UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended November 1, 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: 169,512,006 shares of Common Stock were outstanding at December 4, 2025.

AMERICAN EAGLE OUTFITTERS, INC.

TABLE OF CONTENTS


		Page Number
	PART I - FINANCIAL INFORMATION

	Forward Looking Statements	4

Item 1.	Financial Statements	7
	Consolidated Balance Sheets: November 1, 2025, February 1, 2025, and November 2, 2024	7
	Consolidated Statements of Operations: 13 and 39 weeks ended November 1, 2025 and November 2, 2024	8
	Consolidated Statements of Comprehensive Income: 13 and 39 weeks ended November 1, 2025 and November 2, 2024	9
	Consolidated Statements of Stockholders' Equity: 13 and 39 weeks ended November 1, 2025 and November 2, 2024	10
	Consolidated Statements of Cash Flows: 39 weeks ended November 1, 2025 and November 2, 2024	12
	Notes to Consolidated Financial Statements	14
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44
Item 4.	Controls and Procedures	44

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	N/A
Item 4.	Mine Safety Disclosures	N/A
Item 5.	Other Information	45
Item 6.	Exhibits	46

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 45 to 50 Aerie and OFFLINE store fronts, 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 35 to 40 American Eagle stores and 5 to 10 Aerie 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, the potential for a trade war, 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, or changes or uncertainties relating to, tariffs, all of which

could impact our suppliers' 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, or changes or uncertainties relating to, tariffs, all of which 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 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


	November 1,			February 1,			November 2,
(In thousands, except per share amounts)	2025			2025			2024
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	112,830		$	308,962		$	160,195
Short-term investments		—			50,000			—
Merchandise inventory		891,232			636,655			804,256
Accounts receivable, net		245,335			262,365			214,114
Prepaid expenses		125,716			76,088			118,773
Other current assets		21,917			20,161			38,810
Total current assets		1,397,030			1,354,231			1,336,148
Operating lease right-of-use assets		1,570,936			1,295,400			1,237,741
Property and equipment, at cost, net of accumulated depreciation		797,154			751,264			745,988
Goodwill, net		225,184			225,079			225,196
Non-current deferred income taxes		46,747			68,158			88,092
Intangible assets, net		39,756			42,449			43,371
Other assets		113,051			94,194			59,596
Total assets	$	4,189,858		$	3,830,775		$	3,736,132
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	305,268		$	280,712		$	283,471
Current portion of operating lease liabilities		319,332			313,034			293,006
Accrued compensation and payroll taxes		71,575			113,388			90,289
Unredeemed gift cards and gift certificates		55,891			70,094			50,161
Accrued income and other taxes		28,847			30,677			38,468
Other current liabilities and accrued expenses		73,887			74,751			95,620
Total current liabilities		854,800			882,656			851,015
Non-current liabilities:
Non-current operating lease liabilities		1,441,904			1,133,296			1,098,197
Long-term debt, net		210,000			—			—
Other non-current liabilities		57,814			47,963			40,322
Total non-current liabilities		1,709,718			1,181,259			1,138,519
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; 169,512, 188,618 and 192,102 shares outstanding, respectively		2,496			2,496			2,496
Contributed capital		378,470			365,845			359,348
Accumulated other comprehensive loss		(31,611	)		(56,390	)		(49,872	)
Retained earnings		2,486,281			2,456,063			2,376,077
Treasury stock, at cost, 80,054, 60,948 and 57,464 shares, respectively		(1,210,296	)		(1,001,154	)		(941,451	)
Total stockholders’ equity		1,625,340			1,766,860			1,746,598
Total liabilities and stockholders’ equity	$	4,189,858		$	3,830,775		$	3,736,132

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	13 Weeks Ended						39 Weeks Ended
	November 1,			November 2,			November 1,			November 2,
(In thousands, except per share amounts)	2025			2024			2025			2024
Total net revenue	$	1,362,701		$	1,289,094		$	3,735,976		$	3,724,019
Cost of sales, including certain buying, occupancy and warehousing expenses		810,824			762,470			2,361,716			2,234,260
Gross profit		551,877			526,624			1,374,260			1,489,759
Selling, general and administrative expenses		386,340			351,380			1,067,338			1,030,186
Impairment and restructuring charges		—			17,561			17,119			17,561
Depreciation and amortization expense		52,963			51,594			159,326			156,978
Operating income	$	112,574		$	106,089		$	130,477		$	285,034
Interest expense (income), net		2,144			(1,246	)		3,844			(5,414	)
Other (income), net		(14,152	)		(895	)		(14,675	)		(4,006	)
Income before income taxes		124,582			108,230			141,308			294,454
Provision for income taxes		33,238			28,211			37,230			69,420
Net income	$	91,344		$	80,019		$	104,078		$	225,034

Basic net income per common share	$	0.54		$	0.42		$	0.60		$	1.16
Diluted net income per common share	$	0.53		$	0.41		$	0.59		$	1.14

Weighted average common shares outstanding - basic		168,925			191,630			173,087			193,908
Weighted average common shares outstanding - diluted		172,860			195,782			175,789			198,201

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	13 Weeks Ended					39 Weeks Ended
	November 1,		November 2,			November 1,		November 2,
(In thousands)	2025		2024			2025		2024
Net income	$	91,344	$	80,019		$	104,078	$	225,034
Other comprehensive gain (loss)
Foreign currency translation gain (loss)		3,035		(10,601	)		24,779		(33,462	)
Other comprehensive gain (loss)		3,035		(10,601	)		24,779		(33,462	)
Comprehensive income	$	94,379	$	69,418		$	128,857	$	191,572

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

13 Weeks Ended November 1, 2025 and November 2, 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 August 3, 2024		192,013		$	2,496	$	353,608		$	2,320,348		$	(942,815	)	$	(39,271	)	$	1,694,366
Stock awards		—			—		5,860			—			—			—			5,860
Repurchase of common stock as part of publicly announced programs, including excise tax		—			—		—			—			—			—			—
Repurchase of common stock from employees		(17	)		—		—			—			(355	)		—			(355	)
Reissuance of treasury stock		106			—		(1,007	)		296			1,719			—			1,008
Net income		—			—		—			80,019			—			—			80,019
Other comprehensive (loss)		—			—		—			—			—			(10,601	)		(10,601	)
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		575			(24,586	)		—			—			(24,011	)
Contributions from non-controlling interests		—			—		312			—			—			—			312
Balance at November 2, 2024		192,102		$	2,496	$	359,348		$	2,376,077		$	(941,451	)	$	(49,872	)	$	1,746,598

Balance at August 2, 2025		169,336		$	2,496	$	372,826		$	2,416,980		$	(1,213,046	)	$	(34,646	)	$	1,544,610
Stock awards		—			—		5,970			—			—			—			5,970
Repurchase of common stock as part of publicly announced programs, including excise tax		—			—		—			—			—			—			—
Repurchase of common stock from employees		(2	)		—		—			—			(34	)		—			(34	)
Reissuance of treasury stock		178			—		(179	)		(157	)		2,784			—			2,448
Net income		—			—		—			91,344			—			—			91,344
Other comprehensive income		—			—		—			—			—			3,035			3,035
Cash dividends declared and dividend equivalents ($0.125 per share)		—			—		697			(21,886	)		—			—			(21,189	)
Contributions from non-controlling interests		—			—		(844	)		—			—			—			(844	)
Balance at November 1, 2025		169,512		$	2,496	$	378,470		$	2,486,281		$	(1,210,296	)	$	(31,611	)	$	1,625,340

