowings during the 13 and 26 weeks ended July 29, 2023 was 6.2 % and 6.0 %, respectively. The total interest expense related to the Credit Facility borrowings for the 13 and 26 weeks ended July 29, 2023 was $ 0.5 million and $ 1.1 million respectively. The total interest expense related to the Credit Facility for both the 13 and 26 weeks ended July 30, 2022 was $ 1.0 million. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | 9. Share-Based Compensation The Company accounts for share-based compensation under the provisions of ASC 718, Compensation - Stock Compensation , which requires the Company to measure and recognize compensation expense for all share-based payments at fair value. Total share-based compensation expense included in the Consolidated Statements of Operations for the 13 and 26 weeks ended July 29, 2023 was $ 10.5 million ($ 7.7 million, net of tax) and $ 25.4 million ($ 18.4 million, net of tax), respectively, and for the 13 and 26 weeks ended July 30, 2022 was $ 8.6 million ($ 7.7 million, net of tax) and $ 22.9 million ($ 20.4 million, net of tax), respectively. Stock Option Grants The Company has granted time-based stock option awards, which vest over the requisite service period of the award. A summary of the Company’s stock option activity for the 26 weeks ended July 29, 2023 follows: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In years) (In thousands) Outstanding - January 28, 2023 3,950 $ 17.01 Granted 1,051 13.17 Exercised ( 70 ) 15.72 Cancelled ( 275 ) 16.75 Outstanding - July 29, 2023 4,656 16.18 4.4 5,217 Vested and expected to vest - July 29, 2023 3,694 16.35 3.1 733 Exercisable - July 29, 2023 (1) 1,199 10.32 3.7 4,376 (1) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price on July 29, 2023 . As of July 29, 2023 , there was $ 9.1 million of unrecognized compensation expense for stock option awards that is expected to be recognized over a weighted average period of 2.1 years. The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: 26 Weeks Ended 26 Weeks Ended July 29, July 30, Black-Scholes Option Valuation Assumptions 2023 2022 Risk-free interest rate (1) 3.4 % 2.5 % Dividend yield 2.8 % 3.8 % Volatility factor (2) 55.7 % 52.2 % Weighted-average expected term (3) 4.5 years 4.5 years (1) Based on the United States Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options. (2) Based on historical volatility of the Company’s common stock. (3) Represents the period of time options are expected to be outstanding. The weighted-average expected option terms were determined based on historical experience. Restricted Stock Grants Time-based restricted stock awards are comprised of time-based restricted stock units. These awards vest over three years . Time-based restricted stock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award. Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three-year period based upon the Company’s achievement of pre-established goals throughout the term of the award. Performance-based restricted stock units receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award. The grant date fair value of time-based restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant. A Monte-Carlo simulation was utilized for performance-based restricted stock awards. A summary of the Company’s restricted stock activity is presented in the following table: Time-Based Restricted Performance-Based Restricted July 29, 2023 July 29, 2023 (Shares in thousands) Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Non-vested - January 28, 2023 2,749 $ 17.00 1,574 $ 20.11 Granted 1,846 $ 13.03 927 $ 14.90 Vested ( 1,551 ) $ 14.88 ( 421 ) $ 15.95 Cancelled ( 158 ) $ 15.68 ( 74 ) $ 23.93 Non-vested - July 29, 2023 2,886 $ 15.67 2,006 $ 18.43 As of July 29, 2023 , there was $ 37.1 million of unrecognized compensation expense related to non-vested, time-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 2.2 years. There is $ 7.4 million of unrecognized compensation expense related to performance-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 1.8 years. As of July 29, 2023 , the Company had 12.0 million shares available for all equity grants. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 13 weeks ended July 29, 2023 was 27.0 % compared to an effective income tax benefit rate of 10.9 % for the 13 weeks ended July 30, 2022. The effective income tax rate for the 26 weeks ended July 29, 2023 was 27.1 % compared to ( 82.5 )% for the 26 weeks ended July 30, 2022. The change in the effective tax rate, as compared to the prior period, is primarily due to the 2022 Note Exchange in Fiscal 2022 as a portion of the inducement charge was not deductible and state legislative changes that occurred in Fiscal 2022. The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Unrecognized tax benefits did not change significantly during the 13 weeks ended July 29, 2023 due to income tax settlements. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may decrease by approximately $ 1.1 million due to settlements, expiration of statute of limitations, or other changes in unrecognized tax benefits. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jul. 29, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 11. Legal Proceedings The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies (“ASC 450”), the Company records a reserve for estimated losses when the loss is probable and the amount can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with ASC 450. As the Company believes that it has provided adequate reserves, it anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial position, results of operations or consolidated cash flows of the Company. However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 29, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | 12. Segment Reporting In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified two operating segments (American Eagle brand and Aerie brand) that also represent our reportable segments and reflect the Chief Operating Decision Maker’s (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder brand, Unsubscribed brand, and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they are presented under the Other caption, as permitted by ASC 280. General corporate expenses are comprised of general and administrative costs that management does not attribute to any of our operating segments. These costs primarily relate to corporate administration, information and technology resources, finance and human resources functional and organizational costs, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects. Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income , or the operating income in periods where there are no adjustments, of each segment. Adjusted operating income is a non-GAAP financial measure ("non-GAAP" or "adjusted") that is defined by the Company as operating income excluding impairment, restructuring and other charges. Adjusted operating income is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP consolidated financial statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. Adjusted operating income on a consolidated basis is presented in the following table to reconcile the segment operating performance measure to operating income as presented on the Consolidated Financial Statements. Reportable segment information is presented in the following table: For the 13 weeks ended For the 26 weeks ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Net Revenue: American Eagle $ 767,018 $ 777,828 $ 1,438,110 $ 1,463,407 Aerie $ 380,413 $ 371,683 $ 739,495 $ 693,395 Total Segment Net Revenue $ 1,147,431 $ 1,149,511 $ 2,177,605 $ 2,156,802 Other $ 108,318 $ 110,393 $ 217,675 $ 200,077 Intersegment Elimination $ ( 54,870 ) $ ( 61,780 ) $ ( 113,475 ) $ ( 103,718 ) Total Net Revenue $ 1,200,879 $ 1,198,124 $ 2,281,805 $ 2,253,161 Adjusted Operating Income: American Eagle $ 128,664 $ 109,110 $ 234,203 $ 213,015 Aerie $ 57,253 $ 11,830 $ 112,922 $ 54,903 Total Segment Adjusted Operating Income $ 185,917 $ 120,940 $ 347,125 $ 267,918 Other $ ( 10,341 ) $ ( 11,507 ) $ ( 26,648 ) $ ( 27,732 ) Intersegment Elimination $ - $ - $ - $ - General corporate expenses $ ( 110,286 ) $ ( 95,419 ) $ ( 211,081 ) $ ( 184,270 ) Total Adjusted Operating Income $ 65,290 $ 14,014 $ 109,396 $ 55,916 Less: Impairment, restructuring and other charges $ - $ - $ ( 21,275 ) $ - Total Operating Income $ 65,290 $ 14,014 $ 88,121 $ 55,916 Debt related charges $ - $ 60,066 $ - $ 60,066 Interest expense, net $ 951 $ 3,421 $ 1,642 $ 8,009 Other income, net $ ( 2,150 ) $ ( 1,839 ) $ ( 5,461 ) $ ( 6,283 ) Income before income taxes $ 66,489 $ ( 47,634 ) $ 91,940 $ ( 5,876 ) Capital Expenditures American Eagle $ 16,249 $ 18,754 $ 31,192 $ 34,524 Aerie $ 10,889 $ 30,244 $ 22,077 $ 61,259 Other $ 6,154 $ 4,107 $ 11,730 $ 5,132 General corporate expenditures $ 12,810 $ 16,359 $ 26,960 $ 26,943 Total Capital Expenditures $ 46,102 $ 69,464 $ 91,959 $ 127,858 The following table presents summarized geographical information: 13 Weeks Ended 26 Weeks Ended (In thousands) July 29, July 30, July 29, July 30, Total net revenue: United States $ 1,005,197 $ 1,027,158 $ 1,919,588 $ 1,935,323 Foreign (1) 195,682 170,966 362,217 317,838 Total net revenue $ 1,200,879 $ 1,198,124 $ 2,281,805 $ 2,253,161 (1) Amounts represent sales from American Eagle and Aerie international retail stores, and e-commerce sales that are billed to and/or shipped to foreign countries and international franchise royalty revenue. |
Impairment, Restructuring and O
Impairment, Restructuring and Other Charges | 6 Months Ended |
Jul. 29, 2023 | |
Restructuring and Related Activities [Abstract] | |
Impairment, Restructuring and Other Charges | 13. Impairment, Restructuring and Other Charges The following table represents impairment, restructuring and other charges related to Quiet Platforms. All amounts were recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations during the 26 weeks ended July 29, 2023. There were no impairment, restructuring and other charges recorded for the 13 weeks ended July 29, 2023. 26 Weeks Ended July 29, (In thousands) 2023 Long-lived asset impairment charges (1) $ 10,759 Employee related costs (2) 5,592 Other commercial related charges (3) 4,924 Total impairment, restructuring and other charges $ 21,275 (1) $ 10.8 million of impairment of supply chain technology assets due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. (2) $ 5.6 million of severance costs (3) $ 4.9 million of contract related charges, resulting from the restructuring of Quiet Platforms |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 29, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and consolidated entities where the Company's ownership percentage is less than 100 %. Non-controlling interests are included as a component of contributed capital within the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity and was not material for any period presented. All intercompany transactions and balances have been eliminated in consolidation. At July 29, 2023 , the Company operated in two reportable segments, American Eagle and Aerie. |
Fiscal Year | Fiscal Year Our fiscal year is a 52- or 53-week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2023” refers to the 53-week period that will end on February 3, 2024. “Fiscal 2022” refers to the 52-week period ended January 28, 2023 . |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (“ASU 2020-06”), which simplifies the accounting for convertible debt instruments. The new guidance eliminates two of the three models in Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share (“EPS”) calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted ASU 2020-06 at the beginning of Fiscal 2022 using the modified retrospective method. Refer to Note 5 and Note 8 to the Consolidated Financial Statements for additional information regarding EPS and long-term debt, respectively. |
Foreign Currency Translation | Foreign Currency Translation In accordance with ASC 830, Foreign Currency Matters , the Company translates assets and liabilities denominated in foreign currencies into U.S. dollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. The Company translates revenues and expenses denominated in foreign currencies into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currency transactions are included in the consolidated results of operations, whereas related translation adjustments are reported as an element of other comprehensive income (loss) in accordance with ASC 220, Comprehensive Income . We are exposed to the impact of foreign exchange rate risk primarily through our Canadian and Mexican operations where the functional currency is the Canadian dollar and Mexican peso, respectively. The impact of all other foreign currencies is currently immaterial to our consolidated financial results. During the 13 and 26 weeks ended July 29, 2023 , an unrealized gain of $ 15.2 million and $ 21.1 million, respectively, was included in other comprehensive income, which were primarily related to the fluctuations of the USD to Mexican peso and USD to Canadian dollar exchange rates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents. |
Accounts Receivable | Accounts Receivable The Company maintains an allowance for doubtful accounts for estimated losses from the failure of certain of our customers to make required payments for products or services delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical and expected future receivables, reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company’s reserves have approximated actual experience. |
Merchandise Inventory | Merchandise Inventory Merchandise inventory is valued at the lower of average cost or net realizable value, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the merchandise has transferred to the Company. The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends. |
