<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 2, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________to______________
COMMISSION FILE NUMBER: 0-23760
AMERICAN EAGLE OUTFITTERS, INC.
(Exact name of registrant as specified in its charter)
OHIO NO. 25-1724320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 THORN HILL DRIVE, WARRENDALE, PA 15086-7528
(Address of principal executive offices) (Zipcode)
(724) 776-4857
(Registrant's telephone number, including area code)
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 X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK, NO PAR VALUE, 23,016,742 SHARES OUTSTANDING AS OF MAY 21, 1998
<PAGE> 2
<TABLE>
AMERICAN EAGLE OUTFITTERS, INC.
-------------------------------
TABLE OF CONTENTS
-----------------
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
--------------------- --------
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
May 2, 1998 (unaudited) and January 31, 1998 3
Consolidated Statements of Operations (unaudited)
Three months ended May 2, 1998 and May 3, 1997 4
Consolidated Statements of Cash Flows (unaudited)
Three months ended May 2, 1998 and May 3, 1997 5
Notes to Consolidated Financial Statements 6-8
Review By Independent Accountants 9
Independent Accountants' Review Report 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10-12
Item 3. Quantitative and Qualitative Disclosures about Market Risk N/A
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings 13
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit 23 Acknowledgment of Independent Accountants 15
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(In thousands) May 2, January 31,
ASSETS 1998 1998
---- ----
<S> <C> <C>
Current assets: (Unaudited)
Cash and cash equivalents $ 44,274 $ 48,359
Merchandise inventory 41,366 36,278
Accounts and note receivable, including related party 5,771 7,647
Prepaid expenses and other 6,142 5,388
Deferred income taxes 5,851 4,801
-------- --------
Total current assets 103,404 102,473
-------- --------
Fixed assets:
Fixtures and equipment 28,530 25,842
Leasehold improvements 40,046 35,978
-------- --------
68,576 61,820
Less: Accumulated depreciation and amortization 27,163 23,273
-------- --------
41,413 38,547
-------- --------
Other assets 4,968 3,775
-------- --------
Total assets $149,785 $144,795
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,989 $ 24,606
Accrued compensation and payroll taxes 9,635 9,227
Accrued rent 9,095 7,909
Accrued income and other taxes 4,098 8,738
Other liabilities and accrued expenses 4,159 3,507
-------- --------
Total current liabilities 50,976 53,987
-------- --------
Shareholders' equity:
Common stock, 30,000,000 shares authorized, 22,700,092
shares issued (22,997,842 shares outstanding at May 2, 1998) 54,325 53,837
Contributed capital 6,241 4,832
Retained earnings 41,561 35,756
-------- --------
102,127 94,425
Less: Deferred compensation 2,362 1,992
Treasury stock, 297,750 shares 956 1,625
-------- --------
Total shareholders' equity 98,809 90,808
-------- --------
Total liabilities and shareholders' equity $149,785 $144,795
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
<TABLE>
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended
------------------
May 2, May 3,
1998 1997
---- ----
<S> <C> <C>
Net sales $99,694 $60,952
Cost of sales, including certain buying, occupancy
and warehousing expenses 62,477 46,699
------- -------
Gross profit 37,217 14,253
Selling, general and administrative expenses 26,223 18,910
Depreciation and amortization 1,975 1,669
------- -------
Operating income (loss) 9,019 (6,326)
Interest income, net 542 330
------- -------
Income (loss) before income taxes 9,561 (5,996)
Provision (benefit) for income taxes 3,756 (2,377)
------- -------
Net income (loss) $ 5,805 $(3,619)
======= =======
Basic income (loss) per common share $ 0.26 $ (0.16)
======= =======
Diluted income (loss) per common share $ 0.24 $ (0.16)
======= =======
Weighted average common shares outstanding - basic 22,417 21,983
======= =======
Weighted average common shares outstanding - diluted 23,705 21,983
======= =======
Retained earnings, beginning $35,756 $17,119
Net income (loss) 5,805 (3,619)
------- -------
Retained earnings, ending $41,561 $13,500
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
<TABLE>
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(In thousands)
(Unaudited)
<CAPTION>
Three Months Ended
May 2, May 3,
1998 1997
---- ----
<S> <C> <C>
Net income (loss) $ 5,805 $ (3,619)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Depreciation and amortization 1,975 1,669