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

39 Weeks Ended November 1, 2025 and November 2, 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		—			—		32,922			—			—			—			32,922
Repurchase of common stock as part of publicly announced programs, including excise tax		(6,000	)		—		—			—			(130,941	)		—			(130,941	)
Repurchase of common stock from employees		(549	)		—		—			—			(13,645	)		—			(13,645	)
Reissuance of treasury stock		1,715			—		(36,173	)		11,291			26,999			—			2,117
Net income		—			—		—			225,034			—			—			225,034
Other comprehensive (loss)		—			—		—			—			—			(33,462	)		(33,462	)
Cash dividends declared and dividend equivalents ($0.250 per share)		—			—		1,779			(74,407	)		—			—			(72,628	)
Contributions from non-controlling interests		—			—		442			—			—			—			442
Balance at November 2, 2024		192,102		$	2,496	$	359,348		$	2,376,077		$	(941,451	)	$	(49,872	)	$	1,746,598

Balance at February 1, 2025		188,618		$	2,496	$	365,845		$	2,456,063		$	(1,001,154	)	$	(56,390	)	$	1,766,860
Stock awards		—			—		32,740			—			—			—			32,740
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		(658	)		—		—			—			(7,946	)		—			(7,946	)
Accelerated share repurchase, including excise tax		(18,416	)		—		—			—			(201,849	)		—			(201,849	)
Reissuance of treasury stock		1,968			—		(21,459	)		(7,780	)		31,954			—			2,715
Net income		—			—		—			104,078			—			—			104,078
Other comprehensive income		—			—		—			—			—			24,779			24,779
Cash dividends declared and dividend equivalents ($0.250 per share)		—			—		2,068			(66,080	)		—			—			(64,012	)
Contributions from non-controlling interests		—			—		(724	)		—			—			—			(724	)
Balance at November 1, 2025		169,512		$	2,496	$	378,470		$	2,486,281		$	(1,210,296	)	$	(31,611	)	$	1,625,340

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	39 Weeks Ended
	November 1,			November 2,
(In thousands)	2025			2024
Operating activities:
Net income	$	104,078		$	225,034
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		167,464			163,524
Share-based compensation		33,190			33,372
Deferred income taxes		24,392			(10,279	)
Loss on impairment of assets		15,063			6,353
Undistributed earnings of equity method investment		(13,074	)		—

Changes in assets and liabilities:
Accounts receivable		17,181			28,032
Merchandise inventory		(243,636	)		(185,521	)
Operating lease assets		293,767			166,605
Operating lease liabilities		(264,943	)		(194,353	)
Other assets		(69,599	)		(75,265	)
Accounts payable		25,355			18,333
Accrued compensation and payroll taxes		(42,455	)		(61,317	)
Accrued and other liabilities		(6,494	)		(21,473	)
Net cash provided by operating activities		40,289			93,045
Investing activities:
Capital expenditures for property and equipment		(202,226	)		(157,668	)
Sale of available-for-sale investments		50,000			100,000
Other investing activities		8,273			(8,385	)
Net cash (used for) investing activities		(143,953	)		(66,053	)
Financing activities:
Accelerated share repurchase, including excise tax		(201,849	)		—
Repurchase of common stock as part of publicly announced programs, including excise tax		(31,301	)		(130,941	)
Repurchase of common stock from employees		(7,946	)		(13,645	)
Proceeds from revolving line of credit		766,800			—
Principal payments on revolving line of credit		(556,800	)		—
Net proceeds from stock options exercised		2,272			3,841
Cash dividends paid		(64,012	)		(72,628	)
Other financing activities		(1,787	)		(4,635	)
Net cash (used for) financing activities		(94,623	)		(218,008	)
Effect of exchange rates changes on cash		2,155			(2,883	)
Net change in cash and cash equivalents		(196,132	)		(193,899	)
Cash and cash equivalents - beginning of period		308,962			354,094
Cash and cash equivalents - end of period	$	112,830		$	160,195

Refer to Notes to Consolidated Financial Statements

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	22
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	29

AMERICAN EAGLE OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Interim Financial Statements

The accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the "Company," "we," "us," and "our"), a Delaware corporation, at November 1, 2025 and November 2, 2024 and for the 13 and 39 week periods ended November 1, 2025 and November 2, 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.

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.

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 November 1, 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 2028” refers to the 53-week period that will end on February 3, 2029. "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. "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.

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.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The new guidance modernizes accounting for the costs of internal-use software by removing "project stages" from the capitalization process. The guidance is effective for annual periods beginning after December 15, 2027 and interim periods within those years. Early adoption is permitted. The Company plans to adopt ASU 2025-06 effective for Fiscal 2028.

Foreign Currency Translation

In accordance with FASB Accounting Standards Codification ("ASC") 830, Foreign Currency Matters, the Company translates assets and liabilities denominated in foreign currencies into U.S. dollars ("USD") (the reporting currency) at the exchange rates prevailing at the balance sheet date. The Company translates revenues and expenses denominated in foreign currencies into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currency transactions are included in the consolidated results of operations, whereas related translation adjustments are reported as an element of other comprehensive income (loss) in accordance with ASC 220, Comprehensive Income.

We are exposed to the impact of foreign exchange rate risk primarily through our Canadian and Mexican operations where the functional currency is the Canadian dollar and Mexican peso, respectively. The impact of all other foreign currencies is currently immaterial to our consolidated financial results. During the 13 and 39 weeks ended November 1, 2025, an unrealized gain of $3 million and $25 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 November 1, 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 39 weeks ended November 1, 2025 and the 13 and 39 weeks ended November 2, 2024. There were no long-lived asset impairment charges recorded during the 13 weeks ended November 1, 2025.

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 and 39 weeks ended November 1, 2025 or November 2, 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 39 weeks ended November 1, 2025 or November 2, 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 within the Consolidated Balance Sheets. Realized and unrealized gains and losses are included within the Consolidated Statements of Operations as a component of Other (Income), net. During the 13 weeks ended November 1, 2025, the Company recorded a $13 million unrealized gain related to its position in the Fund.

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.

Co-Branded and Private Label Credit Cards

The Company offers a co-branded credit card and a private-label credit card under the AE and Aerie brands. These credit cards are issued by a third-party bank (the "Bank") in accordance with a credit card agreement (the "Agreement"). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this funding as we fulfill our performance obligations under the Agreement. This revenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations.

Customer Loyalty Program

The Company offers a highly digitized loyalty program called Real Rewards by American Eagle and Aerie™ (the "Program"). The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited.

Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). The portion of the sales revenue attributed to the reward points is deferred and recognized when the reward is redeemed or when the points expire, using the relative stand-alone selling price method. Additionally, reward points earned using the co-branded credit card on non-AE or Aerie purchases are accounted for in accordance with ASC 606. As the points are earned, a current liability is recorded for the estimated cost of the reward, and the impact of adjustments is recorded in revenue.

The Company defers a portion of the sales revenue attributed to the loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606.

Credit Agreement

In June 2022, the Company entered into an amended and restated credit agreement (the "Credit Agreement"). The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations (the "Credit Facility"). The Credit Facility expires on June 24, 2027.