Property and Equipment | Property and Equipment Property and equipment is recorded on the basis of cost with depreciation computed utilizing the straight-line method over the asset’s estimated useful life. The useful lives of our major classes of assets are as follows: Buildings 25 years Leasehold improvements Lesser of 10 years or the term of the lease Fixtures and equipment Information technology Five year s Three to five year s As of July 29, 2023 , the weighted average remaining useful life of our assets was approximately six years . In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company’s management evaluates the value of leasehold improvements, store fixtures, and operating lease right-of-use ("ROU") assets associated with retail stores. The Company evaluates long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income within the Consolidated Statements of Operations. Our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values. The significant assumption used in our fair value analysis is forecasted revenue. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected. When the Company closes, remodels, or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense. There were no long-lived asset impairment charges recorded during the 13 weeks ended July 29, 2023 or July 30, 2022. During the 26 weeks ended July 29, 2023 , the Company recorded impairment of property and equipment of $ 10.8 million. No long-lived asset impairment charges were recorded during the 26 weeks ended July 30, 2022 . Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property and equipment and refer to Note 13 to the Consolidated Financial Statements for additional information regarding the impairment of these assets. |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets The Company’s goodwill is primarily related to the acquisition of Quiet Logistics, in Fiscal 2021, as well as its importing operations and Canadian business, and represents the excess of cost over fair value of net assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other , the Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge is recorded in the period of the evaluation based on that difference. As a result of the Company's annual goodwill impairment test as of January 28, 2023 , the Company concluded that its goodwill was no t impaired. No indicators of impairment were present during the 13 or 26 weeks ended July 29, 2023 and July 30, 2022. Definite-lived intangible assets are initially recorded at fair value, with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s definite-lived intangible assets, which consist primarily of trademark assets, are generally amortized over 10 to 15 years. The Company evaluates definite-lived intangible assets for impairment in accordance with ASC 360 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows is less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No definite-lived intangible asset impairment charges were recorded during the 13 or 26 weeks ended July 29, 2023 or July 30, 2022. Refer to Note 7 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets. |
Construction Allowances | Construction Allowances As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally comprised of cash amounts. The Company records a receivable and an adjustment to the operating lease ROU asset at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized as part of the single lease cost over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the lessor. |
Self-Insurance Liability | Self-Insurance Liability The Company uses a combination of insurance and self-insurance mechanisms for certain losses related to employee medical benefits and worker’s compensation. Costs for self-insurance claims filed and claims incurred but not reported are accrued based on known claims and historical experience. Management believes that it has adequately reserved for its self-insurance liability, which is capped by stop-loss contracts with insurance companies. However, any significant variation of future claims from historical trends could cause actual results to differ from the accrued liability. |
Leases | Leases The Company leases all store premises, the Canadian distribution center in Mississauga, Ontario, regional distribution facilities, some of its office space and certain information technology and office equipment. These leases are generally classified as operating leases. Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes and certain other expenses. When measuring operating lease ROU assets and operating lease liabilities, the Company only includes cash flows related to options to extend or terminate leases once those options are executed. Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities. When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset. For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less. |
Co-Branded and Private Label Credit Cards | Co-branded and Private Label Credit Cards The Company offers a co-branded credit card and a private-label credit card under the AE and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (the “Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this funding as we fulfill our performance obligations under the Agreement. This revenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations. |
Customer Loyalty Program | Customer Loyalty Program The Company offers a highly digitized loyalty program called Real Rewards by American Eagle and Aerie (the “Program”). The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited. Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The portion of the sales revenue attributed to the reward points is deferred and recognized when the reward is redeemed or when the points expire, using the relative stand-alone selling price method. Additionally, reward points earned using the co-branded credit card on non-AE or Aerie purchases are accounted for in accordance with ASC 606. As the points are earned, a current liability is recorded for the estimated cost of the reward, and the impact of adjustments is recorded in revenue. The Company defers a portion of the sales revenue attributed to the loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. |
Long-Term Debt | Long-Term Debt In April 2020, the Company issued $ 415 million aggregate principal amount of convertible senior notes due 2025 (the "2025 Notes"). Prior to the adoption of ASU 2020-06 in Fiscal 2022, the 2025 Notes were accounted for under the cash conversion model, which is one of the models eliminated by ASU 2020-06. The adoption of ASU 2020-06 resulted in the 2025 Notes being accounted for as a single balance in long-term debt, rather than being accounted for as separate debt and equity components. In June 2022, the Company entered into an amended and restated credit agreement (the “Credit Agreement”). The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $ 700 million, subject to customary borrowing base limitations (the "Credit Facility"). The Credit Facility expires on June 24, 2027 . Refer to Note 8 to the Consolidated Financial Statements for additional information regarding Long-Term Debt. |
