10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 4, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-33338

American Eagle Outfitters, Inc.

(Exact name of registrant as specified in its charter)

Delaware	No. 13-2721761
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
77 Hot Metal Street, Pittsburgh, PA	15203-2329
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (412) 432-3300

Former name, former address and former fiscal year, if changed since last report:

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 192,671,985 Common Shares were outstanding at May 24, 2013.

AMERICAN EAGLE OUTFITTERS, INC.

TABLE OF CONTENTS

		Page Number
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements		3
	Consolidated Balance Sheets: May 4, 2013, February 2, 2013 and April 28, 2012		3
	Consolidated Statements of Operations and Retained Earnings: 13 weeks ended May 4, 2013 and April 28, 2012		4
	Consolidated Statements of Comprehensive Income: 13 weeks ended May 4, 2013 and April 28, 2012		5
	Consolidated Statements of Cash Flows: 13 weeks ended May 4, 2013 and April 28, 2012		6
	Notes to Consolidated Financial Statements		7
	Report of Independent Registered Public Accounting Firm		20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		29
Item 4.	Controls and Procedures		30
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings		N/A
Item 1A.	Risk Factors		30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 3.	Defaults Upon Senior Securities		N/A
Item 4.	Mine Safety Disclosures		N/A
Item 5.	Other Information		31
Item 6.	Exhibits		32

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)	May 4, 2013			February 2, 2013			April 28, 2012
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	383,175		$	509,119		$	713,443
Short-term investments		113,041			121,873			8,587
Merchandise inventory		340,508			332,452			367,695
Assets held for sale		4,528			9,499			19,039
Accounts receivable		55,193			46,321			37,472
Prepaid expenses and other		97,512			73,805			75,433
Deferred income taxes		42,649			58,230			48,358
Total current assets		1,036,606			1,151,299			1,270,027
Property and equipment, at cost, net of accumulated depreciation		522,269			500,134			562,058
Intangible assets, at cost, net of accumulated amortization		37,931			38,136			39,556
Goodwill		11,434			11,484			11,544
Non-current deferred income taxes		23,325			31,282			16,579
Other assets		35,479			23,718			16,688
Total assets	$	1,667,044		$	1,756,053		$	1,916,452
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	161,778		$	176,874		$	133,861
Accrued compensation and payroll taxes		27,993			65,533			21,970
Accrued rent		74,034			77,873			76,550
Accrued income and other taxes		7,948			29,155			14,333
Unredeemed gift cards and gift certificates		33,435			46,458			30,783
Current portion of deferred lease credits		14,219			13,381			14,945
Other liabilities and accrued expenses		27,728			26,628			25,779
Total current liabilities		347,135			435,902			318,221
Non-current liabilities:
Deferred lease credits		69,399			59,571			73,350
Non-current accrued income taxes		19,321			19,011			31,806
Other non-current liabilities		24,064			20,382			22,544
Total non-current liabilities		112,784			98,964			127,700
Commitments and contingencies		—			—			—
Stockholders’ equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding		—			—			—
Common stock, $0.01 par value; 600,000 shares authorized; 249,566, 249,566 and 249,566 shares issued; 192,617, 192,604 and 195,841 shares outstanding, respectively		2,496			2,496			2,496
Contributed capital		583,795			627,065			567,700
Accumulated other comprehensive income		28,795			29,297			30,532
Retained earnings		1,592,706			1,553,058			1,774,205
Treasury stock, 56,949, 56,962 and 53,725 shares, respectively		(1,000,667	)		(990,729	)		(904,402	)
Total stockholders’ equity		1,207,125			1,221,187			1,470,531
Total liabilities and stockholders’ equity	$	1,667,044		$	1,756,053		$	1,916,452

Refer to Notes to Consolidated Financial Statements

3

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

(Unaudited)

	13 Weeks Ended
(In thousands, except per share amounts)	May 4,			April 28,
	2013			2012
Total net revenue	$	679,477		$	708,695
Cost of sales, including certain buying, occupancy and warehousing expenses		415,868			433,782
Gross profit		263,609			274,913
Selling, general and administrative expenses		182,253			178,539
Depreciation and amortization expense		35,539			32,066
Operating income		45,817			64,308
Other (expense) income, net		(682	)		3,507
Income before income taxes		45,135			67,815
Provision for income taxes		17,159			23,780
Income from continuing operations	$	27,976		$	44,035
Loss from discontinued operations, net of tax		—			(4,338	)
Net income	$	27,976		$	39,697
Basic income per common share:
Income from continuing operations	$	0.14		$	0.22
Loss from discontinued operations		—		($	0.02	)
Net income per basic share	$	0.14		$	0.20
Diluted income per common share:
Income from continuing operations	$	0.14		$	0.22
Loss from discontinued operations		—		($	0.02	)
Net income per diluted share	$	0.14		$	0.20
Cash dividends per common share		—		$	0.11
Weighted average common shares outstanding—basic		192,710			194,890
Weighted average common shares outstanding—diluted		196,718			197,252
Retained earnings, beginning	$	1,553,058		$	1,771,464
Net income		27,976			39,697
Cash dividends and dividend equivalents		—			(21,945	)
Reissuance of treasury stock		11,672			(15,011	)
Retained earnings, ending	$	1,592,706		$	1,774,205

Refer to Notes to Consolidated Financial Statements

4

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	13 Weeks Ended
(In thousands)	May 4,			April 28,
	2013			2012
Net income	$	27,976		$	39,697
Other comprehensive income:
Foreign currency translation (loss) gain		(502	)		1,873
Other comprehensive (loss) income		(502	)		1,873
Comprehensive income	$	27,474		$	41,570

Refer to Notes to Consolidated Financial Statements

5

AMERICAN EAGLE OUTFITTERS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	13 Weeks Ended
(In thousands)	May 4,			April 28,
	2013			2012
Operating activities:
Net income	$	27,976		$	39,697
Loss from discontinued operations, net of tax		—			4,338
Income from continuing operations	$	27,976		$	44,035
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		35,926			32,591
Share-based compensation		5,289			21,299
Provision for deferred income taxes		23,446			(2,772	)
Tax benefit from share-based payments		7,890			4,422
Excess tax benefit from share-based payments		(8,101	)		(2,643	)
Foreign currency transaction loss (gain)		640			(145	)
Changes in assets and liabilities:
Merchandise inventory		(8,375	)		426
Accounts receivable		(8,942	)		2,570
Prepaid expenses and other		(20,497	)		(379	)
Other assets		(12,524	)		(426	)
Accounts payable		(15,811	)		(46,766	)
Unredeemed gift cards and gift certificates		(12,981	)		(14,260	)
Deferred lease credits		10,752			1,149
Accrued compensation and payroll taxes		(37,537	)		(20,577	)
Accrued income and other taxes		(24,103	)		(9,527	)
Accrued liabilities		(1,732	)		9,327
Total adjustments		(66,660	)		(25,711	)
Net cash (used for) provided by operating activities		(38,684	)		18,324
Investing activities:
Capital expenditures for property and equipment		(45,657	)		(24,054	)
Acquisition of intangible assets		(295	)		(220	)
Purchase of available-for-sale securities		(15,217	)		(3,051	)
Sale of available-for-sale securities		23,778			20,119
Net cash used for investing activities		(37,391	)		(7,206	)
Financing activities:
Payments on capital leases		(2,564	)		(923	)
Repurchase of common stock as part of publicly announced programs		(33,051	)		—
Repurchase of common stock from employees		(23,291	)		(4,100	)
Net proceeds from stock options exercised		1,523			12,165
Excess tax benefit from share-based payments		8,101			2,643
Cash dividends paid		—			(21,524	)
Net cash used for financing activities		(49,282	)		(11,739	)
Effect of exchange rates changes on cash		(587	)		960
Cash flows of discontinued operations
Net cash used for operating activities		—			(5,664	)
Net cash used for investing activities		—			(777	)
Net cash used for financing activities		—			—
Effect of exchange rates changes on cash		—			—
Net cash used for discontinued operations		—			(6,441	)
Net decrease in cash and cash equivalents		(125,944	)		(6,102	)
Cash and cash equivalents—beginning of period		509,119			719,545
Cash and cash equivalents—end of period	$	383,175		$	713,443
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	$	33,023		$	34,782
Cash paid during the period for interest	$	100		$	33

Refer to Notes to Consolidated Financial Statements

6

AMERICAN EAGLE OUTFITTERS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Interim Financial Statements

The accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the “Company”) at May 4, 2013 and April 28, 2012 and for the 13 week periods ended May 4, 2013 and April 28, 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Certain notes and other information have been condensed or omitted from the interim Consolidated Financial Statements presented in this Quarterly Report on Form 10-Q. Therefore, these Consolidated Financial Statements should be read in conjunction with the Company’s Fiscal 2012 Annual Report. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and those described in the footnotes that follow) considered necessary for a fair presentation have been included. The existence of subsequent events has been evaluated through the filing date of this Quarterly Report on Form 10-Q.

As used in this report, all references to “we,” “our” and the “Company” refer to American Eagle Outfitters, Inc. and its wholly owned subsidiaries. “American Eagle Outfitters,” “American Eagle,” “AEO” and the “AE Brand” refer to our American Eagle Outfitters stores. “aerie” refers to our aerie^® by American Eagle^® stores. “AEO Direct” refers to our e-commerce operations, ae.com and aerie.com. “77kids” refers to the 77kids by american eagle^® stores and related e-commerce operations which the Company exited in Fiscal 2012.

The Company’s business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are not necessarily indicative of future financial results.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At May 4, 2013, the Company operated in one reportable segment.

In Fiscal 2012, the Company announced plans to exit the 77kids business, which included all 22 stores and related e-commerce operations. These Consolidated Financial Statements reflect the results of 77kids as a discontinued operation for all periods presented. Refer to Note 12 to the Consolidated Financial Statements for additional information regarding the discontinued operations of 77kids.

Fiscal Year

The Company’s financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2013” refers to the 52 week period ending February 1, 2014. “Fiscal 2012” refers to the 53 week period ended February 2, 2013. “Fiscal 2011” and “Fiscal 2010” refer to the 52 week periods ended January 28, 2012 and January 29, 2011, respectively.

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to provide additional information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the

7

face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The amendments are effective prospectively for reporting periods beginning after December 15, 2012. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income. Because the standard only affects the presentation of comprehensive income and does not impact what is included in comprehensive income, ASU 2013-02 did not have an impact on the Company’s Consolidated Financial Statements.

Foreign Currency Translation

The Canadian dollar (“CAD”) is the functional currency for our Canadian business and the Mexican Peso is the functional currency for our Mexican business. In accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters, assets and liabilities denominated in foreign currencies were translated into United States dollars (“USD”) (the reporting currency) at the exchange rate prevailing at the balance sheet date. Revenues and expenses denominated in foreign currencies were translated into USD at the monthly average exchange rate for the period. Gains or losses resulting from foreign currency transactions are included in the results of operations, whereas, related translation adjustments are reported as an element of other comprehensive income in accordance with ASC 220, Comprehensive Income.

Revenue Recognition

Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets.

Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages.

Revenue is not recorded on the purchase of gift cards. A current liability is recorded upon purchase, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion to actual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cards caption below.

The Company recognizes royalty revenue generated from its Country License Agreements based on a percentage of merchandise sales by the franchisee. This revenue is recorded as a component of total net revenue when earned.

Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs. Buying, occupancy and warehousing costs 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 operation. Gross profit is the difference between total net revenue and cost of sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales.

8

Other (Expense) Income, Net

Other (expense) income, net consists primarily of interest income/expense, foreign currency transaction gain/loss and realized investment gains/losses.

Other-than-Temporary Impairment

The Company evaluates its investments for impairment in accordance with ASC 320, Investments – Debt and Equity Securities (“ASC 320”). ASC 320 provides guidance for determining when an investment is considered impaired, whether impairment is other-than-temporary, and measurement of an impairment loss. An investment is considered impaired if the fair value of the investment is less than its cost. If, after consideration of all available evidence to evaluate the realizable value of its investment, impairment is determined to be other-than-temporary, then an impairment loss is recognized in the Consolidated Statement of Operations equal to the difference between the investment’s cost and its fair value. Additionally, ASC 320 requires additional disclosures relating to debt and equity securities both in the interim and annual periods as well as requires the Company to present total other-than-temporary impairment (“OTTI”) with an offsetting reduction for any non-credit loss impairment amount recognized in other comprehensive income (“OCI”). There was no net impairment loss for investment securities recognized in earnings during the 13 weeks ended May 4, 2013 or April 28, 2012.

Cash and Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

As of May 4, 2013, short-term investments include treasury bills and term-deposits with a maturity of greater than three months, but less than one year.

Unrealized gains and losses on the Company’s available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity, within accumulated other comprehensive income, until realized. When available-for-sale securities are sold, the cost of the securities is specifically identified and is used to determine any realized gain or loss.

Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents, short-term investments and long-term investments.

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts at the time at which title and risk of loss for the merchandise transfers to the Company.

The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends.

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits may materially impact the Company’s effective income tax rate.

9

The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits.

The calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance require management to make estimates and assumptions. The Company believes that its assumptions and estimates are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income.

Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes.

Property and Equipment

Property and equipment is recorded on the basis of cost, including costs to prepare the asset for use, with depreciation computed utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows:

Buildings	25 years
Leasehold improvements	Lesser of 10 years or the term of the lease
Fixtures and equipment	5 years

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company evaluates long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified, for stores that have been open for a period of time sufficient to reach maturity. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets are impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded.

