UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~November~~May 23, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-33338

American Eagle Outfitters, Inc.

(Exact name of registrant as specified in its charter)


Delaware		No. 13-2721761
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

77 Hot Metal Street, Pittsburgh, PA		15203-2329
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (412) 432-3300

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	AEO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer,", "accelerated filer,", "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~192~~173,~~101~~268,~~783~~234 shares of Common Stock were outstanding at ~~November~~June 274, ~~2024~~2025.

AMERICAN EAGLE OUTFITTERS, INC.

TABLE OF CONTENTS

		Page Number
	PART I - FINANCIAL INFORMATION
	Forward Looking Statements	4
Item 1.	Financial Statements	7
	Consolidated Balance Sheets: November 2, 2024, February 3, 2024, and October 28, 2023	7
	Consolidated Balance Sheets: May 3, 2025, February 1, 2025, and May 4, 2024	7
	Consolidated Statements of Operations: 13 and 39 weeks ended November 2, 2024 and October 28, 2023	8
	Consolidated Statements of Operations: 13 weeks ended May 3, 2025 and May 4, 2024	8
	Consolidated Statements of Comprehensive Income: 13 and 39 weeks ended November 2, 2024 and October 28, 2023	9
	Consolidated Statements of Comprehensive Income: 13 weeks ended May 3, 2025 and May 4, 2024	9
	Consolidated Statements of Stockholders' Equity: 13 and 39 weeks ended November 2, 2024 and October 28, 2023	10
	Consolidated Statements of Stockholders' Equity: 13 weeks ended May 3, 2025 and May 4, 2024	10
	Consolidated Statements of Cash Flows: 39 weeks ended November 2, 2024 and October 28, 2023	12
	Consolidated Statements of Cash Flows: 13 weeks ended May 3, 2025 and May 4, 2024	11
	Notes to Consolidated Financial Statements	13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2927
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4336
Item 4.	Controls and Procedures	4437
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	4538
Item 1A.	Risk Factors	4538
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4538
Item 3.	Defaults Upon Senior Securities	N/A
Item 4.	Mine Safety Disclosures	N/A
Item 5.	Other Information	4538
Item 6.	Exhibits	4639

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Quarterly Report") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are based on the views and beliefs of management of American Eagle Outfitters, Inc. (the "Company," "~~AEO," "~~we," "us," and "our"), as well as assumptions and estimates made by management. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not intend to correct or update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Actual results could differ materially from such forward-looking statements as a result of various risk factors, including those contained in this Quarterly Report and in the Company's Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025 filed with the Securities and Exchange Commission (the "SEC") on March 1520, ~~2024~~2025 (the "Fiscal ~~2023~~2024 Form 10-K") that may not be in the control of management. As ~~Our~~used ~~fiscal~~herein, ~~year~~"Fiscal is2027" arefers ~~52-~~to orthe 5352-week ~~year~~period that ~~ends~~will end on ~~the~~January ~~Saturday~~29, ~~nearest~~2028. "Fiscal 2025" refers to ~~January~~the ~~31.~~52-week Asperiod ~~used~~that ~~herein~~will end on January 31, 2026. "Fiscal 2024" refers to the 52-week period ~~that~~ended ~~will end on~~ February 1, 2025. "Fiscal 2023" refers to the 53-week period ended February 3, 2024.

All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," "potential," and similar expressions may identify forward-looking statements. Our forward-looking statements include, but are not limited to, statements about:

•

the planned opening of approximately five to 15 American Eagle stores and approximately 25 to 40 Aerie and OFFLINE stores, which will be a mix of stand-alone and Aerie side-by-sides, during Fiscal ~~2024~~2025;

•

the anticipated selection of approximately 8090 to 90100 American Eagle and Aerie stores in ~~North~~the ~~America~~United States ("U.S.") and Canada for remodeling during Fiscal ~~2024~~2025;

•

the potential net closure of approximately 1015 to 20 American Eagle stores at the expiration of their lease term, primarily in North America, during Fiscal ~~2024~~2025;

•

the success of our core American Eagle and Aerie brands through our omni-channel and licensed outlets within North America and internationally;

•

the success of our business priorities and strategies;

•

the continued validity of our trademarks;

•

our performance during the back-to-school and holiday selling ~~season~~seasons;

•

the reduction of operating expenses and capital expenditures, including through our profit improvement program, and impact on our results of operations;

•

the accuracy of the estimates and assumptions we make pursuant to our critical accounting policies and estimates;

•

the payment of a dividend in future periods;

•

our ability to fund our current and long-term cash requirements through current cash holdings and available liquidity, including under our revolving credit facility;

•

the ~~possibility~~extent ~~that~~to which our product costs are adversely affected by foreign trade issues, (including import tariffs and other trade restrictions, ~~imposed~~increasing byprices ~~the~~for ~~United~~raw ~~States~~materials ~~("U.S."),~~unrelated ~~China~~to ~~or other countries)~~tariffs, currency exchange rate fluctuations, ~~increasing prices for raw materials,~~ supply chain issues, political instability, or other reasons;, all of which could impact our profitability

•

the extent to which our suppliers may be impacted by economic conditions and cycles and changing laws and regulatory requirements, including the imposition of tariffs, that could impact their ability to do business with us or

cause us to terminate our relationship with them and require us to find replacements, which we may have difficulty doing;

•

the possibility of changes in global economic and financial conditions, and resulting impacts on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits;

•

the effect of inflation on our business;

•

the possibility that we may be required to take additional write-downs, impairment or other restructuring charges; and

•

the impact of any macroeconomic or geopolitical conditions; and

the ability of our distribution centers and stores to maintain adequate staffing to meet increased customer demand.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following:

•

4the risk that global economic conditions and the effect of economic pressures and other business factors will continue to negatively impact discretionary consumer spending and, in turn, adversely impact our revenues and margins;

•

the risk that general macroeconomic conditions, including the effect of inflationary economic pressures and other business factors, will continue to negatively impact discretionary consumer spending and adversely impact our revenues and/or margins;

the risk that foreign policy changes resulting from the presidential and congressional elections in the US and the foreign policy of other jurisdictions in which we conduct business, including threatened and actual changes in tariffs or other trade restrictions, uncertainty regarding international trade agreements, immigration policy, and defense and security policy, could adversely impact our business, our financial condition, and the results of operations;

the risk that our inability to anticipate and respond to changing consumer preferences and fashion trends and fluctuations in consumer demand in a timely manner could adversely impact our business and results of operations;

•

the risk that seasonality may cause sales to fluctuate and negatively impact our results of operations;

•

the risks associated with operating in a highly competitive industry, and ~~with~~ facing significant pricing pressures from existing and new competitors;

•

the risk that our results could be adversely affected by events beyond our control, such as natural disasters, public health crises, political crises and results of elections, negative global climate patterns, or other catastrophic events;

•

the risk that ~~impairments~~impairment ofto goodwill, intangible assets, and other long-lived assets, ~~including impairments relating to our Quiet Platforms business,~~ could adversely impact our profitability;

•

the risk that our inability to grow and optimize our digital channels and leverage omni-channel capabilities could adversely impact ~~tour~~our business;

•

the risk that our failure to manage growth in our omni-channel operations and the resulting impact on our distribution and fulfillment networks may have an adverse effect on our results of operations;

•

the risk that failure to define, launch and communicate a brand-relevant customer experience could have a negative impact on our growth and profitability;

•

the risk that our inability to execute on our key business priorities could have a negative impact on our growth and profitability;

•

the ~~inherent~~risk ~~risks~~that ~~of operating in other countries from~~ our current international operations and efforts to further expand internationally expose us to risks inherent in operating in other countries;

•

the risk that failure to protect our reputation could have a material adverse effect on our brands;

•

the ~~risk~~risks ~~that~~associated ~~failure~~with our inability to ~~manage~~implement ~~growth~~and insustain ~~our~~adequate ~~omni-channel~~information ~~operations~~technology ~~and~~systems ~~the~~could ~~resulting~~adversely impact on our ~~distribution~~profitability and ~~fulfillment~~the ~~networks~~loss ~~may~~of disruption of information technology systems could have ana material adverse effect on our ~~results of operations~~business;

•

the risks ~~that~~related to our ~~inability~~electronic toprocessing ~~implement~~of sensitive and ~~sustain~~confidential ~~adequate~~personal ~~information~~and ~~technology~~business ~~systems~~data, ~~could~~including ~~adversely~~cyberattacks, ~~impact~~data ~~our~~breaches, ~~profitability~~other ~~and~~security ~~that~~incidents, ~~the loss~~ or disruption of information technology systems ~~could~~or ~~have a material adverse effect on our business~~software;

•

~~the~~ risks ~~related~~associated towith our ~~electronic~~international ~~processing~~merchandise ofsourcing ~~sensitive~~strategy ~~and~~subjects ~~confidential~~us ~~personal~~to ~~and~~risks ~~business~~that ~~data,~~could ~~including~~adversely asimpact aour ~~result~~business ofand ~~cyberattacks,~~results ~~data breaches, other security incidents, or disruption~~ of ~~information technology systems or software~~operations;

•

the risk that our inability to achieve ~~targeted~~planned store performance, gain market share in the face of declining shopping center traffic or attract customers to our stores could adversely impact our profitability and our results of operations;

•

the risk that failure to properly manage and allocate our inventory could have an adverse effect on our business, sales, margins, financial condition, and results of operations;

•

the risks associated with our significant lease obligations and with leasing substantial amounts of space, including future increases in occupancy costs and the need to generate significant cash flow to meet our lease obligations;

•

the risks associated with our reliance on key personnel, the loss of whom could have a material adverse effect on our business;

•

the ~~risk~~risks ~~that~~associated with the increases in labor costs, including wages, could adversely impact our operational results, financial condition and results of operations;

•

the risks ~~that~~associated ~~the~~with ~~current~~fluctuations ~~legal~~in ~~and~~our ~~regulatory~~tax ~~environment,~~obligations ~~or changes to the legal~~ and ~~regulatory~~effective ~~environment,~~tax rate could adversely affect ~~our~~us; ~~financial condition~~ and ~~results of operations;~~

•

the risk that ~~fluctuations~~the inunfavorable ~~our~~outcome ~~tax~~of ~~obligations~~pending ~~and~~or ~~effective~~future ~~tax~~litigation ~~rate~~ could ~~adversely~~have ~~affect~~an ~~us;~~adverse impact on our business, financial condition, and results of operations.

the risk that the unfavorable outcome of pending or future litigation could have an adverse impact on our business, financial condition and results of operations.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED BALANCE SHEETS

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


	May 3,			February 1,			May 4,
(In thousands, except per share amounts)	2025			2025			2024
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	87,853		$	308,962		$	300,518
Short-term investments		—			50,000			—
Merchandise inventory		645,062			636,655			681,062
Accounts receivable, net		228,561			262,365			230,934
Prepaid expenses		103,466			76,088			72,973
Other current assets		23,082			20,161			25,830
Total current assets		1,088,024			1,354,231			1,311,317
Operating lease right-of-use assets		1,471,705			1,295,400			1,123,649
Property and equipment, at cost, net of accumulated depreciation		765,594			751,264			703,551
Goodwill, net		225,225			225,079			225,253
Non-current deferred income taxes		78,483			68,158			89,332
Intangible assets, net		41,549			42,449			45,178
Other assets		96,774			94,194			58,937
Total assets	$	3,767,354		$	3,830,775		$	3,557,217
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	247,994		$	280,712		$	225,480
Current portion of operating lease liabilities		319,626			313,034			303,603
Accrued compensation and payroll taxes		58,380			113,388			64,502
Unredeemed gift cards and gift certificates		63,282			70,094			57,373
Accrued income and other taxes		23,114			30,677			50,716
Other current liabilities and accrued expenses		75,261			74,751			71,655
Total current liabilities		787,657			882,656			773,329
Non-current liabilities:
Non-current operating lease liabilities		1,337,489			1,133,296			1,002,529
Long-term debt, net		110,000			—			—
Other non-current liabilities		57,992			47,963			29,003
Total non-current liabilities		1,505,481			1,181,259			1,031,532
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; 173,267, 188,618 and 196,430 shares outstanding, respectively		2,496			2,496			2,496
Contributed capital		365,326			365,845			345,922
Accumulated other comprehensive loss		(42,105	)		(56,390	)		(15,722	)
Retained earnings		2,361,273			2,456,063			2,267,785
Treasury stock, at cost, 76,299, 60,948 and 53,136 shares, respectively		(1,212,774	)		(1,001,154	)		(848,125	)
Total stockholders’ equity		1,474,216			1,766,860			1,752,356
Total liabilities and stockholders’ equity	$	3,767,354		$	3,830,775		$	3,557,217

	November 2,			February 3,			October 28,
	2024			2024			2023
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	160,195		$	354,094		$	240,940
Short-term investments		—			100,000			—
Merchandise inventory		804,256			640,662			769,315
Accounts receivable, net		214,114			247,934			239,374
Prepaid expenses		118,773			65,082			81,423
Other current assets		38,810			25,578			22,366
Total current assets		1,336,148			1,433,350			1,353,418
Operating lease right-of-use assets		1,237,741			1,005,293			995,023
Property and equipment, at cost, net of accumulated depreciation		745,988			713,336			742,793
Goodwill, net		225,196			225,303			264,825
Non-current deferred income taxes		88,092			82,064			20,791
Intangible assets, net		43,371			46,109			88,201
Other assets		59,596			52,454			55,735
Total assets	$	3,736,132		$	3,557,909		$	3,520,786
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	283,471		$	268,308		$	300,031
Current portion of operating lease liabilities		293,006			284,508			294,898
Accrued compensation and payroll taxes		90,289			152,353			96,484
Unredeemed gift cards and gift certificates		50,161			66,285			47,676
Accrued income and other taxes		38,468			46,114			19,255
Other current liabilities and accrued expenses		95,620			73,604			72,887
Total current liabilities		851,015			891,172			831,231
Non-current liabilities:
Non-current operating lease liabilities		1,098,197			901,122			927,019
Other non-current liabilities		40,322			28,856			24,247
Total non-current liabilities		1,138,519			929,978			951,266
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; 192,102, 196,936, and 197,538 shares outstanding, respectively		2,496			2,496			2,496
Contributed capital		359,348			360,378			343,695
Accumulated other comprehensive loss		(49,872	)		(16,410	)		(32,865	)
Retained earnings		2,376,077			2,214,159			2,234,761
Treasury stock, at cost, 57,464, 52,630, and 52,028 shares, respectively		(941,451	)		(823,864	)		(809,798	)
Total stockholders’ equity		1,746,598			1,736,759			1,738,289
Total liabilities and stockholders’ equity	$	3,736,132		$	3,557,909		$	3,520,786

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	13 Weeks Ended						~~39 Weeks Ended~~
	November 2,			October 28,			November 2,			October 28,
	May 3,			May 4,
	2024			2023			2024			2023
(In thousands, except per share amounts)	2025			2024
Total net revenue	$	1,~~289~~089,~~094~~599		$	1,~~301~~143,~~055~~867		$	~~3,724,019~~		$	~~3,582,859~~
Cost of sales, including certain buying, occupancy and warehousing expenses		~~762~~767,~~470~~178			~~757~~679,~~258~~628			~~2,234,260~~			~~2,172,867~~
Gross profit		~~526~~322,~~624~~421			~~543~~464,~~797~~239			~~1,489,759~~			~~1,409,992~~
Selling, general and administrative expenses		~~351~~338,~~380~~786			~~361~~333,~~992~~493			~~1,030,186~~			~~1,006,210~~
Impairment, restructuring and other charges		17,561			—			17,561			21,275
Impairment and restructuring charges		17,119			—
Depreciation and amortization expense		51,~~594~~697			5652,~~444~~910			~~156,978~~			~~169,026~~
Operating income	$	106,089			125,361		$	285,034		$	213,481
Operating (loss) income	$	(85,181	)	$	77,836
Interest (income), net		(~~1,246~~219	)		(23,~~871~~439	)		~~(5,414~~	)		~~(1,229~~	)
Other (income), net		(~~895~~351	)		(31,~~984~~396	)		~~(4,006~~	)		~~(9,446~~	)
Income before income taxes		108,230			132,216			294,454			224,156
(Loss) income before income taxes		(84,611	)		82,671
Provision for income taxes		28,211			35,516			69,420			60,434
(Benefit) provision for income taxes		(19,712	)		14,919
Net income	$	80,019		$	96,700		$	225,034		$	163,722
Net (loss) income	$	(64,899	)	$	67,752
Basic net income per common share	$	0.42		$	0.50		$	1.16		$	0.84
Basic net (loss) income per common share	$	(0.36	)	$	0.34
Diluted net income per common share	$	0.41		$	0.49		$	1.14		$	0.83
Diluted net (loss) income per common share	$	(0.36	)	$	0.34
Weighted average common shares outstanding - basic		~~191~~179,~~630~~548			~~195~~196,~~343~~429			~~193,908~~			~~195,467~~
Weighted average common shares outstanding - diluted		~~195~~179,~~782~~548			~~198~~201,~~367~~310			~~198,201~~			~~197,969~~