Loss on impairment and write-off of fixed assets 675 401
Restricted stock compensation 1,514 262
Deferred income taxes (2,427) (45)
CHANGES IN ASSETS AND LIABILITIES:
Merchandise inventory (5,088) (8,369)
Accounts and note receivable 1,440 1,782
Prepaid expenses and other (778) (523)
Accounts payable (356) (2,066)
Accrued liabilities (1,964) (5,725)
-------- --------
Total adjustments (5,009) (12,614)
-------- --------
Net cash provided by (used for) operating activities 796 (16,233)
-------- --------
INVESTING ACTIVITIES:
Capital expenditures (5,568) (3,845)
-------- --------
Net cash used for investing activities (5,568) (3,845)
-------- --------
FINANCING ACTIVITIES:
Net proceeds from stock options exercised 677 13
-------- --------
Net cash provided by financing activities 677 13
-------- --------
Net decrease in cash (4,085) (20,065)
Cash - beginning of period 48,359 34,326
-------- --------
Cash - end of period $ 44,274 $ 14,261
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The accompanying Consolidated Financial Statements of American Eagle Outfitters,
Inc. (the "Company") at May 2, 1998 and for the three month periods ended May 2,
1998 (the "current period") and May 3, 1997 (the "prior period") have been
prepared in accordance with generally accepted accounting principles 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
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The Consolidated Balance Sheet at January 31, 1998 was derived
from the audited financial statements. The Company's business is affected by the
pattern of seasonality common to most retail apparel businesses. The results for
the current and prior periods are not necessarily indicative of future financial
results.
Certain notes and other information have been condensed or omitted from the
interim Consolidated Financial Statements presented in this Quarterly Report on
Form 10-Q. Therefore, these Consolidated Financial Statements should be read in
conjunction with the Company's Fiscal 1997 Annual Report.
2. BASIS OF PRESENTATION
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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,
management reviews its estimates based on currently available information.
Changes in facts and circumstances may result in revised estimates.
STOCK SPLIT
On April 13, 1998, the Company's Board of Directors approved a three-for-two
stock split to be distributed on May 8, 1998, to shareholders of record on April
24, 1998. Accordingly, all share amounts and per share data have been restated
to reflect the stock split.
EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share" (FASB 128), which was adopted for Fiscal 1997.
Earnings per share amounts for all periods have been restated to give effect to
the application of FASB 128. The effect of the restatement on earnings per share
for the restated periods is immaterial.
6
<PAGE> 7
The following table shows the amounts used in computing earnings per share and
the effect on income and the weighted average number of shares of dilutive
potential common stock.
Three Months Ended
May 2, 1998 May 3, 1997
----------- -----------
Net income (loss) used in basic EPS $ 5,805 $(3,619)
======= =======
Weighted average number of common shares used in
basic EPS 22,417 21,983
Effect of dilutive stock options and nonvested
restricted stock 1,288 --
------- -------
Weighted average number of common shares and
dilutive potential common stock used in diluted EPS 23,705 21,983
======= =======
RECLASSIFICATION
Certain reclassifications have been made to the Consolidated Financial
Statements for the prior period in order to conform to the May 2, 1998
presentation.
3. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Because no borrowings were required under the terms of the Company's line of
credit, there were no amounts paid for interest during the three months ended
May 2, 1998 or May 3, 1997. Income tax payments were $8.5 million and $2.4
million during the three months ended May 2, 1998 and May 3, 1997, respectively.
4. RELATED PARTY TRANSACTIONS
As described in the information that follows, the Company has various
transactions with related parties. The nature of the relationship is primarily
through common ownership. The Company has an operating lease for its corporate
headquarters and distribution center with an affiliate. The lease, which was
entered into on January 1, 1996, and expires on December 31, 2010, provides for
annual rental payments of approximately $1.2 million through 2001, $1.6 million
through 2006, and $1.8 million through the end of the lease.