The Company had $4.5 million, $9.5 million and $19.0 million of long-lived assets held-for-sale as of May 4, 2013, February 2, 2013 and April 28, 2012, respectively. The $19.0 million of long-lived assets held for sale as of April 28, 2012 includes $9.0 million of merchandise inventory related to 77kids in addition to other long-lived corporate assets. There were no inventory balances for 77kids included in assets held-for-sale as of May 4, 2013 or February 2, 2013.

These long-lived corporate assets held-for-sale are recorded at their estimated net realizable value, less disposal costs. The Company believes it is probable that these assets will be sold within one year.

Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property, plant and equipment and Note 12 for additional information regarding 77 kids as a discontinued operation.

Goodwill

The Company’s goodwill is primarily related to the acquisition of its importing operations and Canadian business. In accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment on at least an annual basis and last performed an annual impairment test as of February 2, 2013. As a result of the Company’s annual goodwill impairment test, the Company concluded that its goodwill was not impaired.

Intangible Assets

Intangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s intangible assets, which primarily include trademark assets, are amortized over 15 to 25 years.

The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows are less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No intangible asset impairment charges were recorded in the 13 weeks ended May 4, 2013 or April 28, 2012.

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Refer to Note 7 to the Consolidated Financial Statements for additional information regarding intangible assets.

Gift Cards

The value of a gift card is recorded as a current liability upon purchase, and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. During both of the 13 weeks ended May 4, 2013 and April 28, 2012, the Company recorded $1.9 million of revenue related to gift card breakage.

Deferred Lease Credits

Deferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores. Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms. The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-opening build-out period) and any subsequent renewal terms. The receivable is reduced as amounts are received from the landlord.

Co-branded Credit Card and Customer Loyalty Program

The Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”). These credit cards are issued by a third-party bank (the “Bank”), and the Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participate in the credit card rewards program. Customers who make purchases earn discounts in the form of savings certificates when certain purchase levels are reached. Also, AEO Visa Card customers who make purchases at other retailers where the card is accepted earn additional discounts. Savings certificates are valid for 90 days from issuance.

Points earned under the credit card rewards program on purchases are accounted for by analogy to ASC 605-25, Revenue Recognition, Multiple Element Arrangements (“ASC 605-25”). The Company believes that points earned under its point and loyalty programs represent deliverables in a multiple element arrangement rather than a rebate or refund of cash. Accordingly, the portion of the sales revenue attributed to the award points is deferred and recognized when the award is redeemed or when the points expire. Additionally, credit card reward points earned on non-AE or aerie purchases are accounted for in accordance with ASC 605-25. As the points are earned, a current liability is recorded for the estimated cost of the award, and the impact of adjustments is recorded in cost of sales.

The Company offers its customers the AEREWARD$^sm loyalty program (the “Program”). Under the Program, customers accumulate points based on purchase activity and earn rewards by reaching certain point thresholds during three-month earning periods. Rewards earned during these periods are valid through the stated expiration date, which is approximately one month from the mailing date of the reward. These rewards can be redeemed for a discount on a purchase of merchandise. Rewards not redeemed during the one-month redemption period are forfeited. The Company determined that rewards earned using the Program should be accounted for in accordance with ASC 605-25. Accordingly, the portion of the sales revenue attributed to the award credits is deferred and recognized when the awards are redeemed or expire.

Segment Information

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified three operating segments (American Eagle Brand US and Canadian retail stores, aerie retail stores and AEO Direct) that reflect the basis used internally to review performance and allocate resources. All of the operating segments have been aggregated and are presented as one reportable segment, as permitted by ASC 280.

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Reclassification

Certain reclassifications have been made to the Consolidated Financial Statements for prior periods in order to conform to the current period presentation.

3. Cash and Cash Equivalents and Short-term Investments

The following table summarizes the fair market values for the Company’s cash and marketable securities, which are recorded on the Consolidated Balance Sheets:

(In thousands)	May 4, 2013		February 2, 2013		April 28, 2012
Cash and cash equivalents:
Cash	$	302,188	$	257,191	$	625,398
Money-market		54,954		221,929		51,915
Commercial paper		20,000		29,999		19,999
Treasury bills		6,033		—		16,131
Total cash and cash equivalents	$	383,175	$	509,119	$	713,443
Short-term investments:
Treasury bills	$	103,144	$	109,305	$	3,087
Term-deposits		9,897		12,568		—
State and local government ARS		—		—		5,500
Total short-term investments	$	113,041	$	121,873	$	8,587
Total	$	496,216	$	630,992	$	722,030

Proceeds from the sale of investments were $23.8 million and $20.1 million for the 13 weeks ended May 4, 2013 and April 28, 2012, respectively. The purchase of investments was $15.2 million and $3.1 million for the 13 weeks ended May 4, 2013 and April 28, 2012, respectively.

4. Fair Value Measurements

ASC 820, Fair Value Measurement Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.

Financial Instruments

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs (i.e., projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of May 4, 2013 and April 28, 2012, the Company held certain assets that are required to be measured at fair value on a recurring basis. These include cash equivalents and short-term investments.

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In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of May 4, 2013 and April 28, 2012:

	Fair Value Measurements at May 4, 2013
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	302,188	$	302,188	$	—	$	—
Money-market		54,954		54,954		—		—
Commercial paper		20,000		20,000		—		—
Treasury bills		6,033		6,033		—		—
Total cash and cash equivalents	$	383,175	$	383,175	$	—	$	—
Short-term investments:
Treasury bills	$	103,144	$	103,144	$	—	$	—
Term-deposits		9,897		9,897		—		—
Total short-term investments	$	113,041	$	113,041	$	—	$	—
Total	$	496,216	$	496,216	$	—	$	—

	Fair Value Measurements at April 28, 2012
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	625,398	$	625,398	$	—	$	—
Money-market		51,915		51,915		—		—
Commercial paper		19,999		19,999		—		—
Treasury bills		16,131		16,131		—		—
Total cash and cash equivalents	$	713,443	$	713,443	$	—	$	—
Short-term investments:
State and local government ARS	$	5,500	$	—	$	—	$	5,500
Treasury bills		3,087		3,087		—		—
Total short-term investments	$	8,587	$	3,087	$	—	$	5,500
Total	$	722,030	$	716,530	$	—	$	5,500

The Company uses a discounted cash flow model to value its Level 3 investments. There were no Level 3 investments at May 4, 2013. At April 28, 2012, the assumptions in the Company’s model for Level 3 investments, included a recovery period of two months, a discount factor for yield of 0.1% and illiquidity of 0.5%. These assumptions are subjective. They are based on the Company’s current judgment and its view of current market conditions. The use of different reasonable assumptions would not result in a material change to the valuation.

As a result of the discounted cash flow analysis, no impairment loss was recorded for the 13 weeks ended April 28, 2012.

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The reconciliation of the Company’s assets measured at fair value on a recurring basis using unobservable inputs (Level 3) for the 13 weeks ended April 28, 2012 is as follows:

	Level 3 (Unobservable inputs)
(In thousands)	Total		Auction-Rate Municipal Securities
Carrying value at January 28, 2012	$	5,500	$	5,500
Settlements		—		—
Balance at April 28, 2012	$	5,500	$	5,500

Non-Financial Assets

The Company’s non-financial assets, which include goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required and the Company is required to evaluate the non-financial instrument for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the estimated fair value. As a result of the Company’s annual goodwill impairment test performed as of February 2, 2013, the Company concluded that its goodwill was not impaired.

5. Earnings per Share

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

	13 Weeks Ended
(In thousands)	May 4,		April 28,
	2013		2012
Weighted average common shares outstanding:
Basic number of common shares outstanding		192,710		194,890
Dilutive effect of stock options and non-vested restricted stock		4,008		2,362
Diluted number of common shares outstanding		196,718		197,252

Equity awards to purchase approximately 1.0 million shares of common stock during the 13 weeks ended May 4, 2013 and approximately 7.7 million shares of common stock during the 13 weeks ended April 28, 2012, respectively, were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would be anti-dilutive.

There were approximately 0.8 million shares for the 13 weeks ended May 4, 2013 and approximately 0.9 million shares for the 13 weeks ended April 28, 2012 of restricted stock units that were outstanding, but not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive. Additionally, approximately 0.6 million shares of restricted stock units for the 13 weeks ended May 4, 2013 were not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on the Company’s performance compared to pre-established annual performance goals.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding share-based compensation.

6. Property and Equipment

Property and equipment consists of the following:

(In thousands)	May 4,			February 2,			April 28,
	2013			2013			2012
Property and equipment, at cost	$	1,452,191		$	1,417,933		$	1,444,394
Less: Accumulated depreciation		(929,922	)		(917,799	)		(882,336	)
Property and equipment, net	$	522,269		$	500,134		$	562,058

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7. Intangible Assets

Intangible assets consist of the following:

(In thousands)	May 4,			February 2,			April 28,
	2013			2013			2012
Trademarks, at cost	$	44,561		$	44,272		$	44,362
Less: Accumulated amortization		(6,630	)		(6,136	)		(4,806	)
Intangible assets, net	$	37,931		$	38,136		$	39,556

8. Other Credit Arrangements

In Fiscal 2012, the Company entered into a five-year, $150.0 million syndicated, unsecured, revolving credit agreement (the “Credit Agreement”). The primary purpose of the Credit Agreement is to provide additional access to capital for general corporate purposes, growth initiatives and the issuance of letters of credit.

The Credit Agreement contains financial covenants that require the Company to maintain certain coverage and leverage ratios, and various customary affirmative and negative covenants such as the ability to incur additional debt not otherwise permitted under the Credit Agreement.

The Credit Agreement has various borrowing options, including rates of interest that are based on (i) an Adjusted London Interbank Offered Rate (“LIBOR” as defined in the Credit Agreement) plus a margin ranging from 1.00% to 1.75% based on a defined leverage ratio, payable at the end of the applicable interest period; and (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.75% based on a defined leverage ratio, payable quarterly.

Under the Credit Agreement, the Company is also required to pay a commitment fee ranging from 0.175% to 0.30%, based on the defined leverage ratio, on the unused portion of the total lender commitments.

As of May 4, 2013, the Company was in compliance with the terms of the Credit Agreement and had $7.9 million outstanding in letters of credit and no borrowings.

The Credit Agreement replaced uncommitted demand lines in the aggregate amount of $110.0 million USD and $25.0 million CAD.

Additionally, the Company has borrowing agreements with two separate financial institutions under which it may borrow an aggregate of $135.0 million USD for the purposes of trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions.

As of May 4, 2013, the Company had outstanding trade letters of credit of $28.1 million.

9. Share-Based Compensation

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires companies to measure and recognize compensation expense for all share-based payments at fair value. Total share-based compensation expense included in the Consolidated Statements of Operations for the 13 weeks ended May 4, 2013 and April 28, 2012 was $5.3 million ($3.3 million, net of tax) and $21.3 million ($13.1 million, net of tax), respectively.

Stock Option Grants

The Company grants both time-based and performance-based stock options under its 2005 Stock Award and Incentive Plan. Time-based stock option awards vest over the requisite service period of the award or to an employee’s eligible retirement date, if earlier. Performance-based stock option awards vest over one year and are earned if the Company meets pre-established performance goals.

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A summary of the Company’s stock option activity for the 13 weeks ended May 4, 2013 follows:

				Weighted- Average		Weighted- Average Remaining Contractual		Aggregate
	Options			Exercise Price		Term		Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding—February 2, 2013		4,629		$	16.29
Granted		376		$	22.55
Exercised (1)		(107	)	$	14.29
Cancelled		(12	)	$	22.15
Outstanding—May 4, 2013		4,886		$	16.80		3.4	$	16,531
Vested and expected to vest—May 4, 2013		4,807		$	16.80		3.3	$	16,053
Exercisable—May 4, 2013 (2)		2,443		$	13.26		3.6	$	8,751

(1) Options exercised during the 13 weeks ended May 4, 2013 had exercise prices ranging from $4.24 to $19.28.

(2) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price at May 4, 2013.

The weighted-average grant date fair value of stock options granted during the 13 weeks ended May 4, 2013 was $3.42. The aggregate intrinsic value of options exercised during the 13 weeks ended May 4, 2013 and April 28, 2012 was $0.5 million and $13.1 million, respectively.

Cash received from the exercise of stock options was $1.5 million for the 13 weeks ended May 4, 2013 and $12.2 million for the 13 weeks ended April 28, 2012. The actual tax benefit realized from stock option exercises totaled $8.1 million for the 13 weeks ended May 4, 2013 and $2.6 million for the 13 weeks ended April 28, 2012.

The fair value of stock options was estimated based on the closing market price of the Company’s common stock on the date of the grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	13 Weeks Ended
Black-Scholes Option Valuation Assumptions	May 4,			April 28,
	2013			2012
Risk-free interest rate (1)		0.3	%		0.6	%
Dividend yield		2.0	%		2.8	%
Volatility factor (2)		34.4	%		41.2	%
Weighted-average expected term (3)		2.5 years			4.0 years
Expected forfeiture rate (4)		8.0	%		8.0	%

(1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.

(2) Based on a combination of historical volatility of the Company’s common stock and implied volatility.