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited~~; Dollars in thousands~~)

	13 Weeks Ended						~~39 Weeks Ended~~
	November 2,			October 28,			November 2,			October 28,
	May 3,			May 4,
	2024			2023			2024			2023
(In thousands)	2025			2024
Net income	$	80,019		$	96,700		$	225,034		$	163,722
Net (loss) income	$	(64,899	)	$	67,752
Other comprehensive (loss):
Other comprehensive gain
Foreign currency translation adjustments		(10,601	)		(21,299	)		(33,462	)		(235	)
Foreign currency translation gain		14,285			688
Other comprehensive (loss):		(10,601	)		(21,299	)		(33,462	)		(235	)
Other comprehensive gain		14,285			688
Comprehensive income	$	69,418		$	75,401		$	191,572		$	163,487
Comprehensive (loss) income	$	(50,614	)	$	68,440

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

13 Weeks Ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024

	SharesOutstanding			Common Stock		ContributedCapital			RetainedEarnings			Treasury Stock			Accumulated OtherComprehensive Loss			Stockholders'Equity
(In thousands, except per share amounts)	SharesOutstanding			Common Stock		ContributedCapital			RetainedEarnings			Treasury Stock			Accumulated OtherComprehensive Loss			Stockholders'Equity
Balance at July 29, 2023		197,481		$	2,496	$	334,447		$	2,158,294		$	(810,672	)	$	(11,566	)	$	1,672,999
Balance at February 3, 2024		196,936		$	2,496	$	360,378		$	2,214,159		$	(823,864	)	$	(16,410	)	$	1,736,759
Stock awards		—			—		920,~~794~~436			—			—			—			920,~~794~~436
Repurchase of common stock from employees		(17	)		—		—			—			(270	)		—			(270	)
Repurchase of common stock as part of publicly announced programs		(1,500	)		—		—			—			(34,949	)		—			(34,949	)
Reissuance of treasury stock		74			—		(557	)		—			1,144			—			587
Repurchase of common stock from employees		(531	)		—		-			—			(13,242	)		—			(13,242	)
Net income		—			—		—			96,700			—			—			96,700
Reissuance of treasury stock		1,525			—		(35,005	)		11,072			23,930			—			(3	)
Other comprehensive (loss)		—			—		—			—			—			(21,299	)		(21,299	)
Net income		—			—		—			67,752			—			—			67,752
Cash dividends declared and dividend equivalents ($0.10 per share)		—			—		483			(20,233	)		—			—			(19,750	)
Other comprehensive income		—			—		—			—			—			688			688
Contributions from non-controlling interests		—			—		(472	)		—			—			—			(472	)
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		605			(25,198	)		—			—			(24,593	)
Balance at October 28, 2023		197,538		$	2,496	$	343,695		$	2,234,761		$	(809,798	)	$	(32,865	)	$	1,738,289
Contributions from non-controlling interests		—					(492	)		—			—			—			(492	)
Balance at August 3, 2024		192,013		$	2,496	$	353,608		$	2,320,348		$	(942,815	)	$	(39,271	)	$	1,694,366
Balance at May 4, 2024		196,430		$	2,496	$	345,922		$	2,267,785		$	(848,125	)	$	(15,722	)	$	1,752,356
Stock awards		—			—		5,860			—			—			—			5,860
Balance at February 1, 2025		188,618		$	2,496	$	365,845		$	2,456,063		$	(1,001,154	)	$	(56,390	)	$	1,766,860
Repurchase of common stock as part of publicly announced programs, including excise tax		—			—		—			—			—			—			—
Stock awards		—			—		20,411			—			—			—			20,411
Repurchase of common stock from employees		(17	)		—		—			—			(355	)		—			(355	)
Repurchase of common stock as part of publicly announced programs, including excise tax		(2,000	)		—		—			—			(31,301	)		—			(31,301	)
Reissuance of treasury stock		106			—		(1,007	)		296			1,719			—			1,008
Accelerated share repurchase, including excise tax		(14,467	)										(201,469	)					(201,469	)
Net income		—			—		—			80,019			—			—			80,019
Repurchase of common stock from employees		(653	)		—		—			—			(7,893	)		—			(7,893	)
Other comprehensive (loss)		—			—		—			—			—			(10,601	)		(10,601	)
Reissuance of treasury stock		1,769			—		(21,368	)		(7,552	)		29,043			—			123
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		575			(24,586	)		—			—			(24,011	)
Net (loss)		—			—		—			(64,899	)		—			—			(64,899	)
Contributions from non-controlling interests		—			—		312			—			—			—			312
Other comprehensive income		—			—		—			—			—			14,285			14,285
Balance at November 2, 2024		192,102		$	2,496	$	359,348		$	2,376,077		$	(941,451	)	$	(49,872	)	$	1,746,598
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		682			(22,339	)		—			—			(21,657	)
Contributions from non-controlling interests		—			—		(244	)		—			—			—			(244	)
Balance at May 3, 2025		173,267		$	2,496	$	365,326		$	2,361,273		$	(1,212,774	)	$	(42,105	)	$	1,474,216

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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

39 Weeks Ended November 2, 2024 and October 28, 2023

	SharesOutstanding			Common Stock		ContributedCapital			RetainedEarnings			Treasury Stock			Accumulated OtherComprehensive Loss			Stockholders'Equity
Balance at January 28, 2023		195,064		$	2,496	$	341,775		$	2,137,126		$	(849,604	)	$	(32,630	)	$	1,599,163
Stock awards		—			—		34,777			—			—			—			34,777
Repurchase of common stock from employees		(766	)		—		—			—			(10,666	)		—			(10,666	)
Reissuance of treasury stock		2,141			—		(28,038	)		(3,330	)		33,364			—			1,996
Redemption of Convertible Senior Notes		1,099			—		(6,281	)		(2,137	)		17,108			—			8,690
Net income		—			—		—			163,722			—			—			163,722
Other comprehensive (loss)		—			—		—			—			—			(235	)		(235	)
Cash dividends declared and dividend equivalents ($0.30 per share)		—			—		1,499			(60,620	)		—			—			(59,121	)
Contributions from non-controlling interests		—			—		(37	)		—			—			—			(37	)
Balance at October 28, 2023		197,538		$	2,496	$	343,695		$	2,234,761		$	(809,798	)	$	(32,865	)	$	1,738,289
Balance at February 3, 2024		196,936		$	2,496	$	360,378		$	2,214,159		$	(823,864	)	$	(16,410	)	$	1,736,759
Stock awards		—			—		32,922			—			—			—			32,922
Repurchase of common stock as part of publicly announced programs, including excise tax		(6,000	)		—		—			—			(130,941	)		—			(130,941	)
Repurchase of common stock from employees		(549	)		—		—			—			(13,645	)		—			(13,645	)
Reissuance of treasury stock		1,715			—		(36,173	)		11,291			26,999			—			2,117
Net income		—			—		—			225,034			—			—			225,034
Other comprehensive (loss)		—			—		—			—			—			(33,462	)		(33,462	)
Cash dividends declared and dividend equivalents ($0.375 per share)		—			—		1,779			(74,407	)		—			—			(72,628	)
Contributions from non-controlling interests		—			—		442			—			—			—			442
Balance at November 2, 2024		192,102		$	2,496	$	359,348		$	2,376,077		$	(941,451	)	$	(49,872	)	$	1,746,598

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited~~; Dollars in thousands~~)

	39 Weeks Ended
	13 Weeks Ended
	November 2,			October 28,
	May 3,			May 4,
	2024			2023
(In thousands)	2025			2024
Operating activities:
Net income	$	225,034		$	163,722
Net (loss) income	$	(64,899	)	$	67,752
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		~~163~~53,~~524~~507			~~174~~55,~~559~~097
Share-based compensation		3320,~~372~~563			3520,~~289~~586
Deferred income taxes		(108,~~279~~748	)		15(7,~~691~~109	)
Loss on impairment of assets		615,~~353~~063			~~10,759~~—
Changes in assets and liabilities:
Accounts receivable		2833,~~032~~826			316,~~906~~729
Merchandise inventory		(~~185~~1,~~521~~671	)		(~~186~~40,~~546~~078	)
Operating lease assets		~~166~~113,~~605~~020			~~201~~(91,~~810~~029	)
Operating lease liabilities		(~~194~~89,~~353~~268	)		~~(241~~93,~~760~~385	)
Other assets		(7534,~~265~~708	)		~~793~~(16,344	)
Accounts payable		18(32,~~333~~741	)		65(42,~~630~~788	)
Accrued compensation and payroll taxes		(6155,~~317~~376	)		44(87,~~584~~931	)
Accrued and other liabilities		(213,~~473~~240	)		(46,~~094~~381	)
Net cash provided by operating activities		93,045			284,343
Net cash (used for) operating activities		(54,672	)		(38,111	)
Investing activities:
Capital expenditures for property and equipment		(~~157~~61,~~668~~606	)		(~~134~~36,~~915~~209	)
Sale of available-for-sale investments		~~100~~50,000			—100,000
Other investing activities		(~~8,385~~227	)		(94,~~346~~570	)
Net cash (used for) investing activities		(66,053	)		(144,261	)
Net cash (used for) provided by investing activities		(11,833	)		59,221
Financing activities:
Repurchase of common stock as part of publicly announced programs		(130,941	)		—
Accelerated share repurchase, including excise tax		(201,469	)		—
Repurchase of common stock from employees		(13,645	)		(10,666	)
Repurchase of common stock as part of publicly announced programs, including excise tax		(31,301	)		(34,948	)
Proceeds from revolving line of credit		—			30,000
Repurchase of common stock from employees		(7,893	)		(13,242	)
Principal payments on revolving line of credit		—			(30,000	)
Proceeds from revolving line of credit		110,000			—
Net proceeds from stock options exercised		~~3,841~~—			1,~~561~~853
Cash dividends paid		(7221,~~628~~657	)		(5924,~~121~~593	)
Other financing activities		(41,~~635~~814	)		(~~762~~3,284	)
Net cash (used for) financing activities		(~~218~~154,~~008~~134	)		(6874,~~988~~214	)
Effect of exchange rates changes on cash		(~~2,883~~470	)		(~~363~~472	)
Net change in cash and cash equivalents		(~~193~~221,~~899~~109	)		70(53,~~731~~576	)
Cash and cash equivalents - beginning of period		~~354~~308,~~094~~962			~~170~~354,~~209~~094
Cash and cash equivalents - end of period	$	~~160~~87,~~195~~853		$	~~240~~300,~~940~~518

Refer to Notes to Consolidated Financial Statements

Index for Notes to the Consolidated Financial Statements


Note 1	Interim Financial Statements	13
Note 2	Summary of Significant Accounting Policies	13
Note 3	Cash and Cash Equivalents and Short-term Investments	19
Note 4	Fair Value Measurements	19
Note 5	Earnings per Share	20
Note 6	Property and Equipment, Net	21
Note 7	Goodwill and Intangible Assets, Net	21
Note 8	Long-Term Debt, Net	21
Note 9	Share-Based Payments	22
Note 10	Income Taxes	23
Note 11	Legal Proceedings	23
Note 12	Segment Reporting	24
Note 13	Impairment and Restructuring Charges	26

AMERICAN EAGLE OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Interim Financial Statements

The accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the "Company," "we," "us," and "our"), a Delaware corporation, at ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024 and for the 13 ~~and 39~~ week periods ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024 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 ~~2023~~2024 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") ~~brand~~ and ~~the~~ Aerie® ~~brand, which includes the OFFLINE by Aerie® brand~~brands. We also operate Todd Snyder New York ("Todd Snyder"), a premium menswear brand, and Unsubscribed, which focuses on consciously made slow fashion.

~~Founded~~AEO inInc. ~~1977, the Company is a leading multi-brand specialty retailer that~~ operates ~~nearly 1,500 retail~~ stores in the ~~U.S.~~United ~~and internationally~~States, ~~online~~Canada ~~through~~and ~~our digital channels at www.ae.com~~Mexico, ~~www.aerie.com,~~with ~~www.toddsnyder.com,~~merchandise ~~and~~available ~~www.unsubscribed.com~~in ~~and through~~ more than ~~300~~30 ~~international~~countries ~~store~~through ~~locations~~a ~~managed~~global bynetwork ~~third-party operators. Through its portfolio~~ of ~~brands,~~license ~~the Company offers high quality, on-trend clothing, accessories, and personal care products at affordable prices~~partners. ~~We sell directly to consumers through our retail channel~~Additionally, ~~which~~the ~~includes~~company ~~our~~operates ~~stores~~a ~~and~~robust ~~concession~~e-~~based~~commerce shop-within-shops. We operate stores in the U.S., Canada, Hong Kong, and Mexico. 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~~across ~~Direct,~~its ~~ships to approximately 80 countries worldwide~~brands.

AsHistorically, ~~e-commerce~~our ~~penetration~~operations ~~and~~have ~~growth~~been ~~have~~seasonal, ~~normalized~~with ~~coming~~a ~~out~~large portion of ~~the~~total ~~COVID-19~~net ~~pandemic,~~revenue and operating income occurring in the ~~supply~~third ~~chain~~and ~~landscape~~fourth ~~has~~fiscal ~~continued~~quarters, reflecting increased demand during the back-to-school ~~evolve. In~~and ~~Fiscal~~year-end ~~2023~~holiday selling seasons, asrespectively. ~~part~~Our ofquarterly ~~its~~results ~~profit~~of ~~improvement~~operations ~~program,~~also ~~the~~may ~~Company~~fluctuate ~~began~~based toupon ~~streamline~~such ~~and~~factors ~~shift~~as the ~~operations~~timing of ~~Quiet~~certain ~~Platforms~~holiday toseasons, ~~better~~the ~~align~~number ~~with~~and ~~AEO's~~timing ~~long~~of ~~term~~new ~~strategy.~~store Asopenings, athe ~~result~~acceptability of ~~these~~seasonal ~~changes~~merchandise offerings, ~~Quiet~~the ~~Platforms~~timing ~~has~~and ~~refined~~level ~~its~~of ~~focus~~markdowns, onstore ~~its~~closings ~~core~~and ~~capabilities~~remodels, ascompetitive afactors, ~~regionalized~~weather, ~~fulfillment~~changes ~~center~~in ~~network.~~import ~~The~~tariffs ~~network~~ and ~~related~~other ~~growth~~trade ~~plans~~restrictions, ~~have~~and ~~been~~general ~~updated~~economic toand ~~reflect~~political ~~this refined focus~~conditions.

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.

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 interest is 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 ~~November~~May 23, ~~2024~~2025, 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 ~~2024~~2025" refers to the 52-week period that will end on January 31, 2026. "Fiscal 2024" refers to the 52-week period ended February 1, 2025. "Fiscal 2023" refers to the 53-week period ended on February 3, 2024.