Income Taxes | Income Taxes The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statements carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits, may materially impact the Company’s effective income tax rate. The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. The calculation of deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance, requires management to make estimates and assumptions. The Company believes that its estimates and assumptions are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income (loss). Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue pursuant to ASC 606. Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets. Revenue is recorded net of estimated and actual sales returns and promotional price reductions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined using historical average return percentages. The presentation on a gross basis of the sales return reserve consists of a separate right of return asset and liability. These amounts are recorded within (i) prepaid expenses and other and (ii) other current liabilities and accrued expenses, respectively, on the Consolidated Balance Sheets. Revenue is not recorded on the issuance of gift cards. A current liability is recorded upon issuance, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on gift card breakage, determined through historical redemption trends. Revenue on unredeemed gift cards, based on an estimate of the amounts that will not be redeemed ("gift card breakage"), is recorded in proportion to actual gift cards redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. During the 13 weeks ended July 29, 2023 and July 30, 2022 , the Company recorded approximately $ 1.8 million and $ 2.2 million, respectively, of revenue related to gift card breakage. During the 26 weeks ended July 29, 2023 and July 30, 2022 , the Company recorded $ 4.2 million and $ 4.9 million, respectively, of revenue related to gift card breakage. The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned and collection is probable. The Company defers a portion of the sales revenue attributed to loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. Refer to the Customer Loyalty Program caption above for additional information. Revenue associated with Quiet Platforms is recognized as the services are performed. |
Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses | Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, “merchandise costs”), Quiet Platforms' costs to service its customers and buying, occupancy and warehousing costs and services. Design costs are related to the Company's Design Center operations and include compensation, travel and entertainment, supplies and samples for our design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory is sold. Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel and entertainment for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operation. Gross profit is the difference between total net revenue and cost of sales. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. SG&A expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. SG&A expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales. Additionally, SG&A expenses do not include rent and utilities related to our stores, operating costs of our distribution centers, and shipping and handling costs related to our e-commerce operations, all of which are included in cost of sales. |
Debt Related Charges | Debt Related Charges Debt related charges consist primarily of a $ 55.7 million induced conversion expense on the exchange of the 2025 Notes, along with certain other costs related to actions we took to strengthen our capital structure during the 13 weeks ended July 30, 2022. Refer to Note 8 to the Consolidated Financial Statements for additional information regarding the Company's 2025 Notes. |
Interest Expense, Net | Interest Expense, Net Interest expense, net primarily consists of interest expense related to the Company’s 2025 Notes and borrowings under our five-year, syndicated, asset-based revolving credit facilities, partially offset by interest income from cash and cash equivalents. |
Other Income, Net | Other Income, Net Other income, net consists primarily of foreign currency fluctuations and changes in other non-operating items. Non-controlling interest was not material for any period presented and is included within other income, net. |
Segment Information | Segment Information The Company has identified two operating segments (American Eagle and Aerie brand) that also represent our reportable segments and reflect the Chief Operating Decision Maker's (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder and Unsubscribed brands and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they are presented under the Other caption. For additional information regarding the Company’s segment and geographic information, refer to Note 12 to the Consolidated Financial Statements. |
Legal Proceedings and Claims | The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies (“ASC 450”), the Company records a reserve for estimated losses when the loss is probable and the amount can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with ASC 450. As the Company believes that it has provided adequate reserves, it anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial position, results of operations or consolidated cash flows of the Company. However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Accounting Policies [Abstract] | |
Useful Lives of Major Classes of Assets | The useful lives of our major classes of assets are as follows: Buildings 25 years Leasehold improvements Lesser of 10 years or the term of the lease Fixtures and equipment Information technology Five year s Three to five year s |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Fair Market Value of Cash and Cash Equivalents | The following table summarizes the fair market values for the Company’s cash and cash equivalents, which are recorded in the Consolidated Balance Sheets: (In thousands) July 29, January 28, July 30, Cash and cash equivalents: Cash $ 174,927 $ 84,960 $ 98,111 Interest bearing deposits 388 85,249 103 Total cash and cash equivalents $ 175,315 $ 170,209 $ 98,214 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | The Company’s cash equivalents and short-term investments are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 3 to the Consolidated Financial Statements for additional information regarding cash equivalents. Fair Value Measurements at July 29, 2023 (In thousands) Carrying Amount Quoted Market Prices Significant Other Significant Cash and cash equivalents: Cash $ 174,927 $ 174,927 $ — $ — Interest bearing deposits 388 388 — — Total cash and cash equivalents $ 175,315 $ 175,315 $ — $ — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation Between Basic and Diluted Earnings per Share | The following is a reconciliation between basic and diluted weighted average shares outstanding: 13 Weeks Ended 26 Weeks Ended (In thousands) July 29, July 30, July 29, July 30, Numerator: Net income (loss) and numerator for basic EPS $ 48,570 $ ( 42,466 ) $ 67,022 $ ( 10,726 ) Add: Interest expense, net of tax, related to the 2025 Notes (1) - — 58 — Numerator for diluted EPS $ 48,570 $ ( 42,466 ) $ 67,080 $ ( 10,726 ) Denominator: Denominator for basic EPS - weighted average shares 195,329 180,189 195,214 174,544 Add: Dilutive effect of the 2025 Notes (1) (2) — — 417 — Add: Dilutive effect of stock options and non-vested restricted stock (3) 774 — 1,191 — Denominator for diluted EPS - adjusted weighted average shares 196,103 180,189 196,822 174,544 Anti-dilutive shares (4) 509 29,221 397 38,763 (1) During the 26 weeks ended July 30, 2022 , the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculated diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06. (2) For the 13 and 26 weeks ended July 30, 2022 , there were 25.3 million and 36.8 million potentially dilutive shares from the Company's 2025 Notes, respectively, that were excluded from the dilutive earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. (3) For the 13 and 26 weeks ended July 30, 2022 , there were 3.9 million and 1.9 million potentially dilutive equity awards, respectively, that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. (4) For both periods presented, anti-dilutive shares relate to stock options and unvested restricted stock. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following: July 29, January 28, July 30, (In thousands) 2023 2023 2022 Property and equipment, at cost $ 2,772,496 $ 2,707,061 $ 2,603,212 Less: Accumulated depreciation and impairment ( 2,013,760 ) ( 1,925,547 ) ( 1,827,243 ) Property and equipment, net $ 758,736 $ 781,514 $ 775,969 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Definite-lived intangible assets, net | Goodwill and definite-lived intangible assets, net consist of the following: July 29, January 28, July 30, (In thousands) 2023 2023 2022 Goodwill, gross $ 269,160 $ 269,141 $ 275,602 Accumulated impairment (1) ( 4,196 ) ( 4,196 ) ( 4,196 ) Goodwill, net $ 264,964 $ 264,945 $ 271,406 (1) Accumulated impairment includes $ 1.7 million recorded in Fiscal 2019 and $ 2.5 million recorded in Fiscal 2016 . July 29, January 28, July 30, (In thousands) 2023 2023 2022 Intangible assets, at cost $ 146,577 $ 146,228 $ 145,765 Accumulated amortization ( 56,265 ) ( 51,692 ) ( 47,114 ) Intangible assets, net $ 90,312 $ 94,536 $ 98,651 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Our long-term debt consisted of the following at July 29, 2023, January 28, 2023, and July 30, 2022: (In thousands) July 29, January 28, July 30, 2025 Notes principal $ — $ 8,791 $ 69,601 Less: unamortized discount — 105 779 2025 Notes, net $ — $ 8,686 $ 68,822 Credit Facility borrowings $ 3,000 $ — $ 307,700 |
Schedule of Interest Expense for Notes | Interest expense for the 2025 Notes was: 13 Weeks Ended 26 Weeks Ended (In thousands) July 29, July 30, July 29, July 30, Accrued interest for interest payments $ — $ 2,008 $ 70 $ 5,914 Amortization of discount — 255 10 782 Total interest expense $ — $ 2,263 $ 80 $ 6,696 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity for the 26 weeks ended July 29, 2023 follows: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In years) (In thousands) Outstanding - January 28, 2023 3,950 $ 17.01 Granted 1,051 13.17 Exercised ( 70 ) 15.72 Cancelled ( 275 ) 16.75 Outstanding - July 29, 2023 4,656 16.18 4.4 5,217 Vested and expected to vest - July 29, 2023 3,694 16.35 3.1 733 Exercisable - July 29, 2023 (1) 1,199 10.32 3.7 4,376 (1) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price on July 29, 2023 . |
Black-Scholes Option Valuation Assumptions | The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: 26 Weeks Ended 26 Weeks Ended July 29, July 30, Black-Scholes Option Valuation Assumptions 2023 2022 Risk-free interest rate (1) 3.4 % 2.5 % Dividend yield 2.8 % 3.8 % Volatility factor (2) 55.7 % 52.2 % Weighted-average expected term (3) 4.5 years 4.5 years (1) Based on the United States Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options. (2) Based on historical volatility of the Company’s common stock. (3) Represents the period of time options are expected to be outstanding. The weighted-average expected option terms were determined based on historical experience. |
Summary of Restricted Stock Activity | A summary of the Company’s restricted stock activity is presented in the following table: Time-Based Restricted Performance-Based Restricted July 29, 2023 July 29, 2023 (Shares in thousands) Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Non-vested - January 28, 2023 2,749 $ 17.00 1,574 $ 20.11 Granted 1,846 $ 13.03 927 $ 14.90 Vested ( 1,551 ) $ 14.88 ( 421 ) $ 15.95 Cancelled ( 158 ) $ 15.68 ( 74 ) $ 23.93 Non-vested - July 29, 2023 2,886 $ 15.67 2,006 $ 18.43 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Segment Reporting [Abstract] | |
Summary of Reportable Segment Information | Reportable segment information is presented in the following table: For the 13 weeks ended For the 26 weeks ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Net Revenue: American Eagle $ 767,018 $ 777,828 $ 1,438,110 $ 1,463,407 Aerie $ 380,413 $ 371,683 $ 739,495 $ 693,395 Total Segment Net Revenue $ 1,147,431 $ 1,149,511 $ 2,177,605 $ 2,156,802 Other $ 108,318 $ 110,393 $ 217,675 $ 200,077 Intersegment Elimination $ ( 54,870 ) $ ( 61,780 ) $ ( 113,475 ) $ ( 103,718 ) Total Net Revenue $ 1,200,879 $ 1,198,124 $ 2,281,805 $ 2,253,161 Adjusted Operating Income: American Eagle $ 128,664 $ 109,110 $ 234,203 $ 213,015 Aerie $ 57,253 $ 11,830 $ 112,922 $ 54,903 Total Segment Adjusted Operating Income $ 185,917 $ 120,940 $ 347,125 $ 267,918 Other $ ( 10,341 ) $ ( 11,507 ) $ ( 26,648 ) $ ( 27,732 ) Intersegment Elimination $ - $ - $ - $ - General corporate expenses $ ( 110,286 ) $ ( 95,419 ) $ ( 211,081 ) $ ( 184,270 ) Total Adjusted Operating Income $ 65,290 $ 14,014 $ 109,396 $ 55,916 Less: Impairment, restructuring and other charges $ - $ - $ ( 21,275 ) $ - Total Operating Income $ 65,290 $ 14,014 $ 88,121 $ 55,916 Debt related charges $ - $ 60,066 $ - $ 60,066 Interest expense, net $ 951 $ 3,421 $ 1,642 $ 8,009 Other income, net $ ( 2,150 ) $ ( 1,839 ) $ ( 5,461 ) $ ( 6,283 ) Income before income taxes $ 66,489 $ ( 47,634 ) $ 91,940 $ ( 5,876 ) Capital Expenditures American Eagle $ 16,249 $ 18,754 $ 31,192 $ 34,524 Aerie $ 10,889 $ 30,244 $ 22,077 $ 61,259 Other $ 6,154 $ 4,107 $ 11,730 $ 5,132 General corporate expenditures $ 12,810 $ 16,359 $ 26,960 $ 26,943 Total Capital Expenditures $ 46,102 $ 69,464 $ 91,959 $ 127,858 |
Summary of Geographical Information | The following table presents summarized geographical information: 13 Weeks Ended 26 Weeks Ended (In thousands) July 29, July 30, July 29, July 30, Total net revenue: United States $ 1,005,197 $ 1,027,158 $ 1,919,588 $ 1,935,323 Foreign (1) 195,682 170,966 362,217 317,838 Total net revenue $ 1,200,879 $ 1,198,124 $ 2,281,805 $ 2,253,161 (1) Amounts represent sales from American Eagle and Aerie international retail stores, and e-commerce sales that are billed to and/or shipped to foreign countries and international franchise royalty revenue. |
Impairment, Restructuring and_2
Impairment, Restructuring and Other Charges (Tables) | 6 Months Ended |
Jul. 29, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Impairment, Restructuring and Other Charges | The following table represents impairment, restructuring and other charges related to Quiet Platforms. All amounts were recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations during the 26 weeks ended July 29, 2023. There were no impairment, restructuring and other charges recorded for the 13 weeks ended July 29, 2023. 26 Weeks Ended July 29, (In thousands) 2023 Long-lived asset impairment charges (1) $ 10,759 Employee related costs (2) 5,592 Other commercial related charges (3) 4,924 Total impairment, restructuring and other charges $ 21,275 (1) $ 10.8 million of impairment of supply chain technology assets due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. (2) $ 5.6 million of severance costs (3) $ 4.9 million of contract related charges, resulting from the restructuring of Quiet Platforms |
Interim Financial Statements -
Interim Financial Statements - Additional Information (Details) | Jul. 29, 2023 Country Store |
Accounting Policies [Abstract] | |
Number of retail stores | 1,000 |
Number of international store locations | 200 |
Number of countries company operates in | Country | 80 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Apr. 30, 2020 USD ($) | Jan. 31, 2019 USD ($) | Jul. 29, 2023 USD ($) | Jul. 30, 2022 USD ($) | Jul. 29, 2023 USD ($) Segment | Jul. 28, 2023 | Jul. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Significant Accounting Policies [Line Items] | ||||||||
