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 ~~May~~August 32, 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: 173,268,234 shares of Common Stock were outstanding at June 4, 2025.~~1

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 169,338,842 shares of Common Stock were outstanding at September 5, 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: May 3, 2025, February 1, 2025, and May 4, 2024	7
	Consolidated Balance Sheets: August 2, 2025, February 1, 2025, and August 3, 2024	7
	Consolidated Statements of Operations: 13 weeks ended May 3, 2025 and May 4, 2024	8
	Consolidated Statements of Operations: 13 and 26 weeks ended August 2, 2025 and August 3, 2024	8
	Consolidated Statements of Comprehensive Income: 13 weeks ended May 3, 2025 and May 4, 2024	9
	Consolidated Statements of Comprehensive Income: 13 and 26 weeks ended August 2, 2025 and August 3, 2024	9
	Consolidated Statements of Stockholders' Equity: 13 weeks ended May 3, 2025 and May 4, 2024	10
	Consolidated Statements of Stockholders' Equity: 13 and 26 weeks ended August 2, 2025 and August 3, 2024	10
	Consolidated Statements of Cash Flows: 13 weeks ended May 3, 2025 and May 4, 2024	11
	Consolidated Statements of Cash Flows: 26 weeks ended August 2, 2025 and August 3, 2024	12
	Notes to Consolidated Financial Statements	1314
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2730
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3643
Item 4.	Controls and Procedures	3743
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	3844
Item 1A.	Risk Factors	3844
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3844
Item 3.	Defaults Upon Senior Securities	N/A
Item 4.	Mine Safety Disclosures	N/A
Item 5.	Other Information	3844
Item 6.	Exhibits	3945

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," "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 1, 2025 filed with the Securities and Exchange Commission (the "SEC") on March 20, 2025 (the "Fiscal 2024 Form 10-K") that may not be in the control of management. As used herein, "Fiscal 2027" refers to the 52-week period that will end on January 29, 2028. "Fiscal 2026" refers to the 52-week period that will end on January 30, 2027. "Fiscal 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 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 2530 ~~to 40~~ Aerie and OFFLINE stores, which will be a mix of stand-alone and Aerie side-by-sides, during Fiscal 2025;

•

the anticipated selection of approximately 90 to 100 American Eagle and Aerie stores in the United States ("U.S.") and Canada for remodeling during Fiscal 2025;

•

the potential net closure of approximately 1535 to 2040 American Eagle stores at the expiration of their lease term, primarily in North America, during Fiscal 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 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 extent to which our product costs are adversely affected by foreign trade issues, including import tariffs and other trade restrictions, increasing prices for raw materials unrelated to tariffs, currency exchange rate fluctuations, 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 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:

•

the 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 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 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 impairment to goodwill, intangible assets, and other long-lived assets, 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 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 risk that 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 risks associated with our inability to implement and sustain adequate information technology systems could adversely impact our profitability and the loss of disruption of information technology systems could have a material adverse effect on our business;

•

the risks related to our electronic processing of sensitive and confidential personal and business data, including cyberattacks, data breaches, other security incidents, or disruption of information technology systems or software;

•

risks associated with our international merchandise sourcing strategy subjects us to risks, including, without limitation, those related to the imposition of tariffs, that could adversely impact our business and results of operations;

•

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

•

the risks associated with fluctuations in our tax obligations and effective tax rate could adversely affect us; and

•

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

	May 3,			February 1,			May 4,
	August 2,			February 1,			August 3,
(In thousands, except per share amounts)	2025			2025			2024
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	87126,~~853~~780		$	308,962		$	~~300~~191,~~518~~837
Short-term investments		—			50,000			—
Merchandise inventory		~~645~~718,~~062~~337			636,655			~~681~~663,~~062~~659
Accounts receivable, net		~~228~~237,~~561~~355			262,365			~~230~~231,~~934~~750
Prepaid expenses		~~103~~167,~~466~~295			76,088			72136,~~973~~787
Other current assets		2321,~~082~~335			20,161			2524,~~830~~412
Total current assets		1,~~088~~271,~~024~~102			1,354,231			1,~~311~~248,~~317~~445
Operating lease right-of-use assets		1,~~471~~604,~~705~~457			1,295,400			1,~~123~~153,~~649~~354
Property and equipment, at cost, net of accumulated depreciation		~~765~~773,~~594~~872			751,264			~~703~~722,~~551~~193
Goodwill, net		225,~~225~~231			225,079			225,~~253~~213
Non-current deferred income taxes		7848,~~483~~322			68,158			8987,~~332~~245
Intangible assets, net		4140,~~549~~674			42,449			4544,~~178~~241
Other assets		9697,~~774~~374			94,194			5859,~~937~~625
Total assets	$	34,~~767~~061,~~354~~032		$	3,830,775		$	3,~~557~~540,~~217~~316
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	247,~~994~~578		$	280,712		$	~~225~~259,~~480~~734
Current portion of operating lease liabilities		~~319~~321,~~626~~334			313,034			~~303~~307,~~603~~570
Accrued compensation and payroll taxes		5849,~~380~~534			113,388			6455,~~502~~441
Unredeemed gift cards and gift certificates		6357,~~282~~376			70,094			5751,~~373~~791
Accrued income and other taxes		2330,~~114~~631			30,677			5041,~~716~~631
Other current liabilities and accrued expenses		7576,~~261~~932			74,751			7178,~~655~~219
Total current liabilities		~~787~~783,~~657~~385			882,656			~~773~~794,~~329~~386
Non-current liabilities:
Non-current operating lease liabilities		1,~~337~~473,~~489~~119			1,133,296			1,~~002~~015,~~529~~455
Long-term debt, net		~~110~~203,000			—			—
Other non-current liabilities		5756,~~992~~918			47,963			2936,~~003~~109
Total non-current liabilities		1,~~505~~733,~~481~~037			1,181,259			1,~~031~~051,~~532~~564
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
Common stock, $0.01 par value; 600,000 shares authorized; 249,566 shares issued; 169,336, 188,618 and 192,013 shares outstanding, respectively		2,496			2,496			2,496
Contributed capital		~~365~~372,~~326~~826			365,845			~~345~~353,~~922~~608
Accumulated other comprehensive loss		(4234,~~105~~646	)		(56,390	)		(1539,~~722~~271	)
Retained earnings		2,~~361~~416,~~273~~980			2,456,063			2,~~267~~320,~~785~~348
Treasury stock, at cost, 76,299, 60,948 and 53,136 shares, respectively		(1,212,774	)		(1,001,154	)		(848,125	)
Treasury stock, at cost, 80,230, 60,948 and 57,553 shares, respectively		(1,213,046	)		(1,001,154	)		(942,815	)
Total stockholders’ equity		1,~~474~~544,~~216~~610			1,766,860			1,~~752~~694,~~356~~366
Total liabilities and stockholders’ equity	$	34,~~767~~061,~~354~~032		$	3,830,775		$	3,~~557~~540,~~217~~316

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	13 Weeks Ended						26 Weeks Ended
	May 3,			May 4,
	August 2,			August 3,			August 2,			August 3,
(In thousands, except per share amounts)	2025			2024			2025			2024
Total net revenue	$	1,~~089~~283,~~599~~675		$	1,~~143~~291,~~867~~058		$	2,373,275		$	2,434,925
Cost of sales, including certain buying, occupancy and warehousing expenses		~~767~~783,~~178~~713			~~679~~792,~~628~~162			1,550,892			1,471,791
Gross profit		~~322~~499,~~421~~962			~~464~~498,~~239~~896			822,383			963,134
Selling, general and administrative expenses		~~338~~342,~~786~~211			~~333~~345,~~493~~313			680,998			678,806
Impairment and restructuring charges		~~17,119~~—			—			17,119			—
Depreciation and amortization expense		5154,~~697~~666			52,~~910~~474			106,363			105,384
Operating (loss) income	$	(85,181	)	$	77,836
Operating income	$	103,085		$	101,109		$	17,903		$	178,944
Interest (income), net		(219	)		(3,439	)
Interest expense (income), net		1,919			(730	)		1,700			(4,168	)
Other (income), net		(~~351~~172	)		(1,~~396~~715	)		(523	)		(3,111	)
(Loss) income before income taxes		(84,611	)		82,671
Income before income taxes		101,338			103,554			16,726			186,223
(Benefit) provision for income taxes		(19,712	)		14,919
Provision for income taxes		23,705			26,290			3,992			41,209
Net (loss) income	$	(64,899	)	$	67,752
Net income	$	77,633		$	77,264		$	12,734		$	145,014
Basic net (loss) income per common share	$	(0.36	)	$	0.34
Basic net income per common share	$	0.45		$	0.40		$	0.07		$	0.74
Diluted net (loss) income per common share	$	(0.36	)	$	0.34
Diluted net income per common share	$	0.45		$	0.39		$	0.07		$	0.73
Weighted average common shares outstanding - basic		~~179~~170,~~548~~756			~~196~~193,~~429~~661			175,156			195,048
Weighted average common shares outstanding - diluted		~~179~~171,~~548~~659			~~201~~197,~~310~~757			176,482			199,406

