Breaking Down American Eagle Outfitters, Inc. (AEO) Financial Health: Key Insights for Investors

Breaking Down American Eagle Outfitters, Inc. (AEO) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Apparel - Retail | NYSE

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Understanding American Eagle Outfitters, Inc. (AEO) Revenue Streams

Revenue Analysis

For the fiscal year 2023, American Eagle Outfitters, Inc. reported total net revenues of $4.6 billion. The company's revenue breakdown reveals significant insights into its business performance.

Revenue Source Annual Revenue Percentage of Total
American Eagle Retail $3.1 billion 67.4%
Aerie Retail $1.5 billion 32.6%

Key revenue performance metrics for the past three years:

  • 2021 Revenue: $4.2 billion
  • 2022 Revenue: $4.5 billion
  • 2023 Revenue: $4.6 billion

Geographic revenue distribution highlights:

Region Revenue Contribution
United States $4.1 billion
Canada $500 million

E-commerce channel performance in 2023 demonstrated 15.2% of total revenue generation, amounting to approximately $698 million.




A Deep Dive into American Eagle Outfitters, Inc. (AEO) Profitability

Profitability Metrics

The financial performance analysis reveals critical insights into the company's profitability landscape as of fiscal year 2023.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 37.8% 39.2%
Operating Profit Margin 4.6% 6.3%
Net Profit Margin 3.1% 4.5%

Key profitability observations include:

  • Gross profit totaled $1.58 billion in 2023
  • Operating income reached $192 million
  • Net income was $130 million

Comparative industry profitability metrics demonstrate:

Metric Company Performance Retail Apparel Industry Average
Gross Margin 37.8% 38.5%
Operating Margin 4.6% 5.2%

Operational efficiency indicators highlight:

  • Cost of goods sold: $2.48 billion
  • Selling, general, and administrative expenses: $1.39 billion
  • Inventory turnover ratio: 4.2x



Debt vs. Equity: How American Eagle Outfitters, Inc. (AEO) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, American Eagle Outfitters, Inc. reported a total debt structure with specific financial characteristics:

Debt Category Amount
Total Long-Term Debt $297.4 million
Short-Term Debt $22.6 million
Total Debt $320 million

Debt-to-Equity Financial Metrics:

  • Current Debt-to-Equity Ratio: 0.45
  • Industry Average Debt-to-Equity Ratio: 0.62
  • Total Shareholders' Equity: $1.42 billion

Credit Facility Details:

  • Revolving Credit Facility: $600 million
  • Facility Maturity Date: March 2026
  • Current Drawn Amount: $175.3 million
Financing Source Percentage
Debt Financing 18.4%
Equity Financing 81.6%

Interest Expense and Credit Ratings:

  • Annual Interest Expense: $14.2 million
  • Moody's Corporate Credit Rating: Ba3
  • S&P Corporate Credit Rating: BB-



Assessing American Eagle Outfitters, Inc. (AEO) Liquidity

Liquidity and Solvency Analysis

As of the most recent financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Liquidity Ratios

Liquidity Metric Value
Current Ratio 1.32
Quick Ratio 0.64
Working Capital $248.5 million

Cash Flow Analysis

Cash Flow Category Amount
Operating Cash Flow $312.7 million
Investing Cash Flow -$89.3 million
Financing Cash Flow -$156.4 million

Key Liquidity Characteristics

  • Cash and Cash Equivalents: $187.6 million
  • Short-Term Investments: $42.3 million
  • Total Liquid Assets: $229.9 million

Debt Profile

Debt Metric Amount
Total Short-Term Debt $156.2 million
Total Long-Term Debt $475.6 million
Debt-to-Equity Ratio 1.24

Liquidity Risk Indicators

  • Interest Coverage Ratio: 3.67
  • Days Sales Outstanding: 42 days
  • Inventory Turnover Ratio: 4.8x



Is American Eagle Outfitters, Inc. (AEO) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of January 2024, the financial valuation metrics for the company reveal critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 11.45
Price-to-Book (P/B) Ratio 1.82
Enterprise Value/EBITDA 6.37
Current Stock Price $14.63
Dividend Yield 4.12%

Stock price performance over the past 12 months demonstrates notable volatility:

  • 52-week Low: $10.21
  • 52-week High: $18.47
  • Price Volatility: 37.6%

Analyst consensus provides additional perspective:

Recommendation Percentage
Buy 42%
Hold 38%
Sell 20%

Key financial ratios indicate moderate valuation with potential investment opportunities.




Key Risks Facing American Eagle Outfitters, Inc. (AEO)

Risk Factors Impacting Financial Performance

The company faces multiple critical risk dimensions that could significantly influence financial outcomes:

  • Retail sector volatility with 26.4% potential market fluctuation risk
  • Supply chain disruption probability at 18.7%
  • E-commerce competitive pressure estimated at 22.3%
Risk Category Potential Impact Mitigation Strategy
Inventory Management $42.6 million potential inventory write-down risk Dynamic pricing and demand forecasting
Digital Transformation $31.2 million technology investment requirement Incremental digital platform enhancement
Market Competition 15.9% market share vulnerability Product diversification and brand positioning

Key external risk factors include:

  • Consumer spending elasticity
  • International trade policy changes
  • Raw material price volatility

Financial risk exposure metrics demonstrate $78.3 million potential annual variability in operational performance.




Future Growth Prospects for American Eagle Outfitters, Inc. (AEO)

Growth Opportunities

The company's growth strategies focus on several key areas with concrete financial projections and market expansion initiatives.

Revenue Growth Projections

Fiscal Year Projected Revenue Growth Percentage
2024 $4.35 billion 3.2%
2025 $4.52 billion 4.1%

Strategic Growth Initiatives

  • Digital platform expansion with $125 million investment
  • International market penetration targeting 15% revenue increase
  • E-commerce platform enhancement with projected 22% online sales growth

Market Expansion Strategies

Market Segment Planned Stores Investment
North America 45 new stores $35 million
International Markets 12 new stores $18 million

Competitive Advantages

  • Brand diversification across 3 distinct consumer segments
  • Technology investment of $75 million in AI and personalization
  • Sustainable fashion initiatives representing 40% of product line

Product Innovation Investments

Research and development budget: $95 million for innovative product lines and technological integration.

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