Refer to Note 8, Long-Term Debt, Net to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements.

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes ("ASC 740"), which requires the use of the liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statements carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits, may materially impact the Company’s effective income tax rate.

The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is "more likely than not" that the position is sustainable based on its technical merits.

The calculation of deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance, requires management to make estimates and assumptions. The Company believes that its estimates and assumptions are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income (loss).

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

Revenue Recognition

The Company recognizes revenue pursuant to ASC 606. Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets.

The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned and collection is probable.

The Company defers a portion of the sales revenue attributed to loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. Refer to Customer Loyalty Program above for additional information.

Revenue associated with Quiet Platforms is recognized as the services are performed.

Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, "merchandise costs"), Quiet Platforms' costs to service its customers and buying, occupancy and warehousing costs and services.

Design costs are related to the Company's Design 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.

Interest Expense (Income), Net

Interest expense (income), net primarily consists of interest expense from Credit Facility borrowings and interest income from cash and 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 chief operating decision maker's ("CODM") (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)	November 1, 2025		February 1, 2025		November 2, 2024
Cash and cash equivalents:
Cash	$	110,190	$	150,053	$	117,348
Interest bearing deposits		2,640		158,909		42,847
Total cash and cash equivalents	$	112,830	$	308,962	$	160,195
Short-term investments:
Certificates of deposits	$	-	$	50,000	$	-
Total short-term investments		-		50,000		-
Total cash and short-term investments	$	112,830	$	358,962	$	160,195

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.


	Fair Value Measurements at November 1, 2025
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	110,190	$	110,190	$	-	$	-
Interest bearing deposits		2,640		2,640		-		-
Total cash and cash equivalents	$	112,830	$	112,830	$	-	$	-

Long-Term Debt

As of November 1, 2025, the fair value of the Company's $210.0 million in outstanding borrowings under its Credit Facility approximated the carrying value. As of November 2, 2024, there were no outstanding borrowings 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 39 weeks ended November 1, 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 39 weeks ended November 1, 2025. There were no long-lived asset impairment charges recorded during the 13 weeks ended November 1, 2025. During the 13 and 39 weeks ended November 2, 2024, the Company recorded impairment of assets of $6.4 million related to the pending sale of its Hong Kong retail operations. 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 39 weeks ended November 1, 2025 and November 2, 2024.

5. Earnings per Share (EPS)

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


	13 Weeks Ended				39 Weeks Ended
(In thousands)	November 1, 2025		November 2, 2024		November 1, 2025		November 2, 2024
Numerator:
Net income	$	91,344	$	80,019	$	104,078	$	225,034

Denominator:
Denominator for basic EPS - weighted average shares		168,925		191,630		173,087		193,908
Add: Dilutive effect of stock options and non-vested restricted stock		3,935		4,152		2,702		4,293
Denominator for diluted EPS - adjusted weighted average shares		172,860		195,782		175,789		198,201
Anti-dilutive shares (1)		1,042		414		2,385		396

(1) For all periods presented, anti-dilutive shares relate to stock options and unvested restricted 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.

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. 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.

6. Property and Equipment, Net

Property and equipment, net consists of the following:


	November 1,			February 1,			November 2,
(In thousands)	2025			2025			2024
Property and equipment, at cost	$	2,687,843		$	2,571,285		$	2,524,158
Less: Accumulated depreciation and impairment		(1,890,689	)		(1,820,021	)		(1,778,170	)
Property and equipment, net	$	797,154		$	751,264		$	745,988

7. Goodwill and Intangible Assets, Net

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


	November 1,			February 1,			November 2,
(In thousands)	2025			2025			2024
Goodwill, gross (1)	$	268,978		$	268,873		$	268,990
Accumulated impairment (2)		(43,794	)		(43,794	)		(43,794	)
Goodwill, net	$	225,184		$	225,079		$	225,196

(1)

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

(2)

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


	November 1,			February 1,			November 2,
(In thousands)	2025			2025			2024
Intangible assets, gross	$	147,928		$	147,356		$	147,173
Accumulated amortization		(67,639	)		(64,374	)		(63,269	)
Accumulated impairment (1)		(40,533	)		(40,533	)		(40,533	)
Intangible assets, net	$	39,756		$	42,449		$	43,371

(1)

Accumulated impairment includes $40.5 million recorded in Fiscal 2023.

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 November 1, 2025, the Company was in compliance with the terms of the Credit Agreement and had $210.0 million in outstanding borrowings and $12 million outstanding in stand-by letters of credit. As of November 2, 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 39 weeks ended November 1, 2025 was $2.0 million and $4.1 million, respectively. There were no Credit Facility borrowings for the 13 and 39 weeks ended November 2, 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 39 weeks ended November 1, 2025 was $6.1 million ($4.5 million, net of tax) and $33.2 million ($24.5 million, net of tax), respectively, and for the 13 and 39 weeks ended November 2, 2024 was $6.0 million ($4.4 million, net of tax) and $33.4 million ($25.5 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 39 weeks ended November 1, 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		1,343		$	12.59
Exercised		(160	)	$	14.22
Cancelled		(532	)	$	21.17
Outstanding - November 1, 2025		4,975		$	16.30		3.9		14,549
Vested and expected to vest - November 1, 2025		4,816		$	16.25		3.7		6,940
Exercisable - November 1, 2025 (1)		1,374		$	11.50		2.7		7,526

(1)

Options exercisable represent "in-the-money" vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price on November 1, 2025.

As of November 1, 2025, there was $0.8 million of unrecognized compensation expense for stock option awards that is expected to be recognized over a weighted average period of 2.1 years.

The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	39 Weeks Ended
	November 1,			November 2,
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.

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
	November 1, 2025					November 1, 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		2,094		$	12.66		1,083		$	14.50
Vested		(1,200	)	$	17.38		(563	)	$	19.69
Cancelled		(182	)	$	16.39		(329	)	$	18.53
Non-vested - November 1, 2025		3,072		$	15.13		2,409		$	16.01

As of November 1, 2025, there was $32.2 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 2.1 years. There is $5.9 million of unrecognized compensation expense related to PSU awards that is expected to be recognized over a weighted-average period of 1.9 years.

As of November 1, 2025, the Company had 7 million shares available for all equity grants under the Company's stockholder-approved equity incentive plan.

10. Income Taxes

On July 4, 2025, the U.S. government enacted tax legislation in H.R.1 Reconciliation Act, commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”). The OBBBA includes significant provisions including modifications to U.S. taxation on foreign earnings, the reinstating of one hundred percent bonus depreciation and the repeal of capitalization of U.S. research and development expenditures, reinstating full expensing. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in subsequent years.

The Company has accounted for the estimated tax implications of the OBBBA in the second quarter of Fiscal 2025. The impact to our effective tax rate for both the 13 and 39 weeks ended November 1, 2025 is immaterial. As our assessment is based on current estimates, we will continue to refine our calculations and evaluate the full impact of the OBBBA on our consolidated financial statements. Our estimates may be adjusted as more guidance is released around OBBBA and as additional information become 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 November 1, 2025 was 26.7% compared to 26.1% for the 13 weeks ended November 2, 2024. The change in the effective tax rate, as compared to the prior period, is primarily due to the international tax provisions of the Tax Cuts and Jobs Act of 2017 (the "Tax Act") and overall geographic mix of earnings in jurisdictions with different tax rates. The effective income tax rate for the 39 weeks ended November 1, 2025 was 26.3% compared to 23.6% for the 39 weeks ended November 2, 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 39 weeks ended November 1, 2025 and November 2, 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 November 1, 2025 and November 2,

2024. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may decrease by approximately $7.1 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

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, 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.