In addition, the Company and its subsidiaries purchase merchandise from and sell
merchandise to various related parties and use the services of a related
importing company.
During Fiscal 1997, the Company provided a short-term loan in the amount of $3.0
million to Azteca Production International, a related party vendor. The terms of
the note include annual interest at 7% plus a margin defined as the difference
between 8.5% and National City Bank's prime lending rate. The loan was paid off
in April 1998. The note receivable outstanding balance at January 31, 1998 was
approximately $1.3 million.
7
<PAGE> 8
Related party amounts follow:
(In thousands)
Three Months Ended
------------------
May 2, May 3,
1998 1997
---- ----
Merchandise purchases plus
import administrative charges $15,049 $12,377
Accounts payable $ 6,837 $ 5,985
Accounts and notes receivable $ 2,742 $ 138
Rent expense $ 387 $ 387
Merchandise sales $ 2,643 $ 305
The Company provided loans to certain officers and other individuals to pay the
taxes on the restricted stock that vested in April 1998. As of May 2, 1998, the
outstanding value of these loans approximated $1,000,000. There was no balance
outstanding as of January 31, 1998.
5. ACCOUNTS RECEIVABLE
Accounts receivable is comprised of the following:
May 2, January 31,
1998 1998
---- ----
Accounts receivable - landlord $ 847 $1,518
Related party accounts and note receivable 2,742 3,755
Accounts receivable - other 2,182 2,374
------ ------
Total $5,771 $7,647
====== ======
6. INCOME TAXES
The provisions of FASB No. 109, "Accounting for Income Taxes", have been
reflected in the preparation of the accompanying Consolidated Financial
Statements. For the three months ended May 2, 1998 and May 3, 1997, the
effective tax rate used to provide income tax amounts approximated 39%.
7. LEASE COMMITMENTS
The Company is contingently liable for the rental payments totaling
approximately $5.0 million for certain outlet stores which were sold in October
1995.
8. LEGAL PROCEEDINGS
The Company is also a party to ordinary routine litigation incidental to its
business. The Company does not expect any of such litigation to have a material
adverse effect on the Company's results of operations or financial condition.
8
<PAGE> 9
REVIEW BY INDEPENDENT ACCOUNTANTS
Ernst & Young LLP, our independent accountants, have performed a limited review
of the Consolidated Financial Statements for the quarters ended May 2, 1998 and
May 3, 1997, as indicated in their report on the limited review included below.
Since they did not perform an audit, they express no opinion on the Consolidated
Financial Statements referred to above. Management has given effect to any
significant adjustments and disclosures proposed in the course of the limited
review.
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors and Shareholders
American Eagle Outfitters, Inc.
We have reviewed the accompanying consolidated balance sheet of American Eagle
Outfitters, Inc. as of May 2, 1998, and the related consolidated statements of
operations for the three-month periods ended May 2, 1998 and May 3, 1997 and the
consolidated statements of cash flows for the three-month periods ended May 2,
1998 and May 3, 1997. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of American Eagle Outfitters, Inc. as
of January 31, 1998, and the related consolidated statements of operations and
cash flows for the year then ended (not presented herein) and in our report
dated March 3, 1998 (except for Note 13, as to which the date is April 14, 1998)
we expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
balance sheet as of January 31, 1998, is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
Pittsburgh, Pennsylvania
May 20, 1998
9
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage
relationship to net sales of the listed items included in the Company's
Consolidated Statements of Operations.