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 ~~November~~December 2023, the Financial ~~Accounting~~ Standards Board ~~("FASB")~~ issued Accounting Standards Update ("ASU") 2023-0709, Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures ("ASU 2023-0709"), which requires ~~segment~~increased ~~expenses~~transparency ~~deemed significant to the Chief Operating Decision Maker ("CODM") typically incorporated~~ in ~~measuring~~tax profit or loss of the segment be disclosed. The guidance also requires that the difference between segment revenues and these significant segment expenses be disclosed. Any annually disclosed segment information is now required to be reported in interim periods as well. The guidance is effective for fiscal years beginning after December 15disclosures, ~~2023,~~specifically ~~and~~by interim periods beginning after December 15, 2024. Public entities are required to apply the amendment retrospectively to prior periods presented in the financial statements. The Company will adopt ASU 2023-07 effective for its Fiscal year 2024 and for interim periods beginning in Fiscal 2025.

~~Refer~~expanding torequirements ~~Note~~for 12rate reconciliation and income taxes paid information. Additionally, ~~Segment~~the ~~Reporting~~amendment requires disclosures of income/(loss) from continuing operations before taxes disaggregated between domestic and foreign, toand income tax expense/(benefit), disaggregated by federal, state, and foreign. Disclosure requirements about the ~~Consolidated~~nature ~~Financial~~and ~~Statements~~estimated range of the reasonably possible change in unrecognized tax benefits over the next year have been removed as part of this amendment. The guidance is effective for ~~additional~~fiscal ~~information~~years beginning after December 15, 2024. The Company plans to adopt ASU 2023-09 effective for Fiscal 2025.

InRefer ~~December~~to ~~2023,~~Note ~~the FASB issued ASU 2023-09~~10, ~~Improvements to~~ Income ~~Tax Disclosures ("ASU 2023-09")~~Taxes, ~~which~~to ~~requires~~the ~~increased~~Consolidated ~~transparency~~Financial inStatements ~~tax disclosures, specifically by expanding requirements~~ for ~~rate~~additional ~~reconciliation and income taxes paid~~ information. ~~Additionally,~~regarding ~~the amendment requires disclosures of~~ income~~/(loss)~~ ~~from continuing operations before~~ taxes ~~disaggregated between domestic and foreign, and income tax expense/(benefit), disaggregated by federal, state, and foreign~~. Disclosure requirements about the nature and estimated range of the reasonably possible change in unrecognized tax benefits over the next year have been removed as part of this amendment. The guidance is effective for fiscal years beginning after December 15, 2024. The Company plans to adopt ASU 2023-09 effective for Fiscal 2025.

Refer to Note 10, Income Taxes, to the Consolidated Financial Statements for additional information.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires disclosure of additional information for specific expense categories in the notes to financial statements for interim and annual periods. Specifically, the amendment requires quantitative disclosure for purchases of inventory, employee compensation, depreciation, and intangible asset amortization within an expense caption. For any remaining amounts within an expense caption, a qualitative description must be included. In all reporting periods, a total selling expense amount must be disclosed, with an annual disclosure of the entity's definition of selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company plans to adopt ASU 2024-03 effective for Fiscal 2027.

Foreign Currency Translation

In accordance with FASB Accounting Standards Codification ("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 39~~ weeks ended ~~November~~May 23, ~~2024~~2025, an unrealized ~~loss~~gain of $~~10.6~~14 million ~~and $33.5 million, respectively,~~ was included in other comprehensive ~~(loss)~~ income, which was primarily related to the fluctuations of the USD to Mexican peso and USD to Canadian dollar exchange rates.

Cash, Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Short-term investments classified as available-for-sale include certificates of deposit with an original maturity greater than three months, but less than one year.

14Refer to Note 3, Cash and Cash Equivalents and Short-term Investments, to the Consolidated Financial Statements for additional information regarding cash, cash equivalents, and short-term investments.

Refer to Note 3, Cash and Cash Equivalents and Short-term Investments, to the Consolidated Financial Statements for additional information.

Accounts Receivable

The Company's receivables are primarily generated from product sales and royalties from our licensees. The primary indicators of the credit quality of our receivables are aging, payment history, economic sector information and outside credit monitoring, and are assessed on a quarterly basis. Our credit loss exposure is mainly concentrated in our accounts receivable portfolio. Our allowance for credit losses is calculated using a loss-rate method based on historical experience, current market conditions and reasonable forecasts. 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 ~~estimated~~ 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 years Three to five years

As of ~~November~~May 23, ~~2024~~2025, 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 ~~that~~ there is a reasonable likelihood that there will be a material change in the estimates or assumptions ~~that~~ 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.

Refer to Note 6, . Property and Equipment, Net, to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note ~~14,~~ 13. Impairment, ~~Restructuring~~ and ~~Other~~Restructuring Charges, to the Consolidated Financial Statements for additional information regarding ~~the~~ impairment ofcharges ~~assets~~for ~~during~~ the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025. ~~and~~There ~~October~~were 28no long-lived asset impairment charges recorded during the 13 weeks ended May 4, ~~2023~~2024.

Goodwill and Intangible Assets

The Company’s goodwill is primarily related to the acquisition of its regionalized fulfillment center network, 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. The Company last performed an annual goodwill impairment test as of February 31, ~~2024~~2025. As a result of the annual impairment test, the Company concluded that the goodwill assigned to the Quiet Platforms reporting unit was impaired, resulting in a charge of $39.6 million recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations for Fiscal 2023, due to insufficient prospective cash flows to support the carrying value of the business. Significant, subjective assumptions used in the Company’s fair value estimate included forecasted cost of sales, forecasted operating expense and the discount rate. No indicators of impairment were present during the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 ~~and~~or ~~October~~May 284, ~~2023~~2024.

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. During Fiscal 2023, the Company recorded a $40.5 million impairment charge within impairment, restructuring and other charges on the Consolidated Statements of Operations related to the definite-lived intangible assets of Quiet Platforms, due to insufficient prospective cash flows to support the carrying value of the assets. No definite-lived intangible asset impairment charges were recorded during the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 ~~and~~or ~~October~~May 284, ~~2023~~2024.

Refer to Note 7, Goodwill and Intangible Assets, Net, to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets.

Equity Method Investments

During Fiscal 2024, the Company entered into a Limited Partnership Agreement of ACON Apparel Investors, L.P. (the "Fund"), with ACON Apparel GenPar, LLC. ("ACON") as the general partner. The Company paid $35.0 million for a 20% interest for its limited partner position in the Fund, which is recorded in Other Assets in the Consolidated Balance Sheet.

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 (~~i.e., the~~ 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, its Canadian distribution center in Mississauga, Ontario, its 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.

Credit Agreement

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, Long-Term Debt, Net, to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements.

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, Income Taxes, 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.

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 Customer Loyalty Program 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~~Design ~~center~~Center operations and include compensation, travel and entertainment, supplies and samples for our design teams, as well as rent and depreciation for our ~~design~~Design ~~center~~Center. These costs are included in cost of sales as the respective inventory is sold.

Total net revenue, net of merchandise costs, represents merchandise margin.

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. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased.

expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased.

Selling, general and administrative 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, selling, general and administrative expenses do not include rent and utilities, 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.

~~Interest (Income), Net~~18

Interest (~~income~~Income) Expense, ~~net primarily consists of interest income from cash and cash equivalents.~~Net

Interest (income) expense, net primarily consists of interest income from cash and cash equivalents and interest expense from Credit Facility borrowings.

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~~our CODM's (defined as our Chief Executive Officer ("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,~~disclosures they ~~are~~have ~~presented~~been ~~under~~included in the Corporate and Other ~~caption~~category. For additional information regarding the Company’s segment and geographic information, refer to Note 12, Segment Reporting, to the Consolidated Financial Statements.

3. Cash and Cash Equivalents and Short-term Investments

The following table summarizes the fair market values for the Company’s cash, cash equivalents, and short-term investments which are recorded in the Consolidated Balance Sheets:

(In thousands)

~~November~~May 23, ~~2024~~2025

February 31, ~~2024~~2025

~~October~~May 284, ~~2023~~2024

Cash and cash equivalents:

Cash

~~117~~85,~~348~~200

~~162~~150,~~279~~053

~~134~~110,~~874~~792

Interest bearing deposits

422,~~847~~653

~~191~~158,~~815~~909

~~106~~189,~~066~~726

Total cash and cash equivalents

~~160~~87,~~195~~853

~~354~~308,~~094~~962

~~240~~300,~~940~~518

Short-term investments:

Certificates of deposits

—-

~~100~~50,000

—-

Total short-term investments

—-

~~100~~50,000

—-

Total cash and short-term investments

~~160~~87,~~195~~853

~~454~~358,~~094~~962

~~240~~300,~~940~~518

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 are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 3, Cash and Cash Equivalents and Short-term Investments to the Consolidated Financial Statements for additional information regarding cash equivalents and short-term investments.

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, Cash and Cash Equivalents, and Short-term Investments to the Consolidated Financial Statements for additional information.


	Fair Value Measurements at May 3, 2025
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	85,200	$	85,200	$	-	$	-
Interest bearing deposits		2,653		2,653		-		-
Total cash and cash equivalents	$	87,853	$	87,853	$	-	$	-

	Fair Value Measurements at November 2, 2024
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets forIdentical Assets(Level 1)		Significant OtherObservable Inputs(Level 2)		SignificantUnobservable Inputs(Level 3)
Cash and cash equivalents:
Cash	$	117,348	$	117,348		—		—
Interest bearing deposits		42,847		42,847		—		—
Total cash and cash equivalents	$	160,195	$	160,195		—		—

Long-Term Debt

As of ~~November~~May 23, ~~2024~~2025, ~~and~~the ~~October~~fair 28value of the Company's $110.0 million in outstanding borrowings under its Credit Facility approximated the carrying value. As of May 4, ~~2023~~2024, there were no outstanding ~~borrowings~~borrowing under the Company's Credit Facility.

Refer to Note 8, Long-Term Debt, Net, 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. During the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025, the Company recorded asset impairment ofcharges ~~assets~~ of $610.4 million related to ~~the~~operating ~~pending~~lease ~~sale~~ROU ofassets ~~its~~and ~~Hong~~$4.9 ~~Kong~~million ~~retail~~related ~~operations~~to fixed assets. ~~There~~These assets were noadjusted ~~long-lived~~to ~~asset~~their fair value and the loss on impairment ~~charges~~was recorded ~~during~~within ~~the~~impairment 13and ~~weeks~~restructuring ~~ended~~charges ~~October~~in ~~28,~~the ~~2023.~~Consolidated ~~During~~Statements of Operations for the 3913 weeks ended ~~October~~May 283, ~~2023,~~2025. ~~the~~There ~~Company~~were ~~recorded~~no long-lived asset impairment ofcharges ~~property~~recorded ~~and~~during ~~equipment~~the of13 ~~$10.8~~weeks ~~million~~ended May 4, 2024. Refer to Note 1413, Impairment, ~~Restructuring~~ and ~~Other~~Restructuring Charges, to the Consolidated Financial Statements for additional information regarding impairment and restructuring charges.

20The 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 February 31, ~~2024~~2025.

No indicators of goodwill impairment were present during the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024.

5. Earnings per Share ~~("EPS")~~

The following is a reconciliation between basic and diluted weighted average shares outstanding:

	13 Weeks Ended				~~39 Weeks Ended~~
(In thousands)	~~November~~May 23, ~~2024~~2025		~~October~~May 284, ~~2023~~2024		~~November 2, 2024~~		~~October 28, 2023~~
Numerator:
Weighted average common shares outstanding:
Net income and numerator for basic EPS	$	80,019	$	96,700	$	225,034	$	163,722
Basic number of common shares outstanding:		179,548		196,429
Add: Interest expense, net of tax, related to the 2025 Notes (1)		—		—		—		58
Dilutive effect of stock options and non-vested restricted stock*		—		4,881
Numerator for diluted EPS	$	80,019	$	96,700	$	225,034	$	163,780
Diluted number of common shares outstanding		179,548		201,310
Denominator:
Anti-Dilutive Shares*		2,939		239
Denominator for basic EPS - weighted average shares		191,630		195,343		193,908		195,467
Add: Dilutive effect of the 2025 Notes (1)		—		—		—		278
Add: Dilutive effect of stock options and non-vested restricted stock		4,152		3,024		4,293		2,224
Denominator for diluted EPS - adjusted weighted average shares		195,782		198,367		198,201		197,969
Anti-dilutive shares (2)		414		1,816		396		1,861

(*For the 13 weeks ended May 3, 2025, there were 1).8 ~~The~~million ~~Company~~potentially ~~utilizes~~dilutive ~~the~~equity ~~"if-converted"~~awards ~~method~~that ofwere ~~calculating~~excluded from diluted ~~EPS,~~earnings inper ~~accordance~~share ~~with~~calculation ~~ASU~~because ~~2020-06,~~the ~~Debt~~Company ~~with~~incurred ~~Conversion~~a net loss for this period and ~~Other~~their ~~Options~~inclusion would be anti-dilutive.

~~(2)~~Dilutive ~~For~~and ~~all periods presented,~~ anti-dilutive shares ~~relate~~related to ~~stock~~share-based ~~options~~compensation. ~~and~~Refer ~~unvested~~to ~~restricted~~Note ~~stock~~9, Share-Based Payments, to the Consolidated Financial Statements for additional information regarding share-based compensation.

Refer to Notes 8, Long-Term Debt, Net, and 9, Share-Based Compensation, to the Consolidated Financial Statements for additional information regarding the 2025 Notes (as defined in Note 8) and share-based compensation, respectively.20

On March 14, 2025, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with Bank of America, N.A. ("Bank of America"). Pursuant to the terms of the ASR Agreement, on March 17, 2025, the Company made an aggregate payment of $200 million to Bank of America and received an aggregate initial delivery of approximately 14.5 million shares of its common stock, representing approximately 80% of the total shares that are expected to be repurchased under the ASR. The 14.5 million shares have been recorded as treasury stock.

6. Property and Equipment, Net

Property and equipment, net consists of the following:

November 2,

February 3,

October 28,

May 3,

February 1,

May 4,

(In thousands)

~~2024~~2025

~~2023~~2024

Property and equipment, at cost

2,~~524~~585,~~158~~414

2,~~427~~571,~~114~~285

2,~~774~~437,~~161~~863

Less: Accumulated depreciation and impairment

(1,~~778~~819,~~170~~820

)

(1,~~713~~820,~~778~~021

)

(21,~~031~~734,~~368~~312

)

Property and equipment, net

~~745~~765,~~988~~594

~~713~~751,~~336~~264

~~742~~703,~~793~~551

7. Goodwill and Intangible Assets, Net

Goodwill and definite-lived intangible assets, net consist of the following:

November 2,

February 3,

October 28,

May 3,

February 1,

May 4,

(In thousands)

~~2024~~2025

~~2023~~2024

Goodwill, gross (1)

~~268~~269,~~990~~019

~~269~~268,~~097~~873

269,~~021~~047

Accumulated impairment (2)

(43,794

)

(43,794

)

(443,~~196~~794

)

Goodwill, net

225,~~196~~225

225,~~303~~079

~~264~~225,~~825~~253

(1)

The change in Goodwill, gross from period to period includes the effect of foreign currency rate fluctuations.

(2)

Accumulated impairment includes $39.6 million recorded in Fiscal 2023, $1.7 million recorded in Fiscal 2019 and $2.5 million recorded in Fiscal 2016.

November 2,

February 3,

October 28,

May 3,

February 1,

May 4,

(In thousands)

~~2024~~2025

~~2023~~2024

Intangible assets, gross

147,~~173~~558

147,~~054~~356

~~146~~147,~~739~~234

Accumulated amortization

(6365,~~269~~476

)

(6064,~~412~~374

)

(5861,~~538~~523

)

Accumulated impairment

(40,533

)

(40,533

)

—(40,533

)

Intangible assets, net

4341,~~371~~549

4642,~~109~~449

8845,~~201~~178

8. Long-Term Debt, Net

The Company had no long-term debt outstanding as of November 2, 2024, February 3, 2024, and October 28, 2023.

