AEO Inc. Provides Fourth Quarter Update Ahead of Today’s Investor Meeting

American Eagle Outfitters (NYSE: AEO) today announced that the company expects fourth quarter 2020 adjusted operating income to exceed $95 million, excluding potential asset impairment and restructuring charges*. This compares to reported operating income of $0.5 million and adjusted operating income of $77 million last year. Anticipated adjusted operating income growth is driven by strong margins, reflecting reduced promotions, higher full-priced selling and well-received holiday product assortments.

Fourth quarter revenue is expected to decrease in the low single digits, due to store revenue declines from weak mall traffic, store closures and reduced hours related to the pandemic. The digital channel maintained strong momentum, with double-digit growth expected across brands. Aerie’s fourth quarter revenue is expected to increase in the high-20% range. American Eagle is expected to decline in the low double-digit range, as a result of its higher store penetration.

“I’m extremely proud of our performance during the fourth quarter, which demonstrated strong growth to last year and continued quarterly sequential improvement. Compelling holiday product and marketing, combined with a disciplined approach to promotional activity drove very strong margin results,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer. “The team continues to instill strong inventory and expense management, and I believe we are well-positioned as we head into 2021. Thanks to our talented, passionate and dedicated associates for making our success this year possible.”

In a separate press release issued this morning, AEO announced its “Real Power. Real Growth.” strategic plan and introduced long-term financial targets. The company will host a virtual investor meeting beginning at 11 am Eastern time, which can be accessed in the Investor Relations section on AEO’s website, www.aeo-inc.com.

The company will release fourth quarter and fiscal 2020 results on March 3, 2021 and will host a conference call to review financial results on the same date.

Non-GAAP Measures

* The Company uses non-GAAP operating income, a non-GAAP financial measure (“non-GAAP” or “adjusted”), to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections, and make strategic decisions. This financial measure is not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“GAAP”) and is not necessarily comparable to similar measures presented by other companies. Management believes that this non-GAAP information is useful for an alternate presentation of the company’s performance, when reviewed in conjunction with the company’s GAAP financial statements. These amounts are not determined in accordance with GAAP and therefore, should not be used exclusively in evaluating the company’s business and operations.