Maximum ownership percentage in consolidated entities and subsidiaries | 100% | 100% | ||||||
Number of reportable segments | Segment | 2 | |||||||
Unrealized gain included in other comprehensive (loss) income | $ 15,211,000 | $ 298,000 | $ 21,064,000 | $ 828,000 | ||||
Weighted average remaining useful life, assets | 6 years | |||||||
Asset impairment charges | 0 | 0 | 0 | 0 | ||||
Goodwill impairment charge | 0 | |||||||
Definite-lived impairment charges | 0 | 0 | 0 | 0 | ||||
Revenue related to gift card breakage | 1,800,000 | 2,200,000 | $ 4,200,000 | 4,900,000 | ||||
Credit Card Reward Program Description | The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited. | |||||||
Debt related charges | 60,066,000 | 60,066,000 | ||||||
Credit Agreement | Credit Facilities | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Loans and letters of credit maximum borrowing capacity | $ 400,000,000 | 700,000,000 | $ 700,000,000 | $ 700,000,000 | ||||
Line of credit facility, expiration date | Jan. 30, 2024 | Jun. 24, 2027 | ||||||
Property, and Equipment | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Asset impairment charges | $ 0 | 0 | $ 10,800,000 | $ 0 | ||||
2025 Notes | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Aggregate principal amount of debt issued | $ 415,000,000 | |||||||
Debt instrument, maturity year | 2025 | |||||||
Debt related charges | $ 55,700,000 | |||||||
Minimum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Definite-lived intangibles, useful life | 10 years | 10 years | ||||||
Maximum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Definite-lived intangibles, useful life | 15 years | 15 years | ||||||
ASU 2020-06 | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Change in accounting principle, accounting standards update, adopted | true | true |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Useful Lives of Major Classes of Assets (Detail) | Jul. 29, 2023 |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | Leasehold Improvements |
Buildings | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 25 years |
Leasehold Improvements | Maximum | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 10 years |
Fixtures and Equipment | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 5 years |
Information Technology | Minimum | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 3 years |
Information Technology | Maximum | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Useful Lives of Major Classes of Assets (Parenthetical) (Detail) | Jul. 29, 2023 |
Maximum | Leasehold Improvements | |
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items] | |
Useful lives in asset class | 10 years |
Cash and Cash Equivalents and S
Cash and Cash Equivalents and Short-Term Investments - Fair Market Values for Cash and Short-term Investments (Detail) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 175,315 | $ 170,209 | $ 98,214 |
Cash | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | 174,927 | 84,960 | 98,111 |
Interest Bearing Deposits | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 388 | $ 85,249 | $ 103 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | ||
Fair Value Measurements Disclosure [Line Items] | ||||||
Impairment charges | $ 0 | $ 0 | $ 10,759,000 | [1] | $ 0 | |
2025 Notes | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Aggregate principal amount of debt issued | $ 415,000,000 | |||||
Debt instrument, maturity year | 2025 | |||||
Revolving Credit Facility | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Outstanding borrowings | $ 3,000,000 | $ 307,700,000 | $ 3,000,000 | $ 307,700,000 | ||
[1] $ 10.8 million of impairment of supply chain technology assets due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 175,315 | $ 170,209 | $ 98,214 |
Fair Value Measurements, Recurring | Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 175,315 | ||
Fair Value Measurements, Recurring | Cash | Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 174,927 | ||
Fair Value Measurements, Recurring | Interest Bearing Deposits | Carrying Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 388 | ||
Fair Value Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 175,315 | ||
Fair Value Measurements, Recurring | Level 1 | Cash | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 174,927 | ||
Fair Value Measurements, Recurring | Level 1 | Interest Bearing Deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 388 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation Between Basic and Diluted Earnings per Share (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | ||
Numerator: | |||||
Net Income (Loss) | $ 48,570 | $ (42,466) | $ 67,022 | $ (10,726) | |
Add: Interest expense, net of tax, related to the 2025 Notes | [1] | 58 | |||
Numerator for diluted EPS | $ 48,570 | $ (42,466) | $ 67,080 | $ (10,726) | |
Denominator: | |||||
Denominator for basic EPS - weighted average shares | 195,329 | 180,189 | 195,214 | 174,544 | |
Add: Dilutive effect of the 2025 Notes | [1],[2] | 417 | |||
Add: Dilutive effect of stock options and non-vested restricted stock | [3] | 774 | 1,191 | ||
Denominator for diluted EPS - adjusted weighted average shares | 196,103 | 180,189 | 196,822 | 174,544 | |
Anti-dilutive shares | [4] | 509 | 29,221 | 397 | 38,763 |
[1] During the 26 weeks ended July 30, 2022 , the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculated diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06. For the 13 and 26 weeks ended July 30, 2022 , there were 25.3 million and 36.8 million potentially dilutive shares from the Company's 2025 Notes, respectively, that were excluded from the dilutive earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. For the 13 and 26 weeks ended July 30, 2022 , there were 3.9 million and 1.9 million potentially dilutive equity awards, respectively, that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. For both periods presented, anti-dilutive shares relate to stock options and unvested restricted stock. |
Earnings per Share - Reconcil_2
Earnings per Share - Reconciliation Between Basic and Diluted Earnings per Share (Parenthetical) (Details) - shares | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Awards excluded from diluted earnings per share calculation | [1] | 509 | 29,221 | 397 | 38,763 |
Equity Awards | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Awards excluded from diluted earnings per share calculation | 3,900,000 | 1,900,000 | |||
Convertible Senior Notes Due 2025 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Awards excluded from diluted earnings per share calculation | 25,300,000 | 36,800,000 | |||
[1] For both periods presented, anti-dilutive shares relate to stock options and unvested restricted stock. |
Earnings per Share (Additional
Earnings per Share (Additional Information) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Jul. 28, 2022 | Jun. 03, 2022 | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Cumulative treasury stock, shares | 52,085 | 54,502 | 62,254 | ||
ASR Agreement | JPM | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Payments for accelerated share repurchase | $ 200 | ||||