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME

(Unaudited)

	13 Weeks Ended						26 Weeks Ended
	May 3,			May 4,
	August 2,			August 3,			August 2,		August 3,
(In thousands)	2025			2024			2025		2024
Net (loss) income	$	(64,899	)	$	67,752
Net income	$	77,633		$	77,264		$	12,734	$	145,014
Other comprehensive gain
Other comprehensive gain (loss)
Foreign currency translation gain		14,285			688
Foreign currency translation gain (loss)		7,459			(23,549	)		21,744		(22,861	)
Other comprehensive gain		14,285			688
Other comprehensive gain (loss)		7,459			(23,549	)		21,744		(22,861	)
Comprehensive (loss) income	$	(50,614	)	$	68,440
Comprehensive income	$	85,092		$	53,715		$	34,478	$	122,153

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

13 Weeks Ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024

(In thousands, except per share amounts)	SharesOutstanding			Common Stock		ContributedCapital			RetainedEarnings			Treasury Stock			Accumulated OtherComprehensive Loss			Stockholders'Equity
Balance at February 3, 2024		196,936		$	2,496	$	360,378		$	2,214,159		$	(823,864	)	$	(16,410	)	$	1,736,759
Stock awards		—			—		20,436			—			—			—			20,436
Repurchase of common stock as part of publicly announced programs		(1,500	)		—		—			—			(34,949	)		—			(34,949	)
Repurchase of common stock from employees		(531	)		—		-			—			(13,242	)		—			(13,242	)
Reissuance of treasury stock		1,525			—		(35,005	)		11,072			23,930			—			(3	)
Net income		—			—		—			67,752			—			—			67,752
Other comprehensive income		—			—		—			—			—			688			688
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		605			(25,198	)		—			—			(24,593	)
Contributions from non-controlling interests		—					(492	)		—			—			—			(492	)
Balance at May 4, 2024		196,430		$	2,496	$	345,922		$	2,267,785		$	(848,125	)	$	(15,722	)	$	1,752,356
Balance at February 1, 2025		188,618		$	2,496	$	365,845		$	2,456,063		$	(1,001,154	)	$	(56,390	)	$	1,766,860
Stock awards		—			—		6,626			—			—			—			6,626
Stock awards		—			—		20,411			—			—			—			20,411
Repurchase of common stock as part of publicly announced programs, including excise tax		(4,500	)		—		—			—			(95,993	)		—			(95,993	)
Repurchase of common stock as part of publicly announced programs, including excise tax		(2,000	)		—		—			—			(31,301	)		—			(31,301	)
Repurchase of common stock from employees		(2	)		—		—			—			(48	)		—			(48	)
Accelerated share repurchase, including excise tax		(14,467	)										(201,469	)					(201,469	)
Reissuance of treasury stock		85			—		(161	)		(78	)		1,351			—			1,112
Repurchase of common stock from employees		(653	)		—		—			—			(7,893	)		—			(7,893	)
Net income		—			—		—			77,264			—			—			77,264
Reissuance of treasury stock		1,769			—		(21,368	)		(7,552	)		29,043			—			123
Other comprehensive (loss)		—			—		—			—			—			(23,549	)		(23,549	)
Net (loss)		—			—		—			(64,899	)		—			—			(64,899	)
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		599			(24,623	)		—			—			(24,024	)
Other comprehensive income		—			—		—			—			—			14,285			14,285
Contributions from non-controlling interests		—					622			—			—			—			622
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		682			(22,339	)		—			—			(21,657	)
Balance at August 3, 2024		192,013		$	2,496	$	353,608		$	2,320,348		$	(942,815	)	$	(39,271	)	$	1,694,366
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
Stock awards		—			—		6,357			—			—			—			6,357
Repurchase of common stock as part of publicly announced programs, including excise tax		—			—		—			—			—			—			—
Accelerated share repurchase, including excise tax		(3,949	)		—		—			—			(380	)		—			(380	)
Repurchase of common stock from employees		(2	)		—		—			—			(20	)		—			(20	)
Reissuance of treasury stock		20			—		90			(67	)		128			—			151
Net income		—			—		—			77,633			—			—			77,633
Other comprehensive income		—			—		—			—			—			7,459			7,459
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		689			(21,859	)		—			—			(21,170	)
Contributions from non-controlling interests		—			—		364			—			—			—			364
Balance at August 2, 2025		169,336		$	2,496	$	372,826		$	2,416,980		$	(1,213,046	)	$	(34,646	)	$	1,544,610

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

26 Weeks Ended August 2, 2025 and August 3, 2024


(In thousands, except per share amounts)	Shares Outstanding			Common Stock		Contributed Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Stockholders' Equity
Balance at February 3, 2024		196,936		$	2,496	$	360,378		$	2,214,159		$	(823,864	)	$	(16,410	)	$	1,736,759
Stock awards		—			—		27,062			—			—			—			27,062
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		(533	)		—		—			—			(13,290	)		—			(13,290	)
Reissuance of treasury stock		1,610			—		(35,166	)		10,996			25,280			—			1,110
Net income		—			—		—			145,014			—			—			145,014
Other comprehensive (loss)		—			—		—			—			—			(22,861	)		(22,861	)
Cash dividends declared and dividend equivalents ($0.250 per share)		—			—		1,204			(49,821	)		—			—			(48,617	)
Contributions from non-controlling interests		—			—		130			—			—			—			130
Balance at August 3, 2024		192,013		$	2,496	$	353,608		$	2,320,348		$	(942,815	)	$	(39,271	)	$	1,694,366

Balance at February 1, 2025		188,618		$	2,496	$	365,845		$	2,456,063		$	(1,001,154	)	$	(56,390	)	$	1,766,860
Stock awards		—			—		26,770			—			—			—			26,770
Repurchase of common stock as part of publicly announced programs, including excise tax		(2,000	)		—		—			—			(31,301	)		—			(31,301	)
Repurchase of common stock from employees		(656	)		—		—			—			(7,913	)		—			(7,913	)
Accelerated share repurchase, including excise tax		(18,416	)		—		—			—			(201,849	)		—			(201,849	)
Reissuance of treasury stock		1,790			—		(21,280	)		(7,622	)		29,171			—			269
Net income		—			—		—			12,734			—			—			12,734
Other comprehensive income		—			—		—			—			—			21,744			21,744
Cash dividends declared and dividend equivalents ($0.250 per share)		—			—		1,371			(44,195	)		—			—			(42,824	)
Contributions from non-controlling interests		—			—		120			—			—			—			120
Balance at August 2, 2025		169,336		$	2,496	$	372,826		$	2,416,980		$	(1,213,046	)	$	(34,646	)	$	1,544,610