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 November 1, 2025 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	853,729	$	461,989	$	54,624		$	(7,641	)	$	1,362,701
Cost of sales, including certain buying, occupancy and warehousing costs		504,590		245,385
Selling, general and administrative expenses		209,430		92,665
Depreciation and amortization		21,217		14,830
Total segment operating income	$	118,492	$	109,109	$	(13,385	)	$	-		$	214,216
Unallocated corporate expenses												(101,642	)
Total operating income											$	112,574
Interest expense, net												2,144
Other (income), net												(14,152	)
Income before income taxes												124,582


For the 13 weeks ended November 2, 2024 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	831,914	$	410,442	$	56,562		$	(9,824	)	$	1,289,094
Cost of sales, including certain buying, occupancy and warehousing costs		476,885		224,206
Selling, general and administrative expenses		189,116		83,040
Depreciation and amortization		18,652		14,282
Total segment operating income	$	147,261	$	88,914	$	(12,593	)	$	-		$	223,582
Unallocated corporate expenses												(99,932	)
Impairment and restructuring charges (1)												(17,561	)
Total operating income												106,089
Interest (income), net												(1,246	)
Other (income), net												(895	)
Income before income taxes											$	108,230


For the 39 weeks ended November 1, 2025 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	2,348,000	$	1,250,861	$	160,117		$	(23,002	)	$	3,735,976
Cost of sales, including certain buying, occupancy and warehousing costs		1,431,346		757,837
Selling, general and administrative expenses		548,399		264,499
Depreciation and amortization		62,103		43,740
Total segment operating income	$	306,152	$	184,785	$	(36,648	)	$	-		$	454,289
Unallocated corporate expenses												(306,693	)
Impairment and restructuring charges (1)											$	(17,119	)
Total operating income												130,477
Interest expense, net												3,844
Other (income), net												(14,675	)
Income before income taxes											$	141,308


For the 39 weeks ended November 2, 2024 (In thousands)	American Eagle		Aerie		Other			Intersegment Elimination			Total
Net Revenue	$	2,384,295	$	1,198,741	$	169,002		$	(28,019	)	$	3,724,019
Cost of sales, including certain buying, occupancy and warehousing costs		1,372,257		690,655
Selling, general and administrative expenses		526,144		244,593
Depreciation and amortization		54,352		44,421
Total segment operating income	$	431,542	$	219,072	$	(37,596	)	$	-		$	613,018
Unallocated corporate expenses												(310,423	)
Impairment and restructuring charges (1)												(17,561	)
Total operating income												285,034
Interest (income), net												(5,414	)
Other (income), net												(4,006	)
Income before income taxes											$	294,454
(1) Refer to Note 13, Impairment and Restructuring Charges, to the Consolidated Financial Statements for additional information.


	13 Weeks Ended
	November 1,		November 2,
	2025		2024
Capital Expenditures
American Eagle	$	24,760	$	24,036
Aerie		19,139		22,503
Other		8,431		3,071
General corporate expenditures		17,331		11,112
Total Capital Expenditures	$	69,661	$	60,722


	39 Weeks Ended
	November 1,		November 2,
	2025		2024
Capital Expenditures
American Eagle	$	68,270	$	60,757
Aerie		59,313		50,119
Other		27,719		10,529
General corporate expenditures		46,924		36,263
Total Capital Expenditures	$	202,226	$	157,668

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 comprised approximately 96% of total net revenue for both the 13 and 39 weeks ended November 1, 2025.

The following table presents summarized geographical information:


	13 Weeks Ended				39 Weeks Ended
(In thousands)	November 1, 2025		November 2, 2024		November 1, 2025		November 2, 2024
Total net revenue:
United States	$	1,153,459	$	1,099,482	$	3,158,785	$	3,148,086
Foreign (1)		209,242		189,612		577,191		575,933
Total net revenue	$	1,362,701	$	1,289,094	$	3,735,976	$	3,724,019

(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.


	November 1,		November 2,
(In thousands)	2025		2024
Long-lived assets, net:
United States	$	2,184,343	$	1,827,199
Foreign		183,747		156,530
Total long-lived assets, net	$	2,368,090	$	1,983,729

13. Impairment and Restructuring Charges

The following table represents impairment and restructuring charges recorded within impairment and restructuring on the Consolidated Statements of Operations during the 39 weeks ended November 1, 2025. There were no impairment and restructuring charges recorded for the 13 weeks ended November 1, 2025.


	39 Weeks Ended
	November 1,
(In thousands)	2025
Long-lived asset impairment charges (1)	$	15,274
Employee severance (2)		1,845
Total impairment and restructuring charges	$	17,119

(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.

The following table represents impairment and restructuring charges recorded in the 13 and 39 weeks ended November 2, 2024.


	13 and 39 Weeks Ended
	November 2,
(In thousands)	2024
Corporate restructuring costs (1)		10,729
Hong Kong retail operations impairment and restructuring costs (2)		6,832
Total impairment and restructuring charges	$	17,561

(1)

The Company recorded restructuring costs of $10.7 million related to employee severance during the 13 weeks ended November 2, 2024.

(2)

The Company recorded impairment and restructuring costs of $6.8 million related to the pending sale of its Hong Kong retail operations to a third party buyer during the 13 weeks ended November 2, 2024. These costs primarily consist of impairment of $6.4 million and employee severance.

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


	39 Weeks Ended
	November 1,
(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		(8,674	)
Accrued liability as of November 1, 2025	$	821

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 CODM 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.

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 39 weeks ended November 2, 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.

Our results for the third quarter of Fiscal 2025 reflect decisive steps taken across the business to drive momentum and growth. We generated meaningful sales improvement, enabling us to deliver operating income results for the 13 weeks ended November 1, 2025 that were slightly ahead of those for the 13 weeks ended November 2, 2024.

In addition, recent changes in legislative and regulatory developments, including tariffs and other trade policies, have introduced additional uncertainty in the global economy and negatively impacted our business. For example, during Fiscal 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.

During the 13 weeks ended November 1, 2025, gross profit increases were partially offset by higher markdowns and incremental tariffs, net of mitigation efforts.

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

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

For the 13 weeks ended November 1, 2025:

•

Total revenue increased 6% from $1.289 billion to $1.363 billion, with American Eagle revenue increasing 3% year-over-year, and Aerie revenue increasing 12% year-over-year. American Eagle's comparable sales increased 1% year-over-year, and Aerie's comparable sales increased 11% year-over-year.

•

Gross profit of $552 million increased 5% year-over-year.

•

Operating income increased 6% to $113 million and increased 10 basis points to 8.3% as a percentage of total revenue, compared to $106 million last year. Operating income decreased 9% compared to adjusted operating income last year of $124 million, or 9.6% as a percentage of total revenue.

•

Diluted earnings per share increased to $0.53 for the 13 weeks ended November 1, 2025 compared to $0.41 for the 13 weeks ended November 2, 2024. Year-to-date, the Company has completed $231 million, or 20.4 million shares, in share repurchases, which is approximately a 12% reduction in diluted shares outstanding.