Number of shares repurchased | 3,700 | 13,400 | |||
Cumulative treasury stock, shares | 17,000 | ||||
Shares repurchased price per share | $ 11.75 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Property, Plant and Equipment [Abstract] | |||
Property and equipment, at cost | $ 2,772,496 | $ 2,707,061 | $ 2,603,212 |
Less: Accumulated depreciation and impairment | (2,013,760) | (1,925,547) | (1,827,243) |
Property and equipment, net | $ 758,736 | $ 781,514 | $ 775,969 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Summary of Goodwill and Definite-lived Intangible Assets, Net (Detail) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 | |
Goodwill [Line Items] | ||||
Goodwill, gross | $ 269,160 | $ 269,141 | $ 275,602 | |
Accumulated impairment | [1] | (4,196) | (4,196) | (4,196) |
Goodwill, net | 264,964 | 264,945 | 271,406 | |
Intangible assets, at cost | 146,577 | 146,228 | 145,765 | |
Accumulated amortization | (56,265) | (51,692) | (47,114) | |
Intangible assets, net | $ 90,312 | $ 94,536 | $ 98,651 | |
[1] Accumulated impairment includes $ 1.7 million recorded in Fiscal 2019 and $ 2.5 million recorded in Fiscal 2016 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Summary of Goodwill and Definite-lived Intangible Assets, Net, (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 01, 2020 | Jan. 28, 2017 | |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Accumulated impairment | $ 1.7 | $ 2.5 |
Long-Term Debt, Net - Component
Long-Term Debt, Net - Components of Long-Term Debt (Detail) - USD ($) $ in Thousands | Jul. 29, 2023 | Jan. 28, 2023 | Jul. 30, 2022 |
Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit Facility borrowings | $ 3,000 | $ 307,700 | |
2025 Notes | |||
Debt Instrument [Line Items] | |||
2025 Notes principal | $ 8,791 | 69,601 | |
Less: unamortized discount | 105 | 779 | |
2025 Notes, net | $ 8,686 | $ 68,822 |
Long-Term Debt, Net - Additiona
Long-Term Debt, Net - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 7 Months Ended | ||||||||
Feb. 10, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | Jun. 30, 2022 USD ($) shares | Apr. 30, 2020 USD ($) TradingDay | Jan. 31, 2019 USD ($) | Jul. 29, 2023 USD ($) | Jan. 28, 2023 USD ($) | Jul. 30, 2022 USD ($) | Jul. 30, 2022 USD ($) shares | Jul. 29, 2023 USD ($) shares | Jul. 30, 2022 USD ($) shares | Dec. 31, 2022 USD ($) | |
Credit Facilities | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Credit facility interest rate | 0.10 | |||||||||||
Weighted average interest rate for borrowings | 6.20% | 6% | ||||||||||
Interest expense | $ 500,000 | $ 1,000,000 | $ 1,100,000 | $ 1,000,000 | ||||||||
Outstanding borrowings | 3,000,000 | $ 307,700,000 | 307,700,000 | $ 3,000,000 | 307,700,000 | |||||||
Credit Facilities | SOFR | Minimum | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Accrued interest margin rate | 1.125% | |||||||||||
Credit Facilities | SOFR | Maximum | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Accrued interest margin rate | 1.375% | |||||||||||
Credit Facilities | Alternate Base Rate | Minimum | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Accrued interest margin rate | 0.125% | |||||||||||
Credit Facilities | Alternate Base Rate | Maximum | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Accrued interest margin rate | 0.375% | |||||||||||
Credit Agreement | Credit Facilities | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Loans and letters of credit maximum borrowing capacity | $ 700,000,000 | $ 400,000,000 | 700,000,000 | $ 700,000,000 | ||||||||
Line of credit facility, expiration date | Jan. 30, 2024 | Jun. 24, 2027 | ||||||||||
Credit Agreement | Stand-by Letters of Credit | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Letters of credit outstanding amount | 7,700,000 | $ 7,700,000 | ||||||||||
Credit Agreement | Credit Agreement Loans | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Letters of credit outstanding amount | $ 3,000,000 | $ 3,000,000 | ||||||||||
Outstanding borrowings | 307,700,000 | $ 307,700,000 | $ 307,700,000 | |||||||||
Common Stock | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Exchange of Convertible Senior Notes (in shares) | shares | 34,679 | 1,099 | 34,679 | |||||||||
2025 Notes | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Aggregate principal amount of debt issued | $ 415,000,000 | |||||||||||
Debt instrument, stated interest rate | 3.75% | |||||||||||
Debt instrument, maturity year | 2025 | |||||||||||
Debt instrument, interest terms | The 2025 Notes had a stated interest rate of 3.75%, payable semi-annually. | |||||||||||
Debt instrument, frequency of periodic payment of interest | payable semi-annually | |||||||||||
Debt instrument, redemption earliest date | Apr. 17, 2023 | Apr. 17, 2023 | ||||||||||
Debt instrument, redemption, scheduled trading day immediately preceding maturity date | TradingDay | 40 | |||||||||||
Debt instrument, redemption percentage of common stock price to conversion price | 130% | |||||||||||
Debt instrument, redemption, effect for trading days | TradingDay | 20 | |||||||||||
Debt instrument, redemption, consecutive trading day period | TradingDay | 30 | |||||||||||
Notes exchange aggregate principal amount | $ 8,800,000 | $ 60,800,000 | 342,400,000 | $ 403,200,000 | ||||||||
Cash paid to noteholders | 136,100,000 | |||||||||||
Carrying value of notes | $ 60,400,000 | $ 339,200,000 | $ 60,400,000 | |||||||||
Pre-tax inducement charge | $ 4,700,000 | $ 55,700,000 | ||||||||||
2025 Notes | Common Stock | ||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||
Exchange of Convertible Senior Notes (in shares) | shares | 1,100,000 | 7,600,000 | 34,700,000 |
Long-Term Debt, Net - Schedule
Long-Term Debt, Net - Schedule of Interest Expense for Notes (Detail) - 2025 Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Debt Instrument [Line Items] | |||
Accrued interest for interest payments | $ 2,008 | $ 70 | $ 5,914 |
Amortization of discount | 255 | 10 | 782 |
Total interest expense | $ 2,263 | $ 80 | $ 6,696 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 10,500 | $ 8,600 | $ 25,355 | $ 22,946 |
Share-based compensation, net of tax | $ 7,700 | $ 7,700 | 18,400 | 20,400 |
Net proceeds from stock options exercised | $ 1,095 | $ 1,369 | ||
Shares available for all equity grants | 12 | 12 | ||
Performance-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unrecognized compensation expense, weighted average period | 1 year 9 months 18 days | |||
Unrecognized compensation expense, restricted stock grants | $ 7,400 | $ 7,400 | ||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | 9,100 | $ 9,100 | ||
Unrecognized compensation expense, weighted average period | 2 years 1 month 6 days | |||
Time Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unrecognized compensation expense, weighted average period | 2 years 2 months 12 days | |||
Unrecognized compensation expense, restricted stock grants | $ 37,100 | $ 37,100 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jul. 29, 2023 USD ($) $ / shares shares | ||
Options | ||
Outstanding - beginning of period | shares | 3,950 | |
Granted | shares | 1,051 | |
Exercised | shares | (70) | |
Cancelled | shares | (275) | |
Outstanding - end of period | shares | 4,656 | |
Vested and expected to vest - end of period | shares | 3,694 | |
Exercisable - end of period | shares | 1,199 | [1] |