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	13 Weeks Ended
	26 Weeks Ended
	May 3,			May 4,
	August 2,			August 3,
(In thousands)	2025			2024
Operating activities:
Net (loss) income	$	(64,899	)	$	67,752
Net income	$	12,734		$	145,014
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		53112,~~507~~416			55109,~~097~~764
Share-based compensation		2027,~~563~~070			2027,~~586~~362
Deferred income taxes		(822,~~748~~399	)		(78,~~109~~145	)
Loss on impairment of assets		15,063			—
Changes in assets and liabilities:
Accounts receivable		3325,~~826~~147			1614,~~729~~638
Merchandise inventory		(171,~~671~~694	)		(4033,~~078~~750	)
Operating lease assets		~~113~~198,~~020~~679			~~(91~~102,~~029~~006	)
Operating lease liabilities		(89170,~~268~~288	)		93(112,~~385~~528	)
Other assets		(3499,~~708~~709	)		(1680,~~344~~600	)
Accounts payable		(3233,~~741~~829	)		(427,~~788~~872	)
Accrued compensation and payroll taxes		(5564,~~376~~412	)		(8796,~~931~~761	)
Accrued and other liabilities		(~~3,240~~435	)		(618,~~381~~988	)
Net cash (used for) operating activities		(54,672	)		(38,111	)
Net cash (used for) provided by operating activities		(26,859	)		40,140
Investing activities:
Capital expenditures for property and equipment		(61132,~~606~~565	)		(3696,~~209~~945	)
Sale of available-for-sale investments		50,000			100,000
Other investing activities		~~(227~~8,452	)		(48,~~570~~384	)
Net cash (used for) provided by investing activities		(11,833	)		59,221
Net cash (used for) investing activities		(74,113	)		(5,329	)
Financing activities:
Accelerated share repurchase, including excise tax		(201,~~469~~849	)		—
Repurchase of common stock as part of publicly announced programs, including excise tax		(31,301	)		(34130,~~948~~941	)
Repurchase of common stock from employees		(7,~~893~~913	)		(13,~~242~~290	)
Proceeds from revolving line of credit		~~110~~485,~~000~~300			—
Net proceeds from stock options exercised		—			1,853
Principal payments on revolving line of credit		(282,300	)		—
Cash dividends paid		(21,657	)		(24,593	)
Net proceeds from stock options exercised		-			2,963
Other financing activities		(1,814	)		(3,284	)
Cash dividends paid		(42,824	)		(48,617	)
Net cash (used for) financing activities		(154,134	)		(74,214	)
Other financing activities		(1,814	)		(4,615	)
Effect of exchange rates changes on cash		(470	)		(472	)
Net cash (used for) financing activities		(82,701	)		(194,500	)
Net change in cash and cash equivalents		(221,109	)		(53,576	)
Effect of exchange rates changes on cash		1,491			(2,568	)
Net change in cash and cash equivalents		(182,182	)		(162,257	)
Cash and cash equivalents - beginning of period		308,962			354,094
Cash and cash equivalents - end of period	$	87126,~~853~~780		$	~~300~~191,~~518~~837

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

Index for Notes to the Consolidated Financial Statements


Note 1	Interim Financial Statements	14
Note 2	Summary of Significant Accounting Policies	14
Note 3	Cash and Cash Equivalents and Short-term Investments	20
Note 4	Fair Value Measurements	20
Note 5	Earnings per Share	22
Note 6	Property and Equipment, Net	22
Note 7	Goodwill and Intangible Assets, Net	23
Note 8	Long-Term Debt, Net	23
Note 9	Share-Based Payments	23
Note 10	Income Taxes	25
Note 11	Legal Proceedings	26
Note 12	Segment Reporting	26
Note 13	Impairment and Restructuring Charges	28

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 ~~May~~August 32, 2025 and ~~May~~August 43, 2024 and for the 13 and 26 week periods ended ~~May~~August 32, 2025 and ~~May~~August 43, 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 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") and Aerie® brands. We also operate Todd Snyder New York ("Todd Snyder"), a premium menswear brand, and Unsubscribed, which focuses on consciously made slow fashion.

~~AEO~~The ~~Inc.~~Company operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the ~~company~~Company operates a robust e-commerce business across its brands.

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, changes in import tariffs and other trade restrictions, 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 ~~May~~August 32, 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 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 February 3, 2024. "Fiscal 2019" refers to the 52-week period ended on February 1, 2020. "Fiscal 2016" refers to the 52-week period ended on January 28, 2017.

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 December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires increased transparency in tax disclosures, specifically by expanding requirements for rate reconciliation and income taxes paid information. Additionally, 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.

expanding requirements for rate reconciliation and income taxes paid information. Additionally, 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 regarding income taxes.

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.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses ("ASU 2025-05"), which amends the guidance under Topic 326. This amendment provides the option to use a practical expedient to assume balance sheet conditions remain unchanged when developing forecasts for estimating expected credit losses. The guidance is effective for fiscal years beginning after December 15, 2025. The Company plans to adopt ASU 2025-05 effective for Fiscal 2026 and does not expect a material impact to the Consolidated Financial Statements.

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 26 weeks ended ~~May~~August 32, 2025, an unrealized gain of $147 million and $22 million, respectively, was included in other comprehensive 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.

Refer 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.

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 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 ~~May~~August 32, 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 there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected.

When the Company closes, remodels, or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense.

Refer to Note 6. , Property and Equipment, Net to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note 13. , Impairment and Restructuring Charges, to the Consolidated Financial Statements for additional information regarding impairment charges for the 1326 weeks ended ~~May~~August 32, 2025. There were no long-lived asset impairment charges recorded during the 13 weeks ended ~~May~~August 42, 2025 or during the 13 and 26 weeks ended August 3, 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 1, 2025. No indicators of impairment were present during the 13 weeks ended May 3, 2025 or May 4, 2024.~~

1516

of February 1, 2025. No indicators of impairment were present during the 13 and 26 weeks ended August 2, 2025 or August 3, 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. No definite-lived intangible asset impairment charges were recorded during the 13 and 26 weeks ended ~~May~~August 32, 2025 or ~~May~~August 43, 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 (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.

1617

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.

1718

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

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.

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.

1819

Interest Expense (Income) ~~Expense~~, Net

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

Other (Income), Net

Other (income), net consists primarily of foreign currency fluctuations and changes in other non-operating items. Non-controlling interest was not material for any period presented and is included within other (income), net.

Segment Information

The Company has identified two operating segments (American Eagle and Aerie brand) that also represent our reportable segments and reflect 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 disclosures they have been included in the Corporate and Other 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)	~~May~~August 32, 2025		February 1, 2025		~~May~~August 43, 2024
Cash and cash equivalents:
Cash	$	85122,~~200~~507	$	150,053	$	~~110~~187,~~792~~592
Interest bearing deposits	$	24,~~653~~273	$	158,909	$	~~189~~4,~~726~~245
Total cash and cash equivalents	$	87126,~~853~~780	$	308,962	$	~~300~~191,~~518~~837
Short-term investments:
Certificates of deposits	$	-	$	50,000	$	-
Total short-term investments	$	-	$	50,000	$	-
Total cash and short-term investments	$	87126,~~853~~780	$	358,962	$	~~300~~191,~~518~~837

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.

1920

Fair Value Measurements at May 3, 2025

Fair Value Measurements at August 2, 2025

(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

85122,~~200~~507

Interest bearing deposits

24,~~653~~273

Total cash and cash equivalents

87126,~~853~~780

Long-Term Debt

As of ~~May~~August 32, 2025, the fair value of the Company's $~~110~~203.0 million in outstanding borrowings under its Credit Facility approximated the carrying value. As of ~~May~~August 43, 2024, there were no outstanding 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 1326 weeks ended ~~May~~August 32, 2025, the Company recorded asset impairment charges of $10.4 million related to operating lease ROU assets and $4.9 million related to fixed assets. These assets were adjusted to their fair value and the loss on impairment was recorded within impairment and restructuring charges in the Consolidated Statements of Operations for the 1326 weeks ended ~~May~~August 32, 2025. There were no long-lived asset impairment charges recorded during the 13 weeks ended ~~May~~August 42, 2025 or during the 13 and 26 weeks ended August 3, 2024. Refer to Note 13, Impairment and Restructuring Charges to the Consolidated Financial Statements for additional information regarding impairment and restructuring charges.

The fair value of the Company's ROU assets was based upon market rent assumptions.

The Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. The Company last performed an annual goodwill impairment test using Level 3 inputs as defined in ASC 820 as of February 1, 2025.

No indicators of goodwill impairment were present during the 13 and 26 weeks ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024.

5. Earnings per Share (EPS)

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

	13 Weeks Ended				26 Weeks Ended
(In thousands)	~~May~~August 32, 2025		~~May~~August 43, 2024		August 2, 2025		August 3, 2024
Weighted average common shares outstanding:
Numerator:
Basic number of common shares outstanding:		179,548		196,429
Net income and numerator for basic EPS	$	77,633	$	77,264	$	12,734	$	145,014
Dilutive effect of stock options and non-vested restricted stock*		—		4,881
Numerator for diluted EPS	$	77,633	$	77,264	$	12,734	$	145,014
Diluted number of common shares outstanding		179,548		201,310
Denominator:
Anti-Dilutive Shares*		2,939		239
Denominator for basic EPS - weighted average shares		170,756		193,661		175,156		195,048
Add: Dilutive effect of stock options and non-vested restricted stock		903		4,096		1,326		4,358
Denominator for diluted EPS - adjusted weighted average shares		171,659		197,757		176,482		199,406
Anti-dilutive shares (1)		4,151		393		3,518		350

*(1) For ~~the~~all 13periods ~~weeks ended May 3~~presented, ~~2025, there were 1.8 million potentially~~ anti-dilutive ~~equity~~shares ~~awards~~relate ~~that~~to ~~were~~stock ~~excluded~~options ~~from diluted earnings per share calculation because the Company incurred a net loss for this period~~ and ~~their~~unvested ~~inclusion~~restricted ~~would be anti-dilutive~~stock.