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
	November 1, 2025							November 2, 2024
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Total net revenue	$	1,362,701		100.0			%	$	1,289,094		100.0			%
Cost of sales, including certain buying, occupancy and warehouse expenses		810,824			59.5				762,470			59.1
Gross profit		551,877			40.5				526,624			40.9
Selling, general and administrative expenses		386,340			28.4				351,380			27.3
Impairment and restructuring charges (1)		—			—				17,561			1.4
Depreciation and amortization expense		52,963			3.8				51,594			4.0
Operating income		112,574			8.3				106,089			8.2
Interest expense (income), net		2,144			0.2				(1,246	)		(0.1	)
Other (income), net		(14,152	)		(1.0	)			(895	)		(0.1	)
Income before income taxes	$	124,582			9.1			$	108,230			8.4
Provision for income taxes		33,238			2.4				28,211			2.2
Net income	$	91,344			6.7		%	$	80,019			6.2		%


	39 Weeks Ended
	November 1, 2025							November 2, 2024
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)
Total net revenue	$	3,735,976		100.0			%	$	3,724,019		100.0			%
Cost of sales, including certain buying, occupancy and warehouse expenses		2,361,716			63.2				2,234,260			60.0
Gross profit		1,374,260			36.8				1,489,759			40.0
Selling, general and administrative expenses		1,067,338			28.6				1,030,186			27.7
Impairment and restructuring charges (1)		17,119			0.5				17,561			0.4
Depreciation and amortization expense		159,326			4.2				156,978			4.2
Operating income(1)		130,477			3.5				285,034			7.7
Interest expense (income), net		3,844			0.1				(5,414	)		(0.1	)
Other (income), net		(14,675	)		(0.4	)			(4,006	)		(0.1	)
Income before income taxes	$	141,308			3.8			$	294,454			7.9
Provision for income taxes		37,230			1.0				69,420			1.9
Net income(1)	$	104,078			2.8		%	$	225,034			6.0		%

(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 39 weeks ended November 1, 2025 and November 2, 2024:


	13 Weeks Ended						39 Weeks Ended
	November 1,			November 2,			November 1,			November 2,
	2025			2024			2025			2024
Number of stores:
Beginning of period		1,185			1,178			1,172			1,182
Opened		8			17			26			35
Closed		(3	)		(9	)		(8	)		(31	)
End of period		1,190			1,186			1,190			1,186

Total gross square feet at end of period (in '000)		7,306			7,282			7,306			7,282
International licensed retail stores at end of period (1)		368			310			368			310

(1)

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

As of November 1, 2025, we operated 830 American Eagle retail stores, consisting of 183 Aerie side-by-side locations, six locations with AE brand, Aerie brand and OFFLINE™ connected as one store, and six OFFLINE™ side-by-side locations, 329 Aerie stand-alone stores (including 44 OFFLINE™ stand-alone stores and 47 OFFLINE™ side-by-side locations), and AEO Direct. Additionally, there were 23 Todd Snyder stand-alone locations and eight Unsubscribed locations.

Comparison of the 13 weeks ended November 1, 2025 to the 13 weeks ended November 2, 2024

Total Net Revenue

Total net revenue increased 6% for the 13 weeks ended November 1, 2025 to $1.363 billion, compared to $1.289 billion last year. Store revenue increased 3%, and digital revenue increased 8%. Total comparable sales increased 4%, compared to a 3% increase last year. Traffic and transactional value were up across brands and channels.


	13 Weeks Ended						Increase/(Decrease)
	November 1, 2025			November 2, 2024
	(In thousands)	(Percentage)		(In thousands)	(Percentage)		(In thousands)	(Percentage)
American Eagle	$853,729	62.6	%	$831,914	64.5	%	$21,815	3	%
Aerie	461,989	33.9		410,442	31.8		51,547	13
Other	54,624	4.0		56,562	4.4		(1,938)	(3)
Intersegment Eliminations	(7,641)	(0.6)		(9,824)	(0.7)		2,183	(22)
Total net revenue	$1,362,701	100.0	%	$1,289,094	100.0	%	$73,607	6	%

American Eagle. The increase in net revenue was driven by traffic and transaction value across channels. American Eagle comparable sales increased 1%.

Aerie. The increase in net revenue was driven by increased traffic and transaction value across channels. Aerie comparable sales increased 11%.

Other, net of intersegment eliminations. The increase in net revenue was primarily attributable to planned lower revenue from Quiet Platforms due to our change in strategy for this business.

Gross Profit


	13 Weeks Ended						Increase/(Decrease)
	November 1, 2025			November 2, 2024
	(In thousands)						(In thousands)		(Percentage)
Gross Profit	$	551,877		$	526,624		$	25,253		5	%
Gross Margin		40.5	%		40.9	%	-40 basis points

Gross profit increased 5% year-over-year, driven by an increase in merchandise margin of $31 million due to increased net revenue and lower product costs from both American Eagle and Aerie, partially offset by higher markdowns and $20 million of incremental tariffs, net of mitigation efforts. Additionally, buying, occupancy, and warehousing costs increased $11 million year-over-year, primarily due to new store openings. However, as a percentage of net revenue, buying, occupancy, and warehousing costs improved by 20 basis points, driven by higher sales.

During the 13 weeks ended November 1, 2025 and November 2, 2024, $2.4 million and $2.5 million, respectively of share-based payment expense were included in gross profit, representing both time- and performance-based awards.

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

Selling, General and Administrative Expenses


	13 Weeks Ended							Increase/(Decrease)
		November 1, 2025			November 2, 2024
		(In thousands)						(In thousands)		(Percentage)
Selling, general and administrative expenses		$	386,340		$	351,380		$	34,960		10	%
Selling, general and administrative expenses as a percentage of net revenue			28.4	%		27.3	%	-110 basis points

The increase in SG&A expense was primarily driven by planned investments in advertising.

There was $3.7 million and $3.5 million of share-based payment expense included in SG&A expenses for the 13 weeks ended November 1, 2025 and November 2, 2024, respectively, comprised of both time- and performance-based awards.

Impairment and Restructuring Charges


	13 Weeks Ended								Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)							(In thousands)			(Percentage)
Impairment and restructuring charges		$	-			$	17,561		$	(17,561	)		100	%
Impairment and restructuring charges as a percentage of net revenue			0.0	%			1.4	%	-140 basis points

There were no impairment and restructuring charges recorded during the 13 weeks ended November 1, 2025.

During the 13 weeks ended November 2, 2024, we recorded $10.7 million of employee severance costs related to corporate restructuring, and $6.8 million of impairment and restructuring costs due to the pending sale of our Hong Kong retail operations.

