Latest website presentation [Read-Only] - IIS Windows …library.corporate-ir.net/.../169479/Latestwebsitepresentation.pdfCoca-Cola/Adidas/Ford 7% Abercrombie & Fitch 8% American Eagle

AMERICAN EAGLEOUTFITTERS

ae.com


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Safe Harbor StatementAny Remarks that we make today about future expectations, plans and prospects for American Eagle Outfitters which are not historical facts, are forward-looking statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause the Company’s actual results to differ from those contained in the forward-looking statements, please read the section entitled “Safe Harbor Statement, Seasonality, and Business Risks” in the Company’s most recent Form 10-K and Form 10-Q, each on file with the Securities and Exchange Commission.


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First Half 2005 RecapSales $967 Million

Sales Growth +33%

Comp Store Sales +24%

Operating Income $174 Million

Operating Margin 17.9% vs. 12.9%

Earnings Per Share $0.74 vs. $0.41 -- 80% Growth


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AE Cash Flow

$92$186Free Cash Flow

-19-9- Dividend Payments

-39-97- Capital Expenditures

+37+68+ Depreciation & Amortization

$113$224Net Income

First Half 20052004($ in millions)


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Second Quarter Balance Sheet Data

18%30%Return on Equity (TTM)

3.0x4.0xCurrent Ratio

$359 Million$751 MillionCash, Short & Long-Term Investments

20042005


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AE Corporate Vision:

• We will be a highly profitable, international, multi-channel retail organization.

• We will grow through a portfolio of our own distinct and segmented casual lifestyle apparel brands.


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Will Be Achieved Through:

• Customer focus

• Innovation

• A diverse world-class team


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What Have We Achieved?


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Strong Brand Positioning


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Coolest Brands (12-19 Year Olds)

Source: Teen Research Unlimited

5%American Eagle5%Coke/Pepsi6%Nintendo10%Gap11%Sony12%Tommy Hilfiger13%Old Navy14%Abercrombie & Fitch20%NikeTotalBrand

4%Chevrolet5%Aeropostale5%Microsoft6%Old Navy/Hollister/Pepsi7%Coca-Cola/Adidas/Ford8%Abercrombie & Fitch

10%American Eagle12%Sony18%NikeTotalBrand

Spring 2000 Spring 2005


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Specialty Stores Shopped Last 12 Months

Source: Teen Research Unlimited

Spring 2005 (12-19 Year Olds)

28%American Eagle

14%Express/Wet Seal15%Hollister20%Abercrombie & Fitch23%Aeropostale23%Hot Topic

25%24%

Pacific SunwearVictoria’s Secret

25%Gap

48%Old NavyTotalStore


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20 Consecutive Months of Positive Comps2004

1Q +9.8%

2Q +13.8%

3Q +26.8%

4Q +28.6%

FY 2004 +21.4%

2005

1Q +27.1%

2Q +21.1%

August +11.8%

September +13.0%

YTD 2005 +20.1%


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Operating Metrics

Comparable Store Sales +20%

Transactions Per Store +15%

Average Unit Retail Price +8%

YTD September 2005 YTD September 2004

Comparable Store Sales +16%

Transactions Per Store +10%

Average Unit Retail Price +7%


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YTD Comps Strong Across Regions

Northeast +21%

Mid-Atlantic +23%

Southeast +24%

Southwest +22%

Canada +20%

Midwest +16%

West +15%


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Operating Margin Up 1,000 bps

Record Operating Profit

$363

$133$159$160$141

13.3% 12.6% 11.5%9.3%

2000 2001 2002 2003 2004

$ in

mill

ions

19.3%


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What is Driving Improved Performance?


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Strengthened Merchandising/Design Operation

• New Talent

• Restructured Process - Improved Product

- Reduced Late Deliveries

- 6 Collections/10 Floorsets


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Sharp Focus on Target Customer

• The widest segment of the 15-25 year old market

• The “Go To” brand for high school and college kids


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Merchandise Strengths

• Fashion trends made

wearable

• Everyday essentials

• Easy on the wallet

• Built to last


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Staying True To Value Message:

Sweaters$39.50

Graphic Tees

$19.50

Hoodies$29.50/$39.50

Denim$29.50/$39.50

Layering Tees

$24.50/$29.50

Rugbys$34.50/ $36.50


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Teen Specialty Apparel Retail MarketplacePR

ICE

AGE20 Year OldYounger Older

Higher

Lower

Value Hot Topic

Hollister

Abercrombie & Fitch

American Eagle

OutfittersAeropostale

Gap

J. Crew

Pacific Sunwear


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we are:realcool

essentialquality

good valuefun

friendlyopen-minded

we are not:too trendy

trashydisposable

cheapoverpriced

formalintimidating

elitist

What Differentiates Us…


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Strong New Store EconomicsFirst 12 Months of Operations (67 stores)*

Average Net Sales: $2.12 Million

Average Gross Feet: 5,857

Four Wall Profit: $405,630; 19% to Sales

Cash Flow: $470,653; 22% to Sales

Investment: $527,996Pre-tax ROI: 89%After-tax ROI: 55%

* First 12 months of operation for 67 stores opened since the beginning of 2003


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2004 Remodeled Stores*

5,500$164

$900,000$514

$2,826,000

Post-Remo

+28%4,300Square Footage+44%$114Profit/Foot+83%$492,000Profit+15%$448Sales/Foot

+47%$1,925,000Sales

% GrowthPre-Remo

* Trailing 12 months of operations for 20 stores


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Holiday 2005 Collection


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Strong Real Estate PortfolioSince 1999:

• Opened 220 “A” Center Stores

• 260 Store Renovations

• 94 Store Location Upgrades

• Flagship Stores – New York, LA, San Francisco, Seattle

• New Markets – Alaska, Puerto Rico, Hawaii


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AE Marketing

• “Live Your Life” 2005 Tagline

• “AE All Access” – Loyalty

• Direct Mail – Best Customer Focus

• MTV On-Going Partnership

• Grassroots – Football Stadium Campaign


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What Will DriveFuture Growth?


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Develop New Concept

• World-Class Team in Place

• Mall-Based Lifestyle Brand

• Fills a Void in the Marketplace

• Complementary to AE Brand

• Test Stores Open 2006


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Growth Opportunity -- Maximize AE Brand

• Continue Store Growth square footage +5-6%

• Increase Store Sales Productivity Goal $550-$600/foot

• Build Powerful Categories (Denim, Knits)

• Pursue Sub-Brand Opportunities (Intimates, Personal Care)

• Maximize AE Direct

• Explore International


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Financial Goals:

• Positive Comp Store

Sales/Higher Productivity

• Steady IMU Improvement

• Expense Leverage

• Double-Digit EPS Growth


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New Store Growth Continues – 2006 Plan

• 40 – 50 New Stores

• 45 – 50 Renovations


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Our Vision:• Highly profitable

• International

• Multi-channel

• Portfolio of brands

Our Goal:• Double-digit EPS growth


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Documents

Latest website presentation [Read-Only] - IIS Windows …library.corporate-ir.net/.../169479/Latestwebsitepresentation.pdfCoca-Cola/Adidas/Ford 7% Abercrombie & Fitch 8% American Eagle