American Eagle Outfitters Inc: Form 10-Q for the period ended Aug 2, 2025

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A") is intended to help the reader understand the Company, our operations and our present business environment. This MD&A is provided as a supplement to — and should be read in conjunction with — our MD&A for Fiscal 2024, which can be found in Part II, Item 7 of our Fiscal 2024 Form 10-K.

In addition, the following discussion and analysis of financial condition and results of operations are based upon our Consolidated Financial Statements and should be read in conjunction with these statements and notes thereto.

Introduction

This MD&A is organized as follows:

• Executive Overview
• Key Performance Indicators
• Current Trends and Outlook
• Results of Operations
• Non-GAAP Information
• Liquidity and Capital Resources
• Critical Accounting Estimates

Recent accounting pronouncements the Company has adopted or is currently evaluating prior to adoption, including the dates of adoption or expected dates of adoption, as applicable, and anticipated effects on the Company’s audited Consolidated Financial Statements, are included in Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements included herein.

Executive Overview

We are a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under our American Eagle® and Aerie® brands.

We have two reportable segments, American Eagle and Aerie. Our Chief Operating Decision Maker (defined as our CEO) analyzes segment results and allocates resources based on adjusted operating income (loss), which is a non-GAAP financial measure. See Note 12, Segment Reporting, to the Consolidated Financial Statements included herein for additional information.

Key Performance Indicators

Our management evaluates the following items, which are considered key performance indicators, in assessing our performance:

Comparable Sales — Comparable sales and comparable sales changes provide a measure of sales growth for stores and channels open at least one year over the comparable prior year period. In fiscal years following those with 53 weeks, the prior year period is shifted by one week to compare similar calendar weeks. A store is included in comparable sales in the 13th month of operation. However, stores that have a gross square footage change of 25% or greater due to a remodel are removed from the comparable sales base but are included in total sales. These stores are returned to the comparable sales base in the 13th month following the remodel. Sales from American Eagle, Aerie, Todd Snyder, and Unsubscribed stores, as well as sales from AEO Direct and other digital channels, are included in total comparable sales. Sales from licensed stores are not included in comparable sales. Individual American Eagle and Aerie brand comparable sales disclosures include sales from stores and AEO Direct.

Omni-Channel Sales Performance – Our management utilizes the following quality of sales metrics in evaluating our omni-channel sales performance: comparable sales, average unit retail price, total transactions, units per transaction, and consolidated comparable traffic. We include these metrics in our discussion within this MD&A when we believe that they enhance the understanding of the matter being discussed. Investors may find them useful as such. Each of these metrics is defined as follows (except comparable sales, which is defined separately above):

• Average unit retail price represents the selling price of our goods. It is the cumulative net sales divided by the net units sold for a period of time.
• Total transactions represents the count of customer transactions over a period of time (inclusive of Company-owned stores and AEO Direct, unless specified otherwise).
• Units per transaction represents the number of units sold divided by total transactions over a period of time (inclusive of Company-owned stores and AEO Direct, unless specified otherwise).
• Consolidated comparable traffic represents visits to our Company-owned stores, limited to those stores that qualify to be included in comparable sales as defined above, including AEO Direct, over a period of time.

Gross Profit — Gross profit measures whether we are optimizing the profitability of our sales. Gross profit is the difference between total net revenue and cost of sales. Cost of sales consists of merchandise costs, including design, sourcing, importing, and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs, Quiet Platforms costs to service its customers and buying, occupancy and warehousing costs and services. Design costs consist of compensation, rent, depreciation, travel, supplies, and samples.

Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operations.

The inability to obtain acceptable levels of sales, initial markups or any significant increase in our use of markdowns could have an adverse effect on our gross consolidated profit and results of operations.

Operating Income — Our management views operating income as a key indicator of our performance. The key drivers of operating income are net revenue, gross profit, our ability to control selling. general, and administrative ("SG&A") expenses, and our level of capital expenditures.