2025 Notes

In April 2020, the Company issued $415 million aggregate principal amount of convertible senior notes due 2025 (the "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" 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

During Fiscal 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").

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 of 2025 Notes 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 $0.1 million for the 39 weeks ended October 28, 2023.

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.

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.

22As of May 3, 2025, the Company was in compliance with the terms of the Credit Agreement and had $110.0 million in outstanding borrowings and $12 million outstanding in stand-by letters of credit. As of May 4, 2024, there were no outstanding borrowings, and the Company was in compliance with the terms of the Credit Agreement with $12 million outstanding in stand-by letters of credit.

AsBorrowings ofunder ~~November~~the 2,Credit ~~2024,~~Facility ~~there~~accrue ~~were~~interest noat ~~outstanding~~the ~~borrowings,~~election ~~and~~of the Company ~~was~~at inan ~~compliance~~adjusted ~~with~~secured ~~the~~overnight ~~terms~~financing ofrate ~~the~~("SOFR") ~~Credit~~plus ~~Agreement~~0.10% ~~with~~plus ~~$12.0~~an ~~million~~applicable ~~outstanding~~margin in(ranging ~~stand-by~~from ~~letters~~1.125% ofto ~~credit~~1.375%) Asor ofan ~~October~~alternate ~~28,~~base ~~2023,~~rate ~~there~~plus ~~were~~an noapplicable ~~outstanding~~margin ~~borrowings~~(ranging from 0.125% to 0.375%), ~~and~~with each such applicable margin being based on average borrowing availability under the ~~Company~~Credit ~~was~~Facility. inInterest ~~compliance~~is ~~with~~payable quarterly and at the ~~terms~~end of each applicable interest period. The total interest expense related to the Credit ~~Agreement~~Facility ~~with~~for the 13 weeks ended May 3, 2025 was $70.73 million. ~~outstanding~~There inwere ~~stand-by~~no ~~letters~~Credit ofFacility ~~credit~~borrowings for the 13 weeks ended May 4, 2024.

Borrowings under the Credit Facility accrue interest at the election of the Company at an adjusted secured overnight financing rate ("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. There were no Credit Facility borrowings during the 13 and 39 weeks ended November 2, 2024. There were no Credit Facility borrowings during the 13 weeks ended October 28, 2023. The total interest expense related to the Credit Facility borrowings for the 39 weeks ended October 28, 2023 was $1.1 million. 21

9. Share-Based ~~Compensation~~ Payments

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 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 was $620.06 million ($415.48 million, net of tax) ~~and $33.4 million ($25.5 million~~, ~~net of tax), respectively,~~ and for the 13 ~~and 39~~ weeks ended ~~October~~May 284, ~~2023~~2024 was $920.96 million ($717.30 million, net of tax) ~~and $35~~.~~3 million ($25.8 million, net of tax), respectively.~~

Stock Option Grants

The Company grants time-based stock option awards, which vest over the requisite service period of the award or at an employee's eligible retirement date, if earlier. A summary of the Company’s stock option activity for the 3913 weeks ended ~~November~~May 23, ~~2024~~2025 follows:

	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding - February 3, 2024		4,213		$	16.83
Outstanding - February 1, 2025		4,324		$	17.98
Granted		~~525~~1,316		$	2412.3765
Exercised		~~(414~~-	)	$	~~14.35~~-
Cancelled		—(468	)	$	—21.89
Outstanding - November 2, 2024		4,324		$	17.98		3.7	$	15,597
Outstanding - May 3, 2025		5,172		$	16.27		4.3		1,074
Vested and expected to vest - November 2, 2024		4,202		$	17.86		3.4	$	5,041
Vested and expected to vest - May 3, 2025		5,011		$	16.22		4.1		-
Exercisable - November 2, 2024 (1)		1,618		$	12.95		3.5	$	10,533
Exercisable - May 3, 2025 (1)		433		$	8.62		1.9		1,074

(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 ~~November~~May 23, ~~2024~~2025.

As of ~~November~~May 23, ~~2024~~2025, there was $01.82 million of unrecognized compensation expense for stock option awards that is expected to be recognized over a weighted average period of 2.15 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:

	39 Weeks Ended
	13 Weeks Ended
	November 2,			October 28,
	May 3,			May 4,
Black-Scholes Option Valuation Assumptions	~~2024~~2025			~~2023~~2024
Risk-free interest rate (1)		43.49	%		34.4	%
Dividend yield		13.95	%		21.89	%
Volatility factor (2)		5547.45	%		55.74	%
Weighted-average expected term (3)	4.5 years			4.5 years

(1)

Based on the U.S. 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.

2322

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 ("~~PSUs~~PSU"). Annual PSU grants cliff vest, if at all, at the end of a three-year performance period upon achievement of pre-established goals. Outstanding ~~PSUs~~PSU awards receive dividend equivalents in the form of additional PSUs, 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 Stock Units					Performance-Based Restricted Stock Units
	November 2, 2024					November 2, 2024
	May 3, 2025					May 3, 2025
(Shares in thousands)	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Non-vested - February 3, 2024		2,830		$	15.83		2,023		$	18.45
Non-vested - February 1, 2025		2,360		$	18.56		2,218		$	18.05
Granted		1,~~084~~963		$	~~24.~~12.67		~~484~~987		$	2714.1951
Vested		(1,~~199~~187	)	$	17.5038		(~~257~~563	)	$	3819.9169
Cancelled		(~~312~~40	)	$	1718.0755		(4899	)	$	1819.5569
Non-vested - November 2, 2024		2,403		$	18.58		2,202		$	17.98
Non-vested - May 3, 2025		3,096		$	15.28		2,543		$	16.25

As of ~~November~~May 23, ~~2024~~2025, there was $3043.78 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 2.04 years. There is $57.59 million of unrecognized compensation expense related to ~~PSU~~performance-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 12.92 years.

As of ~~November~~May 23, ~~2024~~2025, the Company had 117 million shares available for all equity grants.

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 ~~November~~May 23, ~~2024~~2025 was 2623.13% compared to 2618.90% for the 13 weeks ended ~~October~~May 284, 2023. The change in the effective tax rate, as compared to the prior period, is primarily due to a change in non-deductible executive compensation and international tax provisions of the Tax Cuts and Jobs Act (the "Tax Act"). The effective income tax rate for the 39 weeks ended November 2, 2024 ~~was 23~~.6% ~~compared to 27.0% for the 39 weeks ended October 28, 2023.~~ The change in the effective tax rate, as compared to the prior period, is primarily due to ~~excess tax benefits on~~ share-based payments and tax audit adjustments.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense, which were insignificant for ~~both~~ the 13 weeks ended ~~November~~May 23, ~~2024~~2025, and ~~October~~$6.7 28million for the 13 weeks ended May 4, ~~2023~~2024. 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 ~~either~~ the 13 weeks ended ~~November~~May 3, 2025, and increased by approximately $14.2 million during the 13 weeks ended May 4, 2024 ordue ~~October~~to ~~28,~~tax ~~2023~~audit adjustments. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may decrease by approximately $145.2 million due to settlements, expiration of statute of limitations, or other changes in unrecognized tax benefits, which is expected to have an immaterial impact on the annual effective tax rate.

11. Legal Proceedings

2423

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.

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 CODM'’s 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~~Unallocated corporate expenses ~~consist~~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 (loss), or the operating income (loss) in periods where there are no adjustments, of each segment. Adjusted operating income (loss) is a non-GAAP financial measure ("non-GAAP" or "adjusted") that is defined by the Company as operating income excluding impairment, ~~restructuring~~ and ~~other~~restructuring charges. Adjusted operating income (loss) 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.

25Reportable segment information is presented in the following tables:

Reportable segment information is presented in the following table:


For the 13 weeks ended May 3, 2025 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	693,865	$	359,788	$	43,970		$	(8,024	)	$	1,089,599
Cost of sales, including certain buying, occupancy and warehousing costs		455,896		261,927
Selling, general and administrative expenses		168,329		82,643
Depreciation and amortization		20,168		14,170
Total segment operating income	$	49,472	$	1,048	$	(13,169	)	$	-		$	37,351
Unallocated corporate expenses												(105,413	)
Impairment and restructuring charges (1)											$	(17,119	)
Total operating (loss)												(85,181	)
Interest (income), net												(219	)
Other (income), net												(351	)
(Loss) before income taxes											$	(84,611	)

	13 weeks ended						39 weeks ended
	November 2, 2024			October 28, 2023			November 2, 2024			October 28, 2023
	Dollars in thousands
Net Revenue:
American Eagle	$	831,914		$	857,378		$	2,384,295		$	2,295,487
Aerie		410,442			393,042			1,198,741			1,132,537
Total Segment Net Revenue	$	1,242,356		$	1,250,420		$	3,583,036		$	3,428,024
Other		56,562			111,805			169,002			329,480
Intersegment Elimination		(9,824	)		(61,170	)		(28,019	)		(174,645	)
Total Net Revenue	$	1,289,094		$	1,301,055		$	3,724,019		$	3,582,859
Operating Income:
American Eagle	$	147,261		$	184,029		$	431,542		$	418,232
Aerie		88,914			75,850			219,072			188,772
Total Segment Operating Income	$	236,175		$	259,879		$	650,614		$	607,004
Other		(12,593	)		(8,601	)		(37,596	)		(35,250	)
Intersegment Elimination		—			—			—			—
General corporate expenses		(99,932	)		(125,917	)		(310,423	)		(336,998	)
Impairment, restructuring and other charges(1)		(17,561	)		—			(17,561	)		(21,275	)
Total Operating Income	$	106,089		$	125,361		$	285,034		$	213,481
Interest (income), net		(1,246	)		(2,871	)		(5,414	)		(1,229	)
Other (income), net		(895	)		(3,984	)		(4,006	)		(9,446	)
Income before income taxes	$	108,230		$	132,216		$	294,454		$	224,156
Capital Expenditures
American Eagle	$	24,036		$	17,219		$	60,757		$	48,411
Aerie		22,503			9,499			50,119			31,576
Other		3,071			9,760			10,529			21,490
General corporate expenditures		11,112			6,478			36,263			33,438
Total Capital Expenditures	$	60,722		$	42,956		$	157,668		$	134,915

(1) Refer to Note 1413, Impairment, ~~Restructuring~~ and ~~Other~~Restructuring Charges, to the Consolidated Financial Statements for additional information.


For the 13 weeks ended May 4, 2024 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	724,744	$	372,652	$	54,984		$	(8,513	)	$	1,143,867
Cost of sales, including certain buying, occupancy and warehousing costs		408,388		217,162
Selling, general and administrative expenses		160,195		78,909
Depreciation and amortization		17,576		15,254
Total segment operating income	$	138,585	$	61,327	$	(14,848	)	$	-		$	185,064
Unallocated corporate expenses												(107,228	)
Total operating income												77,836
Interest (income), net												(3,439	)
Other (income), net												(1,396	)
Income before income taxes											$	82,671


	13 Weeks Ended
	May 3,		May 4,
	2025		2024
Capital Expenditures
American Eagle	$	18,933	$	12,634
Aerie	$	17,925	$	11,741
Other	$	10,173	$	2,864
General corporate expenditures	$	14,575	$	8,970
Total Capital Expenditures	$	61,606	$	36,209

We do not allocate assets to the reportable segment level and therefore our CEO does not use segment asset information to make decisions.

Total net revenue for the American Eagle and Aerie reportable segments in the table above represents revenue attributable to each brand's merchandise, which comprises approximately 9697% of total net revenue for ~~each of~~ the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024 and October 28, 2023~~2025.

The following table presents summarized geographical information:

	13 Weeks Ended				~~39 weeks ended~~
	November 2, 2024		October 28, 2023		November 2, 2024		October 28, 2023
(In thousands)	May 3, 2025		May 4, 2024
	Dollars in thousands
Total net revenue:
Total net revenue:
United States	$	921,512	$	952,685
United States	$	1,099,482	$	1,114,115	$	3,148,086	$	3,035,573
Foreign (1)		168,087		191,182
Foreign (1)		189,612		186,940		575,933		547,286
Total net revenue	$	1,089,599	$	1,143,867
Total net revenue	$	1,289,094	$	1,301,055	$	3,724,019	$	3,582,859

(1) Amounts represent sales from American Eagle and Aerie international retail stores, e-commerce sales that are billed to and/or shipped to foreign countries and international franchise royalty revenue.

13. Assets Held for Sale


	13 Weeks Ended
	May 3,		May 4,
(In thousands)	2025		2024
Long-lived assets, net:
United States	$	2,065,144	$	1,673,059
Foreign		172,155		154,141
Total long-lived assets, net	$	2,237,299	$	1,827,200

During the third quarter of Fiscal 2024, the Company entered into an agreement to sell its Hong Kong retail operations to a third party buyer. This decision supports the strategies outlined in our Powering Profitable Growth plan. This transaction closed in the fourth quarter of Fiscal 2024. Remeasuring the assets and liabilities of our Hong Kong retail operations asset group at fair value less cost to sell resulted in an impairment charge of $6.4 million, recorded in impairment, restructuring, and other charges on the Consolidated Statement of Operations during the 13 weeks ended November 2, 2024. As of November 2, 2024, the Company had $19.0 million of assets held for sale recorded in other current assets, and $15.2 of liabilities held for sale recorded in other current liabilities and accrued expenses on its Consolidated Balance Sheet related to this transaction. 25

1413. Impairment, ~~Restructuring~~ and ~~Other~~Restructuring Charges

The following table represents impairment, ~~restructuring~~ and ~~other~~restructuring charges. All amounts were recorded inwithin impairment and restructuring on the Consolidated Statements of Operations during the 13 weeks ended May 3, 2025. There were no impairment and 39restructuring charges recorded for the 13 weeks ended May ~~November 2~~4, 2024.

	13 and 39 Weeks Ended
	13 Weeks Ended
	November 2,
	May 3,
(In thousands)	~~2024~~2025
Corporate restructuring costs (1)		10,729
Long-lived asset impairment charges (1)	$	15,274
Hong Kong retail operations impairment and restructuring costs (2)		6,832
Employee severance (2)		1,845
Total impairment, restructuring and other charges	$	17,561
Total impairment and restructuring charges	$	17,119

The following footnotes relate to ~~the~~ impairment and restructuring charges recorded in the ~~third~~13 ~~quarter~~weeks ofended ~~Fiscal~~May ~~2024~~3, 2025:

(1)

The Company recorded ~~restructuring~~$15.3 ~~costs~~million of asset impairment charges primarily related to closing two fulfillment centers as part of its supply chain network optimization project. Of this amount, $10.74 million ~~related~~of charges relate to ~~employee~~ROU ~~severance~~assets and $4.9 million relates to property and equipment.

(2)

The Company recorded ~~impairment and restructuring costs of~~ $61.8 million ~~related to the pending sale~~ of ~~its~~employee ~~Hong~~severance, ~~Kong~~primarily ~~retail~~related ~~operations~~ to aclosing ~~third~~two ~~party~~fulfillment ~~buyer~~centers. ~~These costs primarily consist of impairment of $6.4 million and employee severance.~~

~~The~~A ~~following~~rollforward ~~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 ~~39 weeks ended October 28, 2023. There were no impairment,~~ restructuring ~~and~~liabilities ~~other~~recognized ~~charges~~in ~~recorded for~~ the 13Consolidated ~~weeks~~Balance ~~ended October~~Sheet ~~28,~~is ~~2023.~~as follows:

	39 Weeks Ended
	13 Weeks Ended
	October 28,
	May 3,
(In thousands)	~~2023~~2025
Long-lived asset impairment charges	$	10,759
Accrued liability as of February 1, 2025	$	7,650
Employee related costs		5,592
Add: Costs incurred, excluding non-cash charges	$	1,845
Other commercial related charges		4,924
Less: Cash payments and adjustments		(3,968	)
Total impairment, restructuring and other charges(1)	$	21,275
Accrued liability as of May 3, 2025	$	5,527

~~The following footnote relates to impairment, restructuring, and other charges recorded during the 39 weeks ended October 28, 2023:~~26

$21.3 million of charges related to the Quiet Platforms restructuring. Of this amount, we recorded $10.8 million of long-term asset impairment primarily related to technology that is no longer a part of our long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $5.6 million of severance based on our revised long-term strategy. We also recorded $4.9 million of contract-related charges.