Dilutive and anti-dilutive shares related to share-based compensation. Refer to Note 9, Share-Based Payments, to the Consolidated Financial Statements for additional information regarding share-based compensation.

20On 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. At final settlement on June 16, 2025, the Company received an additional 3.9 million shares. The cumulative repurchases under the ASR agreement totaled 18.4 million shares, in the aggregate, at an average price of $10.86. The aforementioned repurchased shares have been recorded as treasury stock.

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:

	May 3,			February 1,			May 4,
	August 2,			February 1,			August 3,
(In thousands)	2025			2025			2024
Property and equipment, at cost	$	2,~~585~~623,~~414~~140		$	2,571,285		$	2,~~437~~474,~~863~~484
Less: Accumulated depreciation and impairment		(1,~~819~~849,~~820~~268	)		(1,820,021	)		(1,~~734~~752,~~312~~291	)
Property and equipment, net	$	~~765~~773,~~594~~872		$	751,264		$	~~703~~722,~~551~~193

7. Goodwill and Intangible Assets, Net

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

	May 3,			February 1,			May 4,
	August 2,			February 1,			August 3,
(In thousands)	2025			2025			2024
Goodwill, gross (1)	$	269,~~019~~025		$	268,873		$	269,~~047~~007
Accumulated impairment (2)		(43,794	)		(43,794	)		(43,794	)
Goodwill, net	$	225,~~225~~231		$	225,079		$	225,~~253~~213

(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.

	May 3,			February 1,			May 4,
	August 2,			February 1,			August 3,
(In thousands)	2025			2025			2024
Intangible assets, gross	$	147,~~558~~765		$	147,356		$	147,~~234~~405
Accumulated amortization		(6566,~~476~~559	)		(64,374	)		(6162,~~523~~631	)
Accumulated impairment		(40,533	)		(40,533	)		(40,533	)
Intangible assets, net	$	4140,~~549~~674		$	42,449		$	4544,~~178~~241

8. Long-Term Debt, Net

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.

As of ~~May~~August 32, 2025, the Company was in compliance with the terms of the Credit Agreement and had $~~110~~203.0 million in outstanding borrowings and $12 million outstanding in stand-by letters of credit. As of ~~May~~August 43, 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.

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. The total interest expense related to the Credit Facility for the 13 and 26 weeks ended ~~May~~August 32, 2025 was $01.38 million and $2.1 million, respectively. There were no Credit Facility borrowings for the 13 and 26 weeks ended ~~May~~August 43, 2024.

9. Share-Based 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 26 weeks ended ~~May~~August 32, 2025 was $~~20.~~6.5 million ($155.80 million, net of tax) and $27.1 million ($20.6 million, net of tax), respectively, and for the 13 and 26 weeks ended ~~May~~August 43, 2024 was $~~20.~~6.8 million ($175.01 million, net of tax) and $27.4 million ($21.3 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 1326 weeks ended ~~May~~August 32, 2025 follows:

	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding - February 1, 2025		4,324		$	17.98
Granted		1,~~316~~343		$	12.6559
Exercised		-		$	-
Cancelled		(468	)	$	21.89
Outstanding - May 3, 2025		5,172		$	16.27		4.3		1,074
Outstanding - August 2, 2025		5,199		$	16.24		4.1		1,185
Vested and expected to vest - May 3, 2025		5,011		$	16.22		4.1		-
Vested and expected to vest - August 2, 2025		5,036		$	16.19		3.9		32
Exercisable - May 3, 2025 (1)		433		$	8.62		1.9		1,074
Exercisable - August 2, 2025 (1)		433		$	8.62		2.8		1,148

(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 ~~May~~August 32, 2025.

As of ~~May~~August 32, 2025, there was $1.2 million of unrecognized compensation expense for stock option awards that is expected to be recognized over a weighted average period of 2.53 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:

	13 Weeks Ended
	26 Weeks Ended
	May 3,			May 4,
	August 2,			August 3,
Black-Scholes Option Valuation Assumptions	2025			2024
Risk-free interest rate (1)		3.9	%		4.4	%
Dividend yield		3.5	%		1.9	%
Volatility factor (2)		47.5	%		55.4	%
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.

2224

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 ("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 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
	May 3, 2025					May 3, 2025
	August 2, 2025					August 2, 2025
(Shares in thousands)	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Non-vested - February 1, 2025		2,360		$	18.56		2,218		$	18.05
Granted		12,~~963~~063		$	12.6763		~~987~~1,058		$	14.5145
Vested		(1,~~187~~193	)	$	17.38		(563	)	$	19.69
Cancelled		(4094	)	$	1817.5545		(99254	)	$	1918.6959
Non-vested - May 3, 2025		3,096		$	15.28		2,543		$	16.25
Non-vested - August 2, 2025		3,136		$	15.14		2,459		$	16.07

As of ~~May~~August 32, 2025, there was $4338.85 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 2.43 years. There is $7.96 million of unrecognized compensation expense related to performance-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 2.20 years.

As of ~~May~~August 32, 2025, the Company had 7 million shares available for all equity grants under the Company's stockholder-approved equity incentive plan.

10. Income Taxes

~~The~~On ~~provision~~July ~~for~~4, ~~income~~2025, ~~taxes~~the isU.S. ~~based~~government onenacted ~~the~~tax ~~current~~legislation ~~estimate~~in ofH.R.1 ~~the~~Reconciliation ~~annual~~Act, ~~effective~~commonly ~~income~~referred ~~tax~~to ~~rate~~as ~~and~~the isOne ~~adjusted~~Big asBeautiful ~~necessary~~Bill ~~for~~Act ~~discrete~~(the ~~quarterly events~~“OBBBA”). The ~~effective~~OBBBA ~~income~~includes ~~tax~~significant ~~rate~~provisions ~~for~~including ~~the~~modifications 13to ~~weeks~~U.S. ~~ended~~taxation ~~May~~on 3foreign earnings, ~~2025~~the ~~was~~reinstating ~~23.3%~~of ~~compared~~one tohundred ~~18.0%~~percent ~~for~~bonus ~~the~~depreciation 13and ~~weeks~~the ~~ended~~repeal ~~May~~of 4,capitalization ~~2024~~of U.S. ~~The~~research ~~change~~and indevelopment ~~the~~expenditures, ~~effective~~reinstating ~~tax~~full ~~rate,~~expensing. asThe ~~compared~~legislation tohas ~~the~~multiple ~~prior~~effective ~~period~~dates, iswith ~~primarily~~certain ~~due~~provisions toeffective ~~share-based~~in ~~payments~~2025 and ~~tax~~others ~~audit~~implemented ~~adjustments~~in subsequent years.

The Company ~~records~~has ~~accrued~~accounted ~~interest~~for ~~and~~the ~~penalties~~estimated ~~related to unrecognized~~ tax ~~benefits~~implications inof ~~income tax expense, which were insignificant for~~ the 13OBBBA ~~weeks~~in ~~ended May 3, 2025, and $6.7 million for~~ the 13second ~~weeks~~quarter ~~ended~~of ~~May 4, 2024~~FY2025. The ~~Company~~impact ~~recognizes income tax liabilities related~~ to ~~unrecognized~~our ~~tax~~effective ~~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~~rate ~~did~~for ~~not~~both ~~change significantly during~~ the 13 and 26 weeks ended ~~May~~August 32, 2025, ~~and~~is ~~increased by approximately $14~~immaterial.2 ~~million~~As ~~during~~our ~~the~~assessment 13is ~~weeks~~based ~~ended~~on ~~May~~current 4estimates, ~~2024~~we ~~due~~will continue to ~~tax~~refine ~~audit~~our ~~adjustments.~~calculations ~~Over~~and evaluate the ~~next~~full ~~twelve~~impact ~~months,~~of the ~~Company~~OBBBA ~~believes~~on ~~that~~our itconsolidated isfinancial ~~reasonably~~statements. ~~possible~~Our ~~that~~estimates ~~unrecognized tax benefits~~ may ~~decrease~~be byadjusted ~~approximately~~as ~~$5.2~~more ~~million~~guidance ~~due to settlements, expiration of statute of limitations, or other changes in unrecognized tax benefits, which~~ is ~~expected~~released toaround ~~have~~OBBBA anand ~~immaterial~~as ~~impact~~additional oninformation ~~the~~become ~~annual effective tax rate~~available.