Depreciation and Amortization Expense


	13 Weeks Ended							Increase/(Decrease)
		November 1, 2025			November 2, 2024
		(In thousands)						(In thousands)			(Percentage)
American Eagle		$	21,217		$	18,652		$	2,565			14		%
Aerie			14,830			14,282			548			4
Other			16,916			18,660			(1,744	)		(9	)
Total depreciation and amortization expense		$	52,963		$	51,594		$	1,369			3		%
Total depreciation and amortization expense as a percentage of net revenue			3.8	%		4.0	%	20 basis points

Operating Income


	13 Weeks Ended						Increase/(Decrease)
	November 1, 2025			November 2, 2024
	(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage of revenue)		(In thousands)	(Percentage)
Operating income
American Eagle	$118,492	8.7	%	$147,261	11.4	%	$(28,769)	(20)	%
Aerie	109,109	8.0		88,914	6.9		20,195	23
Other	(13,385)	(1.0)		(12,593)	(1.0)		(792)	6
General corporate expenses	(101,642)			(99,932)			(1,710)
Impairment and restructuring charges	-			(17,561)			17,561
Total Operating Income	$112,574			$106,089			$6,485	6	%
Total Operating Income as a percentage of net revenue	8.3	%		8.2	%		10 basis points

The increase in operating income was primarily driven by higher gross profit, as well as an $18 million reduction in impairment and restructuring charges, partially offset by increased SG&A expenses, all of which are explained in detail above.

American Eagle. The decrease was primarily the result of a $6 million decrease in gross profit driven by decreased merchandise margin on the $22 million, or 3%, increase in total net revenue, due to higher markdowns and incremental net tariffs, and a $21 million increase in SG&A expenses, primarily related to planned investments in advertising.

Aerie. The increase was primarily the result of a $30 million increase in gross profit driven by incremental merchandise margin on the $52 million, or 13%, increase in total net revenue, partially offset by incremental net tariffs, and a $6 million increase in buying, occupancy, and warehousing expenses. Additionally, SG&A expenses increased $10 million, primarily due to store salaries and variable selling expenses.

Interest Expense (Income), Net


	13 Weeks Ended								Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)							(In thousands)			(Percentage)
Interest expense (income), net		$	2,144		$	(1,246	)		$	(3,390	)		272	%
Interest expense (income) as a percentage of net revenue			0.2	%		(0.1	)	%	-30 basis points

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

Other (Income), Net


	13 Weeks Ended					Increase/(Decrease)
	November 1, 2025			November 2, 2024
		(In thousands)				(In thousands)	(Percentage)
Other (income), net		$(14,152)		$(895)		$13,257	1481	%
Other (income), net as a percentage of net revenue		(1.0)	%	(0.1)	%	90 basis points

The increase in other (income), net consists of a $13 million unrealized gain in equity method investments.

Provision for Income Taxes


		13 Weeks Ended						Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)						(In thousands)		(Percentage)
Provision for income taxes		$	33,238		$	28,211		$	5,027		18	%
Provision for incomes taxes as a percentage of net revenue			2.4	%		2.2	%	-20 basis points

Effective tax rate			26.7	%		26.1	%

Net Income


		13 Weeks Ended						Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)						(In thousands)		(Percentage)
Net income		$	91,344		$	80,019		$	11,325		14	%
Net income as a percentage of net revenue			6.7	%		6.2	%	50 basis points

Net income per diluted share of $0.53 increased for the 13 weeks ended November 1, 2025, compared to $0.41 for the 13 weeks ended November 2, 2024. The increase in net income was attributable to the factors noted above. The increase in net income per diluted share was in part due to a reduction in diluted shares outstanding as a result of recent share repurchases.

Comparison of the 39 weeks ended November 1, 2025 to the 39 weeks ended November 2, 2024

Total Net Revenue

Total net revenue was relatively flat for the 39 weeks ended November 1, 2025, compared to last year. Digital revenue increased 2%, and store revenue decreased 1%. Total comparable sales were flat, compared to a 4% increase last year.


	39 Weeks Ended														Increase/(Decrease)
	November 1, 2025							November 2, 2024
	(In thousands)			(Percentage)				(In thousands)			(Percentage)				(In thousands)			(Percentage)
American Eagle	$	2,348,000			62.8		%	$	2,384,295			64.0		%	$	(36,295	)		(2	)	%
Aerie		1,250,861			33.5				1,198,741			32.2				52,120			4
Other		160,117			4.3				169,002			4.5				(8,885	)		(5	)
Intersegment Eliminations		(23,002	)		(0.6	)			(28,019	)		(0.7	)			5,017			(18	)
Total net revenue	$	3,735,976			100.0		%	$	3,724,019			100.0		%	$	11,957			0		%

American Eagle. The decrease in net revenue was driven by lower average unit retail, partially offset by increased traffic and units per transaction. American Eagle comparable sales decreased 1%.

Aerie. The increase in net revenue was driven by increased traffic and transactions across channels, as well as increased units per transaction, partially offset by lower average unit retail price. Aerie comparable sales increased 3%.

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


	39 Weeks Ended						Increase/(Decrease)
	November 1, 2025			November 2, 2024
	(In thousands)						(In thousands)			(Percentage)
Gross Profit	$	1,374,260		$	1,489,759		$	(115,499	)		(8	)	%
Gross Margin		36.8	%		40.0	%	-320 basis points

The 8% decrease in gross profit was primarily driven by a decrease of $99 million in merchandise margin year-over-year due to flat sales, increased promotional activity and incremental net tariffs.

During the 39 weeks ended November 1, 2025 and November 2, 2024, $12.0 million and $11.6 million, respectively of share-based payment expense were included in gross profit, representing both time- and performance-based awards.

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

Selling, General and Administrative Expenses


	39 Weeks Ended							Increase/(Decrease)
		November 1, 2025			November 2, 2024
		(In thousands)						(In thousands)		(Percentage)
Selling, general and administrative expenses		$	1,067,338		$	1,030,186		$	37,152		4	%
Selling, general and administrative expenses as a percentage of net revenue			28.6	%		27.7	%	-90 basis points

The increase in SG&A expense was primarily related to planned investments in advertising year-over-year.

There was $21.2 million and $21.8 million of share-based payment expense included in SG&A expenses for the 39-week periods ended November 1, 2025 and November 2, 2024, respectively, comprised of both time and performance-based awards.

Impairment and Restructuring Charges


	39 Weeks Ended								Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)							(In thousands)			(Percentage)
Impairment and restructuring charges		$	17,119			$	17,561		$	(442	)		100	%
Impairment and restructuring charges as a percentage of net revenue			0.5	%			0.4	%	-10 basis points

During the 39 weeks ended November 1, 2025, we recorded $17.1 million of impairment and restructuring charges. We recorded $10.4 million of impairment related to ROU assets and $4.9 million related to fixed assets, primarily related to closing two fulfillment centers as part of our supply chain network optimization project, as well as $1.8 million of employee severance.

During the 39 weeks ended November 2, 2024, we recorded $10.7 million of employee severance related to corporate restructuring, and $6.8 million of impairment and restructuring costs due to the pending sale of our Hong Kong retail operations.

Depreciation and Amortization Expense


	39 Weeks Ended							Increase/(Decrease)
		November 1, 2025			November 2, 2024
		(In thousands)						(In thousands)			(Percentage)
American Eagle		$	62,103		$	54,352		$	7,751			14		%
Aerie			43,740			44,421			(681	)		(2	)
Other			53,483			58,205			(4,722	)		(8	)
Total depreciation and amortization expense		$	159,326		$	156,978		$	2,348			1		%
Total depreciation and amortization expense as a percentage of net revenue			4.2	%		4.2	%	0 basis points

The increase in expense was primarily driven by new and renovated American Eagle stores, partially offset by a reduction in depreciation related to fulfillment centers.