Cash Flow and Liquidity — Our management evaluates cash flow from operations and investing and financing activities in determining the sufficiency of our cash position and capital allocation strategies. Cash flow has historically been sufficient to cover our uses of cash. Our management believes that cash flow and liquidity will be sufficient to fund anticipated capital expenditures and working capital requirements for the next twelve months and beyond.

Current Trends and Outlook

Macroeconomic Conditions

During Fiscal 2024 and the 13 and 26 weeks ended August 2, 2025, our results were negatively impacted by macro-economic challenges and global inflationary pressures impacting consumer spending behavior, which constrained revenue and increased margin pressure to clear through excess spring and summer inventory.

After a challenging spring season, second quarter demand increased as the quarter progressed. Top-line improvement, coupled with lower than expected promotional activity, enabled us to stabilize margins and deliver operating income slightly ahead of last year for the 13 weeks ended August 2, 2025.

In addition, recent changes in legislative and regulatory developments, including tariffs and other trade policies, have introduced additional uncertainty in the global economy. For example, in April 2025, the U.S. government imposed a new tariff and trade policy and has subsequently announced various updates to its tariff policy. The imposition of tariffs by the U.S. government, associated geopolitical tensions, including retaliatory tariffs by trading partners, and uncertainties regarding tariffs have and may further affect our margins and operations or could lead to further weakened business conditions for our industry. We continue to evaluate the impact of tariffs and other trade policies on our business.

For further information about the risks associated with global economic conditions and the effect of economic pressures on our business, see "Risk Factors" in Part I, Item 1A of our Fiscal 2024 Form 10-K.

Omni-Channel Capabilities

The Company operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the company operates a robust e-commerce business across its brands.

Over the past several years, we have invested in building our technologies and digital capabilities. We focused our investments in three key areas: making significant advances in mobile technology, investing in digital marketing and improving the digital customer experience.

Results of Operations

Overview

For the 13 weeks ended August 2, 2025:

• Total revenue decreased 1% from $1.291 billion to $1.284 billion, with American Eagle revenue decreasing 3% year-over-year, and Aerie revenue increasing 3% year-over-year. American Eagle's comparable sales decreased 3% year-over-year, and Aerie's comparable sales increased 3% year-over-year.
• Gross profit of $500 million increased by 30 basis points year-over-year to 38.9% as a percentage of total revenue.
• Operating income increased 2% to $103 million and increased by 20 basis points to 8.0% as a percentage of total revenue, compared to $101 million last year.
• Diluted earnings per share increased to $0.45 for the 13 weeks ended August 2, 2025 compared to $0.39 for the 13 weeks ended August 3, 2024. Year-to-date, the company has completed $231 million, or 20.4 million shares, in share repurchases, which is approximately a 10% reduction in diluted shares outstanding.

The following table shows the percentage relationship to total net revenue of the listed line items included in our Consolidated Statements of Operations:

(In thousands)

(In thousands)

32

(In thousands)

(In thousands)

(1) Refer to "Non-GAAP Information" below for non-GAAP or adjusted financial measures.

The following table shows our consolidated store data for the 13 and 26 weeks ended August 2, 2025 and August 3, 2024:

(1) International licensed retail stores are not included in the consolidated store data or the total gross square feet calculation.

As of August 2, 2025, we operated 829 American Eagle retail stores, consisting of 183 Aerie side-by-side locations, five locations with AE brand, Aerie brand and OFFLINE™ connected as one store, and six OFFLINE™ side-by-side locations, 325 Aerie stand-alone stores (including 43 OFFLINE™ stand-alone stores and 46 OFFLINE™ side-by-side locations), and AEO Direct. Additionally, there were 23 Todd Snyder stand-alone locations and eight Unsubscribed locations.

Comparison of the 13 weeks ended August 2, 2025 to the 13 weeks ended August 3, 2024

Total Net Revenue

Total net revenue decreased 1% for the 13 weeks ended August 2, 2025 to $1.284 billion, compared to $1.291 billion last year. Store and digital revenue both decreased 1%. Total comparable sales decreased by 1%, compared to a 4% increase last year. Traffic and units were up across brands and channels, with declines in average unit retail price.