Three months ended
------------------
May 2, May 3,
1998 1997
---- ----
Net sales 100.0% 100.0%
Cost of sales, including certain buying,
occupancy and warehousing expenses 62.7 76.7
----- -----
Gross profit 37.3 23.3
Selling, general and administrative expenses 26.3 31.0
Depreciation and amortization 2.0 2.7
----- -----
Operating income (loss) 9.0 (10.4)
Interest income, net 0.5 0.5
----- -----
Income (loss) before income taxes 9.5 (9.9)
Provision (benefit) for income taxes 3.7 (3.9)
----- -----
Net income (loss) 5.8% (6.0)%
===== =====
COMPARISON OF THREE MONTHS ENDED MAY 2, 1998 TO THE THREE MONTHS ENDED MAY 3,
1997
Net sales for the three months ended May 2, 1998 (the "current period")
increased 63.6% to $99.7 million from $61.0 million for the three months ended
May 3, 1997 (the "prior period"). The increase in net sales resulted primarily
from increases of $30.8 million or 52.4% from comparable store sales and $8.1
million from non-comparable stores sales. The total increase in net sales
resulted primarily from an increase in units sold rather than from an increase
in prices. The Company operated 336 stores at the end of the current period
compared to 312 stores operated at the end of the prior period.
Gross profit for the current period increased to $37.2 million from $14.3
million for the prior period. Gross profit as a percent of net sales for the
current period increased to 37.3% from 23.3% for the prior period. This increase
was attributable to a 7.0% increase in merchandise margins as well as a 7.0%
improvement in buying, occupancy, and warehousing costs reflecting improved
leveraging of these expenses. The increase in merchandise margins resulted
primarily from decreased markdowns as a percent of sales.
Selling, general and administrative expenses for the current period increased to
$26.2 million from $18.9 million for the prior period. As a percent of net
sales, these expenses decreased to 26.3% from 31.0% for the prior period. The
increase of $7.3 million included $1.8 million to support the new stores that
were opened since the first quarter last year, as well as an increase of $0.9
million in advertising costs related to direct mail costs, advertising to
enhance brand imaging, and costs related to the Company's web site. Also
included were $2.9 million of increased salary and benefit costs incurred as a
result of the favorable sales and earnings performance, in addition to increased
professional fees of $0.4 million. The remaining increase resulted from
additional costs incurred to support the increased sales volumes.
Depreciation and amortization expense for the current period increased to $2.0
million from $1.7 million for the prior period and represented 2.0% of sales in
the current period as compared to 2.7% of sales in the prior period.
Interest income for the current period increased to $0.5 million from $0.3
million for the prior period because of higher cash reserves available for
investment. No borrowings were required under the terms of the Company's line of
credit during the current period.
10
<PAGE> 11
Income before income taxes for the current period increased to $9.6 million from
a ($6.0) million loss before income taxes for the prior period. As a percent of
net sales, the income before income taxes for the current period increased to
9.5% from a (9.9%) loss for the prior period. The increase in income before
income taxes as a percent of sales was attributable to a 7.0% increase in
merchandise margins, a 7.0% improvement in the leveraging of store occupancy and
warehousing expenses, a 4.7% improvement in selling, general, and administrative
expenses, and a decrease of 0.7% in depreciation costs as a percent of sales.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of cash in the current period was cash flow
provided by operating activities. The primary use of cash in the current period
was cash flow used by operating activities, primarily to support inventory
increases of $4.4 million for anticipated sales and new store growth.
Additionally, the Company used cash of $5.6 million for capital expenditures.
The Company had working capital of $52.4 million and $28.7 million at May 2,
1998 and May 3, 1997, respectively.
At May 2, 1998, the Company had an unsecured demand lending arrangement with a
bank to provide a $60.0 million line of credit at either the lender's prime
lending rate (8.50% at May 2, 1998) or a negotiated rate such as LIBOR. The
facility has a limit of $40.0 million that can be used for direct borrowing.
Cash generated from operations in prior periods was sufficient enough to finance
operations so that no borrowings were required against the line during the
current period. Letters of credit in the amount of $52.1 million were
outstanding at May 2, 1998 and the remaining balance on the line was $7.9
million at May 2, 1998.
Capital expenditures, net of construction allowances, totaled $5.6 million for
the three months ended May 2, 1998. These expenditures included the addition of
four new stores and eight remodeled locations totaling approximately $2.9
million, the expansion and upgrade of distribution center facilities totaling
approximately $2.0 million, the purchase of information systems hardware,
software, and licenses totaling approximately $0.3 million, and other
expenditures totaling $0.4 million.