Operating Income


	39 Weeks Ended														Increase/(Decrease)
	November 1, 2025							November 2, 2024
	(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage of revenue)				(In thousands)			(Percentage)
Operating income
American Eagle	$	306,152			22.5		%	$	431,542			11.6		%	$	(125,390	)		(29	)	%
Aerie	$	184,785			13.6				219,072			5.9				(34,287	)		(16	)
Other	$	(36,648	)		(2.7	)			(37,596	)		(1.0	)			948			(3	)
General corporate expenses	$	(306,693	)						(310,423	)						3,730
Impairment and restructuring charges	$	(17,119	)						(17,561	)						442
Total Operating Income	$	130,477						$	285,034						$	(154,557	)		(54	)	%
Total Operating Income as a percentage of income		3.5		%					7.7		%				-420 basis points

The decrease in operating income was primarily driven by lower gross profit and higher SG&A expenses, which are explained in detail above.

American Eagle. The decrease was primarily the result of a $95 million decline in gross profit driven by lower merchandise margin on the $36 million, or 2%, decline in total net revenue, due to increased promotional activity and incremental tariffs, net of mitigation efforts. Selling, general, and administrative expenses increased $22 million primarily due to planned investments in advertising. Depreciation and amortization expense also increased $8 million primarily as a result of new and renovated stores.

Aerie. The decrease was primarily the result of a $15 million decline in gross profit driven by lower merchandise margin due to increased promotional activity and incremental tariffs, net of mitigation efforts, as well as a $6 million increase in buying, occupancy, and warehousing costs. Selling, general, and administrative expenses also increased $20 million year-over-year, primarily due to increased store compensation cost and advertising expense.

General Corporate Expenses. The decrease in expense was primarily the result of lower depreciation and amortization expense, and a reduction in corporate compensation costs due to lower incentives.

Interest Expense (Income), net


	39 Weeks Ended								Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)							(In thousands)			(Percentage)
Interest expense (income), net		$	3,844		$	(5,414	)		$	(9,258	)		171	%
Interest expense (income) as a percentage of net revenue			0.1	%		(0.1	)	%	-20 basis points

The increase in interest expense (income), net during the 39 weeks ended November 1, 2025 was primarily attributable to a $4 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 investable cash balances.

Other (Income), net


	39 Weeks Ended									Increase/(Decrease)
	November 1, 2025					November 2, 2024
		(In thousands)								(In thousands)		(Percentage)
Other (income), net		$	(14,675	)		$	(4,006	)		$	10,669		266	%
Other (income), net as a percentage of net revenue			(0.4	)	%		(0.1	)	%	30 basis points

The increase in other (income), net consists of a $13 million unrealized gain on equity method investments, partially offset by foreign currency fluctuations.

Provision for Income Taxes


		39 Weeks Ended						Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)						(In thousands)			(Percentage)
Provision for income taxes		$	37,230		$	69,420		$	(32,190	)		(46	)	%
Provision for incomes taxes as a percentage of net revenue			1.0	%		1.9	%	90 basis points

Effective tax rate			26.3	%		23.6	%

Net Income


		39 Weeks Ended						Increase/(Decrease)
	November 1, 2025				November 2, 2024
		(In thousands)						(In thousands)			(Percentage)
Net income		$	104,078		$	225,034		$	(120,956	)		(54	)	%
Net income as a percentage of net revenue			2.8	%		6.0	%	-320 basis points

Net income per diluted share decreased to $0.59 per diluted share for the 39 weeks ended November 1, 2025, compared to $1.14 per diluted share for the 39 weeks ended November 2, 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)
	39 Weeks Ended
	November 1, 2025
	Operating income			Provision for income taxes		Net income			Earnings per Diluted Share
GAAP Basis	$	130,477		$	37,230	$	104,078		$	0.59
% of Revenue		3.5	%				2.8	%

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

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

Non-GAAP Basis	$	147,596		$	41,218	$	117,209		$	0.66
% of Revenue		4.0	%				3.1	%

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

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


GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
	13 Weeks Ended
	November 2, 2024
	Operating Income			Provision for Income Taxes		Net Income			Earnings per Diluted Share
GAAP Basis	$	106,089		$	28,211	$	80,019		$	0.41
% of Revenue		8.2	%				6.2	%

Add: Impairment and restructuring charges (1)	$	17,561				$	12,983		$	0.07

Tax effect of the above (2)				$	4,578

Non-GAAP Basis	$	123,650		$	32,789	$	93,002		$	0.48
% of Revenue		9.6	%				7.3	%

GAAP to Non-GAAP Reconciliation
(Dollars in thousands, except per share amounts)
	39 Weeks Ended
	November 2, 2024
	Operating Income			Provision for Income Taxes		Net Income			Earnings per Diluted Share
GAAP Basis	$	285,034		$	69,420	$	225,034		$	1.14
% of Revenue		7.7	%				6.0	%

Add: Impairment and restructuring charges (1)	$	17,561				$	12,983		$	0.06

Tax effect of the above (2)				$	4,578

Non-GAAP Basis	$	302,595		$	73,998	$	238,017		$	1.20
% of Revenue		8.1	%				6.4	%

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

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

International Operations

We have agreements with multiple third-party operators to expand our brands internationally. Our international licensing partners acquire the right to sell, promote, market, and/or distribute various categories of our products in a given geographic area and to source products from us. International licensees' rights include the right to own and operate retail stores and may include rights to sell in wholesale markets, shop-in-shop concessions and operate online marketplace businesses. As of November 1, 2025, our international licensing partners operated in 368 licensed retail stores and concessions, as well as wholesale markets, online brand sites, and online marketplaces in approximately 30 countries.

As of November 1, 2025, we had 99 and 95 Company-owned stores in Canada and Mexico, respectively.

Liquidity and Capital Resources

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

Historically, our uses of cash have been funded with cash flow from operations and existing cash on hand. We also maintain an asset-based revolving credit facility that allows us to borrow up to $700 million, which will expire in June 2027. As of November 1, 2025, the Company had $210.0 million in borrowings under the Credit Facility. Refer to Note 8, Long-Term Debt, Net, to the Consolidated Financial Statements included herein for additional information.

As of November 1, 2025, we had approximately $112.8 million in cash and cash equivalents. We expect to be able to fund our future cash requirements through current cash holdings and available liquidity.

The following sets forth certain measures of our liquidity:


	November 1, 2025
Working Capital (in thousands)		542,230
Current Ratio		1.63

The following table sets forth net cash flows in operating, investing, and financing activities for the 39 weeks ended November 1, 2025 and November 2, 2024:


	39 Weeks Ended								Increase/(Decrease)
	November 1, 2025				November 2, 2024
	(In thousands)
Total cash provided by (used for):
Operating activities		$	40,289			$	93,045			$	(52,756	)
Investing activities			(143,953	)			(66,053	)			(77,900	)
Financing activities			(94,623	)			(218,008	)			123,385
Effect of foreign currency exchange rate changes on cash and cash equivalents			2,155				(2,883	)			5,038
(Decrease) in cash and cash equivalents		$	(196,132	)		$	(193,899	)		$	(2,233	)

Cash Flows Provided By Operating Activities

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

Cash Flows (Used For) Investing Activities

Investing activities for the 39 weeks ended November 1, 2025 primarily consisted of capital expenditures of $202.2 million, partially offset by the sale of available-for-sale investments of $50.0 million.

Investing activities for the 39 weeks ended November 2, 2024 primarily consisted of capital expenditures of $157.7 million, partially offset by the sale of available-for-sale investments of $100.0 million.