(In thousands)

(In thousands)

(In thousands)

American Eagle. The decrease in net revenue was driven by lower average unit retail price, leading to lower transaction value, partially offset by increases in traffic and transactions. American Eagle comparable sales decreased 3%.

Aerie. The increase in net revenue was driven by increased traffic and transactions across channels, as well as increased units per transaction, partially offset by lower average unit retail price. Aerie comparable sales increased 3%.

Other. The increase in net revenue was primarily attributable to higher revenue from Todd Snyder and Unsubscribed.

Gross Profit

(In thousands)

(In thousands)

Gross profit was flat year-over-year, with the decline in revenue offset by lower promotional activity.

During the 13 weeks ended August 2, 2025 and August 3, 2024, $2.6 million and $2.5 million, respectively of share-based payment expense were included in gross profit, representing both time and performance-based 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 SG&A expenses. Refer to Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements included herein for a description of our accounting policy regarding cost of sales, including certain buying, occupancy and warehousing expenses.

Selling, General and Administrative Expenses

(In thousands)

(In thousands)

The decrease in SG&A expense was primarily driven by lower compensation costs as a result of recent restructuring and lower incentive costs, partially offset by investments in advertising. The balance of expense categories were flat, reflecting ongoing cost management initiatives.

There was $3.9 million and $4.3 million of share-based payment expense included in SG&A expenses for the 13 weeks ended August 2, 2025 and August 3, 2024, respectively, comprised of both time and performance-based awards.

Depreciation and Amortization Expense

(In thousands)

(In thousands)

The increase in expense was primarily driven by new and renovated American Eagle stores.

Operating Income

(In thousands)

(In thousands)

(In thousands)

The increase in operating income was primarily driven by higher gross profit and lower SG&A expenses, partially offset by increased depreciation and amortization expense, all of which are explained in detail above.

American Eagle. The decrease was primarily the result of an $11 million decrease in gross profit driven by decreased merchandise margin on the $27 million, or 3%, decline in total net revenue, partially offset by a $6 million reduction in SG&A expenses.

Aerie. The increase was primarily the result of a $12 million increase in gross profit driven by incremental merchandise margin on the $13 million, or 3% increase in total net revenue, partially offset by a $7 million increase in SG&A expenses, primarily related to investments in advertising and variable selling expenses.

General Corporate Expenses. The decrease was primarily driven by a reduction in compensation costs as a result of recent restructuring and lower incentive costs.

Interest Expense (Income), net

(In thousands)

(In thousands)

35

The increase in interest expense (income), net is primarily related to $2 million in interest expense on increased borrowings year-over-year.

Other (Income), net

(In thousands)

(In thousands)

Provision for Income Taxes

(In thousands)

(In thousands)

The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 13 weeks ended August 2, 2025 was 23.4% compared to 25.4% for the 13 weeks ended August 3, 2024. The change in the effective tax rate, as compared to the prior period, is primarily due to tax audit adjustments and foreign currency adjustments.

Net Income

(In thousands)

(In thousands)

Net income per diluted share of $0.45 increased for the 13 weeks ended August 2, 2025, compared to $0.39 for the 13 weeks ended August 3, 2024. The increase in net income was attributable to the factors noted above. The increase in net income per diluted share was due to a reduction in diluted shares outstanding as a result of recent share repurchases.

Comparison of the 26 weeks ended August 2, 2025 to the 26 weeks ended August 3, 2024

Total Net Revenue

Total net revenue decreased 3% to $2.373 billion for the 26 weeks ended August 2, 2025, compared to $2.435 billion last year. Digital revenue decreased 1%, and store revenue decreased 3%. Total comparable sales decreased by 2%, compared to a 5% increase last year.

(In thousands)

(In thousands)

(In thousands)

American Eagle. The decrease in net revenue was driven by lower average unit retail, partially offset by increased units per transaction. American Eagle comparable sales decreased 3%.