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 August 2, 2025 was 23.4% compared to 25.4% for the 13 weeks ended August 3, 2024. The change in the effective tax rate, as compared to the prior period, is primarily due to tax audit adjustments and foreign currency adjustments. The effective income tax rate for the 26 weeks ended August 2, 2025 was 23.9% compared to 22.1% for the 26 weeks ended August 3, 2024. The change in the effective tax rate, as compared to the prior period, is primarily due to 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 and 26 weeks ended August 2, 2025 and August 3, 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 the 13 weeks ended August 2, 2025 and August 3, 2024. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may

decrease by approximately $6.8 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

23The 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, as of the date of this Quarterly Report, 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.

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.

Unallocated corporate expenses are comprised of general and administrative costs that management does not attribute to any of our operating segments. These costs primarily relate to corporate administration, information and technology resources, finance and human resources functional and organizational costs, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects.

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (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 and 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.

Reportable segment information is presented in the following tables:

For the 13 weeks ended May 3, 2025 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
For the 13 weeks ended August 2, 2025 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	~~693~~800,~~865~~406	$	~~359~~429,~~788~~084	$	4361,~~970~~523		$	(87,~~024~~338	)	$	1,~~089~~283,~~599~~675
Cost of sales, including certain buying, occupancy and warehousing costs		~~455~~470,~~896~~860		~~261~~250,~~927~~525
Selling, general and administrative expenses		~~168~~170,~~329~~640		8289,~~643~~191
Depreciation and amortization		20,~~168~~718		14,~~170~~740
Total segment operating income	$	49138,~~472~~188	$	174,~~048~~628	$	(1310,~~169~~094	)	$	-		$	37202,~~351~~722
Unallocated corporate expenses												(~~105~~99,~~413~~637	)
Impairment and restructuring charges (1)											$	(17,119	)
Total operating income												103,085
Total operating (loss)												(85,181	)
Interest expense, net												1,919
Interest (income), net												(219	)
Other (income), net												(172	)
Other (income), net												(351	)
Income before income taxes											$	101,338
(Loss) before income taxes											$	(84,611	)

2426

(1) Refer to Note 13, Impairment and Restructuring Charges, to the Consolidated Financial Statements for additional information.


For the 13 weeks ended August 3, 2024 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	827,638	$	415,646	$	57,457		$	(9,683	)	$	1,291,058
Cost of sales, including certain buying, occupancy and warehousing costs		487,351		248,883
Selling, general and administrative expenses		177,274		82,239
Depreciation and amortization		18,124		14,884
Total segment operating income	$	144,889	$	69,640	$	(10,155	)	$	-		$	204,374
Unallocated corporate expenses												(103,265	)
Total operating income												101,109
Interest (income), net												(730	)
Other (income), net												(1,715	)
Income before income taxes											$	103,554

For the 13 weeks ended May 4, 2024 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
For the 26 weeks ended August 2, 2025 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	~~724~~1,~~744~~494,271	$	~~372~~788,~~652~~872	$	54105,~~984~~494		$	(815,~~513~~362	)	$	12,~~143~~373,~~867~~275
Cost of sales, including certain buying, occupancy and warehousing costs		~~408~~926,~~388~~755		~~217~~512,~~162~~451
Selling, general and administrative expenses		~~160~~338,~~195~~695		78172,~~909~~108
Depreciation and amortization		1740,~~576~~886		1528,~~254~~910
Total segment operating income	$	~~138~~187,~~585~~935	$	6175,~~327~~403	$	(1423,~~848~~264	)	$	-		$	~~185~~240,~~064~~074
Unallocated corporate expenses												(~~107~~205,~~228~~052	)
Total operating income												77,836
Impairment and restructuring charges (1)											$	(17,119	)
Interest (income), net												(3,439	)
Total operating income												17,903
Other (income), net												(1,396	)
Interest expense, net												1,700
Income before income taxes											$	82,671
Other (income), net												(523	)
Income before income taxes											$	16,726
(1) Refer to Note 13, Impairment and Restructuring Charges, to the Consolidated Financial Statements for additional information.
For the 26 weeks ended August 3, 2024 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	1,552,382	$	788,298	$	112,441		$	(18,196	)	$	2,434,925
Cost of sales, including certain buying, occupancy and warehousing costs		895,774		466,044
Selling, general and administrative expenses		337,435		161,148
Depreciation and amortization		35,700		30,139
Total segment operating income	$	283,473	$	130,967	$	(25,003	)	$	-		$	389,437
Unallocated corporate expenses												(210,493	)
Total operating income												178,944
Interest (income), net												(4,168	)
Other (income), net												(3,111	)
Income before income taxes											$	186,223

	13 Weeks Ended
	May 3,		May 4,
	August 2,		August 3,
	2025		2024
Capital Expenditures
American Eagle	$	1824,~~933~~577	$	1224,~~634~~087
Aerie	$	1722,~~925~~249	$	1115,~~741~~874
Other	$	109,~~173~~115	$	24,~~864~~593
General corporate expenditures	$	1415,~~575~~018	$	816,~~970~~182
Total Capital Expenditures	$	6170,~~606~~959	$	3660,~~209~~736


	26 Weeks Ended
	August 2,		August 3,
	2025		2024
Capital Expenditures
American Eagle	$	43,510	$	36,721
Aerie		40,174		27,616
Other		19,288		7,457
General corporate expenditures		29,593		25,151
Total Capital Expenditures	$	132,565	$	96,945

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 97% and 96%, respectively, of total net revenue for the 13 weeks and 26 weeks ended ~~May~~August 32, 2025.

The following table presents summarized geographical information:

	13 Weeks Ended				26 Weeks Ended
(In thousands)	~~May~~August 32, 2025		~~May~~August 43, 2024		August 2, 2025		August 3, 2024
Total net revenue:
United States	$	~~921~~1,~~512~~083,813	$	~~952~~1,~~685~~088,870	$	2,005,326	$	2,048,604
Foreign (1)		~~168~~199,~~087~~862		~~191~~202,~~182~~188		367,949		386,321
Total net revenue	$	1,~~089~~283,~~599~~675	$	1,~~143~~291,~~867~~058	$	2,373,275	$	2,434,925

(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 Weeks Ended
	August 2,			August 3,
		May 3,			May 4,
(In thousands)	2025			2024
(In thousands)		2025			2024
Long-lived assets, net:
Long-lived assets, net:
United States	$	2,204,998		$	1,717,538
United States		$	2,065,144		$	1,673,059
Foreign		173,331			158,009
Foreign			172,155			154,141
Total long-lived assets, net	$	2,378,329		$	1,875,547
Total long-lived assets, net		$	2,237,299		$	1,827,200

13. Impairment and Restructuring Charges

The following table represents impairment and restructuring charges. All amounts were recorded within impairment and restructuring on the Consolidated Statements of Operations during the 1326 weeks ended ~~May~~August 32, 2025. There were no impairment and restructuring charges recorded for the 13 weeks ended ~~May~~ 4August 2, 2025 or August 3, 2024 or for the 26 weeks ended August 3, 2024.

	13 Weeks Ended
	26 Weeks Ended
	May 3,
	August 2,
(In thousands)	2025
Long-lived asset impairment charges (1)	$	15,274
Employee severance (2)		1,845
Total impairment and restructuring charges	$	17,119

The following footnotes relate to impairment and restructuring charges recorded in the 1326 weeks ended ~~May~~August 32, 2025:

(1)

The Company recorded $15.3 million of asset impairment charges primarily related to closing two fulfillment centers as part of its supply chain network optimization project. Of this amount, $10.4 million of charges relate to ROU assets and $4.9 million relates to property and equipment.

(2)

The Company recorded $1.8 million of employee severance, primarily related to closing two fulfillment centers.

A rollforward of the restructuring liabilities recognized in the Consolidated Balance Sheet is as follows:

	13 Weeks Ended
	26 Weeks Ended
	May 3,
	August 2,
(In thousands)	2025
Accrued liability as of February 1, 2025	$	7,650
Add: Costs incurred, excluding non-cash charges	$	1,845
Less: Cash payments and adjustments		(37,~~968~~276	)
Accrued liability as of May 3, 2025	$	5,527
Accrued liability as of August 2, 2025	$	2,219

2629

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 2024, which can be found in Part II, Item 7 of our Fiscal 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 the Company has adopted or is currently evaluating prior to adoption, including the dates of adoption or expected dates of adoption, as applicable, and anticipated effects on the Company’s audited Consolidated Financial Statements, are included in Note 2, Summary of Significant Accounting Policies, 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, 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, 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.

2730

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.

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

During Fiscal 2024 and the 13 and 26 weeks ended ~~May~~August 32, 2025, our results were negatively impacted by macro-economic challenges and global inflationary pressures impacting consumer spending behavior, which constrained revenue and increased margin pressure to clear through excess spring and summer 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 2024 Form 10-K.