(3) Represents the period of time options are expected to be outstanding, based on historical experience.

(4) Based upon historical experience.

As of May 4, 2013, there was $1.8 million of unrecognized compensation expense related to non-vested time-based stock option awards that is expected to be recognized over a weighted average period of 1.5 years.

Restricted Stock Grants

Time-based restricted stock awards are comprised of time-based restricted stock units. These awards vest over three years; however, they may be accelerated to vest over one year if the Company meets pre-established performance goals in the year of grant. Time-based restricted stock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award.

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Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three year period based upon the Company’s achievement of pre-established goals throughout the term of the award. Performance-based restricted stock units receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award.

The grant date fair value of all restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant.

A summary of the Company’s restricted stock activity is presented in the following tables:

	Time-Based Restricted Stock Units					Performance-Based Restricted Stock Units
	13 Weeks Ended					13 Weeks Ended
	May 4, 2013					May 4, 2013
(Shares in thousands)	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Nonvested—February 2, 2013		1,386		$	13.91		2,086		$	14.91
Granted		846			22.47		814			21.01
Vested		(966	)		13.55		(566	)		17.39
Cancelled		(37	)		14.84		(4	)		14.65
Nonvested—May 4, 2013		1,229		$	20.05		2,330		$	16.78

As of May 4, 2013, there was $21.3 million of unrecognized compensation expense related to non-vested time-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 1.7 years. Additionally, there was $23.0 million of unrecognized compensation expense related to performance-based restricted stock unit awards which will be recognized as achievement of performance goals that is probable over a one to three year period.

As of May 4, 2013, the Company had 17.8 million shares available for all equity grants.

10. Income Taxes

The provision for income taxes from continuing operations 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 from continuing operations based on actual operating results for the 13 weeks ended May 4, 2013 was 38.0% compared to 35.1% for the 13 weeks ended April 28, 2012. The lower effective income tax rate for the 13 weeks ended April 28, 2012 was primarily due to state income tax settlements and proceeds on the sale of certain ARS investments for which no income tax expense was recognized.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense.

The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as the result of the evaluation of new information not previously available. Unrecognized tax benefits did not change significantly during the 13 weeks ended May 4, 2013 or April 28, 2012. Over the next twelve months the Company does not anticipate any significant changes to unrecognized tax benefits

11. Legal Proceedings

The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies (“ASC 450”), management records a reserve for estimated losses when the loss is probable and the amount can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with ASC 450. As the Company believes that it has provided adequate reserves, it anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial position or results of operations of the Company.

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12. Discontinued Operations

During Fiscal 2012, the Company exited the 77kids business which included all 22 stores and related e-commerce operations. These Consolidated Financial Statements reflect the results of 77kids as a discontinued operation for all periods presented.

Additionally, the third party purchaser assumed certain liabilities associated with the 77kids business and paid the Company an amount equal to 65% of the cost of the acquired inventory. A $9.0 million inventory balance for 77kids has been recorded as a component of assets held-for-sale on the Company’s Consolidated Balance Sheets as of April 28, 2012. There were no inventory balances for 77kids included in assets held-for-sale as of May 4, 2013 or February 2, 2013.

In connection with the exit of the 77kids business, the Company is secondarily liable for obligations under the lease agreements for 21 store leases assumed by the third party purchaser. These obligations will remain in effect until the leases expire through 2022, unless the Company otherwise is released by the applicable landlord. In the event that the third party purchaser does not fulfill its obligations under any of the leases and the Company is required to make any such payments, the Company would seek full reimbursement from the third party purchaser in accordance with the asset purchase agreement. The third party purchaser has provided a stand-by letter of credit to the Company in order to secure payment of obligations under the leases.

In accordance with ASC 460, Guarantees (“ASC 460”), as we became secondarily liable under the leases at the time that we transferred them to the third party, no amounts have been accrued in our Consolidated Financial Statements related to these guarantees.

The table below presents the significant components of 77kids’ results included in Loss from Discontinued Operations on the Consolidated Statement of Operations for the 13 weeks ended April 28, 2012:

	13 Weeks Ended
(In thousands)	April 28, 2012
Total net revenue	$	10,398
Loss from discontinued operations, before income taxes		(7,048	)
Income tax benefit		2,710
Loss from discontinued operations, net of tax	($	4,338	)
Loss per common share from discontinued operations:
Basic		(0.02	)
Diluted		(0.02	)

There were no assets or liabilities included in the Consolidated Balance Sheets for 77kids as of May 4, 2013 or February 2, 2013. The major classes of assets and liabilities included in the Consolidated Balance Sheet for 77kids as of April 28, 2012 are as follows:

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(In thousands)	April 28, 2012
Current assets	$	10,077
Non-current assets		15,647
Total assets (1)	$	25,724
Total current liabilities	$	6,166
Total non-current liabilities		2,686
Total liabilities	$	8,852

(1) Current assets primarily relate to merchandise inventory classified as an asset held-for-sale on the Company’s Consolidated Balance Sheets. Non-current assets relate primarily to property and equipment at cost, net of, accumulated depreciation.

13. Acquisitions and Dispositions

Effective February 4, 2013, the Company mutually terminated its store license agreement (the “Agreement”) with Dickson Concepts (International) Limited (“Dickson”) for Hong Kong, Macau, China and other designated territories in Asia (the “Territory”).

Pursuant to an amendment to the Agreement, the Company paid to Dickson $10.0 million USD to terminate their right to open additional stores in the Territory, beyond the six existing American Eagle Outfitters stores in Hong Kong and China (the “Six Stores”).

A separate agreement, dated February 4, 2013 (the “Termination Agreement”), terminates all of Dickson’s remaining rights under the Agreement. Under the Termination Agreement, the Company will acquire the Six Stores and related assets operated by Dickson. It is anticipated that the Company will pay Dickson approximately $11.0 million USD under the Termination Agreement, subject to adjustments. The Company entered into the Termination Agreement in order to further support its long-term global expansion strategy.

This transaction is expected to close, following completion of customary conditions, in the second quarter of Fiscal 2013. The $10.0 million USD amount paid to Dickson for the termination of their rights is recorded as a long-term asset within other assets on the Company’s Consolidated Balance Sheet as of May 4, 2013.

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Review by Independent Registered Public Accounting Firm

Ernst & Young LLP, our independent registered public accounting firm, has performed a limited review of the unaudited Consolidated Financial Statements as of and for the thirteen week periods ended May 4, 2013 and April 28, 2012, as indicated in their report on the limited review included below. Since they did not perform an audit, they express no opinion on the unaudited Consolidated Financial Statements referred to above.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

American Eagle Outfitters, Inc.

We have reviewed the consolidated balance sheets of American Eagle Outfitters, Inc. (the Company) as of May 4, 2013 and April 28, 2012, and the related consolidated statements of operations and retained earnings and the consolidated statements of comprehensive income for the thirteen week periods ended May 4, 2013 and April 28, 2012 and the consolidated statements of cash flows for the thirteen week period ended May 4, 2013 and April 28, 2012. These financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of American Eagle Outfitters, Inc. as of February 2, 2013, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended not presented herein, and in our report dated March 12, 2013, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of February 2, 2013, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

May 30, 2013

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our Fiscal 2012 Management’s Discussion and Analysis of Financial Condition and Results of Operations which can be found in our Fiscal 2012 Annual Report on 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.

This report contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent our expectations or beliefs concerning future events, including the following:

• the planned opening of approximately 50 to 55 new American Eagle Outfitters stores in North America and internationally during Fiscal 2013;

• the success of our efforts to expand internationally, engage in future franchise/license agreements, and/or grow through acquisitions or joint ventures;

• the selection of approximately 50 to 65 American Eagle Outfitters stores in the United States and Canada for remodeling and refurbishing during Fiscal 2013;

• the potential closure of approximately 20 to 30 American Eagle Outfitters and 15 to 20 aerie stores in the United States and Canada during Fiscal 2013;

• the planned opening of approximately 20 new franchised American Eagle Outfitters stores during Fiscal 2013;

• the success of our core American Eagle Outfitters and aerie brands through our omni-channel outlets within North America and internationally;

• the possibility that economic pressures and other business factors will have a significant negative impact on our continued growth and results of operations;

• the expected payment of a dividend in future periods;

• the possibility that our credit facilities may not be available for future borrowings;

• the possibility that rising prices of raw materials, labor, energy and other inputs to our manufacturing process, if unmitigated, will have a significant impact to our profitability; and

• the possibility that we may be required to take additional store impairment charges related to underperforming stores.

We caution that these forward-looking statements, and those described elsewhere in this report, involve material risks and uncertainties and are subject to change based on factors beyond our control as discussed within Item 1A of this Quarterly Report on Form 10-Q and Item 1A of our Fiscal 2012 Annual Report on Form 10-K. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements.

Key Performance Indicators

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

Comparable sales — Comparable sales 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, including Fiscal 2013, the prior year period is shifted by one week to compare similar calendar weeks. A store is included in comparable sales in the thirteenth month of operation. However, stores that have a gross square footage increase 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 thirteenth month following the remodel. Sales from American Eagle Outfitters and aerie stores, as well as sales from AEO Direct, are included in total comparable sales. Sales from franchise stores are not included in comparable sales. Individual American Eagle Outfitters and aerie brand comparable sales disclosures represent sales from stores and AEO Direct.

We began to include AEO Direct sales in the individual American Eagle Outfitters and aerie brand comparable sales metric in Fiscal 2013 for the following reasons:

• our approach to customer engagement continues to evolve as “omni-channel”, which provides a seamless customer experience through both traditional and non-traditional channels, including four wall store locations, web, mobile/tablet devices, social networks, email, in-store displays and kiosks;

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• shopping behavior has continued to evolve across multiple channels that work in tandem to meet all customer needs. Management believes that presenting a brand level performance metric that includes all channels (i.e., stores and AEO Direct) to be the most appropriate, given customer behavior.

Our management considers comparable sales to be an important indicator of our current performance. Comparable sales results are important to achieve leveraging of our costs, including store payroll, store supplies, rent, etc. Comparable sales also have a direct impact on our total net revenue, cash and working capital.

Gross profit—Gross profit measures whether we are optimizing the price and inventory levels of our merchandise and achieving an optimal level of 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, certain promotional costs and buying, occupancy and warehousing costs. Buying, occupancy and warehousing costs 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 operation. 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 profit and results of operations.

Operating income—Our management views operating income as a key indicator of our success. The key drivers of operating income are comparable sales, gross profit, our ability to control selling, general and administrative expenses, and our level of capital expenditures. Management also uses earnings before interest and taxes (“EBIT”) as an indicator of successful operating results, as it is impacted by the same key drivers as operating income.

Return on invested capital—Our management uses return on invested capital (“ROIC”) as a key measure to assess our efficiency at allocating capital to profitable investments. This measure is critical in determining which strategic alternatives to pursue. ROIC is calculated as net income divided by average stockholder’s equity for a given period.

Store productivity—Store productivity, including total net revenue per average square foot, sales per productive hour, average unit retail price (“AUR”), conversion rate, the number of transactions per store, the number of units sold per store, the number of units per transaction and four wall profit, is evaluated by our management in assessing our operational performance.

Inventory turnover—Our management evaluates inventory turnover as a measure of how productively inventory is bought and sold. Inventory turnover is important as it can signal slow moving inventory. This can be critical in determining the need to take markdowns on merchandise.

Cash flow and liquidity—Our management evaluates cash flow from operations, investing and financing in determining the sufficiency of our liquidity. Cash flow from operations has historically been sufficient to cover our uses of cash. Our management believes that cash flow from operations will be sufficient to fund anticipated capital expenditures and working capital requirements.

Our management’s goals are to drive improvements to our gross profit performance, bring greater consistency to our results and to deliver profitable growth over the long term. Specifically, our targets are to deliver a total net revenue compounded annual growth rate (“CAGR”) of 7% to 9%, an EBIT CAGR of 12% to 15% and an annual ROIC in the range of 14% to 17%.

Results of Operations

Overview

In the first quarter of Fiscal 2013, the macroeconomic environment presented challenges. Additionally, cold weather following last year’s record warmth and soft consumer demand for spring apparel negatively impacted store traffic. Within this context, it was difficult to generate growth against a very strong quarter last year. However, our execution of strong inventory principles, fleet repositioning and the growth of our online business, led to profitability.

Our first quarter total net revenue decreased 4% to $679.5 million and comparable sales, including AEO Direct, decreased 5%, compared to a 17% increase last year. By brand, including AEO Direct, American Eagle Outfitters brand comparable sales decreased 6% and aerie brand increased 4%. AEO Direct increased 24%. A decrease in total net revenue resulted in the deleverage of fixed costs, which increased slightly to last year. Additionally, promotions were higher than last year.

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Gross profit decreased 4% to $263.6 million compared to $274.9 million last year and was 38.8% as a rate to total net revenue for both periods. This year, favorable product costs benefited the gross margin rate but were offset by higher markdowns and an increase in the buying, occupancy and warehousing costs rate to revenue from higher delivery costs and the deleverage of rent on negative comparable sales.

Operating income for the first quarter was $45.8 million compared to $64.3 million last year, and includes $11.5 million of asset write-offs and corporate charges. Operating income as a rate to total net revenue was 6.7% this year compared to 9.1% last year. On an adjusted basis, income from continuing operations this year was $0.18 per diluted share, which excludes a ($0.04) per diluted share impact from asset write-offs and corporate charges. This compares to income from continuing operations last year of $0.22 per diluted share.