Aerie. Net revenue was flat year-over-year, with lower average unit retail price leading to lower transaction value, offset by 11 net new store openings year-over-year.

Other. The decrease in net revenue was primarily attributable to planned lower revenue from Quiet Platforms due to our change in strategy for this business.

Gross Profit

(In thousands)

(In thousands)

The 15% decrease in gross profit was primarily driven by a decrease of $123 million in merchandise margin year over year due to lower sales and increased promotional activity.

During the 26 weeks ended August 2, 2025 and August 3, 2024, $9.5 million and $9.1 million, respectively of share-based payment expense were included in gross profit, representing both time and performance-based 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 SG&A expenses. Refer to Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements for a description of our accounting policy regarding cost of sales, including certain buying, occupancy and warehousing expenses.

Selling, General and Administrative Expenses

(In thousands)

(In thousands)

The increase in SG&A expense was primarily related to an increase in advertising year-over-year, partially offset by lower compensation costs.

There was $17.5 million and $18.3 million of share-based payment expense included in SG&A expenses for the 26 week periods ended August 2, 2025 and August 3, 2024, respectively, comprised of both time and performance-based awards.

Impairment & Restructuring Charges

(In thousands)

(In thousands)

During the 26 weeks ended August 2, 2025, we recorded $17.1 million of impairment and restructuring charges. We recorded $10.4 million of impairment related to ROU assets, $4.9 million related to fixed assets, and $1.8 million of employee severance.

Depreciation and Amortization Expense

(In thousands)

(In thousands)

The increase in expense was primarily driven by new and renovated American Eagle stores.

Operating Income

(In thousands)

(In thousands)

(In thousands)

The decrease in operating income was primarily driven by lower gross profit, and an increase in impairment and restructuring charges, all of which are explained in detail above.

American Eagle. The decrease was primarily the result of a $89 million decline in gross profit driven by lower merchandise margin on the $58 million, or 4%, decline in total net revenue and increased promotional activity. Depreciation and amortization expense also increased $5 million primarily as a result of new and renovated stores.

Aerie. The decrease was primarily the result of a $46 million decline in gross profit driven by lower merchandise margin due to increased promotional activity and product cost. Selling, general, and administrative expenses also increased $11 million year-over-year, primarily due to investments in advertising and increased store compensation cost.

Interest Expense (Income), net

(In thousands)

(In thousands)

The increase in interest expense (income), net during the 26 weeks ended August 2, 2025 was primarily attributable to a $3 million increase in interest expense as a result of borrowings on our Credit Facility, as well as a $3 million reduction in interest income as a result of lower cash balances.

Other (Income), net

(In thousands)

(In thousands)

Provision for Income Taxes

(In thousands)

(In thousands)

The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 26 weeks ended August 2, 2025 was 23.9% compared to 22.1% for the 26 weeks ended August 3, 2024. The change in the effective tax rate, as compared to the prior period, is primarily due to share-based payments and tax audit adjustments.

Net Income

(In thousands)

(In thousands)

Net income per diluted share decreased to $0.07 per diluted share for the 26 weeks ended August 2, 2025, compared to $0.73 per diluted share for the 26 weeks ended August 3, 2024. The decrease in net income was attributable to the factors noted above. The reduction in net income per diluted share was partially offset by a reduction in diluted shares outstanding as a result of recent share repurchases.

Non-GAAP Information

The results of operations section above includes operating income and net income per diluted share presented on an adjusted or non-GAAP basis, which are non-GAAP financial measures. These financial measures are not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance when reviewed in conjunction with our GAAP Consolidated Financial Statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. The table below reconciles the GAAP financial measure to the non-GAAP financial measures discussed above.

GAAP to Non-GAAP Reconciliation

(Dollars in thousands, except per share amounts)

(1) Refer to Note 13, Impairment and Restructuring Charges, to the Consolidated Financial Statements included herein for additional information.

