American Eagle Outfitters 2009 Annual Report Download - page 69

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The Company has not recorded a valuation allowance on the temporary impairment of the investment securities
recorded in other comprehensive income. The Company believes this treatment is consistent with the Company’s
intent and ability to hold the debt securities to recovery.
A reconciliation between the statutory federal income tax rate and the effective income tax rate from
continuing operations follows:
January 30,
2010
January 31,
2009
February 2,
2008
For the Years Ended
Federal income tax rate ............................ 35% 35% 35%
State income taxes, net of federal income tax effect ........ 3 3 3
Canadian earnings repatriation ....................... (7) — —
Tax settlements . . ................................ (5) — —
Valuation allowance on ARS and ARPS impairment ....... 1 3
Tax impact of tax exempt interest ..................... — (1) (1)
27% 40% 37%
14. Quarterly Financial Information — Unaudited
The sum of the quarterly EPS amounts may not equal the full year amount as the computations of the weighted
average shares outstanding for each quarter and the full year are calculated independently.
May 2,
2009
August 1,
2009
October 31,
2009
January 30,
2010
Fiscal 2009
Quarters Ended
(In thousands, except per share amounts)
Net sales .............................. $611,986 $657,596 $748,962 $971,976
Gross profit ............................ 220,925 248,833 300,128 388,163
Net income............................. 21,967 28,572 59,159 59,324
Income per common share — basic ........... 0.11 0.14 0.29 0.29
Income per common share — diluted.......... 0.11 0.14 0.28 0.28
May 3,
2008
August 2,
2008
November 1,
2008
January 31,
2009
Fiscal 2008
Quarters Ended
(In thousands, except per share amounts)
Net sales .............................. $640,302 $688,815 $754,036 $905,713
Gross profit ............................ 263,667 289,384 309,412 311,638
Net income ............................ 43,895 59,831 42,604 32,731
Income per common share — basic .......... 0.21 0.29 0.21 0.16
Income per common share — diluted ......... 0.21 0.29 0.21 0.16
15. Subsequent Event
On March 5, 2010, the Company’s Board approved management’s recommendation to proceed with the
closure of the M+O brand. The Company notified employees and issued a press release announcing this decision on
March 9, 2010. The decision to take this action resulted from an extensive evaluation of the brand and review of
68
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)