The preceding paragraph contains non-GAAP financial measures (“non-GAAP” or “adjusted”), comprised of earnings per share information excluding non-GAAP items. This financial measure is not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“GAAP”) and is not necessarily comparable to similar measures presented by other companies. 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 financial statements. 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 measure discussed above.

	13 Weeks Ended
	May 4, 2013
Income from continuing operations per diluted share—GAAP Basis	$	0.14
Add back: Asset write-offs and corporate charges (1)		0.04
Income from continuing operations per diluted share—Non-GAAP Basis	$	0.18

(1) Adjustment consists of $10.1 million of pre-tax corporate and store asset write-offs and $1.4 million of pre-tax severance and related employee costs.

We had $496.2 million in cash and cash equivalents and short-term investments as of May 4, 2013 after repurchasing 1.6 million shares of common stock for $33.1 million. Merchandise inventory at May 4, 2013 was $340.5 million, compared to $367.7 million last year, a decrease of 6% on a cost per foot basis. The decrease is due to a 10% decrease in ending units per foot, partially offset by a 5% increase in ending average cost per unit, driven by a change in product mix.

Our business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are not necessarily indicative of future financial results.

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

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	13 Weeks Ended
	May 4, 2013			April 28, 2012
Total net revenue		100.0	%		100.0	%
Cost of sales, including certain buying, occupancy and warehousing expenses		61.2			61.2
Gross profit		38.8			38.8
Selling, general and administrative expenses		26.8			25.2
Depreciation and amortization expense		5.3			4.5
Operating income		6.7			9.1
Other (expense) income, net		(0.1	)		0.5
Income before income taxes		6.6			9.6
Provision for income taxes		2.5			3.4
Income from continuing operations		4.1			6.2
Loss from discontinued operations, net of tax		—			(0.6	)
Net income		4.1			5.6

The following table shows our adjusted consolidated store data, which excludes 77kids stores:

	13 Weeks Ended
	May 4, 2013			April 28, 2012
Number of stores:
Beginning of period		1,044			1,069
Opened		7			6
Closed		(14	)		(7	)
End of period		1,037			1,068
Total gross square feet at end of period		6,191,638			6,301,843
International franchise stores at end of period (1)		57			34

(1) International franchise stores are not included in the consolidated store data or the total gross square feet calculation. Additionally, international franchise stores include the six stores in Hong Kong and China, which we have executed an agreement to acquire. The agreement is expected to close in the second quarter of Fiscal 2013.

Our operations are conducted in one reportable segment, which includes 896 American Eagle Outfitters retail stores, 141 aerie stand-alone retail stores and AEO Direct.

Comparison of the 13 weeks ended May 4, 2013 to the 13 weeks ended April 28, 2012

Total net revenue

Total net revenue decreased 4% to $679.5 million compared to $708.7 million last year. The change in total net revenue resulted primarily from a comparable sales decrease of 5%, or $35.6 million, for the period. By brand, including the respective AEO Direct sales, American Eagle Outfitters brand comparable sales decreased 6%, or $37.4 million, and aerie brand increased 4%, or $1.8 million. First quarter 2013 comparable sales are compared to the 13 weeks ended May 5, 2012.

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AE women’s and men’s comparable sales decreased 7% and 3%, respectively. For the first quarter, both transactions and average transaction value decreased. AUR decreased in the low single-digits, primarily due to greater promotions.

Gross Profit

Gross profit decreased 4% to $263.6 million compared to $274.9 million last year. As a rate to total net revenue, gross profit was 38.8%, flat to last year. Included in gross profit was $2.4 million of corporate charges. Favorable product costs provided 230 basis points of improvement. This favorability was offset by 70 basis points of decline due to higher markdowns. Buying, occupancy and warehousing costs deleveraged 160 basis points from corporate charges, higher delivery costs and deleverage of rent on negative comparable sales.

There was $2.3 million and $11.0 million of share-based payment expense included in gross profit for the periods ended May 4, 2013 and April 28, 2012, respectively, comprised of both time and performance-based awards. The decrease is due to a change in performance this year and reduced levels of outstanding share 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 selling, general and administrative expenses. Refer to Note 2 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

Selling, general and administrative expenses increased 2% to $182.3 million from $178.5 million last year and increased 160 basis points, as a rate to total net revenue, to 26.8% from 25.2% last year. Included in selling, general and administrative expense is $1.5 million of severance and related employee costs. The minimal dollar increase was driven primarily by corporate charges, advertising investments and fortifying our corporate team, partially offset by lower incentive compensation costs.

There was $3.0 million and $10.3 million of share-based payment expense included in selling, general and administrative expenses for the periods ended May 4, 2013 and April 28, 2012, respectively, comprised of both time and performance-based awards. The decrease is due to a change in performance this year and reduced levels of outstanding share awards.

Depreciation and Amortization Expense

Depreciation and amortization expense increased to $35.5 million, compared to $32.1 million last year, as result of $7.6 million of corporate and store write-offs, partially offset by the impact of prior year store impairments and maturing assets.

Other (Expense) Income, Net

Other expense was $0.7 million, compared to income of $3.5 million last year. Other income last year primarily resulted from recovery proceeds received from previously sold Auction Rate Securities.

Provision for Income Taxes

The provision for income taxes from continuing operations 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 from continuing operations based on actual operating results for the 13 weeks ended May 4, 2013 was 38.0% compared to 35.1% for the 13 weeks ended April 28, 2012. The lower effective income tax rate for the 13 weeks ended April 28, 2012 was primarily due to state income tax settlements and proceeds on the sale of certain ARS investments for which no income tax expense was recognized.

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Income from Continuing Operations

Income from continuing operations for the first quarter was $28.0 million, or $0.14 per diluted share, compared to $44.0 million, or $0.22 per diluted share, last year. Included in income from continuing operations this year was $0.04 per diluted share of loss related to asset write-offs and corporate charges. The change in income from continuing operations is attributable to the factors noted above.

Loss from Discontinued Operations

Due to the completion of the sale of the 77kids business to a third party in Fiscal 2012, the results of 77kids are presented as a discontinued operation. Loss from discontinued operations, net of tax, was $4.3 million, or a $0.02 loss per diluted share, for the period ended April 28, 2012.

Refer to Note 12 to the Consolidated Financial Statements for additional information regarding the discontinued operations of 77kids.

Net Income

Net income decreased to $28.0 million, or 4.1% as a percent to total net revenue, from $39.7 million, or 5.6% as a percent to total net revenue last year. Net income per diluted share decreased to $0.14 per diluted share from $0.20 per diluted share in the prior year. The change in net income is attributable to the factors noted above, including the impact of the discontinued operations of 77kids.

International Operations

We have entered into Country License Agreements with multiple partners to expand our brands internationally. Through these Country License Agreements, we plan to open a series of American Eagle Outfitters stores in Eastern Europe, Northern Africa and various parts of Asia. As of May 4, 2013, we had 57 franchised stores operated by our franchise partners in 14 countries. During the first quarter, we executed an agreement to acquire six franchise stores in Hong Kong and China from our franchise partner. This agreement is expected to close in the second quarter of Fiscal 2013. These six stores are included in total franchise stores as of May 4, 2013.

These Country License Agreements do not involve a capital investment from AEO and require minimal operational involvement. International franchise stores are not included in the consolidated store data or the total gross square feet calculation.

As of May 4, 2013, we operated 92 wholly owned stores in Canada, one in Mexico and six in Puerto Rico. We plan to open several additional wholly owned stores in Mexico throughout 2013. We continue to evaluate further opportunities to expand internationally, which may include additional Country License Agreements or wholly owned stores, as well as joint ventures.

Fair Value Measurements

ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.

Financial Instruments

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs (i.e., projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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As of May 4, 2013, we held certain assets that are required to be measured at fair value on a recurring basis. These include cash equivalents and short-term investments.

In accordance with ASC 820, the following table represents the fair value hierarchy of our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of May 4, 2013:

	Fair Value Measurements at May 4, 2013
(In thousands)	Carrying Amount			Quoted Market Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	302,188		$	302,188		$	—		$	—
Money-market		54,954			54,954			—			—
Commercial paper		20,000			20,000			—			—
Treasury bills		6,033			6,033			—			—
Total cash and cash equivalents	$	383,175		$	383,175		$	—		$	—
Short-term investments:
Treasury bills	$	103,144		$	103,144		$	—		$	—
Term-deposits		9,897			9,897			—			—
Total short-term investments	$	113,041		$	113,041		$	—		$	—
Total	$	496,216		$	496,216		$	—		$	—
Percent to Total		100.0	%		100.0	%		0.0	%		0.0	%

Refer to Notes 3 and 4 to the Consolidated Financial Statements for additional information on our investment securities, including a description of the securities.

Liquidity and Capital Resources

Our uses of cash are generally for working capital, the construction of new stores and remodeling of existing stores, information technology upgrades, distribution center improvements and expansion, the purchase of both short and long-term investments, the repurchase of common stock and the payment of dividends. Historically, these uses of cash have been funded with cash flow from operations and existing cash on hand. We expect to be able to fund our future cash requirements through current cash holdings as well as cash generated from operations.

Our growth strategy includes internally developing our brands and the possibility of further international expansion or acquisitions. We periodically consider and evaluate these options to support future growth. In the event we do pursue such options, we could require additional debt financing. There can be no assurance that we would be successful in any endeavor we may undertake to increase our profitability.

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The following sets forth certain measures of our liquidity:

	May 4, 2013		February 2, 2013		April 28, 2012
Working Capital (in thousands)	$	689,471	$	715,397	$	951,806
Current Ratio		2.99		2.64		3.99

The $25.9 million decrease in working capital compared to February 2, 2013 and the $262.3 million decrease compared to last year, is primarily related to use of cash for financing and investing activities including capital expenditures and the distribution of cash to shareholders through the payment of dividends and share repurchases, which is partially offset from positive cash flow from operations as detailed below.

Cash Flows from Operating Activities of Continuing Operations

Net cash (used for) provided by operating activities totaled ($38.7) million and $18.3 million for the 13 weeks ended May 4, 2013 and April 28, 2012, respectively. For both periods, our major source of cash from operations was merchandise sales and our primary outflow of cash for operations was for the payment of operational costs. Cash flows from operations last year were positive, driven in part by an increase in income from continuing operations, net of non-cash adjustments, as a result of improved margin rates resulting from favorable product costs and lower overall inventory balances. Negative cash flows from operations this year is due to the decrease in profitability and the payment of accrued bonuses and other operating items subsequent to Fiscal 2012 end.

Cash Flows from Investing Activities of Continuing Operations

Investing activities for the 13 weeks ended May 4, 2013 included $45.7 million of capital expenditures for property and equipment and $15.2 million of investment security purchases partially offset by $23.8 million of proceeds from the sale of investments classified as available-for-sale. Investing activities for the 13 weeks ended April 28, 2012 primarily included $24.1 million of capital expenditures for property and equipment and $3.1 million of investment security purchases partially offset by $20.1 million of proceeds from the sale of investments classified as available-for-sale.

Cash Flows from Financing Activities of Continuing Operations

Cash used for financing activities for the 13 weeks ended May 4, 2013 consisted primarily of $33.1 million for the repurchase of common stock as part of publicly announced programs and $23.3 million for the repurchase of common stock from employees for the payment of taxes in connection with the vesting of share-based payment, partially offset by $8.1 million related to excess tax benefit from share-based payments. Cash used for financing activities for the 13 weeks ended April 28, 2012 consisted primarily of $21.5 million for the payment of dividends.

Credit Facilities

In Fiscal 2012, we entered into a five-year, $150.0 million syndicated, unsecured, revolving credit agreement (the “Credit Agreement”). The primary purpose of the Credit Agreement is to provide additional access to capital for general corporate purposes, growth initiatives and the issuance of letters of credit.

The Credit Agreement contains financial covenants that require us to maintain certain coverage and leverage ratios, and various customary affirmative and negative covenants such as the ability to incur additional debt not otherwise permitted under the Credit Agreement.

The Credit Agreement has various borrowing options, including rates of interest that are based on (i) an Adjusted LIBOR plus a margin ranging from 1.00% to 1.75% based on a defined leverage ratio, payable at the end of the applicable interest period; and (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.75% based on a defined leverage ratio, payable quarterly.

Under the Credit Agreement, we are also required to pay a commitment fee ranging from 0.175% to 0.30%, based on the defined leverage ratio, on the unused portion of the total lender commitments.

As of May 4, 2013, we were in compliance with the terms of the Credit Agreement and had $7.9 million outstanding in letters of credit and no borrowings.

The Credit Agreement replaced uncommitted demand lines in the aggregate amount of $110.0 million USD and $25.0 million CAD.

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Additionally, we have borrowing agreements with two separate financial institutions under which we may borrow an aggregate of $135.0 million USD for the purposes of trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions.

Capital Expenditures for Property and Equipment

Capital expenditures for the 13 weeks ended May 4, 2013 were $45.7 million and included $29.4 million related to investments in our stores, including 7 new AE stores and 13 remodels. Additionally, we continued to support our infrastructure growth by investing in information technology initiatives ($8.2 million), other home office projects ($4.0 million), the improvement and expansion of our distribution centers ($2.7 million) and investments in e-commerce ($1.4 million).