(2) The tax effect of excluded items is the difference between the tax benefit calculated on a GAAP basis and on a non-GAAP basis.

International Operations

We have agreements with multiple third-party operators to expand our brands internationally. Our international licensing partners acquire the right to sell, promote, market, and/or distribute various categories of our products in a given geographic area and to source products from us. International licensees' rights include the right to own and operate retail stores and may include rights to sell in wholesale markets, shop-in-shop concessions and operate online marketplace businesses. As of August 2, 2025, our international licensing partners operated in 365 licensed retail stores and concessions, as well as wholesale markets, online brand sites, and online marketplaces in approximately 30 countries.

As of August 2, 2025, we had 99 and 92 Company-owned stores in Canada and Mexico, respectively.

Liquidity and Capital Resources

Our uses of cash have historically been for working capital, the construction of new stores and remodeling of existing stores, information technology and e-commerce upgrades and investments, distribution center improvements and expansion, and the return of value to stockholders through the repurchase of common stock and the payment of dividends. Additionally, our uses of cash have included the development of the Aerie brand, investments in technology and omni-channel capabilities, and our international expansion efforts.

Historically, our uses of cash have been funded with cash flow from operations and existing cash on hand. We also maintain an asset-based revolving credit facility that allows us to borrow up to $700 million, which will expire in June 2027. As of August 2, 2025, the Company had $203.0 million in borrowings under the Credit Facility. Refer to Note 8, Long-Term Debt, Net, to the Consolidated Financial Statements included herein for additional information.

As of August 2, 2025, we had approximately $126.8 million in cash and cash equivalents. We expect to be able to fund our future cash requirements through current cash holdings and available liquidity.

The following sets forth certain measures of our liquidity:

The following table sets forth net cash flows in operating, investing, and financing activities for the 26 weeks ended August 2, 2025 and August 3, 2024:

(In thousands)

Cash Flows (Used For) Provided By Operating Activities

Our major source of cash from operations for both periods was merchandise sales and our primary outflow of cash from operations was for the payment of operational costs.

Cash Flows (Used For) Investing Activities

Investing activities for the 26 weeks ended August 2, 2025 primarily consisted of capital expenditures of $132.6 million, partially offset by the sale of available-for-sale investments of $50.0 million.

Investing activities for the 26 weeks ended August 3, 2024 primarily consisted of the sales of available-for-sale investments of $100.0 million, partially offset by capital expenditures of $96.9 million.

Cash Flows (Used for) Financing Activities

Cash used for financing activities for the 26 weeks ended August 2, 2025 consisted primarily of $201.8 million, including excise taxes, used to repurchase the Company's common stock under the ASR Agreement (as defined below), $42.8 million for cash dividends paid at a quarterly rate of $0.125 per share, and $31.3 million, including commissions and excise taxes, used for the repurchase of common stock under our publicly announced program, partially offset by net Credit Facility borrowings of $203.0 million.

Cash used for financing activities for the 26 weeks ended August 3, 2024 consisted primarily of $130.9 million used for the repurchase of common stock under our publicly announced program, and $48.6 million for cash dividends paid at a quarterly rate of $0.125 per share.

Revolving Credit Facility

In June 2022, we entered into an amended and restated Credit Agreement, which provides senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations. The Credit Facility expires on June 24, 2027.

All obligations under the Credit Facility are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by certain assets of the Company and certain subsidiaries.

As of August 2, 2025, the Company was in compliance with the terms of the Credit Agreement and had borrowings of $203.0 million and $12.0 million outstanding in stand-by letters of credit. As of August 3, 2024, the Company was in compliance with the terms of the Credit Agreement and had no borrowings and $12.0 million outstanding in stand-by letters of credit.

