Earnings per Share

12 Months Ended

Jan. 29, 2022

6. Earnings per Share

The following is a reconciliation between basic and diluted weighted average shares outstanding:


	For the Years Ended
	January 29,		January 30,		February 1,
(In thousands, except per share amounts)	2022		2021		2020
Weighted average common shares outstanding:
Basic number of common shares outstanding		168,156		166,455		169,711
Dilutive effect of convertible notes		34,003		—		—
Dilutive effect of stock options and non-vested restricted stock		4,370		—		1,156
Diluted number of common shares outstanding		206,529		166,455		170,867

Anti-Dilutive Shares*		202		14,259		700

*In Fiscal 2020, there were 1.9 million potentially dilutive equity awards and 12.4 million potentially dilutive shares from the Company’s Notes that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. For all other periods, anti-dilutive shares relate to stock options and unvested restricted stock.

The Company has the right to settle the Notes in any combination of cash and shares of common stock. However, the Company intends to settle the original principal portion of the Notes in cash and any conversion value above the principal

in stock. Because of this repayment policy election, only the conversion spread portion of the amount owed is reflected as dilutive in our weighted average diluted shares outstanding. The Company uses the average of the closing prices of its common stock (NYSE: AEO) as reported on the New York Stock Exchange to calculate the conversion spread. The Notes could have a potential dilutive effect in future periods.

Refer to Note 10 and Note 13 to the Consolidated Financial Statements for additional information regarding the Notes and share-based compensation.