For Fiscal 2013, we continue to expect capital expenditures to be approximately $250 million to $280 million related to the construction of a new distribution center to support our expansion efforts, stores, information technology upgrades to support growth and investments in e-commerce. New store growth is primarily related to AEO Factory stores, which are among our most productive format. Additionally, we plan to remodel and refurbish approximately 50 to 65 AEO stores. During the 13 weeks ended May 4, 2013, we completed 22 remodels and refurbishes.

Stock Repurchases

During the 13 weeks ended May 4, 2013, as part of our publicly announced share repurchase program, we repurchased 1.6 million shares for approximately $33.1 million, at a weighted average price of $20.66 per share. As of May 4, 2013, we had 18.4 million shares remaining authorized for repurchase. These shares may be repurchased at our discretion through January 28, 2017. There were no share repurchases as a part of our publicly announced repurchase programs during the 13 weeks ended April 28, 2012

During the 13 weeks ended May 4, 2013 and April 28, 2012, we repurchased approximately 1.1 million and 0.3 million shares, respectively, from certain employees at market prices totaling $23.3 million and $4.1 million, respectively. These shares were repurchased for the payment of taxes, not in excess of the minimum statutory withholding requirements, in connection with the vesting of share-based payments, as permitted under the 2005 Stock Award and Incentive Plan. The aforementioned shares repurchased have been recorded as treasury stock.

Dividends

On December 4, 2012, our Board declared a regular quarterly cash dividend of $0.11 and accelerated the payment of the first quarter 2013 dividend. This dividend was paid on December 28, 2012. In March 2013, our Board raised our quarterly dividend to $0.125 per share, a 14% increase. Due to the early payment of our Fiscal 2013 first quarter dividend, the increased dividend distribution will begin in the second quarter of Fiscal 2013. 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 U.S. taxation and other relevant factors. It is anticipated that any future dividends paid will be declared on a quarterly basis.

Critical Accounting Policies

Our critical accounting policies are described in 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 2, 2013 contained in our Fiscal 2012 Annual Report on 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 on Form 10-Q. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There were no material changes in our exposure to market risk from February 2, 2013. Our market risk profile as of February 2, 2013 is disclosed in Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our Fiscal 2012 Annual Report on Form 10-K.

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ITEM 4. CONTROLS AND PROCEDURES.

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our 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 on Form 10-Q, as of May 4, 2013, an evaluation was performed 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 Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Principal Executive Officer and our Principal Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the 13 weeks ended May 4, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1A. RISK FACTORS.

Risk factors that affect our business and financial results are discussed within Item 1A of our Fiscal 2012 Annual Report on Form 10-K. There have been no material changes to the disclosures relating to this item from those set forth in our Fiscal 2012 Annual Report on Form 10-K.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities

The following table provides information regarding our repurchases of our common stock during the 13 weeks ended May 4, 2013.

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Shares Purchased as Part of Publicly Announced Programs		Maximum Number of Shares that May Yet Be Purchased Under the Program
	(1)		(2)		(1)		(1) (3)
Month #1 (February 3, 2013 through March 2, 2013)		245,950	$	20.78		—		20,000,000
Month #2 (March 3, 2013 through April 6, 2013)		2,405,455	$	21.27		1,600,000		18,400,000
Month #3 (April 7, 2013 through May 4, 2013)		1,868	$	19.00		—		18,400,000
Total		2,653,273	$	21.22		1,600,000		18,400,000

(1) There were 1.6 million shares repurchased as part of our publicly announced share repurchase program during the 13 weeks ended May 4, 2013 and there were 1,053,273 shares repurchased for the payment of taxes in connection with the vesting of share-based payments.

(2) Average price paid per share excludes any broker commissions paid.

(3) In January 2013, our Board authorized the repurchase of 20.0 million shares of our common stock. The authorization of the shares that may yet be purchased expires on January 28, 2017.

ITEM 5. OTHER INFORMATION.

Effective April 8, 2013, the Company entered into a Change in Control Agreement (the “CIC Agreement”), consistent with the other senior executives of the Company, with Kitty Yung, Executive Vice President – Asia/Pacific. The CIC Agreement contains double-trigger change in control provisions. If Ms. Yung resigns for Good Reason or is terminated by the Company other than for Cause, Disability or as a result of her death during the 18-month period following a Change in Control (as such terms are defined in the CIC Agreement), Ms. Yung will, among other things receive: (1) a severance amount equal to 1.5 times her Annual Compensation (as such term is defined in the Agreement); (2) a bonus amount equal to the amount of her then current annual incentive cash bonus at target prorated based on the portion of the Company’s fiscal year elapsed at the time of the Change in Control; and (3) coverage under the Company’s group health insurance for the 12-month period following termination. The Agreement also contains certain confidentiality, non-solicitation and non-disparagement provisions. Prior to receipt of any such payments, Ms. Yung is required to execute a general release of the Company in the form attached to the CIC Agreement. The foregoing descriptions of the CIC Agreement is qualified in its entirety by reference to the CIC Agreement, which form of agreement is filed as Exhibit 10.1 to the Form 8-K dated April 21, 2010 and filed April 26, 2010, and is incorporated herein by reference.

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ITEM 6. EXHIBITS.

* Exhibit 10.1	Employment Agreement between the Registrant and Kitty Yung, dated February 26, 2013
* Exhibit 10.2	General Release and Separation Agreement between the Registrant and Sherry Harris, dated April 12, 2013
* Exhibit 15	Acknowledgement of Independent Registered Public Accounting Firm
* Exhibit 31.1	Certification by Robert L. Hanson pursuant to Rule 13a-14(a) or Rule 15d-14(a)
* Exhibit 31.2	Certification by Mary M. Boland pursuant to Rule 13a-14(a) or Rule 15d-14(a)
**Exhibit 32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**Exhibit 32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
* Exhibit 101	Interactive Data File

* Filed with this report.

** Furnished with this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: May 30, 2013

American Eagle Outfitters, Inc. (Registrant)
By:	/s/ Robert L. Hanson
	Robert L. Hanson
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Mary M. Boland
	Mary M. Boland
	Chief Financial Officer and Chief Administrative Officer
	(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

February 26, 2013

Kitty Yung

Dear Kitty:

American Eagle Outfitters Hong Kong Limited (the “Company”) is pleased to offer you the position of Executive Vice President – Asia/Pacific reporting to Robert Hanson, Chief Executive Officer. The details of the terms and conditions of this offer letter are outline herein and in the attached documents (collectively, the “Employment Agreement”).

This offer letter and the terms of our offer are highly confidential. You agree to keep this offer and its terms confidential and you will not disclose the offer or its terms to any third party (excluding your spouse, lawyer, tax advisor or pursuant to court order). You understand that if you breach this provision the offer may be automatically revoked at the Company’s discretion and the Company will have no obligation to you.

Commencement Date: Your employment with the Company shall commence on the date in which you begin to provide full time service for the Company. Your position will be based in Hong Kong.

Salary: You will be paid an annual base salary of US$575,000 per annum less applicable taxes and withholdings (or pro-rated amount for incomplete year of service), payable in 12 equal monthly instalments by the end of each month.

Sign-on Cash Bonus: You will be eligible for a cash sign-on bonus of US$450,000 gross, paid in a lump-sum in 30 days after your employment commences. This payment is subject to the attached repayment agreement.

Annual Incentive Bonus: Subject to the terms of this clause, you will be eligible to earn an incentive compensation bonus of up to 70% (Target) of your base salary equal to US$402,500 with a maximum up to 140% equal to US$805,000. You will first be eligible to participate in the Annual Incentive Bonus plan for fiscal year 2013, and your entitlement to the Annual Incentive Bonus is based upon the achievement of the Company and Brand (where applicable) financial performance based goals to be established by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”). In order to be eligible to receive this Bonus, you must remain continuously employed by the Company through the date the Bonus is awarded. Fiscal 2013 bonus will not be prorated based on your service within the performance period.

Restricted Stock Units: Upon your Commencement Date, you will be eligible for consideration of a RSU grant with an expected value of US$250,000.The grant price will be the closing price of American Eagle Outfitters, Inc (“AEO”) common stock on the grant date. The number of units can fluctuate based on the stock price at the grant date, but the overall grant value will remain constant. The units will be a part of the grant made by the Compensation Committee pursuant to and subject to all terms and conditions set forth in the AEO’s 2005A Plan.

The RSU grant will only vest contingent upon the achievement of your personal goals set with the Company for both fiscal year 2013 and fiscal year 2014. If your performance meets or exceeds the targets for fiscal year 2013 and fiscal year 2014, the entire RSU grant will vest 2 years after the grant date, in the Spring of fiscal year 2015. The Compensation Committee must verify that the performance goals and other material terms are met prior to vesting. If your employment is terminated for any reasons before the vesting of the RSU grant, any unvested RSU grant shall be forfeited without compensation.

Additionally, upon your Commencement Date, you will be eligible for consideration of a RSU grant with an expected value of US$270,000. The grant price will be the closing price of AEO common stock on the grant date. The number of units can fluctuate based on the stock price at the grant date, but the overall grant value will remain constant. The units will be a part of the grant made by the Compensation Committee pursuant to and subject to all terms and conditions set forth in the AEO’s 2005A Plan.

If AEO performance meets or exceeds certain Company targets for fiscal year 2013, the entire RSU grant will vest upon certification of fiscal year 2013 performance. The Compensation Committee must verify that the performance goals and other material terms are met prior to vesting. However, if the performance goals for fiscal year 2013 are not met, then the RSU grant will vest proportionally over three years from the grant date based solely on your continued employment with the Company over that period. For the avoidance of doubt, if your employment is terminated for any reasons during the aforesaid three-year period, any unvested RSU grant shall be forfeited without compensation.

It is the parties’ intention that the 2005A Plan be adopted and administered in a manner that enables the Company to deduct for federal income tax purposes the full value of all RSU grants (if applicable).

Based upon Company performance in Fiscal 2013, you will be eligible for consideration for a time-based Restricted Stock award, granted in Spring 2014 and vesting in Spring, 2015 up to US$400,000 in grant value.

For the avoidance of doubt, your entitlement to the RSU grant shall also be subject to the terms and conditions of the RSU Confidentiality, Non-Solicitation, Non-Competition and Intellectual Property Agreement attached hereto.

Performance Share Plan: Upon your Commencement Date, you will be eligible for consideration of a Performance Share Unit grant with an expected target value of US$330,000. The grant price will be the closing price of AEO common stock on the grant date. The number of units can fluctuate based on the stock price at the grant date, but the overall value will remain constant. Vesting of the PSU will be contingent upon the achievement of AEO performance goals set by the Company at its discretion for a given 3-year period. Based upon AEO performance, the units will vest at the end of the 3-year period. The actual number of units vested will be based upon a sliding performance scale, varying between 0-150% of the target award. Shares not vested will be forfeited.

The units will be part of the grant made by the Compensation Committee pursuant to and subject to all terms and conditions set forth in the AEO’s 2005A Plan. It is the parties’ intention that the 2005A Plan be adopted and administered in a manner that enables the Company to deduct for federal income tax purposes the full value of all RSU grants (if applicable).

Performance Review: Annual performance appraisals take place in March. You will receive your first evaluation for merit consideration in March, 2014 with a retro-active effective date to the beginning of the 2014 fiscal year.

Mandatory Provident Fund (MPF): You will participate in the Company’s mandatory provident fund in accordance with applicable laws.

Health Insurance: Medical and dental coverage will begin on your first day of employment at no cost to you and will be administered by HSBC. Please note that the Company has rights to amend, revise, cancel or change the service provider of the insurance scheme at its sole discretion.

Vision Plan: The Company will provide you with reimbursements up to HK $1,550 dollars per calendar year for vision services rendered. Any unused entitlement in one year cannot be carried forward to the following year.

Life & Disability (Personal Accident) Insurance: You will be enrolled in the Company’s Life Insurance scheme and Accidental Death & Dismemberment Insurance/Total & Permanent Disability scheme at no cost to you. Please note that the Company has rights to amend, revise, cancel or change the service provider of the insurance scheme at its sole discretion.

Working Hours: The Company works on a five day work week. You will always be entitled to one statutory rest day in each 7–day period as required per Hong Kong law; such day will be determined by the Company. You may be required to work a sixth day occasionally and when traveling, or otherwise as business dictates.

Annual Leave: In addition to all Hong Kong general holidays, you will be entitled to 28 working days of paid annual leave in a leave year (or a pro-rated number for incomplete year of service). You may begin to take your annual leave after 60 days of employment with the consent of the Company.

Car Allowance: You will receive a monthly car allowance of USD$1,500 gross. This will be paid to you at the end of each month.

Taxes: As your position is based in Hong Kong (home country), there may be times when business travel outside the country is necessary. If you become subject to foreign country tax liability due to business travel on wage income paid by AEO, the Company will tax equalize you to your home country tax liability.

Contractual Severance Payment: If your employment is terminated by the Company for any reason or no reason at all, except for proven fraud, you will be entitled to receive a contractual severance payment equivalent to 12 months’ base salary within 30 days of the termination of employment conditioned upon the execution of a General Release in a form provided by The Company. This contractual severance payment is inclusive of any statutory severance payment that may be payable under the Hong Kong Employment Ordinance.

Merchandise Discount: You will also be eligible for an employee discount of 40% off regular price merchandise and 25% off sale merchandise.