A roll-forward of the restructuring liabilities recognized in the Consolidated Balance Sheet is as follows:

	39 Weeks Ended
	November 2,
(In thousands)	2024
Accrued liability as of February 3, 2024	$	11,414
Add: Costs incurred, excluding non-cash charges		10,728
Less: Cash payments and adjustments		(11,375	)
Accrued liability as of November 2, 2024	$	10,767

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A") is intended to help the reader understand the Company, our operations and our present business environment. This MD&A is provided as a supplement to — and should be read in conjunction with — our MD&A for Fiscal ~~2023~~2024, which can be found in Part II, Item 7 of our Fiscal ~~2023~~2024 Form 10-K.

In addition, the following discussion and analysis of financial condition and results of operations are based upon our Consolidated Financial Statements and should be read in conjunction with these statements and notes thereto.

Introduction

This MD&A is organized as follows:

     •Executive Overview

    

     •Key Performance Indicators

    

     •Current Trends and Outlook

    

     •Results of Operations 

    

     •Non-GAAP Information

    

     •Liquidity and Capital Resources

    

     •Critical Accounting Estimates

    

Recent accounting pronouncements ~~that~~ the Company has adopted or is currently evaluating prior to adoption, including the dates of adoption or expected dates of adoption, as applicable, and ~~the~~ anticipated effects on the Company’s audited Consolidated Financial Statements, are included in Note 2, Summary of Significant Accounting Policies, ~~of the Notes~~ to the Consolidated Financial Statements included herein.

Executive Overview

We are a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under our American Eagle® and Aerie® brands.

We have two reportable segments, American Eagle and Aerie. Our Chief Operating Decision Maker (defined as our CEO) analyzes segment results and allocates resources based on adjusted operating income (loss), which is a non-GAAP financial measure. See Note 12, Segment Reporting, ~~of the Notes~~ to the Consolidated Financial Statements included herein for additional information.

Key Performance Indicators

Our management evaluates the following items, which are considered key performance indicators, in assessing our performance:

Comparable Sales — Comparable sales and comparable sales changes provide a measure of sales growth for stores and channels open at least one year over the comparable prior year period. In fiscal years following those with 53 weeks, ~~including Fiscal 2024,~~ the prior year period is shifted by one week to compare similar calendar weeks. A store is included in comparable sales in the 13th month of operation. However, stores that have a gross square footage change of 25% or greater due to a remodel are removed from the comparable sales base but are included in total sales. These stores are returned to the comparable sales base in the 13th month following the remodel. Sales from American Eagle, Aerie, Todd Snyder, and Unsubscribed stores, as well as sales from AEO Direct and other digital channels, are included in total comparable sales. Sales from licensed stores are not included in comparable sales. Individual American Eagle and Aerie brand comparable sales disclosures include sales from stores and AEO Direct.

2927

Omni-Channel Sales Performance – Our management utilizes the following quality of sales metrics in evaluating our omni-channel sales performance: comparable sales, average unit retail price, total transactions, units per transaction, and consolidated comparable traffic. We include these metrics in our discussion within this MD&A when we believe that they enhance the understanding of the matter being discussed. Investors may find them useful as such. Each of these metrics is defined as follows (except comparable sales, which is defined separately above):

•

Average unit retail price represents the selling price of our goods. It is the cumulative net sales divided by the net units sold for a period of time.

•

Total transactions represents the count of customer transactions over a period of time (inclusive of Company-owned stores and AEO Direct, unless specified otherwise).

•

Units per transaction represents the number of units sold divided by total transactions over a period of time (inclusive of Company-owned stores and AEO Direct, unless specified otherwise).

•

Consolidated comparable traffic represents visits to our Company-owned stores, limited to those stores that qualify to be included in comparable sales as defined above, including AEO Direct, over a period of time.

Gross Profit — Gross profit measures whether we are optimizing the profitability of our sales. Gross profit is the difference between total net revenue and cost of sales. Cost of sales consists of merchandise costs, including design, sourcing, importing, and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs, Quiet Platforms' costs to service its customers and buying, occupancy and warehousing costs and services. Design costs consist of compensation, rent, depreciation, travel, supplies, and samples.

Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel 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 operations.

The inability to obtain acceptable levels of sales, initial markups or any significant increase in our use of markdowns could have an adverse effect on our gross consolidated profit and results of operations.

Operating Income — Our management views operating income as a key indicator of our performance. The key drivers of operating income are net revenue, gross profit, our ability to control selling,. general, and administrative ("SG&A") expenses, and our level of capital expenditures. ~~Operating profit rate is operating profit as a percent of revenue.~~

Cash Flow and Liquidity — Our management evaluates cash flow from operations and investing and financing activities in determining the sufficiency of our cash position and capital allocation strategies. Cash flow has historically been sufficient to cover our uses of cash. Our management believes that cash flow and liquidity will be sufficient to fund anticipated capital expenditures and working capital requirements for the next twelve months and beyond.

Current Trends and Outlook

Macroeconomic Conditions ~~and Inflation~~

During Fiscal ~~2023~~2024 and the 3913 weeks ended ~~November~~May 23, ~~2024~~2025, our results were negatively impacted by ~~macroeconomic~~macro-economic challenges and global inflationary pressures impacting consumer spending behavior, which constrained revenue and increased margin pressure to clear through excess ~~inventory.~~spring ~~Given~~and ~~ongoing~~summer ~~external uncertainties, we have taken additional actions to improve financial performance, including more operating efficiency initiatives, as described below under "Profit Improvement Program"~~inventory. For further information about the risks associated with global economic conditions and the effect of economic pressures on our business, see "Risk Factors" in Part I, Item 1A of our Fiscal ~~2023~~2024 Form 10-K.

Omni-Channel ~~and Digital~~ Capabilities

WeAEO ~~sell~~Inc. ~~merchandise~~operates ~~through~~stores ~~our~~in ~~digital~~the ~~channels,~~United ~~www.ae.com~~States, ~~www.aerie.com,~~Canada and ~~our AEO apps~~Mexico, ~~both~~with ~~domestically~~merchandise ~~and~~available ~~internationally~~ in ~~approximately~~more 80than 30 countries. Wethrough ~~also~~a ~~sell~~global AEnetwork ~~brand~~of ~~and~~license ~~Aerie brand merchandise on various international online marketplaces~~partners. ~~We offer Todd Snyder and Unsubscribed brand products online at www.toddsnyder.com and www.unsubscribed.com~~Additionally, ~~respectively.~~the ~~The~~company ~~digital~~operates ~~channels~~a ~~reinforce~~robust ~~each~~e-commerce ~~particular~~business ~~brand~~across ~~and~~its ~~are designed to complement the in-store experience~~brands.

Over the past several years, we have invested in building our technologies and digital capabilities. We focused our investments in three key areas: making significant advances in mobile technology, investing in digital marketing and improving the digital customer experience.

Profit Improvement Program

We launched our profit improvement program, "Powering Profitable Growth," during Fiscal 2023, which focused on a comprehensive review of our cost structure. Early actions focused on the components of gross margin and contributed to margin expansion in Fiscal 2023. Other significant work streams have been identified, actioned and incorporated into our Fiscal 2024 plans. The results of these initiatives are expected to yield gross margin expansion, as well as SG&A and depreciation leverage, resulting in an improved operating profit rate. Through the third quarter of Fiscal 2024, we saw expansion of our gross profit rate of 60 basis points and expansion of our operating rate of 170 basis points in comparison to the 39 weeks ended October 28, 2023, primarily as a result of our initiatives.

Results of Operations

~~The third quarter of Fiscal 2024 showed continued progress on our "Powering Profitable Growth" plan, marked by the three strategic priorities. Compared to the third quarter of Fiscal 2023:~~28

~~Total revenue decreased 1% to $1.289 billion from $1.301 billion, which included an approximately $45 million headwind from the shifted 2024 retail calendar. Comparable sales increased 3%.~~Overview

~~Operating~~The ~~income~~first ~~decreased~~quarter ~~$19~~was ~~million,~~a orchallenging ~~15%~~period ~~year~~for ~~over~~our ~~year~~business. While ~~including~~the ~~approximately~~broader ~~$20~~macro ~~million~~environment ~~negative~~and ~~impact~~cold ~~from~~spring weather presented challenges, merchandising strategies did not drive the ~~retail~~results ~~calendar~~we ~~shift~~anticipated, leading to higher promotions and excess inventory. ~~Adjusted~~As ~~operating~~a ~~income~~result, ~~which~~the ~~excludes~~operating loss reflects an inventory charge of $1875 million ~~from~~related ~~the~~to ~~impairment,~~a ~~restructuring,~~write-down of spring and ~~other~~summer ~~charges~~merchandise, ~~decreased~~as $2well ~~million~~as tohigher ~~prior~~than ~~year~~planned promotional activity in the quarter.

~~Diluted~~Compared ~~earnings per share decreased of $0.41, or $0.48 on an adjusted basis, for the 13 weeks ended November 2, 2024 compared~~ to ~~$0.49 for~~ the first 13 weeks ~~ended~~of ~~October~~Fiscal ~~28, 2023.~~ 2024:

•

~~The~~Total ~~following~~revenue ~~tables~~decreased 5% ~~show~~to ~~the~~$1.090 ~~percentage~~billion ~~relationship~~from to$1.144 ~~total~~billion, ~~net~~with American Eagle revenue ofdecreasing ~~the~~4% ~~listed~~year-over-year, ~~line~~and ~~items~~Aerie ~~included~~revenue indecreasing ~~our~~3% ~~Consolidated~~year-over-year. ~~Statements~~American ofEagle's ~~Operations:~~comparable sales decreased 2% year-over-year, and Aerie's comparable sales decreased 4% year-over-year.

•

	13 Weeks Ended
	November 2, 2024							October 28, 2023
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Total net revenue	$	1,289,094		100.0			%	$	1,301,055			100.0		%
Cost of sales, including certain buying, occupancy and warehouse expenses		762,470			59.1				757,258			58.2
Gross profit		526,624			40.9				543,797			41.8
Selling, general and administrative expenses		351,380			27.3				361,992			27.8
Impairment, restructuring and other charges (1)		17,561			1.4				—			0.0
Depreciation and amortization expense		51,594			4.0				56,444			4.4
Operating income (1)		106,089			8.2				125,361			9.6
Interest (income), net		(1,246	)		(0.1	)			(2,871	)		(0.2	)
Other (income), net		(895	)		(0.1	)			(3,984	)		(0.3	)
Income before income taxes	$	108,230			8.4			$	132,216			10.1
Provision for income taxes		28,211			2.2				35,516			2.7
Net income (1)	$	80,019			6.2		%	$	96,700			7.4		%
(1) Refer to "Non-GAAP Information" below for non-GAAP or adjusted financial measures.

Gross profit decreased 31% to $322 million year-over-year, and decreased to 29.6% as a percentage of revenue.

•

31Operating loss of $85 million compared to $77 million operating income last year. Adjusted operating loss of $68 million this year compared to operating income of $78 million last year.

	39 Weeks Ended
	November 2, 2024							October 28, 2023
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Total net revenue	$	3,724,019		100.0			%	$	3,582,859			100.0		%
Cost of sales, including certain buying, occupancy and warehouse expenses		2,234,260			60.0				2,172,867			60.6
Gross profit		1,489,759			40.0				1,409,992			39.4
Selling, general and administrative expenses		1,030,186			27.7				1,006,210			28.1
Impairment, restructuring and other charges (1)		17,561			0.4				21,275			0.6
Depreciation and amortization expense		156,978			4.2				169,026			4.7
Operating income (1)		285,034			7.7				213,481			6.0
Interest (income), net		(5,414	)		(0.1	)			(1,229	)		(0.0	)
Other (income), net		(4,006	)		(0.1	)			(9,446	)		(0.3	)
Income before income taxes	$	294,454			7.9			$	224,156			6.3
Provision for income taxes		69,420			1.9				60,434			1.7
Net income (1)	$	225,034			6.0		%	$	163,722			4.6		%
(1) Refer to "Non-GAAP Information" below for non-GAAP or adjusted financial measures.

Diluted loss per share decreased to ($0.36) for the 13 weeks ended May 3, 2025 compared to earnings per share of $0.34 for the 13 weeks ended May 4, 2024.

The following table shows ~~our~~the ~~consolidated~~percentage ~~store~~relationship ~~data~~to ~~for~~total ~~the~~net 13revenue ~~and~~of 39the ~~weeks~~listed ~~ended~~line ~~November~~items 2,included ~~2024~~in ~~and~~our ~~October~~Consolidated ~~28,~~Statements ~~2023~~of Operations:

	13 Weeks Ended							~~39 Weeks Ended~~
	November 2,				October 28,			November 2,				October 28,
	May 3, 2025							May 4, 2024
	2024				2023			2024				2023
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Number of stores:
Total net revenue	$	1,089,599		100.0			%	$	1,143,867		100.0			%
Beginning of period		1,178				1,184			1,182				1,175
Cost of sales, including certain buying, occupancy and warehouse expenses		767,178			70.4				679,628			59.4
Opened		17				17			35				31
Gross profit		322,421			29.6				464,239			40.6
Closed		(9	)			(2	)		(31	)			(7	)
Selling, general and administrative expenses		338,786			31.1				333,493			29.2
End of period		1,186				1,199			1,186				1,199
Impairment and restructuring charges (1)		17,119			1.6				-			0.0
Total gross square feet at end of period (in '000)		7,282				7,333			7,282				7,333
Depreciation and amortization expense		51,697			4.7				52,910			4.6
International licensed/franchise stores at end of period (1)		310				301			310				301
Operating (loss) income(1)		(85,181	)		(7.8	)			77,836			6.8
Interest (income), net		(219	)		(0.0	)			(3,439	)		(0.3	)
Other (income), net		(351	)		(0.0	)			(1,396	)		(0.1	)
(Loss) income before income taxes	$	(84,611	)		(7.8	)		$	82,671			7.2
(Benefit) provision for income taxes		(19,712	)		(1.8	)			14,919			1.3
Net (loss) income(1)	$	(64,899	)		(6.0	)	%	$	67,752			5.9		%
(1) Refer to "Non-GAAP Information" below for non-GAAP or adjusted financial measures.

~~International~~The ~~licensed/franchise~~following ~~stores~~table ~~are~~shows ~~not~~our ~~included in the~~ consolidated store data orfor the ~~total~~13 ~~gross~~weeks ~~square~~ended ~~feet~~May ~~calculation.~~3, 2025 and May 4, 2024:

As of November 2, 2024, we operated 845 AE retail stores (AE brand stores include 649 AE stand alone locations, 187 AE/Aerie side-by-side locations, four AE/OFFLINE side-by-side locations, and five AE/Aerie/OFFLINE side-by-side locations), and 317 Aerie retail stores (Aerie brand (which includes OFFLINE) stores include 239 Aerie stand alone locations, 41 OFFLINE stand alone locations, and 37 Aerie/OFFLINE side-by-side locations). Additionally, there were 19 Todd Snyder retail locations, and five Unsubscribed locations.


	13 Weeks Ended
	May 3,			May 4,
	2025			2024
Number of stores:
Beginning of period		1,172			1,182
Opened		6			4
Closed		(2	)		(13	)
End of period		1,176			1,173

Total gross square feet at end of period (in '000)		7,232			7,221
International licensed retail stores at end of period (1)		363			315

~~Comparison of the 13 weeks ended November 2, 2024 to the 13 weeks ended October 28, 2023~~29

(1)

International licensed retail stores are not included in the consolidated store data or the total gross square feet calculation.

