American Eagle Outfitters Announces Three-Year Strategy to Power Profitable Growth; Clear Path to $5.7 to $6.0B in Revenue and an Approximate 10% Operating Margin Rate

Building upon momentum and strong results achieved in 2023, American Eagle Outfitters, Inc. (NYSE: AEO) today unveiled its new Powering Profitable Growth plan, structured to deliver mid-to-high teens annual operating income expansion on 3-5% annual revenue growth over the next three years, and an approximate 10% operating margin.

Fueled by a shift in strategy, culture and focus to generate stronger profitability on continued growth, the multi-year plan is centered around three key pillars:

• Amplify our brands: Grow American Eagle, powering market leadership in denim and expansion into right-to-win adjacencies; Fuel Aerie’s expansion and Accelerate activewear opportunity with OFFLINE.
• Execute with financial discipline: Organization structured to deliver consistent profit growth and shareholder returns.
• Optimize operations: Leverage best-in-class operating capabilities to fuel our growth and profit roadmap.

“Amplifying American Eagle and Aerie’s stronghold in casual apparel is at the very center of our strategic plan. We see incredible growth opportunities as we elevate key businesses and expand into category adjacencies at American Eagle, fuel the #AerieReal movement in underpenetrated markets and accelerate OFFLINE’s significant potential in activewear. These efforts will be supported by a sharp focus on profit expansion. We will utilize our leading operating capabilities and leverage new technologies to maximize ongoing efficiencies and deliver the very best and innovative experiences for our customers,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

“I’m extremely excited about our Powering Profitable Growth strategy. We have passionate, driven and talented teams surrounded by a renewed focus on performance. Together we look forward to executing and delivering on our plan, creating long-term value for our shareholders,” he continued.

In a separate release today the company reported fourth quarter and full-year fiscal 2023 results, in which management provided fiscal 2024 operating income guidance of $445 to $465 million, based on 2 to 4% revenue growth inclusive of an approximately one point revenue headwind from the shift in the retail calendar, which is consistent with the long-term financial targets stated above.

First quarter 2024 guidance was also provided reflecting operating income in the range of $65 to $70 million. This reflects revenue up mid-single digits, including an approximately one point positive impact from the retail calendar shift.