American Eagle Outfitters 2013 Annual Report Download - page 23

Table of Contents
The following table shows our adjusted consolidated store data:
Our operations are conducted in one reportable segment, which includes 949 American Eagle Outfitters retail stores, 108 aerie stand-alone retail
stores and AEO Direct.
Comparison of the 13 weeks ended May 3, 2014 to the 13 weeks ended May 4, 2013
Total net revenue
Total net revenue decreased 5% to $646.1 million compared to $679.5 million last year. The decline resulted primarily from a consolidated
comparable sales decrease of 10% for the period. By brand, including the respective AEO Direct sales, American Eagle Outfitters brand
comparable sales decreased 11%, or $62.0 million, and aerie brand comparable sales decreased 4%, or $1.6 million. Of the total consolidated
comparable sales decrease, approximately 10% of the decline is attributable to AEO Direct.
Total comparable sales for AE women’s and men’s decreased 10% and 13%, respectively. For the first quarter, weakness in traffic and
incremental markdowns resulted in lower transactions and transaction value. AUR and average dollar sale declined approximately 5% and 3%,
respectively.
Gross Profit
Gross profit decreased 14.0% to $225.8 million compared to $263.6 million last year. As a rate to total net revenue, gross profit was 34.9%
compared to 38.8% in the same quarter last year. Included in gross profit last year were $2.4 million of corporate charges. The 390 basis point
decline in gross margin was due to competitive pricing pressures and increased markdowns as a result of increased promotional activity.
Additionally, buying, occupancy and warehousing costs increased 200 basis points as a rate to total net revenue from deleverage of rent on
negative comparable sales and increased delivery costs.
There was $1.4 million and $2.3 million of share-based payment expense included in gross profit for the periods ended May 3, 2014 and May 4,
2013, respectively, comprised of both time and performance-
based awards. The decrease is due to a change in performance this year and reduced
levels of outstanding share 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 selling,
general and administrative expenses. Refer to Note 2 to the Consolidated Financial Statements for a description of our accounting policy
regarding cost of sales, including certain buying, occupancy and warehousing expenses.
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13 Weeks Ended
May 3,
May 4,
2014
2013
Number of stores:
Beginning of period
1,066
1,044
Opened
11
7
Closed
(20
)
(14
)
End of period
1,057
1,037
Total gross square feet at end of period
6,495,360
6,191,638
International franchise stores at end of period (1)
77
57
(1) International franchise stores are not included in the consolidated store data or the total gross square feet calculation. International
franchise stores at May 4, 2013 include the six stores in Hong Kong and China which were acquired in May 2013.