Weighted-Average Exercise Price | ||
Outstanding - beginning of period | $ / shares | $ 17.01 | |
Granted | $ / shares | 13.17 | |
Exercised | $ / shares | 15.72 | |
Cancelled | $ / shares | 16.75 | |
Outstanding - end of period | $ / shares | 16.18 | |
Vested and expected to vest - end of period | $ / shares | 16.35 | |
Exercisable - end of period | $ / shares | $ 10.32 | [1] |
Weighted-Average Remaining Contractual Term (In years) | ||
Outstanding - end of period | 4 years 4 months 24 days | |
Vested and expected to vest - end of period | 3 years 1 month 6 days | |
Exercisable - end of period | 3 years 8 months 12 days | [1] |
Aggregate Intrinsic Value | ||
Outstanding - end of period | $ | $ 5,217 | |
Vested and expected to vest - end of period | $ | 733 | |
Exercisable - end of period | $ | $ 4,376 | [1] |
[1] Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price on July 29, 2023 . |
Share-Based Compensation - Blac
Share-Based Compensation - Black-Scholes Option Valuation Assumptions (Detail) | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | [1] | 3.40% | 2.50% |
Dividend yield | 2.80% | 3.80% | |
Volatility factor | [2] | 55.70% | 52.20% |
Weighted-average expected term | [3] | 4 years 6 months | 4 years 6 months |
[1] Based on the United States Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options. Based on historical volatility of the Company’s common stock. Represents the period of time options are expected to be outstanding. The weighted-average expected option terms were determined based on historical experience. |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Restricted Stock Activity (Detail) shares in Thousands | 6 Months Ended |
Jul. 29, 2023 $ / shares shares | |
Time Based Restricted Stock Units | |
Shares | |
Nonvested - beginning of period | shares | 2,749 |
Granted | shares | 1,846 |
Vested | shares | (1,551) |
Cancelled | shares | (158) |
Nonvested - end of period | shares | 2,886 |
Weighted-Average Grant Date Fair Value | |
Nonvested - beginning of period | $ / shares | $ 17 |
Granted | $ / shares | 13.03 |
Vested | $ / shares | 14.88 |
Cancelled | $ / shares | 15.68 |
Nonvested - end of period | $ / shares | $ 15.67 |
Performance-Based Restricted Stock Units | |
Shares | |
Nonvested - beginning of period | shares | 1,574 |
Granted | shares | 927 |
Vested | shares | (421) |
Cancelled | shares | (74) |
Nonvested - end of period | shares | 2,006 |
Weighted-Average Grant Date Fair Value | |
Nonvested - beginning of period | $ / shares | $ 20.11 |
Granted | $ / shares | 14.9 |
Vested | $ / shares | 15.95 |
Cancelled | $ / shares | 23.93 |
Nonvested - end of period | $ / shares | $ 18.43 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Reasonably possible amount of reduction in unrecognized tax benefit over the next twelve months | $ 1.1 | $ 1.1 | ||
Effective income tax benefit rate | 27% | 10.90% | 27.10% | (82.50%) |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 6 Months Ended |
Jul. 29, 2023 Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segment Reporting - Summary of
Segment Reporting - Summary of Reportable Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 1,200,879 | $ 1,198,124 | $ 2,281,805 | $ 2,253,161 |
Adjusted operating income | 65,290 | 14,014 | 109,396 | 55,916 |
Less: Impairment, restructuring and other charges | (21,275) | |||
Operating income | 65,290 | 14,014 | 88,121 | 55,916 |
Debt related charges | 60,066 | 60,066 | ||
Interest expense, net | 951 | 3,421 | 1,642 | 8,009 |
Other income, net | (2,150) | (1,839) | (5,461) | (6,283) |
Income (loss) before income taxes | 66,489 | (47,634) | 91,940 | (5,876) |
Capital expenditures | 46,102 | 69,464 | 91,959 | 127,858 |
General Corporate Expenses | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | (110,286) | (95,419) | (211,081) | (184,270) |
Capital expenditures | 12,810 | 16,359 | 26,960 | 26,943 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 1,147,431 | 1,149,511 | 2,177,605 | 2,156,802 |
Adjusted operating income | 185,917 | 120,940 | 347,125 | 267,918 |
Operating Segments | American Eagle | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 767,018 | 777,828 | 1,438,110 | 1,463,407 |
Adjusted operating income | 128,664 | 109,110 | 234,203 | 213,015 |
Capital expenditures | 16,249 | 18,754 | 31,192 | 34,524 |
Operating Segments | Aerie | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 380,413 | 371,683 | 739,495 | 693,395 |
Adjusted operating income | 57,253 | 11,830 | 112,922 | 54,903 |
Capital expenditures | 10,889 | 30,244 | 22,077 | 61,259 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 108,318 | 110,393 | 217,675 | 200,077 |
Adjusted operating income | (10,341) | (11,507) | (26,648) | (27,732) |
Capital expenditures | 6,154 | 4,107 | 11,730 | 5,132 |
Intersegment Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ (54,870) | $ (61,780) | $ (113,475) | $ (103,718) |
Segment Reporting - Summary o_2
Segment Reporting - Summary of Geographical Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Total net revenue | $ 1,200,879 | $ 1,198,124 | $ 2,281,805 | $ 2,253,161 | |
United States | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Total net revenue | 1,005,197 | 1,027,158 | 1,919,588 | 1,935,323 | |
Foreign | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Total net revenue | [1] | $ 195,682 | $ 170,966 | $ 362,217 | $ 317,838 |
[1] Amounts represent sales from American Eagle and Aerie international retail stores, and e-commerce sales that are billed to and/or shipped to foreign countries and international franchise royalty revenue. |
Impairment, Restructuring and_3
Impairment, Restructuring and Other Charges - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jul. 29, 2023 | Jul. 29, 2023 | |
Restructuring and Related Activities [Abstract] | ||
Impairment and restructuring charges | $ 0 | $ 21,275 |
Impairment, Restructuring and_4
Impairment, Restructuring and Other Charges - Schedule of Impairment and Restructuring Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |||
Restructuring and Related Activities [Abstract] | ||||||
Long-lived asset impairment charges | $ 0 | $ 0 | $ 10,759 | [1] | $ 0 | |
Employee related costs | [2] | 5,592 | ||||
Other commercial related charges | [3] | 4,924 | ||||
Total impairment, restructuring and other charges | $ 0 | $ 21,275 | ||||
[1] $ 10.8 million of impairment of supply chain technology assets due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. $ 5.6 million of severance costs $ 4.9 million of contract related charges, resulting from the restructuring of Quiet Platforms |
Impairment, Restructuring and_5
Impairment, Restructuring and Other Charges - Schedule of Impairment and Restructuring Charges (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 29, 2023 | Jul. 30, 2022 | Jul. 29, 2023 | Jul. 30, 2022 | |||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance Costs | $ 5,600 | |||||
Contract related charges | [1] | 4,924 | ||||
Impairment charges | $ 0 | $ 0 | 10,759 | [2] | $ 0 | |
Quiet Platforms | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Contract related charges | 4,900 | |||||
Impairment charges | $ 10,800 | |||||
[1] $ 4.9 million of contract related charges, resulting from the restructuring of Quiet Platforms $ 10.8 million of impairment of supply chain technology assets due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. |