As of May 3, 2025, we operated 828 American Eagle retail stores, consisting of 182 Aerie side-by-side locations, five locations with AE brand, Aerie brand and OFFLINE™ connected as one store, and six OFFLINE™ side-by-side locations, 321 Aerie stand-alone stores (including 42 OFFLINE™ stand-alone stores and 40 OFFLINE™ side-by-side locations), and AEO Direct. Additionally, there were 20 Todd Snyder stand-alone locations and seven Unsubscribed locations.

Comparison of the 13 weeks ended May 3, 2025 to the 13 weeks ended May 4, 2024

Total Net Revenue

Total net revenue decreased 15% ~~to $1.289 billion~~ for the 13 weeks ended ~~November~~May 23, ~~2024~~2025 to $1.090 billion, compared to $1.~~301~~144 billion last year. ~~The~~This ~~shift~~included a one point headwind from adverse currency and another point from moving our Hong Kong operations to a license model in ~~the~~Fiscal ~~retail~~2024. ~~calendar~~Digital ~~negatively~~revenue ~~impacted~~decreased 2%, and store revenue decreased 6%. Total comparable sales decreased by ~~approximately~~3%, ~~$45~~compared ~~million~~to ~~for~~a ~~the~~7% 13increase ~~weeks~~last ~~ended~~year. ~~November~~Traffic 2was up across brands and channels, ~~2024~~with declines in average unit retail price and conversion.

Digital revenue increased 6%, and store revenue decreased 4% compared to the 13 weeks ended October 28, 2023. The increase in digital revenue was driven by increased transactions. The decrease in store revenue was primarily attributable to the shift in the retail calendar. Total comparable sales increased by 3%, compared to a 5% increase last year.


	13 Weeks Ended						Increase/(Decrease)
	May 3, 2025			May 4, 2024
	(In thousands)	(Percentage)		(In thousands)	(Percentage)		(In thousands)	(Percentage)
American Eagle	$693,865	63.7	%	$724,744	63.4	%	$(30,879)	(4)	%
Aerie	359,788	33.0		372,652	32.6		(12,864)	(3)
Other	43,970	4.0		54,984	4.8		(11,014)	(20)
Intersegment Eliminations	(8,024)	(0.7)		(8,513)	(0.7)		489	(6)
Total net revenue	$1,089,599	100.0	%	$1,143,867	100.0	%	$(54,268)	(5)	%

32American Eagle. The decrease in net revenue was driven by lower average unit retail price. American Eagle comparable sales decreased 2%.

	13 Weeks Ended						Increase/(Decrease)
	November 2, 2024			October 28, 2023
	(In thousands)	(Percentage)		(In thousands)	(Percentage)		(In thousands)	(Percentage)
American Eagle	$831,914	64.5	%	$857,378	65.9	%	$(25,464)	(3)	%
Aerie	410,442	31.8		393,042	30.2		17,400	4
Other	56,562	4.4		111,805	8.6		(55,243)	(49)
Intersegment Eliminations	(9,824)	(0.7)		(61,170)	(4.7)		51,346	(84)
Total net revenue	$1,289,094	100.0	%	$1,301,055	100.0	%	$(11,961)	(1)	%

Aerie. The decrease in net revenue was driven by decreased transactions across channels. Aerie comparable sales decreased 4%.

~~American Eagle~~Other. The decrease in net revenue was primarily ~~driven~~attributable byto ~~the~~$6 ~~shift~~million inof ~~the~~lower ~~retail~~revenue ~~calendar.~~from ~~Comparable~~Todd ~~sales~~Snyder, ~~increased~~and ~~3%,~~$5 ~~driven~~million byof ~~increased~~lower ~~traffic~~revenue ~~and~~from ~~transactions~~Quiet ~~across~~Platforms ~~channels~~due to our change in strategy for this business.

Aerie. The increase in net revenue was primarily driven by the increase in comparable sales. Aerie comparable sales increased 5%, driven primarily by increased traffic and transactions across channels.

Other. The decrease in net revenue was primarily attributable to planned lower revenue from Quiet Platforms offset by lower intersegment eliminations of this revenue (net reduction of $5 million) due to our change in strategy for this business.

Gross Profit

	13 Weeks Ended						Increase/(Decrease)
	November 2, 2024			October 28, 2023
	May 3, 2025			May 4, 2024
	(In thousands)						(In thousands)			(Percentage)
Gross Profit	$	~~526~~322,~~624~~421		$	~~543~~464,~~797~~239		$	(17141,~~173~~818	)		(331	)	%
Gross Margin		4029.96	%		4140.86	%	-901100 basis points

The 331% decrease in gross profit ~~resulted~~was primarily ~~from~~driven ~~the~~by ~~impact~~a decrease of ~~the shifted retail calendar on revenue, as well as an~~ $1866 million ~~increase~~ in ~~markdowns~~merchandise margin due to ~~timing~~lower ofsales and increased promotional activity, inas ~~the~~well ~~third~~as ~~quarter~~a of$75 ~~Fiscal~~million ~~2024.~~inventory ~~Buying,~~charge ~~occupancy~~related ~~and warehousing costs were flat compared~~ to ~~the~~a ~~third~~write-down ~~quarter~~ of ~~Fiscal~~spring ~~2023~~and summer merchandise.

During the 13 weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024, $27.50 million and $46.56 million, respectively, of share-based payment expense were included in gross profit, representing both time- and performance-based awards.

Our gross profit may not be comparable to that of other retailers, as some retailers include all costs related to their distribution network, as well as design costs in cost of sales and others may exclude a portion of these costs from cost of sales, including them in a line item such as SG&A expenses. Refer to Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements included herein for a description of our accounting policy regarding cost of sales, including certain buying, occupancy and warehousing expenses.

Selling, General and Administrative Expenses

	13 Weeks Ended							Increase/(Decrease)
		November 2, 2024			October 28, 2023
		May 3, 2025			May 4, 2024
		(In thousands)						(In thousands)			(Percentage)
Selling, general and administrative expenses		$	~~351~~338,~~380~~786		$	~~361~~333,~~992~~493		$	~~(10~~5,~~612~~293	)		(32	)	%
Selling, general and administrative expenses as a percentage of net revenue			2731.31	%		2729.82	%	50-190 basis points

The ~~decrease~~increase in ~~expenses~~expense was primarily ~~related~~driven ~~to:~~by a $7 million increase in advertising year-over-year, with a partial offset from lower compensation.

~~lower~~There ~~corporate~~was ~~compensation~~$13.6 ~~costs,~~million ~~including~~and a $14.0 million ~~reduction~~of ~~in performance~~share-based ~~incentive~~payment ~~compensation,~~expense asincluded ~~well~~in asSG&A ~~lower~~expenses ~~services~~for the 13 weeks ended May 3, 2025 and ~~maintenance~~May ~~costs;~~4, ~~partially~~2024, ~~offset~~respectively, bycomprised of both time and performance-based awards.

aImpairment $9and ~~million increase in advertising.~~Restructuring


	13 Weeks Ended								Increase/(Decrease)
	May 3, 2025				May 4, 2024
		(In thousands)							(In thousands)		(Percentage)
Impairment and restructuring charges		$	17,119			$	-		$	17,119		100	%
Impairment and restructuring charges as a percentage of net revenue			1.6	%			0.0	%	-160 basis points

~~There~~During ~~was~~the $13 weeks ended May 3.5, ~~million~~2025, ~~and~~we recorded $517.41 million of ~~share-based~~impairment ~~payment~~and ~~expense~~restructuring. ~~included~~We inrecorded ~~SG&A~~$10.4 ~~expenses~~million ~~for~~of ~~the~~impairment 13related ~~week~~to ~~periods~~ROU ~~ended~~assets, ~~November~~$4.9 2,million ~~2024~~related ~~and~~to ~~October~~fixed 28assets, ~~2023,~~and ~~respectively,~~$1.8 ~~comprised~~million of ~~both~~employee ~~time- and performance-based awards~~severance.

Impairment, Restructuring and Other Charges

	13 Weeks Ended						Increase/(Decrease)
	November 2, 2024				October 28, 2023
		(In thousands)					(In thousands)
Corporate restructuring costs		$	10,729			—	$	10,729
Hong Kong retail operations impairment and restructuring costs			6,832			—	$	6,832
Impairment, restructuring and other charges		$	17,561			—	$	17,561
Impairment, restructuring and other charges as a percentage of net revenue			1.4	%			-140 basis points

During the 13 weeks ended November 2, 2024, we recorded $10.7 million of employee severance costs related to corporate restructuring, and $6.8 million of impairment and restructuring costs due to the pending sale of our Hong Kong retail operations. There were no impairment, restructuring, and other charges recorded during the 13 weeks ended October 28, 2023.

Depreciation and Amortization Expense

	13 Weeks Ended							Increase/(Decrease)
		November 2, 2024			October 28, 2023
		May 3, 2025			May 4, 2024
		(In thousands)						(In thousands)			(Percentage)
American Eagle		$	1820,~~652~~168		$	1917,~~125~~576		$	~~(473~~2,592	)		(215	)	%
Aerie			14,~~282~~170			1415,~~921~~254			(~~639~~1,084	)		(47	)
Other			1817,~~660~~359			2220,~~398~~080			(32,~~738~~721	)		(1714	)
Total depreciation and amortization expense		$	51,~~594~~697		$	5652,~~444~~910		$	(41,~~850~~213	)		(92	)	%
Total depreciation and amortization expense as a percentage of net revenue			4.07	%		4.46	%	40-10 basis points

~~The~~Operating ~~decrease~~(Loss) ~~in depreciation and amortization expense was primarily driven by prior year impairments of definite-lived tangible and intangible assets of Quiet Platforms.~~ Income

Operating Income


	13 Weeks Ended						Increase/(Decrease)
	May 3, 2025			May 4, 2024
	(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage)
Operating income
American Eagle	$49,472	4.5	%	$138,585	12.1	%	$(89,113)	(64)	%
Aerie	1,048	0.1		61,327	5.4		(60,279)	(98)
Other	(13,169)	(1.2)		(14,848)	(1.3)		1,679	(11)
General corporate expenses	(105,413)			(107,228)			1,815
Impairment and restructuring charges	(17,119)			-			(17,119)
Total Operating (Loss) Income	$(85,181)	(7.8)	%	$77,836	6.8	%	$(163,017)	(209)	%

	13 Weeks Ended						Increase/(Decrease)
	November 2, 2024			October 28, 2023
	(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage)
Operating income
American Eagle	$147,261	11.4	%	$184,029	14.1	%	$(36,768)	(20)	%
Aerie	88,914	6.9		75,850	5.8		13,064	17
Other	(12,593)	(1.0)		(8,601)	(0.7)		(3,992)	46
General corporate expenses	(99,932)			(125,917)			25,985
Impairment, restructuring, and other charges	(17,561)			—			(17,561)
Total Operating Income	$106,089			$125,361			$(19,272)	(15)	%
Total Operating Income as a percentage of net revenue	8.2	%		9.6	%		-140 basis points

34The decrease in operating (loss) income was primarily driven by lower gross profit, and an increase in impairment and restructuring charges, all of which are explained in detail above.

~~The~~American ~~$19~~Eagle. ~~million,~~The ordecrease ~~15% decline in operating income~~ was primarily ~~driven~~the byresult ~~the~~of a $1778 million ~~reduction~~decrease in gross profit ~~discussed~~driven ~~above,~~by asdecreased ~~well~~merchandise asmargin on the $1831 million, ofor ~~impairment~~4%, ~~restructuring~~decline in total net revenue, and ~~other~~increased ~~charges~~promotional activity, ~~partially~~as ~~offset~~well byas ana $1131 million ~~reduction~~inventory inwrite-down ~~selling,~~of ~~general~~spring and ~~administrative~~summer merchandise. SG&A expenses and ~~lower~~ depreciation and amortization ~~expense~~also increased a combined $11 million year-over-year.

~~American Eagle~~Aerie. The ~~20%~~decrease ~~decline~~ was primarily the result of ~~the 3% reduction in revenue as~~ a ~~result~~$58 ofmillion ~~the~~decrease ~~shifted~~in ~~retail~~gross ~~calendar~~profit ~~discussed~~driven ~~above,~~by asdecreased ~~well~~merchandise asmargin anon ~~$11~~the ~~million increase in markdowns, leading to a~~ $3113 million, or 83%, decline in ~~gross~~total ~~profit. Additionally~~net ~~SG&A~~revenue ~~costs~~and increased bypromotional $6activity, ~~million~~as well as a ~~result~~$44 million inventory write-down of ~~incremental~~spring ~~advertising~~and ~~investments~~summer merchandise.

~~Aerie.~~Interest ~~The 17% increase was primarily the result of the 4% increase in revenue discussed above as well as a $5 million reduction in buying~~(Income), ~~occupancy, and warehousing costs, partially offset by an increase in SG&A costs of $3 million, primarily driven by store compensation.~~ net

General Corporate Expenses. The reduction in expense is primarily due to a $17 million decrease in performance-based incentives and other compensation, as well as decreased depreciation and amortization expense.


	13 Weeks Ended									Increase/(Decrease)
	May 3, 2025					May 4, 2024
		(In thousands)								(In thousands)			(Percentage)
Interest (income), net		$	(219	)		$	(3,439	)		$	(3,220	)		94	%
Interest (income), net as a percentage of net revenue			(0.0	)	%		(0.3	)	%	-30 basis points

~~Interest~~The decrease in interest (~~Income~~income), ~~Net~~net is primarily related to $3 million less interest income on deposits year-over-year.

	13 Weeks Ended									Increase/(Decrease)
	November 2, 2024					October 28, 2023
		(In thousands)								(In thousands)			(Percentage)
Interest (income), net		$	(1,246	)		$	(2,871	)		$	(1,625	)		57	%
Interest (income) as a percentage of net revenue			(0.1	)	%		(0.2	)	%	-10 basis points

Other (Income), net

The decrease in interest income, net was primarily attributable to a decrease in cash and investment balances outstanding.


	13 Weeks Ended					Increase/(Decrease)
	May 3, 2025			May 4, 2024
		(In thousands)				(In thousands)	(Percentage)
Other (income), net		$(351)		$(1,396)		$(1,045)	(75)	%
Other (income), net as a percentage of net revenue		(0.0)	%	(0.1)	%	-10 basis points

~~Other~~ (~~Income~~Benefit), ~~Net~~Provision for Income Taxes

	~~13 Weeks Ended~~	13 Weeks Ended							~~Increase/(Decrease)~~				Increase/(Decrease)
	November 2, 2024				October 28, 2023
	May 3, 2025						May 4, 2024
		(In thousands)							~~(In thousands)~~		~~(Percentage)~~		(In thousands)			(Percentage)
Other (income), net		$(895)			$(3,984)				$(3,089)		(78)	%
(Benefit) provision for income taxes		$	(19,712	)			$	14,919					$	(34,631	)		(232	)	%
Other (income), net as a percentage of net revenue		(0.1)	%		(0.3)	%			-20 basis points
(Benefit) provision for incomes taxes as a percentage of net revenue			(1.8	)	%			1.3	%				-310 basis points
Effective tax rate			23.3		%			18.0		%

The ~~decrease~~(benefit) inprovision ~~other~~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 May 3, ~~net~~2025 was 23.3% compared to 18.0% for the 13 weeks ended May 4, 2024. The change in the effective tax rate, as compared to the prior period, is primarily ~~attributable~~due to ~~foreign~~share-based ~~currency~~payments ~~fluctuations~~and tax audit adjustments.

~~Provision for Income Taxes~~ 32

		13 Weeks Ended								Increase/(Decrease)
	November 2, 2024					October 28, 2023
		(In thousands)								(In thousands)			(Percentage)
Provision for income taxes		$	28,211			$	35,516			$	(7,305	)		(21	)	%
Provision for income taxes as a percentage of net revenue			2.2	%			2.7	%		50 basis points
Effective tax rate			26.1		%		26.9		%

Net (Loss) Income


		13 Weeks Ended							Increase/(Decrease)
	May 3, 2025					May 4, 2024
		(In thousands)							(In thousands)			(Percentage)
Net (loss) income		$	(64,899	)		$	67,752		$	(132,651	)		(196	)	%
Net (loss) income as a percentage of net revenue			(6.0	)	%		5.9	%	-1090 basis points

35Net loss per diluted share of ($0.36) decreased for the 13 weeks ended May 3, 2025, compared to net income per diluted share of $0.34, for the 13 weeks ended May 4, 2024. The decrease in net income was attributable to the factors noted above.