The Company is currently planning to open approximately 46 stores during the
remainder of the fiscal year. Additionally, the Company has selected
approximately 7 locations to upgrade to its newest store design during the
remainder of the fiscal year. These locations were selected based upon criteria
such as historical sales performance and lease terms. These forward-looking
statements will be influenced by factors including the Company's financial
position, consumer spending, and the number of acceptable mall store leases that
may become available. The Company believes that the cash flow from operations
and its bank line of credit will be sufficient to meet its presently anticipated
cash requirements through Fiscal 1998.
SEASONALITY
The Company experiences seasonal fluctuations in its net sales and net income,
with a disproportionate amount of net sales and a majority of its net income
typically realized in the fourth quarter. The Company's quarterly results of
operations may also fluctuate significantly as a result of a variety of other
factors, including the timing of certain holiday seasons and new store openings,
the net sales contributed by new stores, merchandise mix, and the timing and
level of markdowns.
IMPACT OF INFLATION
The Company does not believe that the relatively modest levels of inflation
which have been experienced in the United States in recent years have had a
significant effect on its net sales or its profitability. Substantial increases
in cost, however, could have a significant impact on the Company and the
industry in the future.
IMPACT OF YEAR 2000
Management has developed a comprehensive plan designed to enable its computer
information systems to properly process transactions in the Year 2000 and
beyond. The project team began working on the plan in Fiscal 1997 and expects to
complete the project by July 1999. The Company is currently communicating with
its significant suppliers and business partners to determine to what extent they
are addressing their own Year 2000 issues. The failure of the Company or any of
its significant suppliers or business partners to properly address Year 2000
issues could potentially adversely affect the Company's business and financial
performance.
11
<PAGE> 12
SAFE HARBOR STATEMENT AND BUSINESS RISKS
This report contains various "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which represent the Company's
expectations or beliefs concerning future events, including the following: the
planned opening of 46 stores during the remainder of Fiscal 1998; the selection
of 7 stores for remodeling during the remainder of Fiscal 1998; the completion
of modifications to computer systems to enable the processing of transactions in
the Year 2000 and beyond; and sufficiency of cash flows and line of credit
facilities to meet Fiscal 1998 cash requirements. The Company cautions that
these statements are further qualified by factors that could cause actual
results to differ materially from those in the forward-looking statements,
including without limitation, the following: decline in demand for the
merchandise offered by the Company; the ability to obtain suitable sites for new
stores at acceptable costs; the retention, hiring and training of qualified
personnel; the integration of new stores into existing operations; the expansion
of buying and inventory capabilities; the availability of capital; the ability
of the Company to anticipate and respond to changing consumer preferences and
fashion trends in a timely manner; the effect of economic conditions; and the
effect of competitive pressures from other retailers. Results actually achieved
may differ materially from expected results in these statements.
Historically, the Company's operations have been seasonal, with a
disproportionate amount of net sales and a majority of net income occurring in
the fourth fiscal quarter, reflecting increased demand during the year-end
holiday selling season and, to a lesser extent, the third quarter, reflecting
increased demand during the back-to-school selling season. As a result of this
seasonality, any factors negatively affecting the Company during the third and
fourth fiscal quarters of any year, including adverse weather or unfavorable
economic conditions, could have a material adverse effect on the Company's
financial condition and results of operations for the entire year. The Company's
quarterly results of operations may also fluctuate based upon such factors as
the timing of certain holiday seasons, the number and timing of new store
openings, the amount of net sales contributed by new and existing stores, the
timing and level of markdowns, store closings, refurbishments and relocations,
competitive factors, weather and general economic conditions.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In a complaint filed on June 2, 1998 in the action styled, Abercrombie & Fitch
Stores, Inc. v. American Eagle Outfitters, Inc., Civil Action No. C2-98-569, in
the United States District Court, Southern District of Ohio, Eastern Division,
Abercrombie & Fitch alleges that the Company infringes Abercrombie & Fitch's
trade dress. The Company believes the allegations in the complaint are without
merit and the Company will vigorously defend its rights.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its 1998 Annual Meeting of Shareholders on June 3,
1998. Holders of 18,488,823 Common Shares of the Company were
present representing approximately 81% of the Company's 22,662,567
Common Shares issued and outstanding.