After a challenging spring season, second quarter demand increased as the quarter progressed. Top-line improvement, coupled with lower than expected promotional activity, enabled us to stabilize margins and deliver operating income slightly ahead of last year for the 13 weeks ended August 2, 2025.

In addition, recent changes in legislative and regulatory developments, including tariffs and other trade policies, have introduced additional uncertainty in the global economy. For example, in April 2025, the U.S. government imposed a new tariff and trade policy and has subsequently announced various updates to its tariff policy. The imposition of tariffs by the U.S. government, associated geopolitical tensions, including retaliatory tariffs by trading partners, and uncertainties regarding tariffs have and may further affect our margins and operations or could lead to further weakened business conditions for our industry. We continue to evaluate the impact of tariffs and other trade policies on our business.

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 2024 Form 10-K.

Omni-Channel Capabilities

AEO Inc. operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the company operates a robust e-commerce business across its brands.31

The Company operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the company operates a robust e-commerce business across its 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.

Results of Operations

Overview

~~The~~For ~~first quarter was a challenging period for our business. While~~ the ~~broader~~13 ~~macro~~weeks ~~environment~~ended ~~and~~August ~~cold spring weather presented challenges~~2, merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory. As a result, the operating loss reflects an inventory charge of $75 million related to a write-down of spring and summer merchandise, as well as higher than planned promotional activity in the quarter.2025:

•

~~Compared~~Total revenue decreased 1% from $1.291 billion to ~~the~~$1.284 ~~first~~billion, 13with ~~weeks~~American ofEagle ~~Fiscal~~revenue ~~2024:~~decreasing 3% year-over-year, and Aerie revenue increasing 3% year-over-year. American Eagle's comparable sales decreased 3% year-over-year, and Aerie's comparable sales increased 3% year-over-year.

•

~~Total~~Gross ~~revenue~~profit ~~decreased 5%~~of to $~~1.090~~500 ~~billion~~million ~~from~~increased ~~$1.144~~by ~~billion,~~30 ~~with~~basis ~~American~~points ~~Eagle revenue decreasing 4%~~ year-over-year, ~~and~~to ~~Aerie revenue decreasing 3% year-over-year~~38. ~~American Eagle's comparable sales decreased 2~~9% ~~year-over-year,~~as ~~and~~a ~~Aerie's~~percentage ~~comparable~~of ~~sales~~total ~~decreased 4% year-over-year~~revenue.

•

~~Gross~~Operating ~~profit~~income ~~decreased~~increased 312% to $~~322~~103 million ~~year-over-year,~~ and ~~decreased~~increased by 20 basis points to 298.60% as a percentage of total revenue, compared to $101 million last year.

•

~~Operating~~Diluted ~~loss~~earnings ofper share increased to $850.45 ~~million~~for the 13 weeks ended August 2, 2025 compared to $770.39 ~~million~~for ~~operating~~the ~~income~~13 ~~last~~weeks ~~year~~ended August 3, 2024. ~~Adjusted~~Year-to-date, ~~operating~~the ~~loss~~company ofhas completed $68231 million, ~~this~~or ~~year~~20.4 ~~compared~~million toshares, ~~operating~~in ~~income~~share ofrepurchases, ~~$78~~which ~~million~~is ~~last~~approximately ~~year~~a 10% reduction in diluted shares outstanding.

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 the percentage relationship to total net revenue of the listed line items included in our Consolidated Statements of Operations:

	13 Weeks Ended
	May 3, 2025							May 4, 2024
	August 2, 2025							August 3, 2024
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Total net revenue	$	1,~~089~~283,~~599~~675		100.0			%	$	1,~~143~~291,~~867~~058		100.0			%
Cost of sales, including certain buying, occupancy and warehouse expenses		~~767~~783,~~178~~713			7061.41				~~679~~792,~~628~~162			5961.4
Gross profit		~~322~~499,~~421~~962			2938.69				~~464~~498,~~239~~896			4038.6
Selling, general and administrative expenses		~~338~~342,~~786~~211			3126.17				~~333~~345,~~493~~313			2926.27
Impairment and restructuring charges (1)		17,119			1.6				-			0.0
Depreciation and amortization expense		54,666			4.2				52,474			4.1
Depreciation and amortization expense		51,697			4.7				52,910			4.6
Operating income		103,085			8.0				101,109			7.8
Operating (loss) income(1)		(85,181	)		(7.8	)			77,836			6.8
Interest expense (income), net		1,919			0.1				(730	)		(0.1	)
Interest (income), net		(219	)		(0.0	)			(3,439	)		(0.3	)
Other (income), net		(172	)		(0.0	)			(1,715	)		(0.1	)
Other (income), net		(351	)		(0.0	)			(1,396	)		(0.1	)
Income before income taxes	$	101,338			7.9			$	103,554			8.0
(Loss) income before income taxes	$	(84,611	)		(7.8	)		$	82,671			7.2
Provision for income taxes		23,705			1.9				26,290			2.0
(Benefit) provision for income taxes		(19,712	)		(1.8	)			14,919			1.3
Net income	$	77,633			6.0		%	$	77,264			6.0		%
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.

~~The following table shows our consolidated store data for the 13 weeks ended May 3, 2025 and May 4, 2024:~~32

	13 Weeks Ended
	26 Weeks Ended
	May 3,				May 4,
	August 2, 2025							August 3, 2024
	2025				2024
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Number of stores:
Total net revenue	$	2,373,275		100.0			%	$	2,434,925		100.0			%
Beginning of period		1,172				1,182
Cost of sales, including certain buying, occupancy and warehouse expenses		1,550,892			65.3				1,471,791			60.5
Opened		6				4
Gross profit		822,383			34.7				963,134			39.5
Closed		(2	)			(13	)
Selling, general and administrative expenses		680,998			28.7				678,806			27.9
End of period		1,176				1,173
Impairment & restructuring charges(1)		17,119			0.7				-			0.0
Total gross square feet at end of period (in '000)		7,232				7,221
Depreciation and amortization expense		106,363			4.5				105,384			4.3
International licensed retail stores at end of period (1)		363				315
Operating income(1)		17,903			0.8				178,944			7.3
Interest expense (income), net		1,700			0.1				(4,168	)		(0.2	)
Other (income), net		(523	)		(0.0	)			(3,111	)		(0.1	)
Income before income taxes	$	16,726			0.7			$	186,223			7.6
Provision for income taxes		3,992			0.2				41,209			1.6
Net income(1)	$	12,734			0.5		%	$	145,014			6.0		%

29(1) Refer to "Non-GAAP Information" below for non-GAAP or adjusted financial measures.

The following table shows our consolidated store data for the 13 and 26 weeks ended August 2, 2025 and August 3, 2024:


	13 Weeks Ended						26 Weeks Ended
	August 2,			August 3,			August 2,			August 3,
	2025			2024			2025			2024
Number of stores:
Beginning of period		1,176			1,173			1,172			1,182
Opened		12			14			18			18
Closed		(3	)		(9	)		(5	)		(22	)
End of period		1,185			1,178			1,185			1,178

Total gross square feet at end of period (in '000)		7,266			7,240			7,266			7,240
International licensed retail stores at end of period (1)		365			313			365			313

(1)

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

As of ~~May~~August 32, 2025, we operated ~~828~~829 American Eagle retail stores, consisting of ~~182~~183 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~~325 Aerie stand-alone stores (including 4243 OFFLINE™ stand-alone stores and 4046 OFFLINE™ side-by-side locations), and AEO Direct. Additionally, there were 2023 Todd Snyder stand-alone locations and ~~seven~~eight Unsubscribed locations.

Comparison of the 13 weeks ended ~~May~~August 32, 2025 to the 13 weeks ended ~~May~~August 43, 2024

Total Net Revenue

Total net revenue decreased 51% for the 13 weeks ended ~~May~~August 32, 2025 to $1.~~090~~284 billion, compared to $1.~~144~~291 billion last year. ~~This~~Store ~~included a one point headwind from adverse currency~~ and ~~another~~digital ~~point from moving our Hong Kong operations to a license model in Fiscal 2024. Digital~~ revenue ~~decreased~~both ~~2%, and store revenue~~ decreased 61%. Total comparable sales decreased by 31%, compared to a 74% increase last year. Traffic ~~was~~and units were up across brands and channels, with declines in average unit retail price ~~and conversion~~.