Net Income

		13 Weeks Ended						Increase/(Decrease)
	November 2, 2024				October 28, 2023
		(In thousands)						(In thousands)			(Percentage)
Net income		$	80,019		$	96,700		$	(16,681	)		(17	)	%
Net income as a percentage of net revenue			6.2	%		7.4	%	-120 basis points

Net income per share decreased to $0.41 per diluted share for the 13 weeks ended November 2, 2024, compared to $0.49 per diluted share for the 13 weeks ended October 28, 2023. The decrease in net income was attributable to the factors noted above.

Comparison of the 39 weeks ended November 2, 2024 to the 39 weeks ended October 28, 2023

Total Net Revenue

Total net revenue increased 4% to $3.724 billion for the 39 weeks ended November 2, 2024, compared to $3.583 billion last year. The shift in the retail calendar contributed approximately $26 million to revenue for the 39 weeks ended November 2, 2024. Digital revenue increased 10%, and store revenue increased 2%, driven by increased transaction volume as a result of increased traffic across channels. Total comparable sales increased by 4%, compared to a 1% increase last year.

	39 Weeks Ended														Increase/(Decrease)
	November 2, 2024							October 28, 2023
	(In thousands)			(Percentage)				(In thousands)			(Percentage)				(In thousands)			(Percentage)
American Eagle	$	2,384,295			64.0		%	$	2,295,487			64.1		%	$	88,808			4		%
Aerie		1,198,741			32.2				1,132,537			31.6				66,204			6
Other		169,002			4.5				329,480			9.2				(160,478	)		(49	)
Intersegment Eliminations		(28,019	)		(0.7	)			(174,645	)		(4.9	)			146,626			(84	)
Total net revenue	$	3,724,019			100.0		%	$	3,582,859			100.0		%	$	141,160			4		%

American Eagle. The increase in net revenue was driven by increased transaction volume in the high single digits as a result of increased traffic across channels. American Eagle comparable sales increased 5%.

Aerie. The increase in net revenue was driven by increased transaction volume as a result of increased traffic across channels. This increase was partially offset by $9 million of incremental revenue from excess end-of-season selloffs, during the 39 weeks ended October 28, 2023, which we did not repeat this year. Aerie comparable sales increased 5%.

Other. The decrease in net revenue was primarily attributable to planned lower revenue from Quiet Platforms offset by lower intersegment eliminations of this revenue (net reduction of $17 million) due to our change in strategy for this business.

Gross Profit

	39 Weeks Ended						Increase/(Decrease)
	November 2, 2024			October 28, 2023
	(In thousands)						(In thousands)		(Percentage)
Gross Profit	$	1,489,759		$	1,409,992		$	79,767		6	%
Gross Margin		40.0	%		39.4	%	60 basis points

The 6% increase in gross profit was primarily driven by an increase of $99 million in merchandise margin year over year due to increased net revenue from both American Eagle and Aerie, partially offset by a $42 million increase in markdowns. Buying, occupancy and warehousing costs increased by $13 million, primarily as a result of the increase in sales volume.

However, as a percentage of net revenue, buying, occupancy, and warehousing costs improved by 40 basis points, driven by rent and digital delivery leverage.

During the 39 weeks ended November 2, 2024 and October 28, 2023, $11.6 million and $15.3 million, respectively, of share-based payment expense were included in gross profit, representing both time- and performance-based awards.

Our gross profit may not be comparable to that of other retailers, as some retailers include all costs related to their distribution network as well as design costs in cost of sales and others may exclude a portion of these costs from cost of sales, including them in a line item such as SG&A expenses. Refer to Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements for a description of our accounting policy regarding cost of sales, including certain buying, occupancy and warehousing expenses.

Selling, General and Administrative Expenses

	39 Weeks Ended							Increase/(Decrease)
		November 2, 2024			October 28, 2023
		(In thousands)						(In thousands)		(Percentage)
Selling, general and administrative expenses		$	1,030,186		$	1,006,210		$	23,976		2	%
Selling, general and administrative expenses as a percentage of net revenue			27.7	%		28.1	%	40 basis points

The increase in expenses was primarily related to:

an increase of $19 million in advertising; and

$16 million of incremental store compensation due to increased wage rates, partially offset by efficiencies in our store labor model.

The increase was partially offset by:

lower corporate compensation costs, including a $9 million reduction in performance-based incentive compensation.

There was $21.8 million and $19.9 million of share-based payment expense included in SG&A expenses for the 39 week periods ended November 2, 2024 and October 28, 2023, respectively, comprised of both time- and performance-based awards.

Impairment, Restructuring and Other Charges

	39 Weeks Ended								Increase/(Decrease)
	November 2, 2024				October 28, 2023
		(In thousands)							(In thousands)
Quiet Platforms impairment, restructuring and other charges			—			$	21,275		$	(21,275	)
Corporate restructuring costs		$	10,729				—		$	10,729
Hong Kong retail operations impairment and restructuring costs			6,832				—		$	6,832
Impairment, restructuring and other charges		$	17,561			$	21,275		$	(3,714	)
Impairment, restructuring and other charges as a percentage of net revenue			0.4	%			0.6	%	20 basis points

During the 39 weeks ended November 2, 2024, we recorded $10.7 million of employee severance related to corporate restructuring, and $6.8 million of impairment and restructuring costs due to the pending sale of our Hong Kong retail operations. During the 39 weeks ended October 28, 2023, we recorded $21.3 million of impairment, restructuring and other charges related to Quiet Platforms. We recorded $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 employee severance, and $4.9 million of contract-related charges.

Depreciation and Amortization Expense

	39 Weeks Ended							Increase/(Decrease)
		November 2, 2024			October 28, 2023
		(In thousands)						(In thousands)			(Percentage)
American Eagle		$	54,352		$	57,155		$	(2,803	)		(5	)	%
Aerie			44,421			45,631			(1,210	)		(3	)
Other			58,205			66,240			(8,035	)		(12	)
Total depreciation and amortization expense		$	156,978		$	169,026		$	(12,048	)		(7	)	%
Total depreciation and amortization expense as a percentage of net revenue			4.2	%		4.7	%	50 basis points

The decrease in depreciation and amortization expense was primarily driven by prior year impairments of definite-lived tangible and intangible assets of Quiet Platforms.

Operating Income

	39 Weeks Ended														Increase/(Decrease)
	November 2, 2024							October 28, 2023
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage)
Operating income
American Eagle	$	431,542			11.6		%	$	418,232			11.7		%	$	13,310			3	%
Aerie		219,072			5.9				188,772			5.3				30,300			16
Other		(37,596	)		(1.0	)			(35,250	)		(1.0	)			(2,346	)		7
General corporate expenses		(310,423	)						(336,998	)						26,575
Impairment, restructuring, and other charges		(17,561	)						(21,275	)						3,714
Total Operating Income	$	285,034						$	213,481						$	71,553			34	%
Total Operating Income as a percentage of net revenue		7.7		%					6.0		%				170 basis points

The increase in operating income was primarily driven by higher gross profit, a reduction in impairment, restructuring, and other charges, and a reduction in depreciation and amortization, partially offset by increased SG&A expenses, all of which are explained in detail above.

American Eagle. The increase was primarily the result of the 4% increase in revenue discussed above, leading to a $27 million, or 3%, increase in gross profit driven by a $44 million increase in merchandise margin, offset by a $7 million increase in buying, occupancy, and warehousing costs from the increased sales volume. The gross profit improvement was partially offset by a $17 million increase in SG&A costs, primarily from incremental advertising and store compensation to arrive at the $13 million increase in operating income.

Aerie. The increase was primarily the result of the 6% increase in revenue discussed above, leading to a $51 million increase in gross profit driven by a $51 million increase in merchandise margin. The gross profit improvement was partially offset by a $22 million increase in SG&A expenses, primarily driven by store compensation and incremental advertising costs to arrive at the $30 million increase in operating income.

General Corporate Expenses. The reduction in expense is primarily due to a $13 million decrease in performance-based incentives and other compensation, an $8 million decrease in depreciation and amortization, and a $4 million decrease in professional services.

Interest (Income), Net

	39 Weeks Ended									Increase/(Decrease)
	November 2, 2024					October 28, 2023
		(In thousands)								(In thousands)		(Percentage)
Interest (income), net		$	(5,414	)		$	(1,229	)		$	4,185		(341	)	%
Interest (income), as a percentage of net revenue			(0.1	)	%		(0.0	)	%	10 basis points

The increase in interest (income), net was primarily attributable to increased interest income of $3 million on deposits, no borrowings on our Credit Facility, and the elimination of convertible note interest expense on the 2025 Notes due to their Early Redemption last year.

Other (Income), Net

	39 Weeks Ended									Increase/(Decrease)
	November 2, 2024					October 28, 2023
		(In thousands)								(In thousands)			(Percentage)
Other (income), net		$	(4,006	)		$	(9,446	)		$	(5,440	)		(58	)	%
Other (income), net as a percentage of net revenue			(0.1	)	%		(0.3	)	%	-20 basis points

The decrease in other (income), net was primarily attributable to foreign currency fluctuations.

Provision for Income Taxes

		39 Weeks Ended								Increase/(Decrease)
	November 2, 2024					October 28, 2023
		(In thousands)								(In thousands)		(Percentage)
Provision for income taxes		$	69,420			$	60,434			$	8,986		15	%
Provision for income taxes as a percentage of net revenue			1.9	%			1.7	%		-20 basis points
Effective tax rate			23.6		%		27.0		%

Net Income

		39 Weeks Ended						Increase/(Decrease)
	November 2, 2024				October 28, 2023
		(In thousands)						(In thousands)		(Percentage)
Net income		$	225,034		$	163,722		$	61,312		37	%
Net income as a percentage of net revenue			6.0	%		4.6	%	140 basis points

Net income per share increased to $1.14 per diluted share for the 39 weeks ended November 2, 2024, compared to $0.83 per diluted share, for the 39 weeks ended October 28, 2023. The increase in net income was attributable to the factors noted above.

Non-GAAP Information

The results of operations section ~~below~~above includes operating income and net income ~~and net income~~ per diluted share presented on an adjusted or non-GAAP basis, which are non-GAAP financial measures. These financial measures are not based on any standardized methodology prescribed by GAAP and ~~are~~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. The table below reconciles the GAAP financial measure to the non-GAAP financial measures discussed above.


GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
	13 Weeks Ended
	May 3, 2025
	Operating Loss				Benefit for Income Taxes			Net Loss				Earnings per Diluted Share
GAAP Basis	$	(85,181	)		$	(19,712	)	$	(64,899	)		$	(0.36	)
% of Revenue		(7.8	)	%					(6.0	)	%

Add: Impairment and restructuring charges (1)		17,119							13,131				0.07

Tax effect of the above (2)					$	3,988

Non-GAAP Basis	$	(68,062	)		$	(15,724	)	$	(51,768	)		$	(0.29	)
% of Revenue		(6.2	)	%					(4.8	)	%

~~measures~~(1) ofRefer ~~financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors~~ to ~~evaluate~~Note ~~our~~13, ~~operating~~Impairment ~~performance when reviewed in conjunction with our GAAP Consolidated Financial Statements~~ and ~~provides~~Restructuring ~~a higher degree of transparency. These amounts are not determined in accordance with GAAP and~~Charges, ~~therefore, should not be used exclusively in evaluating our business and operations. The table below reconciles the GAAP financial measures~~ to the ~~non-GAAP~~Consolidated ~~financial~~Financial ~~measures~~Statements ~~discussed~~included ~~above~~herein for ~~the~~additional ~~13 weeks ended November 2, 2024~~information.

GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
	13 Weeks Ended
	November 2, 2024
	Operating Income			Provision for Income Taxes		Net Income			Earnings per Diluted Share
GAAP Basis	$	106,089		$	28,211	$	80,019		$	0.41
% of Revenue		8.2	%				6.2	%
Add: Impairment, restructuring and other charges (1)	$	17,561				$	12,983		$	0.07
Tax effect of the above (2)				$	4,578
Non-GAAP Basis	$	123,650		$	32,789	$	93,002		$	0.48
% of Revenue		9.6	%				7.3	%

(2) The tax effect of excluded items is the difference between the tax benefit calculated on a GAAP basis and on a non-GAAP basis.

(1)Refer to Note 14, Impairment, Restructuring and Other Charges, to the Consolidated Financial Statements included herein for additional information.

(2)The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and on a non-GAAP basis.

There were no impairment, restructuring, and other charges recorded for the 13 weeks ended October 29, 2023.

For the 39 weeks ended November 2, 2024, the table below reconciles the GAAP financial measures to the non-GAAP financial measures:

GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
	39 Weeks Ended
	November 2, 2024
	Operating Income			Provision for Income Taxes		Net Income			Earnings per Diluted Share
GAAP Basis	$	285,034		$	69,420	$	225,034		$	1.14
% of Revenue		7.7	%				6.0	%
Add: Impairment, restructuring and other charges (1)	$	17,561				$	12,983		$	0.06
Tax effect of the above (2)				$	4,578
Non-GAAP Basis	$	302,595		$	73,998	$	238,017		$	1.20
% of Revenue		8.1	%				6.4	%

(1)Refer to Note 14, Impairment, Restructuring and Other Charges, to the Consolidated Financial Statements included herein for additional information.

(2)The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and on a non-GAAP basis.

For the 39 weeks ended October 28, 2023, the table below reconciles the GAAP financial measures to the non-GAAP financial measures:

GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
	39 Weeks Ended
	October 28, 2023
	Operating Income			Provision for Income Taxes		Net Income			Earnings per Diluted Share
GAAP Basis	$	213,481		$	60,434	$	163,722		$	0.83
% of Revenue		6.0	%				4.6	%
Add: Impairment, restructuring and other charges (1)	$	21,275				$	15,424		$	0.08
Tax effect of the above (2)				$	5,851
Non-GAAP Basis	$	234,756		$	66,285	$	179,146		$	0.91
% of Revenue		6.6	%				5.0	%

(1)Refer to Note 14, Impairment, Restructuring and Other Charges, to the Consolidated Financial Statements included herein for additional information.

(2)The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and on a non-GAAP basis.

International Operations

We have agreements with multiple third-party operators to expand our brands internationally. Our international licensing partners acquire the right to sell, promote, market, and/or distribute various categories of our products in a given geographic area and to source products from us. International licensees' rights include the right to own and operate retail stores and may include rights to sell in wholesale markets, shop-in-shop concessions and ~~rights to~~ operate online marketplace businesses. As of ~~November~~May 23, ~~2024~~2025, our international licensing partners operated in ~~310~~363 licensed retail stores and concessions, as well as wholesale markets, online brand sites, and online marketplaces in approximately 30 countries.

As of November 2, 2024, we had 103 Company-owned stores in Canada, 85 in Mexico, 13 in Hong Kong, and seven in Puerto Rico. Refer to Note 14, Impairment, Restructuring and Other Charges, to the Consolidated Financial Statements included herein for additional information regarding Hong Kong retail operations.33

As of May 3, 2025, we had 100 and 90 Company-owned stores in Canada and Mexico, respectively.

Liquidity and Capital Resources

Our uses of cash have historically been for working capital, the construction of new stores and remodeling of existing stores, information technology and e-commerce upgrades and investments, distribution center improvements and expansion, and the return of value to stockholders through the repurchase of common stock and the payment of dividends. Additionally, our uses of cash have included the development of the Aerie brand, investments in technology and omni-channel capabilities, and our international expansion efforts.

Historically, our uses of cash have been funded with cash ~~flows~~flow from operations and existing cash on hand. We also maintain an asset-based revolving ~~Credit~~credit ~~Facility~~facility that allows us to borrow up to $700 million, which will expire in June 2027. As of ~~November~~May 23, ~~2024~~2025, ~~there~~the ~~were~~Company nohad $110.0 million in borrowings under the Credit Facility. Refer to Note 8, Long-Term Debt, Net, to the Consolidated Financial Statements included herein for additional information regarding our long-term debt.