RSU Confidentiality, Non-Solicitation, Non-competition and Intellectual Property Agreement: Your employment is conditioned upon your execution of the form of Confidentiality, Non-Competition and Intellectual Property Agreement (the “RSU Confidentiality Agreement”) attached to this letter.

Third Party Confidential Information: The terms and conditions of your employment with the Company prohibit you from using or disclosing any confidential or proprietary information of third parties, including your prior employers. In your employment with the Company, you are expected to comply with any current contractual restrictions that prohibit either the misappropriation or disclosure of confidential and proprietary information or the solicitation of employees.

Future Compensation: The compensation package outlined here is based on current American Eagle benefits and compensation policies and practices. Your compensation and benefits levels are subject to change by the Company in the future, but shall not be less than as set out above in this Employment Agreement, unless such reductions apply on the same basis to all executive officers of the Company.

We also attach an Appendix setting out additional terms and conditions of employment (the “Appendix”) which form part of this Employment Agreement. Please sign and date one copy of this letter, one copy of the enclosed Appendix, and one copy of the RSU Confidentiality Agreement enclosed herein, and return them to Dave McNulty’s attention. You can scan and email your signed copy to mcnultyd@ae.com and then send the original in the postal mail. I have enclosed an additional copy for your records.

Please feel free to contact me if you have any questions.

We very much look forward to you becoming a member of our team at American Eagle Outfitters. Please sign and date one copy of this and return it to us to verify your verbal acceptance. Because of your professional level within the Company, this offer is subject to approval by the Board of Directors, which we anticipate receiving shortly. Upon approval, we will send you a fully executed copy of this letter for your records. Please let me know if you have any questions.

Sincerely,

/s/ Robert Hanson

Robert Hanson

Chief Executive Officer

For and on behalf of

American Eagle Outfitters Hong Kong Limited

I accept the offer of employment under the terms noted in this letter and attached Appendix.

/s/ Kitty Yung	April 8, 2013
Kitty Yung	Date

AMERICAN EAGLE OUTFITTERS HONG KONG LIMITED

SIGN-ON BONUS PAYBACK AGREEMENT

For: Kitty Yung

In exchange for American Eagle Outfitters Hong Kong Limited’s agreement to provide a one-time, sign-on bonus in the amount of US$450,000 GROSS to me in connection with my employment, I agree as follows:

I acknowledge that I have read this Sign-On Bonus Payback Agreement and that I understand its provisions.

I agree that if I voluntarily terminate my employment with American Eagle Outfitters Hong Kong Limited (the “Company”), or I am dismissed by the Company based on gross misconduct or proven dishonesty during the first 12 months of employment following my start date, I will payback to the Company 100% of the monies received.

If I leave the Company’s employment as stated above, subject to applicable laws, I authorize them to deduct from monies otherwise due to me, any amounts I am obligated hereunder to pay. I understand that if such monies are not sufficient to repay the full amount I owe, I will immediately pay the remainder owed to the Company under this Agreement. In the event that I fail to pay the remaining amounts due within 30 days following the date that I terminate my employment, I will also pay the Company interest at an annual rate of one (1%) percent over prime on all amounts that remain unpaid after the end of such 30-day period.

I agree to pay the Company’s cost (including reasonable attorney’s fees and court costs) of collecting any amounts payable under this Agreement.

Signature:	/s/ Kitty Yung
	Kitty Yung
Date:	April 8, 2013

ONE COPY OF THIS SIGN-ON BONUS PAYBACK AGREEMENT MUST BE SIGNED AND RETURNED TO HUMAN RESOURCES PRIOR TO PAYMENT OF ANY AMOUNT. PLEASE RETAIN THE OTHER FOR YOUR RECORDS.

Appendix

I, Kitty Yung, agree that the additional employment terms set out in this Appendix shall form part of my terms and conditions of employment with American Eagle Outfitters Hong Kong Limited (hereinafter referred to as the “Company”).

In consideration of being hired as Executive Vice President–Asia Pacific with the Company, I acknowledge and agree to the following:

1. I will not have any financial involvement with any customer, supplier or vendor, or any involvement in any trade or other business, whether for personal gain or that of a third party, where a conflict of interest with the Company may exist. I will avoid situations where my personal interest may conflict or appear to conflict with that of the Company or a client, supplier or vendor of the Company and if there is any doubt I will obtain prior authorization from my manager. I will not accept gifts from a customer, supplier or vendor, or any prospective customer, supplier or vendor of the Company except as permitted by the Company policy.

2. I agree that during my employment with the Company, I will devote my full working time and attention and best efforts to the service and benefit of the Company’s business and shall comply with all rules, regulations, policies and instructions of the Company.

3. I will behave in an honest, decent, courteous manner at all times in dealing with customers and employees of the Company. I understand that discriminatory practices are against Company policy and I agree that I will not act in a discriminatory manner in dealing with customers and employees, including acts of sexual or psychological harassment.

4. Subject to the other provisions of this Employment Agreement, including specifically payment of the equivalent of 12 months base salary as set forth in the Contractual Severance Payment provision in the main body of the Employment Agreement, I understand that my employment may be terminated by either the Company or myself by serving on the other party not less than 1 months’ notice in writing or by making payment in lieu of notice. I also understand that subject to the other provisions of this Employment Agreement, including specifically payment of the equivalent of 12 months base salary as set forth in the Contractual Severance Payment provision in the main body of the Employment Agreement, the Company may terminate my employment at any time without 1 month’s notice or 1 month’s payment in lieu thereof for just cause including, but not limited to, any material breach of any terms and conditions of employment.

5. I have not relied on any representations (either verbal, written, or otherwise) by the Company, its agents, employees, officers, or employment consultants, prior to my commencement of employment except as specifically set forth in this Appendix and the related offer letter received by me.

6. I understand that the Company reserves the right to change, without notice, the terms of its benefit plan, incentive plan, retirement plan, stock option plan, and any other Company or successor plan of which I may be eligible to participate (hereinafter “plans”). I agree to comply with and be bound by the terms of these plans (if eligible). Upon ceasing to be an employee for any reason, I understand and agree that no further rights accrue under these plans (unless vested and expressly provided otherwise under the terms of the plans or in this Employment Agreement) effective the day I cease employment. I understand that I cease to be an employee on the date that I am effectively and lawfully dismissed. In the event of any potential inconsistent interpretation between this paragraph and any of the plans, this paragraph shall take precedence and govern.

7. I understand and agree that my job responsibilities, manner of remuneration, reporting relationship, hours of work, and the geographic location where I perform my job may change from time to time and that the Company has the right to make these changes in the Company’s sole discretion, provided that the total remuneration package shall not be less than set out above in this Employment Agreement, unless such reductions apply on the same basis to all executive officers of the Company. I understand and agree that such changes will not constitute a constructive termination of my employment.

8. I understand this Appendix and the related offer letter may not be changed, amended or modified orally, and may only be changed, amended or modified by written agreement between myself and the Company. I also understand and agree that the terms and obligations outlined in this Appendix shall continue to apply in the future regardless of what position I may hold.

9. I acknowledge that certain information which may be acquired by me during the course of my employment relating, without limitation to the Company’s systems, financial results or forecasts, sales or marketing results, vendor contracts or arrangements, marketing programs or strategies, or merchandising programs may be of a confidential nature and that disclosure of such information, particularly to competitors, could be damaging to the Company’s interest. Accordingly, I agree to keep all such information which is identified to me as being confidential or which, by its nature, should be apparent to me to be commercially sensitive and that is not already in the public domain or enters the public domain through no fault of mine, strictly confidential except as required by law, regulation, or court order and I agree not to disclose such information to any one outside the Company at any time during within three years after my employment with the Company, provided for the avoidance of doubt, after the end of my employment with the Company, I will be permitted to utilize my acquired professional skill and experience in other employment and in providing services to others

10. I agree that I will not, without the prior written consent of the Company, and for a period of eighteen months after the date of the termination of my employment for whatever reason, directly or indirectly interfere with, hire, entice away or otherwise engage the services of any employee of the Company, who was at any time during the twelve months prior to my termination of employment, an employee of the Company, with whom I have/had dealing.

11. In the event that any provision or part of this Appendix or the related offer letter shall be deemed void or invalid by a court, the remaining provisions, or parts of it, shall be and remain in full force and effect.

12. I understand that the Company is committed to a policy of treating all its employees equally. No employee shall receive less favorable treatment or consideration on the grounds of disability, sex or family status or will be disadvantaged by any conditions of employment or company requirements that cannot be justified as necessary on operational grounds.

13. Subject to applicable laws, I understand that the personal data I have supplied for the purpose of employment is required for obtaining reference checks, for maintaining employee records, for assessing employee compensation and benefits, for training and development, for appraisal and for emergency purposes and such personal data may be forwarded to the Company’s insurers, bankers, and medical practitioners providing medical services to employees, if applicable, and to any relevant service provider or any government authority (at the authority’s request).

14. I hereby represent and warrant that I am free from any encumbrances or restrictions imposed by my current or former employer which may in any way prohibit me from performing services for the Company. I further represent and warrant that I have not breached and will not breach any duty of confidentiality to my current/former employer or any third party under any contract or common law in carrying out my duties. I confirm that the Company has not requested or induced me to breach any of my duty of confidentiality to any party.

15. This Appendix and the related offer letter dated February 26, 2013 contain the entire understanding between the parties in relation to the subject matter hereunder and supersedes any prior understanding or agreement (whether written or oral) in relation to the subject matter hereunder.

16. This Appendix and the related offer letter shall be governed by and construed in accordance with the laws of the Hong Kong Special Administrative Region.

In signing my name below I agree that I have read, understand and agree to the terms and provisions as outlined in this Appendix and the offer letter dated February 26, 2013. I agree I have had the opportunity to seek explanation as required, and to obtain independent legal advice prior to signing below.

/s/ Kitty Yung	April 8, 2013
Kitty Yung	Date

AMERICAN EAGLE OUTFITTERS HONG KONG LIMITED

RSU Confidentiality, Non-Solicitation, Non-Competition And Intellectual Property Agreement

As a new officer and/or employee of American Eagle Outfitters Hong Kong Limited or one of its subsidiaries or affiliates (collectively, the “Company”), the undersigned is eligible to participate in the Company Long Term Restricted Stock Unit Incentive Plan (the “RSU Plan”) and will be placed or retained by the Company in a position of special trust and confidence, will be granted access to or may develop trade secretes, intellectual property, and other confidential or proprietary information (“Confidential Information”) of the Company, and will be authorized to communicate with customers, vendors, employees and others to develop good will for the Company.

NOW, THEREFORE, in recognition of the highly competitive nature of the business conducted by the Company and in exchange for and in consideration of:

• my employment; and

• in the event of termination of my employment without just cause, to be eligible to receive an award in accordance with the terms of the RSU Plan , pro-rated based on actual days worked (excluding any period in which pay in lieu of notice is or ought to have been provided) and performance goals being met for the full such period, but not an amount above the “target” award level;

I agree as follows:

1. I will at all times during and after my employment faithfully hold the Company’s Confidential Information in the strictest confidence, and I will use my best efforts and diligence to guard against its disclosure to anyone other than as required in the proper and lawful performance of my employment. I will not use Confidential Information for my own personal benefit or for the benefit of any competitor or other person. I understand that Confidential Information includes all information and materials relating to Intellectual Property, as defined below, the Company’s trade secrets and all information relating to the Company that the Company does not make available to the public. By way of example, Confidential Information includes information about the Company’s products, designs, processes, systems, marketing, promotional plans, technical procedures, strategies, costs, financial information, and many other types of information and materials. Upon termination of my employment, regardless of the reason for such termination, I will return to the Company all computers, data storage devices, documents and other materials of any kind that contain Confidential Information, and all copies thereof, whether electronic or hard copy.

2. I will not use any confidential information of any third party, including any prior employer, in breach of a legal obligation to that third party in the course of my employment.

3. If my employment terminates for any reason whatsoever, then for a period of eighteen (18) months after termination, I will not directly or indirectly solicit, induce or attempt to influence any employee of the Company to leave his or her employment, nor will I in any way assist anyone else in doing so.

4. I agree that all inventions, designs and ideas conceived, produced, created, or reduced to practice, either solely or jointly with others, during my employment, including those developed on my own time, which relate to or are useful in the Company’s business (“Intellectual Property”) shall be owned solely by the Company. I understand that whether in preliminary or final form, such Intellectual Property includes, for example, all ideas, inventions, discoveries, designs, innovations, improvements, trade secrets, and other intellectual property. All Intellectual Property is either work made for hire for the Company within the meaning of the U. S. Copyright Act, and, whether or not such Intellectual Property is determined to be work made for hire, I irrevocably assign all right, title, moral rights and interest in and to the Intellectual Property to the Company, including all copyrights, patents, and/or trademarks. I will, without any additional consideration, execute all documents and take all other actions needed to convey my complete ownership of the Intellectual Property to the Company so that the Company may own and protect such Intellectual Property and obtain patent, copyright and trademark registrations for it. I agree that the Company may alter or modify the Intellectual Property at the Company’s sole discretion, and I waive all right to claim or disclaim authorship. I represent and warrant that any Intellectual Property that I assign to the Company, except as otherwise disclosed in writing at the time of assignment, will be my sole, exclusive, original work. I have not previously invented any Intellectual Property or I have advised the Company in writing of any prior inventions or ideas.

