Segment Reporting

9 Months Ended

Oct. 29, 2022

Segment Reporting [Abstract]

Segment Reporting

12. Segment Reporting

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified two operating segments (American Eagle brand and Aerie brand) that also represent our reportable segments and reflect the Chief Operating Decision Maker’s (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder brand, Unsubscribed brand, and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they have been included in the Corporate and Other category, as permitted by ASC 280.

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (loss), or the operating income (loss) in periods where there are no adjustments, of each segment. Adjusted operating income (loss) is a non-GAAP financial measure ("non-GAAP" or "adjusted") that is defined by the Company as operating income excluding impairment, restructuring and COVID-19 related charges. Adjusted operating income (loss) is 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. There were no adjustments to operating income in either the 13 or 39 weeks ended October 29, 2022 or October 30, 2021 for any segment, therefore adjusted operating income (loss) is not presented in the table below.

Reportable segment information is presented in the following table:

(in thousands)	American Eagle		Aerie		Corporate and Other (1)			Total (2)
13 weeks ended October 29, 2022
Total net revenue	$	837,575	$	349,712	$	53,296		$	1,240,583
Operating income (loss)	$	174,129	$	56,487	$	(113,068	)	$	117,548
Capital expenditures	$	20,477	$	24,404	$	26,626		$	71,507
13 weeks ended October 30, 2021
Total net revenue	$	940,992	$	315,049	$	18,037		$	1,274,078
Operating income (loss)	$	261,225	$	52,021	$	(103,559	)	$	209,687
Capital expenditures	$	13,298	$	24,867	$	20,036		$	58,201
(in thousands)	American Eagle		Aerie		Corporate and Other (1)			Total (2)
39 weeks ended October 29, 2022
Total net revenue	$	2,301,051	$	1,043,129	$	149,565		$	3,493,745
Operating income (loss)	$	387,213	$	111,414	$	(325,162	)	$	173,465
Capital expenditures	$	55,000	$	85,663	$	58,701		$	199,364
39 weeks ended October 30, 2021
Total net revenue	$	2,513,700	$	947,851	$	41,297		$	3,502,848
Operating income (loss)	$	611,650	$	191,341	$	(291,880	)	$	511,111
Capital expenditures	$	36,093	$	48,164	$	60,148		$	144,405

(1)Corporate and Other includes revenue and operating results of the Todd Snyder brand, Unsubscribed brand, and Quiet Platforms (net of intersegment eliminations), which have been identified as separate operating segments, but are not material to disclose as separate reportable segments. Corporate operating costs represent certain costs that are not directly attributable to another reportable segment.

(2)The difference between operating income (loss) and income before income taxes includes the following, which are not allocated to our reportable segments:

- For the 13 weeks ended October 29, 2022: interest expense, net of $3.9 million; and other expense (income), net of $0.8 million. For the 39 weeks ended October 29, 2022: debt related charges of $60.1 million; interest expense, net of $11.9 million; and other expense (income), net of ($5.5) million.

- For the 13 weeks ended October 30, 2021: interest expense, net of $8.6 million and other expense (income), net of ($3.1) million. For the 39 weeks ended October 30, 2021: interest expense, net of $26.0 million and other expense (income), net of ($6.4) million.

We do not allocate assets at the reportable segment level and therefore our CEO does not use segment asset information to make decisions.

The following table presents summarized geographical information:

	13 Weeks Ended				39 Weeks Ended
(In thousands)	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Total net revenue:
United States	$	1,076,096	$	1,104,441	$	3,011,419	$	3,044,407
Foreign (1)		164,487		169,637		482,326		458,441
Total net revenue	$	1,240,583	$	1,274,078	$	3,493,745	$	3,502,848

(1)Amounts represent sales from American Eagle and Aerie international retail stores, e-commerce sales that are billed to and/or shipped to foreign countries, and international franchise royalty revenue.