Cash Flows (Used For) Financing Activities

Cash used for financing activities for the 39 weeks ended November 1, 2025 consisted primarily of $201.8 million, including excise taxes, used to repurchase the Company's common stock under the ASR Agreement (as defined below), $64.0 million for cash dividends paid at a quarterly rate of $0.125 per share, and $31.3 million, including commissions and excise taxes, used for the repurchase of common stock under our publicly announced program, partially offset by net Credit Facility borrowings of $210.0 million.

Cash used for financing activities for the 39 weeks ended November 2, 2024 consisted primarily of $130.9 million used for the repurchase of common stock under our publicly announced program, and $72.6 million for cash dividends paid at a quarterly rate of $0.125 per share.

Revolving Credit Facility

In June 2022, we entered into an amended and restated Credit Agreement, which provides senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations. The Credit Facility expires on June 24, 2027.

As of November 1, 2025, the Company was in compliance with the terms of the Credit Agreement and had borrowings of $210.0 million and $12.0 million outstanding in stand-by letters of credit. As of November 2, 2024, the Company was in compliance with the terms of the Credit Agreement and had no borrowings and $12.0 million outstanding in stand-by letters of credit.

Capital Expenditures for Property and Equipment

For the 39 weeks ended November 1, 2025, capital expenditures totaled $202.2 million. See below for a breakdown of expenditures:


	39 Weeks Ended						Increase/(Decrease)
	November 1, 2025			November 2, 2024
	(In thousands)						(In thousands)				(Percentage)
Store, fixture, and visual investments		$	103,790		$	100,808		$	2,982			3		%
Information technology initiatives			35,698			35,850			(152	)		(0	)
Supply chain infrastructure			24,689			11,846			12,843			108
Other home office projects			38,049			9,164			28,885			315
Capital Expenditures		$	202,226		$	157,668		$	44,558			28		%

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

See below for a breakdown for stores remodeled and new stores opened in the 39 weeks ended November 1, 2025 and November 2, 2024:


	39 Weeks Ended
	November 1, 2025			November 2, 2024
	New Stores		Remodels	New Stores		Remodels
American Eagle (1)		6	34		14	38
Aerie (2)		14	1		17	-
Todd Snyder		4	-		4	-
Unsubscribed		2	-		-	-
Total stores		26	35		35	38

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

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

Share Repurchases

On March 11, 2025, the Company’s Board of Directors (the "Board") authorized 50 million additional shares for repurchase as part of its existing share repurchase program, which was previously announced in February 2024. Including this additional authorization, as of November 1, 2025, the Company had a total of 50.0 million shares remaining authorized for repurchase through February 3, 2029. During the 39 weeks ended November 1, 2025, approximately 2.0 million shares were repurchased as part of our publicly announced share repurchase program.

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

Pursuant to the terms of the ASR Agreement, on March 17, 2025, the Company made an aggregate payment of $200 million to Bank of America and received an aggregate initial delivery of approximately 14.5 million shares of its common stock. 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.

During the 39 weeks ended November 1, 2025 and November 2, 2024, we repurchased approximately 0.7 million and 0.5 million shares, respectively, from certain employees at market prices totaling $7.9 million and $13.6 million, respectively. These shares were repurchased for the payment of taxes, in connection with the vesting of share-based payments, as permitted under our equity incentive plans.

The aforementioned repurchased shares have been recorded as treasury stock.

Dividends

During the 13 weeks ended November 1, 2025, the Board declared a quarterly cash dividend of $0.125 per share on September 16, 2025, which was paid on October 29, 2025.

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

Critical Accounting Estimates

Our critical accounting policies and estimates are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year ended February 1, 2025 contained in our Fiscal 2024 Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Consolidated Financial Statements in this Quarterly Report. The application of our critical accounting policies and estimates may require our management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Our management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are primarily exposed to the impact of foreign exchange rate risk primarily through our Canadian and Mexican operations where the functional currency is the Canadian dollar and Mexican peso, respectively. The impact of all other foreign currencies is currently immaterial to our consolidated financial results. An unrealized gain of $3 million and $25 million is included in accumulated other comprehensive income during the 13 and 39 weeks ended November 1, 2025, respectively. Our market risk profile as of February 1, 2025 is disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our Fiscal 2024 Form 10-K, and was unchanged as of November 1, 2025.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

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

In connection with the preparation of this Quarterly Report, as of November 1, 2025, the Company performed an evaluation under the supervision and with the participation of our Management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective in the timely and accurate recording, processing, summarizing, and reporting of material financial and non-financial information within the time periods specified within the SEC’s rules and forms. Our principal executive officer and principal financial officer also concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our Management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

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

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

ITEM 1A. RISK FACTORS.

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

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

Issuer Purchases of Equity Securities

The following table provides information regarding our repurchases of our common stock during the 13 weeks ended November 1, 2025:


	Total				Total Number of		Maximum Number of
	Number of		Average		Shares Purchased as		Shares that May
	Shares		Price Paid		Part of Publicly		Yet Be Purchased
Period	Purchased		Per Share		Announced Programs		Under the Program
	(1)		(2)		(1)		(1) (3)
Month #1 (August 3, 2025 through August 30, 2025)		-	$	-		—		50,084,301
Month #2 (August 31, 2025 through October 4, 2025)		621		16.94		—		50,084,301
Month #3 (October 5, 2025 through November 1, 2025)		1,546		14.97		—		50,084,301
Total		2,167	$	15.53		—		50,084,301

(1)

There were no shares repurchased as part of our publicly announced share repurchase program and an aggregate of 2,167 shares were repurchased from employees for the payment of taxes in connection with the vesting of share-based payments during the 13 weeks ended November 1, 2025.

(2)

Average price paid per share excludes any broker commissions paid.

(3)

On March 11, 2025, the Board authorized the public repurchase of an additional 50 million shares under our existing share repurchase program, which expires on February 3, 2029.

ITEM 5: OTHER INFORMATION

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

ITEM 6. EXHIBITS.


* Exhibit 31.1		Certification by Jay L. Schottenstein pursuant to Rule 13a-14(a) or Rule 15d-14(a)

* Exhibit 31.2		Certification by Michael A. Mathias pursuant to Rule 13a-14(a) or Rule 15d-14(a)

** Exhibit 32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

** Exhibit 32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Exhibit 101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 1, 2025, formatted as inline eXtensible Business Reporting Language ("XBRL"): (i) Consolidated Balance Sheets as of November 1, 2025, February 1, 2025, and November 2, 2024 (ii) Consolidated Statements of Operations for the 13 and 39 weeks ended November 1, 2025 and November 2, 2024, (iii) Consolidated Statements of Comprehensive Income for the 13 and 39 weeks ended November 1, 2025 and November 2, 2024, (iv) Consolidated Statements of Stockholders’ Equity for the 13 and 39 weeks ended November 1, 2025 and November 2, 2024, and (v) Consolidated Statements of Cash Flows for the 39 weeks ended November 1, 2025 and November 2, 2024.

* Exhibit 104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 1, 2025, formatted in inline XBRL

^ Management contract or compensatory plan or arrangement.

* Filed with this report.

** Furnished with this report.

SIGNATURES

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

Dated: December 9, 2025


		American Eagle Outfitters, Inc. (Registrant)

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

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