	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)	%

American 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)
	August 2, 2025			August 3, 2024
	(In thousands)	(Percentage)		(In thousands)	(Percentage)		(In thousands)	(Percentage)
American Eagle	$800,406	62.4	%	$827,638	64.1	%	$(27,232)	(3)	%
Aerie	429,084	33.4		415,646	32.2		13,438	3
Other	61,523	4.8		57,457	4.5		4,066	7
Intersegment Eliminations	(7,338)	(0.6)		(9,683)	(0.8)		2,345	(24)
Total net revenue	$1,283,675	100.0	%	$1,291,058	100.0	%	$(7,383)	(1)	%

~~Aerie~~American Eagle. The decrease in net revenue was driven by ~~decreased~~lower ~~transactions~~average ~~across~~unit ~~channels~~retail price, leading to lower transaction value, partially offset by increases in traffic and transactions. ~~Aerie~~American Eagle comparable sales decreased 43%.

~~Other~~Aerie. The ~~decrease~~increase in net revenue was ~~primarily~~driven ~~attributable~~by toincreased $6traffic ~~million~~and oftransactions ~~lower~~across ~~revenue~~channels, ~~from~~as ~~Todd~~well ~~Snyder,~~as ~~and~~increased $5units ~~million~~per oftransaction, ~~lower~~partially ~~revenue~~offset ~~from~~by ~~Quiet~~lower ~~Platforms~~average ~~due~~unit toretail ~~our~~price. ~~change~~Aerie incomparable ~~strategy~~sales ~~for~~increased ~~this business~~3%.

Other. The increase in net revenue was primarily attributable to higher revenue from Todd Snyder and Unsubscribed.

Gross Profit

13 Weeks Ended

Increase/(Decrease)

May 3, 2025

May 4, 2024

August 2, 2025

August 3, 2024

(In thousands)

(Percentage)

Gross Profit

~~322~~499,~~421~~962

~~464~~498,~~239~~896

~~(141~~1,~~818~~066

)

~~(31~~0

)

Gross Margin

2938.69

4038.6

~~-1100~~30 basis points

~~The~~Gross ~~31% decrease in gross~~ profit was ~~primarily~~flat ~~driven~~year-over-year, bywith athe ~~decrease~~decline ~~of $66 million~~ in ~~merchandise~~revenue ~~margin~~offset ~~due~~by to lower ~~sales and increased~~ promotional activity~~, as well as a $75 million inventory charge related to a write-down of spring and summer merchandise~~.

During the 13 weeks ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024, $72.06 million and $62.65 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)
		May 3, 2025			May 4, 2024
		August 2, 2025			August 3, 2024
		(In thousands)						(In thousands)			(Percentage)
Selling, general and administrative expenses		$	~~338~~342,~~786~~211		$	~~333~~345,~~493~~313		$	5(3,~~293~~102	)		2(1	)	%
Selling, general and administrative expenses as a percentage of net revenue			3126.17	%		2926.27	%	~~-190~~0 basis points

The ~~increase~~decrease in SG&A expense was primarily driven by lower compensation costs as a $7result ~~million~~of ~~increase~~recent restructuring and lower incentive costs, partially offset by investments in advertising. ~~year-over-year,~~The ~~with~~balance aof ~~partial~~expense ~~offset~~categories ~~from~~were ~~lower~~flat, ~~compensation~~reflecting ongoing cost management initiatives.

There was $133.69 million and $144.03 million of share-based payment expense included in SG&A expenses for the 13 weeks ended ~~May~~August 32, 2025 and ~~May~~August 43, 2024, respectively, comprised of both time and performance-based awards.

~~Impairment and Restructuring~~34

	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

During the 13 weeks ended May 3, 2025, we recorded $17.1 million of impairment and restructuring. We recorded $10.4 million of impairment related to ROU assets, $4.9 million related to fixed assets, and $1.8 million of employee severance.

Depreciation and Amortization Expense

	13 Weeks Ended							Increase/(Decrease)
		May 3, 2025			May 4, 2024
		August 2, 2025			August 3, 2024
		(In thousands)						(In thousands)			(Percentage)
American Eagle		$	20,~~168~~718		$	1718,~~576~~124		$	2,~~592~~594			1514		%
Aerie			14,~~170~~740			1514,~~254~~884			(~~1,084~~144	)		(71	)
Other			1719,~~359~~208			2019,~~080~~466			(~~2,721~~258	)		(141	)
Total depreciation and amortization expense		$	5154,~~697~~666		$	52,~~910~~474		$	(12,~~213~~192	)		(24	)	%
Total depreciation and amortization expense as a percentage of net revenue			4.72	%		4.61	%	-10 basis points

~~Operating~~The ~~(Loss)~~increase ~~Income~~in expense was primarily driven by new and renovated American Eagle stores.

	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)	%

Operating Income


	13 Weeks Ended						Increase/(Decrease)
	August 2, 2025			August 3, 2024
	(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage)
Operating income
American Eagle	$138,188	10.8	%	$144,889	11.2	%	$(6,701)	(5)	%
Aerie	74,628	5.8		69,640	5.4		4,988	7
Other	(10,094)	(0.8)		(10,155)	(0.8)		61	(1)
General corporate expenses	(99,637)			(103,265)			3,628
Total Operating Income	$103,085			$101,109			$1,976	2	%
Total Operating Income as a percentage of net revenue	8.0	%		7.8	%		20 basis points

The ~~decrease~~increase in operating ~~(loss)~~ income was primarily driven by ~~lower~~higher gross profit, and anlower ~~increase~~SG&A inexpenses, ~~impairment~~partially offset by increased depreciation and ~~restructuring~~amortization ~~charges~~expense, all of which are explained in detail above.

American Eagle. The decrease was primarily the result of aan $7811 million decrease in gross profit driven by decreased merchandise margin on the $3127 million, or 43%, decline in total net revenue, ~~and~~partially ~~increased~~offset ~~promotional~~by ~~activity, as well as~~ a $316 million ~~inventory~~reduction ~~write-down~~in ~~of spring and summer merchandise.~~ SG&A expenses ~~and depreciation and amortization also increased a combined $11 million year-over-year~~.

Aerie. The ~~decrease~~increase was primarily the result of a $5812 million ~~decrease~~increase in gross profit driven by ~~decreased~~incremental merchandise margin on the $13 million, or 3%, ~~decline~~increase in total net revenue ~~and increased promotional activity~~, aspartially ~~well~~offset asby a $447 million ~~inventory~~increase ~~write-down~~in ofSG&A ~~spring~~expenses, primarily related to investments in advertising and ~~summer~~variable ~~merchandise~~selling expenses.

~~Interest~~General ~~(Income),~~Corporate ~~net~~Expenses. The decrease was primarily driven by a reduction in compensation costs as a result of recent restructuring and lower incentive costs.

	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 Expense (Income), net

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


	13 Weeks Ended								Increase/(Decrease)
	August 2, 2025				August 3, 2024
		(In thousands)							(In thousands)			(Percentage)
Interest expense (income), net		$	1,919		$	(730	)		$	(2,649	)		363	%
Interest expense (income) as a percentage of net revenue			0.1	%		(0.1	)	%	-20 basis points

The increase in interest expense (income), net is primarily related to $2 million in interest expense on increased borrowings year-over-year.

Other (Income), net

13 Weeks Ended

Increase/(Decrease)

May 3, 2025

May 4, 2024

August 2, 2025

August 3, 2024

(In thousands)

(Percentage)

Other (income), net

$(~~351~~172)

$(1,~~396~~715)

$(1,~~045~~543)

(7590)

Other (income), net as a percentage of net revenue

(0.0)

(0.1)

-10 basis points

~~(Benefit)~~ Provision for Income Taxes

		13 Weeks Ended								Increase/(Decrease)
	May 3, 2025					May 4, 2024
	August 2, 2025					August 3, 2024
		(In thousands)								(In thousands)			(Percentage)
(Benefit) provision for income taxes		$	(19,712	)		$	14,919			$	(34,631	)		(232	)	%
Provision for income taxes		$	23,705			$	26,290			$	(2,585	)		(10	)	%
(Benefit) provision for incomes taxes as a percentage of net revenue			(1.8	)	%		1.3	%		-310 basis points
Provision for incomes taxes as a percentage of net revenue			1.9		%		2.0	%		10 basis points
Effective tax rate			23.34		%		1825.04		%

The ~~(benefit)~~ 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 ~~May~~August 32, 2025 was 23.34% compared to 1825.04% for the 13 weeks ended ~~May~~August 43, 2024. The change in the effective tax rate, as compared to the prior period, is primarily due to ~~share-based~~tax ~~payments~~audit adjustments and ~~tax~~foreign ~~audit~~currency adjustments.