Capital Expenditures for Property and Equipment

For the 26 weeks ended August 2, 2025, capital expenditures totaled $132.6 million. See below for a breakdown of expenditures:

(In thousands)

(In thousands)

For Fiscal 2025, we expect capital expenditures to be approximately $275 million related to the continued support of our expansion efforts, stores, information technology upgrades to support growth and investments in e-commerce, as well as to support and enhance our supply chain. We expect to be able to fund our capital expenditures through current available liquidity and cash generated from operations.

See below for a breakdown for stores remodeled and new stores opened in the 26 weeks ended August 2, 2025 and August 3, 2024:

(1) American Eagle includes AE stand-alone stores, Aerie side-by-side stores connected to an AE brand location, AE, Aerie, and OFFLINE locations connected as one store, and OFFLINE side-by-side stores connected to an AE brand location

(2) Aerie includes Aerie stand-alone, OFFLINE stand-alone, and OFFLINE side-by-side stores connected to an Aerie brand location

Share Repurchases

On March 11, 2025, the Company’s Board of Directors (the "Board") authorized 50 million additional shares for repurchase as part of its existing share repurchase program, which was previously announced in February 2024. Including this additional authorization, as of August 2, 2025, the Company had a total of 54.0 million shares remaining authorized for repurchase through February 3, 2029. During the 26 weeks ended August 2, 2025, approximately 2.0 million shares were repurchased as part of our publicly announced share repurchase program.

On March 14, 2025, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with Bank of America, N.A. ("Bank of America") to repurchase an aggregate of $200 million of the Company’s common stock.

Pursuant to the terms of the ASR Agreement, on March 17, 2025, the Company made an aggregate payment of $200 million to Bank of America and received an aggregate initial delivery of approximately 14.5 million shares of its common stock. At final settlement on June 16, 2025, the Company received an additional 3.9 million shares. The cumulative repurchases under the ASR Agreement totaled 18.4 million shares, in the aggregate, at an average price of $10.86.

During the 26 weeks ended August 2, 2025 and August 3, 2024, we repurchased approximately 0.7 million and 0.5 million shares, respectively, from certain employees at market prices totaling $7.9 million and $13.3 million, respectively. These shares were repurchased for the payment of taxes, in connection with the vesting of share-based payments, as permitted under our equity incentive plans.

The aforementioned repurchased shares have been recorded as treasury stock.

Dividends

During the 13 weeks ended August 2, 2025, the Board declared a quarterly cash dividend of $0.125 per share on June 4, 2025, which was paid on July 25, 2025.

The Company maintains the right to defer the record and payment dates of any declared dividends, depending upon, among other factors, business performance and the macroeconomic environment. The payment of future dividends is at the discretion of our Board and is based on future earnings, cash flow, financial condition, capital requirements, changes in United States taxation, and other relevant factors.

Critical Accounting Estimates

Our critical accounting policies and estimates are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year ended February 1, 2025 contained in our Fiscal 2024 Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Consolidated Financial Statements in this Quarterly Report. The application of our critical accounting policies and estimates may require our management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Our management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.

We are primarily exposed to the impact of foreign exchange rate risk primarily through our Canadian and Mexican operations where the functional currency is the Canadian dollar and Mexican peso, respectively. The impact of all other foreign currencies is currently immaterial to our consolidated financial results. An unrealized gain of $7 million and $22 million is included in accumulated other comprehensive income during the 13 and 26 weeks ended August 2, 2025, respectively. Our market risk profile as of February 1, 2025 is disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our Fiscal 2024 Form 10-K, and was unchanged as of August 2, 2025.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the management of American Eagle Outfitters, Inc. (the "Management"), including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, Management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In connection with the preparation of this Quarterly Report, as of August 2, 2025, the Company performed an evaluation under the supervision and with the participation of our Management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective in the timely and accurate recording, processing, summarizing, and reporting of material financial and non-financial information within the time periods specified within the SEC’s rules and forms. Our principal executive officer and principal financial officer also concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our Management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Risk factors that affect our business and financial results are discussed within Part I, Item 1A of our Fiscal 2024 Form 10-K. There have been no material changes to our risk factors as disclosed in the Fiscal 2024 Form 10-K.