Segment Reporting

9 Months Ended

Oct. 28, 2023

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 are presented under the Other caption, as permitted by ASC 280.

General corporate expenses are comprised of general and administrative costs that management does not attribute to any of our operating segments. These costs primarily relate to corporate administration, information and technology resources, finance and human resources functional and organizational costs, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects.

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income , or the operating income in periods where there are no adjustments, of each segment. Adjusted operating income is a non-GAAP financial measure ("non-GAAP" or "adjusted") that is defined by the Company as operating income excluding impairment, restructuring and other charges. Adjusted operating income 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.

Reportable segment information is presented in the following table:

	For the 13 weeks ended						For the 39 weeks ended
	October 28, 2023			October 29, 2022			October 28, 2023			October 29, 2022
Net Revenue:
American Eagle	$	857,378		$	837,575		$	2,295,487		$	2,301,051
Aerie	$	393,042		$	349,712		$	1,132,537		$	1,043,129
Total Segment Net Revenue	$	1,250,420		$	1,187,287		$	3,428,024		$	3,344,180
Other	$	111,805		$	115,346		$	329,480		$	315,332
Intersegment Elimination	$	(61,170	)	$	(62,050	)	$	(174,645	)	$	(165,768	)
Total Net Revenue	$	1,301,055		$	1,240,583		$	3,582,859		$	3,493,745
Operating Income:
American Eagle	$	184,029		$	174,129		$	418,232		$	387,213
Aerie	$	75,850		$	56,487		$	188,772		$	111,414
Total Segment Operating Income	$	259,879		$	230,616		$	607,004		$	498,627
Other	$	(8,601	)	$	(11,650	)	$	(35,250	)	$	(39,381	)
Intersegment Elimination	$	-		$	-		$	-		$	-
General corporate expenses	$	(125,917	)	$	(101,418	)	$	(336,998	)	$	(285,781	)
Impairment, restructuring and other charges(1)	$	-		$	-		$	(21,275	)	$	-
Total Operating Income	$	125,361		$	117,548		$	213,481		$	173,465
Debt related charges	$	-		$	-		$	-		$	60,066
Interest (income) expense, net	$	(2,871	)	$	3,878		$	(1,229	)	$	11,887
Other (income) expense, net	$	(3,984	)	$	782		$	(9,446	)	$	(5,501	)
Income before income taxes	$	132,216		$	112,888		$	224,156		$	107,013
Capital Expenditures
American Eagle	$	17,219		$	20,477		$	48,411		$	55,000
Aerie	$	9,499		$	24,404		$	31,576		$	85,663
Other	$	9,760		$	20,801		$	21,490		$	25,933
General corporate expenditures	$	6,478		$	5,825		$	33,438		$	32,768
Total Capital Expenditures	$	42,956		$	71,507		$	134,915		$	199,364

(1) Represents pre-tax impairment, restructuring and other charges related to Quiet Platforms, including $10.8 million of long-lived asset impairment charges, $5.6 million of severance costs, and $4.9 million of contract related charges for the 39 weeks ended October 28, 2023.

The following table presents summarized geographical information:

	13 Weeks Ended				39 Weeks Ended
(In thousands)	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Total net revenue:
United States	$	1,114,115	$	1,076,096	$	3,035,573	$	3,011,419
Foreign (1)		186,940		164,487		547,286		482,326
Total net revenue	$	1,301,055	$	1,240,583	$	3,582,859	$	3,493,745

(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.