5. If my employment terminates for any reason whatsoever, then for a period of twelve (12) months after termination, I will not, directly or indirectly, engage in (either as an owner, investor, partner, employer, employee, consultant or director), or otherwise perform services for, any Competitive Business. The term “Competitive Business” means any business in competition with the retail, direct marketing and/or internet apparel and accessories business and any other material business the Company is engaged in as of the date of termination of employment. Such businesses include, but are not necessarily limited to the following: Gap, Old Navy, Abercrombie & Fitch, Hollister, Aeropostale, Forever 21, Rue 21, Express, Buckle, Limited, Victoria’s Secret, VS Pink, Pacific Sunwear, J. Crew, Banana Republic, Inditex S.A., Fast Retailing Co., Ltd., and H&M Hennes & Mauritz AB. I understand that the Company at its discretion may waive this provision or shorten the twelve month period by giving me a written waiver.

6. I understand and agree that if I breach any provision of this Agreement, I shall then immediately have no further rights or entitlements under the RSU Plan or in respect of Restricted Stock Units generally, and I shall not be entitled to any payment or other entitlement in any way relating to Restricted Stock Units. This paragraph shall govern in the event of any conflict with any other agreement, term of employment or other commitment or arrangement, or any legal requirement except the minimum extent imposed by applicable legislation that cannot be avoided by contract.

7. I understand and agree that the Company has the right to suspend or terminate the RSU Plan at any time in the future, provided that such suspension or termination does not decrease the value of my then-current account balance.

8. I understand and agree that the Company is entitled, in addition to other remedies, to obtain an injunction against any potential or actual violation of this Agreement. This Agreement is in addition to and does not replace any other agreement between me and the Company relating to the subject matter hereof, and I acknowledge that the Company is entitled to enforce any such other agreement in addition to the provisions of this Agreement.

9. Notwithstanding the foregoing, if I am a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Company determines that any amounts to be paid to me under this Agreement could be subject to penalty taxes under Section 409A of the Code, then the Company shall not commence payment of such amounts until the earlier of (a) the date that is six months after my Termination Date or (b) the date of my death. Any amount that otherwise would have been payable but for the delay described above shall be aggregated and paid with the first payment under this Section 9. For purposes of this Agreement, ‘Termination Date’ shall mean the date on which a ‘separation from service’ occurs, as defined in Treasury Regulation Section 1.409A-1(h) and the guidance promulgated there under.

10. This Agreement cannot be changed in any way unless the Company agrees in writing. This Agreement will be governed by and interpreted in accordance with Pennsylvania law, without reference to its conflicts of laws rules.

		American Eagle Outfitters Hong Kong Limited
Date:	April 8, 2013	By:	/s/ Robert Hanson
		(American Eagle Outfitters Hong Kong Limited Representative)
			Title:	Chief Executive Officer
Date:	April 8, 2013	Kitty Yung
		Print Name
		/s/ Kitty Yung
		Signature

EX-10.2

Exhibit 10.2

GENERAL RELEASE AND SEPARATION AGREEMENT

(“AGREEMENT”)

PLEASE READ THIS ENTIRE AGREEMENT CAREFULLY.

NOTE THAT IT CONTAINS YOUR RELEASE AND WAIVER OF LEGAL RIGHTS AND CLAIMS. YOU ARE ADVISED

TO CONSULT WITH AN ATTORNEY OF YOUR CHOICE CONCERNING ITS TERMS AND LEGAL SIGNIFICANCE BEFORE SIGNING. IF YOU AGREE TO ITS TERMS, SIGN BELOW.

I, Sherry Harris, understand and agree to the terms of this Agreement between me and American Eagle Outfitters, Inc and/or any of its or their subsidiaries or affiliates (collectively, “the Company”).

1. Separation From Employment By signing below, I agree that my employment with the Company will end pursuant to the terms of this Agreement on April 12, 2013 (“Separation Date”) and I will cease to be employed by the Company as of that date.

2. Resignation of All Positions Pursuant to this Agreement, I hereby resign all positions I hold within the Company and/or any other entity as a result of my employment with the Company, including without limitation as an officer or director of any entity. This resignation will be effective on my Separation Date or such other date as requested by the Company.

3. Separation Payments and Benefits I understand that by signing, returning and not revoking this Agreement within the time periods described below, I will receive the following pay and/or benefits from the Company, subject to the “Post-Employment Limitations and Obligations” section of this Agreement, including all subparagraphs:

a. Separation Payments I will receive a lump sum separation payment in the amount of Five Hundred Forty One Thousand Six Hundred Sixty Seven Dollars ($541,667.00) (an amount equal to one year of my regular base pay and 30 days notice), less applicable deductions and withholdings. This payment will be made on within 30 days of the date that I have signed, returned and not revoked this Agreement. I understand that this Lump Sum Payment will not be counted as earnings for purposes of my incentive bonus or 401(k) benefit plans, regular or supplemental.

b. Health Insurance Continuation If I make a timely election to continue medical, dental and/or vision insurance coverage under the Company’s group medical, dental and/or vision plans pursuant to the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Company will reimburse me for up to twelve (12) months of my COBRA premiums, ending April 30, 2014. However, if I secure employment before April 30, 2014 and medical, dental and/or vision coverage is available as a result of that employment, the Company’s obligation to reimburse COBRA shall immediately cease. I will notify the Company in writing immediately if I accept employment prior to April 30, 2014, and I will repay to the Company any COBRA reimbursement for any period of employment during which medical, dental and/or vision coverage is available. After April 30, 2014, I may continue COBRA coverage, subject to applicable law, at my sole expense. 

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c. Equity I acknowledge and agree that the equity awards granted to me under the terms of the Company’s benefit plans will be administered as follows, all in accordance with the terms of their respective plans:

• Restricted Stock (Time-based) My unvested, time-based awards under the Company’s Long-term Restricted Stock Unit Incentive Plan shall be forfeited on the Separation Date or on my last date of employment if I separate prior to the Separation Date.

• Restricted Stock (Performance-based) I may be eligible for a pro-rata portion of my performance-based awards under the Long-term Restricted Stock Unit Incentive Plan if the Company achieves the applicable performance goals established by the plan. The pro-rata amount I may be eligible for will be based on my days of service in the performance period as of the Separation Date or on my last date of employment if I separate prior to the Separation Date. Payment will be made no sooner than the date on which other participants are paid their awards, if any payments are made, in accordance with the terms of the plan. Under the terms of the plan, I am not required to be employed by the Company at the time my prorated share of such awards is paid as a condition precedent to receiving them. The payment will be made less any applicable withholdings or deductions. The balance of my performance-based awards shall be forfeited on the Separation Date or on my last date of employment if I separate prior to the Separation Date. To the extent that the Company does not achieve the applicable performance goals established under the plan, the portion of my award for which performance goals are not achieved will be forfeited in accordance with the terms of the plan.

d. Other Benefit Plans I understand that for benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA), my eligibility for benefits will be determined in accordance with the terms of the applicable plan or other governing documents. Nothing in this Agreement shall impair, diminish or interfere with any rights, privileges or benefits I have with respect to ERISA plans, equity award agreements or similar governing documents. Except as described above, I hereby withdraw my participation in any and all bonus or incentive plan(s) or program(s) and understand that I am not now nor will in the future be entitled to any payments under those plans, including the incentive cash bonus plan for fiscal 2013 and future equity grants of restricted stock units, stock or stock options.

e. No Other Payments I acknowledge that this Agreement does not include any form of compensation or benefits other than specifically described herein. I acknowledge that I am not eligible for any post-separation pay or benefits other than provided in this Agreement, including but not limited to payments under any of the Company’s severance plans or programs and bonus or incentive pay programs.

f. Forgiveness of Sign-on Bonus and Relocation Payments I understand and agree that I am not required to reimburse the Company for any amount of my sign-on bonus or relocation payments previously paid to me.

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g. Reimbursement for Temporary Housing I understand and agree that the Company will continue to reimburse me for the monthly rental obligation for my Condominium Apartment Lease dated January 13,2013 in New York City through the earlier of the end of the original term on January 31, 2014 or any earlier termination of the Lease by me, less the amount of the last month rent and any security deposit previously paid by the Company. I understand and agree that the Company will assist and pay for the removal of my personal possessions from the temporary housing unit in Pittsburgh, PA and for the shipment of those items to me in New York.

4. General Release of Claims/Covenant Not to Sue

a. I fully waive, release and forever discharge the Company and all of its officers, directors, employees, assigns, agents, plans and plan trustees, independent contractors, shareholders, attorneys and representatives, jointly and individually, (the “Released Parties”) from any manner of suits, actions, or causes of action, including any claim for attorneys’ fees or costs, existing at the time I sign this Agreement, whether currently known or unknown to me, under any possible legal, equitable, contract, tort or statutory theory. To the greatest extent permitted by applicable law, this General Release includes, but is not limited to, claims arising out of or in any way related to my employment and/or separation from employment, such as, by way of example only, claims under the federal Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, Section 1981 of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974, the Americans With Disabilities Act, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the federal Family and Medical Leave Act (FMLA), the federal Equal Pay Act, and any other federal, state or local statute, ordinance, executive order, regulation, including without limitation any amendments thereto, or any other legal theory. This paragraph will not limit or prohibit in any way my ability to bring an action to enforce the terms of this Agreement.

b. I acknowledge and agree that included in my General Release of claims are any and all claims that have been, or may be asserted by me or by any other person or entity on my behalf in any class or collective action relating to my employment and/or the termination of my employment with the Company. Accordingly, (i) I waive any right to become, and promise not to consent to become, a member of any class in a case in which claims are asserted against the Released Parties that are related in any way to my employment with or termination from the Company, and that involve events which have occurred as of the date I sign this Agreement; and (ii) I waive any and all rights I might otherwise have to receive notice of any class or collective action. In the event that I am included or identified as a member, or potential member of a class in any proceeding, I agree to opt out of the class at the first opportunity afforded to me after learning of my inclusion. In this regard, I agree that I will execute, without objection or delay, an “opt-out” form presented to me in connection with such proceeding.

c. I agree that should any person or entity file or cause to be filed any civil action, suit, arbitration, or legal proceeding (with the exception of EEOC and similar state agency charges of discrimination as described below) seeking equitable or monetary relief in connection with any aspect of my employment relationship with the Company, I will take all necessary actions to withdraw from such action and/or have it dismissed with

3

prejudice as it relates to me personally, and agree not to voluntarily participate or cooperate in such matter(s) unless required by law. If I am unable to preclude a charge or claim on my behalf, I agree that I will not seek or accept any personal relief, including but not limited to an award of monetary damages or reinstatement to employment, in connection with such a charge or claims.

d. Notwithstanding any local or other law to the contrary, I expressly agree that the General Release will extend and apply to all claims, injuries and damages I may have against the Company or any Released Parties at the time I sign the Agreement, regardless of whether I am aware of or suspect such claims at the time I sign.

e. I agree that the above paragraphs shall release the Company from liability to the fullest extent permitted by law and only to the extent permitted by law. I acknowledge that the General Release does not prohibit the following rights or claims: 1) claims that first arise after the date I sign the Agreement or which arise out of or in connection with the interpretation or enforcement of the Agreement itself; 2) my right to file a charge or complaint with the EEOC or similar federal or state agency, or my ability to participate in any investigation or proceeding conducted by such agency; 3) any rights or claims, whether specified above or not, that cannot be waived as a matter of law pursuant to federal, state or local statute. If it is determined that any claim covered by this General Release cannot be waived as a matter of law, I expressly agree that the General Release will nevertheless remain valid and fully enforceable as to the remaining released claims.

5. Special Provisions Relating to Release of Age Discrimination Claims (I understand this paragraph only applies if I am age 40 or over.) I understand that as part of the General Release/Covenant Not to Sue, I voluntarily and knowingly waive rights or claims under the federal Age Discrimination in Employment Act of 1967 (ADEA), as amended, that may have existed on or prior to the date I sign the Agreement. If at any time I am obligated to return the consideration I received under this Agreement, I agree that I will retain Five Hundred Dollars ($500.00), representing the consideration I received in exchange for waiver of my rights and claims under ADEA.

6. Absence of Certain Claims

a. I acknowledge that as of the date I sign this Agreement, I have not filed or otherwise pursued any charges, complaints or claims of any nature against the Company or any Released Party with any local, state or federal government agency or court on or prior to the date of signing this Agreement, which have not been dismissed, closed, withdrawn or otherwise terminated, unless otherwise permitted by law. I further acknowledge that the Company has fully satisfied all its obligations to me as a matter of law and pursuant to Company policy and I have no additional claims against the Company.

b. I acknowledge and agree that, except for benefits under any Company plans that have vested or will vest according to the terms of those plans, the Company shall have no obligation to provide me with any payments, benefits or consideration other than as described herein.

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c. I acknowledge that as an employee of the Company it has been my obligation to advise the Company completely and candidly of all facts of which I am aware that constitute or might constitute violations of the Company’s ethical standards or legal or regulatory obligations. I represent and warrant that I am not aware of any such facts or that I have previously advised the Company about any such facts. I further agree that I will advise the Company in the future of all such facts that come to my attention.

