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TheStreet Open House

American Eagle Outfitters Reports Record Annual Sales Of $3.5 Billion And 43% Growth In Adjusted EPS

Stocks in this article: AEO

“We remain committed to using our strong balance sheet and free cash flow to invest in our business to support long-term profitable growth and to consistently return cash to our shareholders,” added Robert Hanson.

Fiscal 2012 Non-GAAP Results

The following discussion is based on Non-GAAP results, which exclude tax benefits, restructuring and store impairment costs as presented in the accompanying GAAP to Non-GAAP reconciliations.

  • Total net revenue for the 53 weeks increased 11% to a record $3.48 billion from $3.12 billion for the 52 week period last year. Consolidated comparable sales for the 53 weeks increased 9% over the comparable 53 week period last year. This follows a 4% increase last year.
  • Gross profit increased 21% to $1.39 billion and increased 330 basis points to 40.0% as a rate to revenue, driven by lower product costs, markdown improvements and rent leverage.
  • Selling, general and administrative expense of $829 million increased 16%, and 90 basis points as a rate to revenue. Increased incentive costs and planned advertising investments offset the leverage of other expenses, primarily store payroll.
  • Operating income increased 49% to $437 million. The operating margin expanded 320 basis points to 12.6%, the company’s best operating margin rate since 2008.
  • Adjusted EPS of $1.39 compares to $0.97 last year, a 43% increase.

Fourth Quarter 2012 Non-GAAP Results

The following discussion is based on Non-GAAP results, which exclude tax benefits, restructuring and store impairment costs as presented in the accompanying GAAP to Non-GAAP reconciliations.

  • Total net revenue for the 14 weeks increased 9% to a record $1.12 billion from $1.03 billion for the 13 week period last year. Consolidated comparable sales for the 14 weeks increased 4% over the comparable 14 week period last year. This follows an 11% increase last year.
  • Gross profit increased 27% to $461 million and increased 600 basis points to 41.2% as a rate to revenue, driven by lower product costs, markdown improvements and rent leverage.
  • Selling, general and administrative expense of $253 million increased 230 basis points to 22.6% as a rate to revenue, due to higher incentive costs and planned advertising investments.
  • Operating income increased 48% to $177 million. The operating margin expanded 430 basis points to 15.9%, the company’s best operating income rate since 2007.
  • Adjusted EPS of $0.55 compares to $0.39 last year, a 41% increase.

AEO Direct

For the year, comparable sales for AEO Direct increased 25% to total sales of $467 million. In the fourth quarter, comparable sales for AEO Direct increased 24%, compared to a 19% increase last year.

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