As of ~~November~~May 23, ~~2024~~2025, we had approximately $~~160~~87.29 million in cash and cash equivalents. We expect to be able to fund our future cash requirements through current cash holdings and available liquidity.

The following sets forth certain measures of our liquidity:

	November 2,2024
	May 3,2025
Working Capital (in thousands)		~~485~~300,~~133~~367
Current Ratio		1.5738

The following table sets forth net cash flows in operating, investing, and financing activities for the 3913 weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024:


	13 Weeks Ended								Increase/(Decrease)
	May 3, 2025				May 4, 2024
	(In thousands)
Total cash (used for) provided by:
Operating activities		$	(54,672	)		$	(38,111	)		$	(16,561	)
Investing activities			(11,833	)			59,221				(71,054	)
Financing activities			(154,134	)			(74,214	)			(79,920	)
Effect of foreign currency exchange rate changes on cash and cash equivalents			(470	)			(472	)			2
(Decrease) in cash and cash equivalents		$	(221,109	)		$	(53,576	)		$	(167,533	)

	39 Weeks Ended								Increase/(Decrease)
	November 2, 2024				October 28, 2023
	(In thousands)
Total cash provided by (used for):
Operating activities		$	93,045			$	284,343			$	(191,298	)
Investing activities			(66,053	)			(144,261	)			78,208
Financing activities			(218,008	)			(68,988	)			(149,020	)
Effect of foreign currency exchange rate changes on cash and cash equivalents			(2,883	)			(363	)			(2,520	)
(Decrease) Increase in cash and cash equivalents		$	(193,899	)		$	70,731			$	(264,630	)

Cash Flows (Used For) Operating Activities

Cash Flows Provided by Operating Activities

Our major source of cash from operations for both periods was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs.

Cash Flows (Used for) Provided by Investing Activities

Investing activities for the 3913 weeks ended ~~November~~May 23, ~~2024~~2025 primarily consisted of capital expenditures of $~~157~~61.76 million, partially offset by the sale of available-for-sale investments of $~~100~~50.0 million.

Investing activities for the 3913 weeks ended ~~October~~April 28May 4, ~~2023~~2024 primarily consisted of the sales of available-for-sale investments of $100.0 million, partially offset by capital expenditures of $~~134~~36.92 million.

Cash Flows (Used for) Financing Activities

Cash used for financing activities for the 3913 weeks ended ~~November~~May 23, ~~2024~~2025 consisted primarily of $~~130~~201.95 million, including excise taxes, used to repurchase the Company's common stock under the ASR Agreement (as defined below), $31.3 million, including commissions and excise taxes, used for the repurchase of common stock under our publicly announced ~~programs~~program, and $7221.67 million for cash dividends paid at a quarterly rate of $0.125 per share.

Cash used for financing activities for the 39 weeks ended October 28, 2023 consisted primarily of $59.1 million for cash dividends paid at a quarterly rate of $0.10 per share and $10.7 million for the repurchase of common stock from employees for the payment of taxes in connection with vesting of share-based payments.34

Cash used for financing activities for the 13 weeks ended May 4, 2024 consisted primarily of $34.9 million used for the repurchase of common stock under our publicly announced programs, and $24.6 million for cash dividends paid at a quarterly rate of $0.125 per share.

Revolving Credit Facility

In June 2022, we entered into an amended and restated Credit Agreement, which 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.

As of ~~November~~May 23, ~~2024~~2025, the Company was in compliance with the terms of the Credit Agreement and had no borrowings of $110.0 million and $12.0 million outstanding in stand-by letters of credit. As of ~~October~~May 284, ~~2023~~2024, the Company was in compliance with the terms of the Credit Agreement and had no borrowings and $712.70 million outstanding in stand-by letters of credit.

Capital Expenditures for Property and Equipment

For the 3913 weeks ended ~~November~~May 23, ~~2024~~2025, capital expenditures totaled $~~157~~61.76 million. See below for a breakdown of expenditures:

39 Weeks Ended

Increase/(Decrease)

13 Weeks Ended

Increase/(Decrease)

November 2, 2024

October 28, 2023

May 3, 2025

May 4, 2024

(In thousands)

(Percentage)

Store, fixture, and visual investments

~~100~~28,~~808~~466

6720,~~713~~532

337,~~095~~934

4939

Information technology initiatives

3511,~~850~~998

4412,~~525~~978

(~~8,675~~980

)

(198

)

Supply chain infrastructure

11,~~846~~427

192,~~637~~116

(79,~~791~~311

)

~~(40~~440

)

Other home office projects

9,~~164~~715

~~3,039~~583

69,~~125~~132

~~202~~1566

Capital Expenditures

~~157~~61,~~668~~606

~~134~~36,~~914~~209

2225,~~754~~397

1770

For Fiscal ~~2024~~2025, we expect capital expenditures to be inapproximately ~~the range of~~ $~~225~~275 million ~~to $245 million~~ related to the continued support of our expansion efforts, stores, information technology upgrades to support growth and investments in e-commerce, as well as to support and enhance our supply chain. We expect to be able to fund our capital expenditures through current available liquidity and cash generated from operations.

42See below for a breakdown for stores remodeled and new stores opened in the 13 weeks ended May 3, 2025 and May 4, 2024:

in e-commerce, as well as to support and enhance our supply chain. We expect to be able to fund our capital expenditures through current cash holdings and cash generated from operations.


	13 Weeks Ended
	May 3, 2025			May 4, 2024
	New Stores		Remodels	New Stores		Remodels
American Eagle (1)		1	11		3	-
Aerie (2)		3	2		1	-
Todd Snyder		1	-		-	-
Unsubscribed		1	-		-	-
Total stores		6	13		4	-

~~See~~(1) ~~below~~American ~~for~~Eagle aincludes ~~breakdown~~AE ~~for~~stand-alone stores, ~~remodeled~~Aerie ~~and~~side-by-side ~~new~~ stores ~~opened~~connected into ~~the~~an 39AE ~~weeks~~brand ~~ended~~location, ~~November~~AE, 2Aerie, ~~2024~~ and ~~October~~OFFLINE 28locations connected as one store, ~~2023:~~and OFFLINE side-by-side stores connected to an AE brand location

	39 Weeks Ended
	November 2, 2024				October 28, 2023
	New Stores		Remodels		New Stores		Remodels
American Eagle (1)		14	38			14	11
Aerie (2)		17		—		13	3
Todd Snyder		4		—		4		—
Total stores		35	38			31	14

(2) Aerie includes Aerie stand-alone, OFFLINE stand-alone, and OFFLINE side-by-side stores connected to an Aerie brand location

(1) American Eagle includes AE stand-alone stores, Aerie side-by-side stores connected to an AE brand location, AE, Aerie, and OFFLINE locations connected as one store, and OFFLINE side-by-side stores connected to an AE brand location.

(2) Aerie includes Aerie stand-alone, OFFLINE stand-alone, and OFFLINE side-by-side stores connected to an Aerie brand location.

Share Repurchases

On ~~February~~March 111, ~~2024~~2025, ~~our~~the Company’s Board ~~authorized~~of Directors (the ~~public~~"Board") ~~repurchase~~authorized of50 ~~30.0~~ million additional shares ~~under~~for arepurchase ~~new~~as part of its existing share repurchase program, which ~~expires~~was onpreviously ~~February~~announced 3,in ~~2029.~~February ~~During the 39 weeks ended November 2,~~ 2024~~, there were 6~~.0 ~~million shares repurchased under this authorization.~~

During the 39 weeks ended November 2, 2024 and October 28, 2023, we repurchased approximately 0.5 million and 0.8 million shares, respectively, from certain employees at market prices totaling $13.6 million and $10.7 million, respectively. These shares were repurchased for the payment of taxes, in connection with the vesting of share-based payments, as permitted under our equity incentive plans. 35

Including this additional authorization, as of May 3, 2025, the Company had a total of 54.0 million shares remaining authorized for repurchase through February 3, 2029.

On March 14, 2025, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with Bank of America, N.A. ("Bank of America") to repurchase an aggregate of $200 million of the Company’s common stock.

Pursuant to the terms of the ASR Agreement, on March 17, 2025, the Company made an aggregate payment of $200 million to Bank of America and received an aggregate initial delivery of approximately 14.5 million shares of its common stock, representing approximately 80% of the total shares that are expected to be repurchased under the ASR agreement. The exact number of shares the Company ultimately will repurchase under the ASR Agreement will be based generally on the average of the daily volume-weighted average price per share of the common stock during the repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreement. At settlement, under certain circumstances, Bank of America may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required either to deliver shares of common stock or to make a cash payment to Bank of America. Final settlement of the transactions under the ASR Agreement is expected to occur by the end of the second quarter of Fiscal 2025.

During the 13 weeks ended May 3, 2025 and May 4, 2024, we repurchased approximately 0.7 million and 0.5 million shares, respectively, from certain employees at market prices totaling $7.9 million and $13.2 million, respectively. These shares were repurchased for the payment of taxes, in connection with the vesting of share-based payments, as permitted under our equity incentive plans.

The aforementioned repurchased shares have been recorded as treasury stock.

Dividends

During the 13 weeks ended ~~November~~May 23, ~~2024~~2025, ~~our~~the Board declared a quarterly cash dividend of $0.125 per share on ~~September~~March 2413, ~~2024~~2025, which was paid on ~~October~~April 3025, ~~2024~~2025.

The Company maintains the right to defer the record and payment dates of any declared dividends, depending upon, among other factors, business performance and the macroeconomic environment. The payment of future dividends is at the discretion of our Board and is based on future earnings, cash flow, financial condition, capital requirements, changes ~~inU.S.~~in United States taxation, and other relevant factors.

Critical Accounting Estimates

Our critical accounting policies and estimates are described in Part III, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year ended February 31, ~~2024,~~2025 ~~each~~ contained in our Fiscal ~~2023~~2024 Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Consolidated Financial Statements in this Quarterly Report. The application of our critical accounting policies and estimates may require our management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Our management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are primarily 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. An unrealized ~~loss~~gain of $~~10.6~~14 million ~~and $33.5 million~~ is included in accumulated other comprehensive ~~(loss)~~ income during the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024, respectively~~2025. Our market risk profile as of February 31, ~~2024~~2025 is disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our Fiscal ~~2023~~2024 Form 10-K, ~~which~~and iswas unchanged as of ~~November~~May 23, ~~2024~~2025.

4336

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the management of American Eagle Outfitters, Inc. (the "Management"), including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, Management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In connection with the preparation of this Quarterly Report, as of ~~November~~May 23, ~~2024~~2025, the Company performed an evaluation under the supervision and with the participation of our Management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective in the timely and accurate recording, processing, summarizing, and reporting of material financial and non-financial information within the time periods specified within the SEC’s rules and forms. Our principal executive officer and principal financial officer also concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our Management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are involved, from time to time, in actions associated with or incidental to our business, including, among other things, matters involving consumer privacy, trademark and other intellectual property, licensing, importation of products, taxation, and employee relations. WeAs ~~believe~~of atthe ~~present~~date of this Quarterly Report, we believe that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on our consolidated financial position or results of operations. 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 that are not in accord with management's evaluation of the possible liability or outcome of such litigation or claims. Consistent with SEC Regulation S-K Item 103, we have elected to disclose those environmental proceedings with a governmental entity as a party where the company reasonably believes such proceeding would result in monetary sanctions, exclusive of interest and costs, of $1.0 million or more. Applying this threshold, there are no environmental matters to disclose for this period.

Refer to Note 11, Legal Proceedings, ~~of the Notes~~ to the Consolidated Financial Statements included herein for additional information.

ITEM 1A. RISK FACTORS.

Risk factors that affect our business and financial results are discussed within Part I, Item 1A of our Fiscal ~~2023~~2024 Form 10-K. There have been no material changes to our risk factors as disclosed in the Fiscal ~~2023~~2024 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Issuer Purchases of Equity Securities

The following table provides information regarding our repurchases of our common stock during the 13 weeks ended ~~November~~May 23, ~~2024~~2025:

	Total				Total Number of		Maximum Number of
	Number of		Average		Shares Purchased as		Shares that May
	Shares		Price Paid		Part of Publicly		Yet Be Purchased
Period	Purchased		Per Share		Announced Programs		Under the Program
	(1)		(2)		(1)		(1) (3)
Month #1 (August 4, 2024 through August 31, 2024)		—		—		—		24,000,000
Month #1 (February 2, 2025 through March 1, 2025)		2,206,230	$	15.35		2,000,000		18,500,000
Month #2 (September 1, 2024 through October 5, 2024)		9,101	$	20.94		—		24,000,000
Month #2 (March 2, 2025 through April 5, 2025)		14,788,376		13.77		14,466,546		54,033,453
Month #3 (October 6, 2024 through November 2, 2024)		7,987	$	20.87		—		24,000,000
Month #3 (April 6, 2025 through May 3, 2025)		126,081		10.92		—		54,033,453
Total		17,~~088~~120,687	$	2013.9196		—16,466,546		2454,~~000~~033,~~000~~453

(1)

~~There~~In March 2025, pursuant to the ASR Agreement, the Company paid $200.0 million in cash and received an initial delivery of 14.5 million shares of its common stock. Additionally, there were no2.0 million shares repurchased as part of our publicly announced share repurchase program and an aggregate of ~~17,088~~0.7 million shares were repurchased ~~from employees~~ for the payment of taxes in connection with the vesting of share-based payments during the 13 weeks ended ~~November~~May 23, ~~2024~~2025.

(2)

Average price paid per share excludes any broker commissions paid.

(3)

On ~~February~~March 111, ~~2024~~2025, ~~our~~the Board authorized the public repurchase of 30an additional 50 million shares under aour existing share repurchase program, which expires on February 3, 2029.

ITEM 5.: OTHER INFORMATION

(Cc) Rule 10b5-1 Trading Plans

During the fiscal quarter ended ~~November~~May 23, ~~2024~~2025, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule ~~10b5~~105b-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).

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ITEM 6. EXHIBITS.

Exhibit 10.1		Accelerated Share Repurchase Agreement, dated March 14, 2025, by and between American Eagle Outfitters, Inc. and Bank of America, N.A. (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on March 17, 2025 (SEC File No. 001-33338))
* Exhibit 31.1		Certification by Jay L. Schottenstein pursuant to Rule 13a-14(a) or Rule 15d-14(a)
* Exhibit 31.2		Certification by Michael A. Mathias pursuant to Rule 13a-14(a) or Rule 15d-14(a)
** Exhibit 32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
** Exhibit 32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
* Exhibit 101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~November~~May 23, ~~2024~~2025, formatted as inline eXtensible Business Reporting Language ("XBRL"): (i) Consolidated Balance Sheets as of ~~November~~May 23, ~~2024~~2025, February 31, ~~2024~~2025, and ~~October~~May 284, ~~2023,~~2024 (ii) Consolidated Statements of Operations for the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024, (iii) Consolidated Statements of Comprehensive Income for the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024, (iv) Consolidated Statements of Stockholders’ Equity for the 13 ~~and 39~~ weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024, and (v) Consolidated Statements of Cash Flows for the 3913 weeks ended ~~November~~May 23, ~~2024~~2025 and ~~October~~May 284, ~~2023~~2024.
* Exhibit 104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~November~~May 23, ~~2024~~2025, formatted in inline XBRL

^ Management contract or compensatory plan or arrangement.

* Filed with this report.

** Furnished with this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: ~~December~~June 45, ~~2024~~2025


		American Eagle Outfitters, Inc. (Registrant)

By:		/s/ Jay L. Schottenstein
		Jay L. Schottenstein
		Chief Executive Officer
		(Principal Executive Officer)

By:		/s/ Michael A. Mathias
		Michael A. Mathias
		Executive Vice President, Chief Financial Officer
		(Principal Financial Officer)

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