American Eagle Outfitters 2009 Annual Report Download - page 24

Download and view the complete annual report

Please find page 24 of the 2009 American Eagle Outfitters annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

categories such as AE jeans and graphic t-shirts. The business continued to strengthen with the holiday merchandise
assortment, driving fourth quarter sales and earnings increases compared to 2008.
Fiscal 2009 net sales of approximately $3.0 billion increased slightly compared to Fiscal 2008. Annual
comparable store sales decreased 4%. A higher merchandise margin reflected lower markdowns, due to the
improvement during the fall and holiday seasons. Buying, occupancy and warehousing expenses increased as a
result of rent related to new store growth. Total selling, general and administrative expenses increased 2%. Expense
reductions in advertising and travel were offset by the accrual of incentive costs, which were not earned in Fiscal
2008.
Operating income as a percent to net sales was 8.0% for Fiscal 2009 compared to 10.1% for Fiscal 2008.
For Fiscal 2009, net income decreased to $169.0 million. As a percent to net sales, net income was 5.7% during
Fiscal 2009 and 6.0% during Fiscal 2008. Net income per diluted share was $0.81 and $0.86 during Fiscal 2009 and
Fiscal 2008, respectively.
We ended Fiscal 2009 with $896.4 million in cash, short-term and long-term investments, an increase of
$161.5 million from last year. During the year, we continued to make investments in our business, including
$127.4 million in capital expenditures. These expenditures related primarily to our new and remodeled stores in the
U.S. and Canada, as well as headquarters, distribution center and information technology projects.
The following table shows, for the periods indicated, the percentage relationship to net sales of the listed items
included in our Consolidated Statements of Operations.
January 30,
2010
January 31,
2009
February 2,
2008
For the Fiscal Years Ended
Net sales ....................................... 100.0% 100.0% 100.0%
Cost of sales, including certain buying, occupancy and
warehousing expenses ............................ 61.3 60.7 53.4
Gross profit ..................................... 38.7 39.3 46.6
Selling, general and administrative expenses ............. 25.2 24.6 23.4
Loss on impairment of assets ........................ 0.6 0.2 —
Depreciation and amortization expense ................. 4.9 4.4 3.6
Operating income . ................................ 8.0 10.1 19.6
Other (expense) income, net ......................... (0.2) 0.6 1.2
Net impairment loss recognized in earnings .............. — (0.8) —
Income before income taxes ......................... 7.8 9.9 20.8
Provision for income taxes .......................... 2.1 3.9 7.7
Net income ..................................... 5.7% 6.0% 13.1%
Our operations are conducted in one reportable segment, which includes our 938 U.S. and Canadian AE retail
stores, 137 aerie by American Eagle retail stores, 28 MARTIN+OSA retail stores and AEO Direct, as of January 30,
2010.
Comparison of Fiscal 2009 to Fiscal 2008
Net Sales
Net sales increased slightly to $2.991 billion from $2.989 billion. The increase resulted primarily from an
increase in our conversion rate driven primarily by strong holiday sales. For Fiscal 2009, comparable store sales
declined in the mid-single digits for both the AE Brand women’s and men’s business compared to Fiscal 2008.
23