(b) and (c) The following persons were elected as members of the
Company's Board of Directors to serve until the annual
meeting following their election or until their successors
are duly elected and qualified. Each person received the
number of votes for or the number of votes with authority
withheld indicated below.
Name Votes For Votes Withheld
---- --------- --------------
Ari Deshe 18,449,169 39,654
Jon P. Diamond 18,449,169 39,654
Martin P. Doolan 18,449,289 39,534
Gilbert W. Harrison 18,482,694 6,129
Michael G. Jesselson 18,483,054 5,769
Thomas R. Ketteler 18,449,529 39,294
George Kolber 18,449,541 39,282
John L. Marakas 18,483,054 5,769
Jay L. Schottenstein 18,449,541 39,282
Saul Schottenstein 18,449,421 39,402
David W. Thompson 18,483,054 5,769
Gerald E. Wedren 18,482,934 5,889
The proposal to approve the Company's Management Incentive Plan
described in the Proxy Statement passed with 18,787,523 votes For, 101,174
votes Against and 9,627 votes withheld.
(d) Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
23. Acknowledgment of Independent Accountants
27. Financial Data Schedule
(b) Reports on Form 8-K - None
13
<PAGE> 14
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 June 11, 1998
American Eagle Outfitters, Inc.
(Registrant)
/s/ Laura A. Weil
------------------------------
Laura A. Weil
Executive Vice President and
Chief Financial Officer
/s/ Dale E. Clifton
------------------------------
Dale E. Clifton
Vice President, Controller and
Chief Accounting Officer
14
<PAGE> 1
Exhibit 23
Acknowledgment of Ernst & Young LLP
The Board of Directors and Shareholders
American Eagle Outfitters, Inc.
We are aware of the incorporation by reference in the Registration Statements
(Forms S-8) of American Eagle Outfitters, Inc. pertaining to the American Eagle
Outfitters, Inc. Employee Stock Purchase Plan, the American Eagle Outfitters,
Inc. 1994 Restricted Stock Plan, the American Eagle Outfitters, Inc. 1994 Stock
Option Plan, and the American Eagle Outfitters, Inc. Stock Fund of American
Eagle Outfitters, Inc. Profit Sharing and 401(k) Plan of our report dated May
20, 1998 relating to the unaudited consolidated interim financial statements of
American Eagle Outfitters, Inc. which are included in its Form 10-Q for the
quarter ended May 2, 1998.
Pursuant to Rule 436 (c) of the Securities Act of 1933, our reports are not a
part of the registration statement prepared or certified by accountants within
the meaning of Section 7 or 11 of the Securities Act of 1933.
Pittsburgh, Pennsylvania
June 10, 1998
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTER ENDED MAY 2, 1998 AND IS QUALIFIED IN IT'S ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000919012
<NAME> AMERICAN EAGLE OUTFITTERS, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> MAY-02-1998
<CASH> 44,274
<SECURITIES> 0
<RECEIVABLES> 5,771
<ALLOWANCES> 0
<INVENTORY> 41,366
<CURRENT-ASSETS> 103,404
<PP&E> 68,576
<DEPRECIATION> 27,163
<TOTAL-ASSETS> 149,785
<CURRENT-LIABILITIES> 50,976
<BONDS> 0
0
0
<COMMON> 54,325
<OTHER-SE> 44,484
<TOTAL-LIABILITY-AND-EQUITY> 149,785
<SALES> 99,694
<TOTAL-REVENUES> 99,694
<CGS> 62,477
<TOTAL-COSTS> 62,477
<OTHER-EXPENSES> 28,198
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (542)
<INCOME-PRETAX> 9,561
<INCOME-TAX> 3,756
<INCOME-CONTINUING> 5,805
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,805
<EPS-PRIMARY> .26
<EPS-DILUTED> .24
</TABLE>