32Net Income

Net (Loss) Income


		13 Weeks Ended						Increase/(Decrease)
	August 2, 2025				August 3, 2024
		(In thousands)						(In thousands)		(Percentage)
Net income		$	77,633		$	77,264		$	368		0	%
Net income as a percentage of net revenue			6.0	%		6.0	%	0 basis points

		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

Net income per diluted share of $0.45 increased for the 13 weeks ended August 2, 2025, compared to $0.39 for the 13 weeks ended August 3, 2024. The increase in net income was attributable to the factors noted above. The increase in net income per diluted share was due to a reduction in diluted shares outstanding as a result of recent share repurchases.

~~Net~~Comparison ~~loss per diluted share~~ of ~~($0.36) decreased for~~ the 1326 weeks ended ~~May~~August 32, 2025, ~~compared~~ to ~~net income per diluted share of $0.34, for~~ the 1326 weeks ended ~~May~~August 43, 2024~~. The decrease in net income was attributable to the factors noted above.~~

Total Net Revenue

Total net revenue decreased 3% to $2.373 billion for the 26 weeks ended August 2, 2025, compared to $2.435 billion last year. Digital revenue decreased 1%, and store revenue decreased 3%. Total comparable sales decreased by 2%, compared to a 5% increase last year.


	26 Weeks Ended														Increase/(Decrease)
	August 2, 2025							August 3, 2024
	(In thousands)			(Percentage)				(In thousands)			(Percentage)				(In thousands)			(Percentage)
American Eagle	$	1,494,271			63.0		%	$	1,552,382			63.8		%	$	(58,111	)		(4	)	%
Aerie		788,872			33.2				788,298			32.4				574			0
Other		105,494			4.4				112,441			4.6				(6,947	)		(6	)
Intersegment Eliminations		(15,362	)		(0.6	)			(18,196	)		(0.7	)			2,834			(16	)
Total net revenue	$	2,373,275			100.0		%	$	2,434,925			100.0		%	$	(61,650	)		(3	)	%

American Eagle. The decrease in net revenue was driven by lower average unit retail, partially offset by increased units per transaction. American Eagle comparable sales decreased 3%.

Aerie. Net revenue was flat year-over-year, with lower average unit retail price leading to lower transaction value, offset by 11 net new store openings year-over-year.

Other. The decrease in net revenue was primarily attributable to planned lower revenue from Quiet Platforms due to our change in strategy for this business.

Gross Profit


	26 Weeks Ended						Increase/(Decrease)
	August 2, 2025			August 3, 2024
	(In thousands)						(In thousands)			(Percentage)
Gross Profit	$	822,383		$	963,134		$	(140,751	)		(15	)	%
Gross Margin		34.7	%		39.5	%	-480 basis points

The 15% decrease in gross profit was primarily driven by a decrease of $123 million in merchandise margin year over year due to lower sales and increased promotional activity.

During the 26 weeks ended August 2, 2025 and August 3, 2024, $9.5 million and $9.1 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


	26 Weeks Ended							Increase/(Decrease)
		August 2, 2025			August 3, 2024
		(In thousands)						(In thousands)		(Percentage)
Selling, general and administrative expenses		$	680,998		$	678,806		$	2,192		0	%
Selling, general and administrative expenses as a percentage of net revenue			28.7	%		27.9	%	-80 basis points

The increase in SG&A expense was primarily related to an increase in advertising year-over-year, partially offset by lower compensation costs.

There was $17.5 million and $18.3 million of share-based payment expense included in SG&A expenses for the 26 week periods ended August 2, 2025 and August 3, 2024, respectively, comprised of both time and performance-based awards.

Impairment & Restructuring Charges


	26 Weeks Ended								Increase/(Decrease)
	August 2, 2025				August 3, 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			0.7	%			0.0	%	-70 basis points

During the 26 weeks ended August 2, 2025, we recorded $17.1 million of impairment and restructuring charges. We recorded $10.4 million of impairment related to ROU assets, $4.9 million related to fixed assets, and $1.8 million of employee severance.

Depreciation and Amortization Expense


	26 Weeks Ended							Increase/(Decrease)
		August 2, 2025			August 3, 2024
		(In thousands)						(In thousands)			(Percentage)
American Eagle		$	40,886		$	35,700		$	5,186			15		%
Aerie			28,910			30,139			(1,229	)		(4	)
Other			36,567			39,545			(2,978	)		(8	)
Total depreciation and amortization expense		$	106,363		$	105,384		$	979			1		%
Total depreciation and amortization expense as a percentage of net revenue			4.5	%		4.3	%	-20 basis points

The increase in expense was primarily driven by new and renovated American Eagle stores.

Operating Income


	26 Weeks Ended														Increase/(Decrease)
	August 2, 2025							August 3, 2024
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage)
Operating income
American Eagle	$	187,935			14.6		%	$	283,473			11.6		%	$	(95,538	)		(34	)	%
Aerie	$	75,403			5.9				130,967			5.4				(55,564	)		(42	)
Other	$	(23,264	)		(1.8	)			(25,003	)		(1.0	)			1,739			(7	)
General corporate expenses	$	(205,052	)						(210,493	)						5,441
Impairment and restructuring charges	$	(17,119	)						-							(17,119	)
Total Operating Income	$	17,903						$	178,944						$	(161,041	)		(90	)	%
Total Operating Income as a percentage of income		0.8		%					7.3		%				-650 basis points

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

American Eagle. The decrease was primarily the result of a $89 million decline in gross profit driven by lower merchandise margin on the $58 million, or 4%, decline in total net revenue and increased promotional activity. Depreciation and amortization expense also increased $5 million primarily as a result of new and renovated stores.

Aerie. The decrease was primarily the result of a $46 million decline in gross profit driven by lower merchandise margin due to increased promotional activity and product cost. Selling, general, and administrative expenses also increased $11 million year-over-year, primarily due to investments in advertising and increased store compensation cost.

Interest Expense (Income), net


	26 Weeks Ended								Increase/(Decrease)
	August 2, 2025				August 3, 2024
		(In thousands)							(In thousands)			(Percentage)
Interest expense (income), net		$	1,700		$	(4,168	)		$	(5,868	)		141	%
Interest expense (income) as a percentage of net revenue			0.1	%		(0.2	)	%	-30 basis points

The increase in interest expense (income), net during the 26 weeks ended August 2, 2025 was primarily attributable to a $3 million increase in interest expense as a result of borrowings on our Credit Facility, as well as a $3 million reduction in interest income as a result of lower cash balances.

Other (Income), net


	26 Weeks Ended									Increase/(Decrease)
	August 2, 2025					August 3, 2024
		(In thousands)								(In thousands)			(Percentage)
Other (income), net		$	(523	)		$	(3,111	)		$	(2,588	)		(83	)	%
Other (income), net as a percentage of net revenue			(0.0	)	%		(0.1	)	%	-10 basis points

Provision for Income Taxes


		26 Weeks Ended							Increase/(Decrease)
	August 2, 2025				August 3, 2024
		(In thousands)							(In thousands)			(Percentage)
Provision for income taxes		$	3,992		$	41,209			$	(37,217	)		(90	)	%
Provision for incomes taxes as a percentage of net revenue			0.2	%		1.6	%		140 basis points

Effective tax rate			23.9	%		22.1		%

Net Income


		26 Weeks Ended						Increase/(Decrease)
	August 2, 2025				August 3, 2024
		(In thousands)						(In thousands)			(Percentage)
Net income		$	12,734		$	145,014		$	(132,280	)		(91	)	%
Net income as a percentage of net revenue			0.5	%		6.0	%	-550 basis points

Net income per diluted share decreased to $0.07 per diluted share for the 26 weeks ended August 2, 2025, compared to $0.73 per diluted share for the 26 weeks ended August 3, 2024. The decrease in net income was attributable to the factors noted above. The reduction in net income per diluted share was partially offset by a reduction in diluted shares outstanding as a result of recent share repurchases.

Non-GAAP Information

The results of operations section above includes operating 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 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	)	%

standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance when reviewed in conjunction with our GAAP Consolidated Financial Statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. 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)
	26 Weeks Ended
	August 2, 2025
	Operating income			Provision for income taxes		Net income			Earnings per Diluted Share
GAAP Basis	$	17,903		$	3,992	$	12,734		$	0.07
% of Revenue		0.8	%				0.5	%

Add: Impairment and restructuring charges (1)		17,119					13,130			0.08

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

Non-GAAP Basis	$	35,022		$	7,980	$	25,864		$	0.15
% of Revenue		1.5	%

Filing Compare · AMERICAN EAGLE OUTFITTERS INC