7. Post-Employment Limitations and Obligations

a. Restrictive Covenants I acknowledge and reaffirm that the Company and I are parties to an “RSU Confidentiality, Non-Solicitation, Non-Competition and Intellectual Property Agreement” signed by me on November 5, 2012 (the “Confidentiality Agreement”). Except with respect to Section 5 of the Confidentiality Agreement, I acknowledge and agree that all of my obligations under the Confidentiality Agreement remain in full force and effect and shall survive the termination of my employment with the Company and the execution of this Agreement. The Company hereby fully waives the non-competition restrictions of Section 5 of the Confidentiality Agreement, which shall have no force and effect following the Separation Date.

b. Obligations Regarding Confidential, Proprietary, and Trade Secret Information I acknowledge and agree that during my employment with the Company I had access to confidential, proprietary and trade secret information about the Company, its employees, customers and vendors, which derives economic value from not being otherwise known to the general public (hereafter “Confidential Information and Trade Secrets”). Confidential Information and Trade Secrets provide a competitive advantage to the Company specifically because it would be valuable to a competitive entity if disclosed. Confidential Information and Trade Secrets includes, but is not limited to, the salaries, specific duties, and other non-public information relating to the Company’s employees, and the Company’s business plans, strategies, products, pricing, computer programs, systems, databases, methods of operation, financial models, investments and other business transactions, policies and procedures. I understand that the Company has obligations to protect the confidentiality of this information and that such obligations extend to me, both during and after my employment with the Company ends for any reason. I acknowledge and agree that the improper use or disclosure of the Company’s Confidential Information and Trade Secrets would cause immediate and irreparable damage to the Company’s business.

For this reason, I acknowledge and agree that (a) I shall not directly or indirectly, alone or in concert with or on behalf of others, use, publish or otherwise disclose any aspect of the Company’s Confidential Information and Trade Secrets to any person or entity outside the Company except pursuant to formal legal process or unless I first obtain the written approval of an authorized Company representative (if I am served with legal process involving the Company, I agree to notify immediately an appropriate representative of the Company’s Legal Department); (b) I shall deliver immediately at the Company’s request and to the custody of whatever person the Company shall designate

5

all originals and copies of any documents or other material in my possession, custody, or control containing or embodying Confidential Information and Trade Secrets, and any derivatives, summaries and excerpts created therefrom, in any form whatsoever, including but not limited to hard copy documents and information housed in or on Company-owned electronic devices or equipment, or devices or equipment owned by me or to which I have access; and (c) I shall not otherwise utilize any of the Company’s Confidential Information and Trade Secrets to interfere with any relationship between the Company and any of the Company’s vendors, prospective vendors, or employees. To the extent that I am unaware or unsure of whether certain information constitutes Confidential Information and Trade Secrets, I agree to consult with an authorized senior management representative of the Company before utilizing the information.

c. Prohibited Solicitation of Company Employees In exchange for the consideration provided hereunder, and based on my access to Confidential Information and Trade Secrets during my employment with the Company, I further agree that for a period of eighteen (18) months following the termination of my employment with the Company, I will not directly or indirectly, alone or in concert with others, solicit, encourage, influence, recruit or induce, or attempt to solicit, encourage, influence, recruit or induce any employee of the Company to cease working for the Company.

d. “Solicit, encourage, influence, recruit or induce,” as used in this Agreement , means that I will not in any way, directly or indirectly, contact or communicate with any Company vendor or person then-employed by the Company, regardless of who initiates the contact or communication, for the express or implicit purpose of requesting the vendor or employee to cease doing business with or remaining employed by the Company, or to begin doing business with or taking employment with another entity.

e. Prior Agreements Regarding Prohibited Competition or Solicitation I understand and agree that nothing in this section should be construed to diminish or affect the validity or enforceability of any prior agreement(s) I have entered into with the Company or any of its predecessors that have not otherwise expired, regarding prohibited competition or solicitation of vendors and/or associates, to the extent such agreements are more protective of the Company’s interests.

f. Future Cooperation I agree that during and after the term of this Agreement, I will make myself available, upon reasonable notice and under reasonable conditions, to assist the Company in any capacity with respect to matters of which I was involved or had knowledge while employed by the Company. Without limitation, such assistance may include providing information or documents, cooperating with investigations, negotiations, lawsuits or administrative proceedings involving the Company, preparing for and giving testimony including written declarations or statements, and other similar activities. I understand that the Company will reimburse me for all reasonable, documented out-of-pocket expenses incurred as a result of my obligations under this paragraph, in accordance with the Company’s then applicable Expense Guidelines.

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g. Confidentiality of Agreement Terms I agree that the terms and conditions of this Agreement, including the consideration offered in connection with it, and any and all actions by the Company in accordance therewith, are strictly confidential and, with the exception of my counsel, tax advisor, immediate family, or as required by applicable law, have not and shall not be disclosed, discussed, or revealed to any other persons, entities, or organizations, whether within or outside the Company, without prior written approval of an authorized officer of the Company. I further agree to take all reasonable steps necessary to ensure that confidentiality is maintained by any of the individuals or entities referenced above to whom disclosure is authorized.

h. Negative Comments I agree to refrain from directly or indirectly engaging in publicity, including written, oral and electronic communication of any kind, or any other activity which reflects negatively or adversely upon the Company, its business, its actions or its officers, directors or employees, whether or not I believe the content of the publicity to be true or whether or not it is, in fact, true. This paragraph does not apply to truthful testimony compelled by applicable law or legal process.

i. Intellectual Property I hereby assign to the Company any and all inventions, copyrightable material, trade secrets or other work conceived, developed, created or otherwise performed by me during my employment and relating in any way to my work or the business of the Company. I agree to cooperate with the Company to further document its ownership of such property. Nothing in this paragraph should be construed to diminish or affect the validity or enforceability of any prior assignment of any such property.

j. Return of Company Property/Expense Reconciliation I further represent and agree that by the last day I am actively at work, I will have returned to the Company all equipment, business records and/or other Company property that has been or is in my care, custody, possession or control. I further represent and agree by my Separation Date I will have reimbursed or reconciled to the Company’s satisfaction all charges made to the Company by me or expenses charged by me to the Company, and that if I fail to make such reimbursement that the Company may deduct any sums owed by me from the payment amount(s) specified in this Agreement.

k. Breach/Remedy I understand and agree that the Company shall have the right to bring legal action to enforce this Agreement and to recover monetary or other damages resulting from a breach of the Agreement by me. This right includes but is not limited to the Company’s right to obtain injunctive relief to restrain any breach or threatened breach of the Agreement by me or otherwise to specifically enforce any provision of this Agreement. In addition, I acknowledge and understand that if I breach any provision of this Agreement, I will cease to be eligible for payments and benefits under this Agreement and the Company may, in its sole discretion, discontinue remaining payments and benefits, if any, and may seek the value of payments and benefits previously received as damages.

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8. Miscellaneous Provisions

a. No Admission of Liability I specifically understand and agree that by entering into this Agreement, the Company and the other Released Parties do not admit any liability whatsoever to me or to any other person arising out of any claims heretofore or hereafter asserted by me and the Company, for itself and on behalf of other Released Parties expressly denies any and all such liability.

b. Severability Should any of the provisions of this Agreement be rendered invalid by a court or government agency of competent jurisdiction, or should I fail to fulfill my obligations under it, the remainder of the Agreement shall, to the fullest extent permitted by applicable law and at the Company’s option, remain in full force and effect and/or I will be obligated to return, in full or in part, as determined by the Company, any and all consideration I received in exchange for signing the Agreement, except, if applicable, the Five Hundred Dollars ($500.00) I received in exchange for my release and waiver of rights or claims under the federal Age Discrimination in Employment Act.

c. 409A This Agreement is intended to comply with Section 409A of the Internal Revenue Code, to the extent applicable. Notwithstanding any provision herein to the contrary, the Agreement shall be interpreted and administered consistent with this intent. If this Agreement provides for multiple payments, each separate payment provided pursuant to the terms of this Agreement shall be treated as a separate “payment” for purposes of Section 409A. In addition, if I am a “specified employee” within the meaning of Section 409A, as determined by the Company under its Section 409A administrative policies, any payment made in connection with my termination of employment shall not be made earlier than six (6) months after the date of such termination to the extent required by Section 409A.

d. PTO Any accrued and unused PTO (paid time off) as of the Separation Date will be distributed in your final paycheck. The Company agrees to waive your obligation to repay any negative outstanding PTO balance.

e. Choice of Law To the extent not governed by federal law or otherwise prohibited by state law, I agree that the Agreement is governed by the laws of Pennsylvania, without regard to its principles on conflict of law. To the extent a federal court or agency does not have jurisdiction over any action involving the validity, interpretation or enforcement of the Agreement, or any of its terms, provisions or obligations, I agree that jurisdiction and venue shall exist exclusively in a court or government agency located within the State of Pennsylvania, unless specifically prohibited by applicable state law.

f. Attorneys’ Fees and Costs As further mutual consideration of the promises set forth herein, the Company and I agree that we each are responsible for our own attorneys’ fees and costs, and each agrees that they will not seek from the other reimbursement for attorneys’ fees and/or costs incurred in relation to any matters addressed in this Agreement.

g. Entire Agreement I understand that, unless specifically mentioned otherwise in this Agreement, all prior agreements and understandings covering the same or similar subject matter, written or oral, between me and the Company, except agreements regarding

8

confidential information, non-solicitation, non-competition or similar agreements that are more protective of the Company’s interests than the terms of this Agreement and that have not expired or been waived by the Company in writing, are replaced and superseded by this Agreement, and are no longer of any force and effect.

9. Time for Signing I acknowledge that I first received this Agreement on or before April 12, 2013 and that to receive the separation pay and benefits described herein, I must sign, return and not revoke this Agreement as described below.

I have twenty one (21) calendar days from my receipt of the Agreement to consider it and consult with an attorney of my choice before signing and returning it. I agree that any changes to the Agreement that may be negotiated between me or my attorney and the Company, whether material or immaterial, will not restart the time I have to consider and sign the Agreement. I understand that I may sign and return the Agreement at any time before the expiration of the 21-day period. I further understand that I can revoke my acceptance of the Agreement, in writing, for a period of seven (7) calendar days after I sign the Agreement.

The signed Agreement and, if applicable, written revocation should be returned within the time periods described above to:

American Eagle Outfitters, Inc.

77 Hot Metal Street

Pittsburgh, PA 15203

Attention: Chief Executive Officer

10. Counterpart Originals This Agreement may be executed in any manner of copies, each of which shall be deemed to be a counterpart original.

I hereby AFFIRM AND ACKNOWLEDGE that I have read the foregoing Agreement, that I have had sufficient time and opportunity to review and discuss it with the attorney of my choice, that I have had any questions about the Agreement answered to my satisfaction, that I fully understand and appreciate the meaning of each of its terms, and that I am voluntarily signing the Agreement on the date indicated below, intending to be fully and legally bound by its terms.

ACKNOWLEDGED AND AGREED:

			ASSOCIATE
DATED:	April 24, 2013		/s/ Sherry Harris
			Sherry Harris
			THE COMPANY
DATED:	April 24, 2013	By:	/s/ Robert Hanson
			Robert Hanson, Chief Executive Officer

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EX-15

Exhibit 15

Acknowledgment of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

American Eagle Outfitters, Inc.

We are aware of the incorporation by reference in the Registration Statement and in the related prospectus (Form S-3, Registration No. 333-68875) of American Eagle Outfitters, Inc. and in the Registration Statements (Form S-8) of American Eagle Outfitters, Inc. as follows:

• 1999 Stock Incentive Plan (Registration Nos. 333-34748 and 333-75188),

• Employee Stock Purchase Plan (Registration No. 333-3278),

• 1994 Restricted Stock Plan (Registration No. 33-79358),

• 1994 Stock Option Plan (Registration Nos. 333-44759, 33-79358, and 333-12661),

• Stock Fund of American Eagle Outfitters, Inc. Profit Sharing and 401(k) Plan (Registration No. 33-84796), and

• 2005 Stock Award and Incentive Plan (Registration Nos. 333-126278 and 333-161661).

of our report dated May 30, 2013 related to the unaudited consolidated financial statements of American Eagle Outfitters, Inc., that is included in its Form 10-Q for the quarter ended May 4, 2013.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

Dated: May 30, 2013

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Robert L. Hanson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Eagle Outfitters, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 30, 2013

/s/ Robert L. Hanson

Robert L. Hanson

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Mary M. Boland, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Eagle Outfitters, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 30, 2013

/s/ Mary M. Boland

Mary M. Boland

Chief Financial Officer and Chief Administrative Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of American Eagle Outfitters, Inc. (the “Company”) on Form 10-Q for the period ended May 4, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert L. Hanson, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 30, 2013

/s/ Robert L. Hanson

Robert L. Hanson

Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of American Eagle Outfitters, Inc. (the “Company”) on Form 10-Q for the period ended May 4, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mary M. Boland, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 30, 2013

/s/ Mary M. Boland

Mary M. Boland

Chief Financial Officer and Chief Administrative Officer

(Principal Financial Officer)

XML

Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 1,452,191	$ 1,417,933	$ 1,444,394
Less: Accumulated depreciation	(929,922)	(917,799)	(882,336)
Property and equipment, net	$ 522,269	$ 500,134	$ 562,058

XML

Discontinued Operations - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified							12 Months Ended
	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012	May 04, 2013 77kids stores	Feb. 02, 2013 77kids stores	Apr. 28, 2012 77kids stores	Feb. 02, 2013 Discontinued Operations Store	Feb. 02, 2013 Discontinued Operations 77kids stores Store	May 04, 2013 Segment, Discontinued Operations 77kids stores	Feb. 02, 2013 Segment, Discontinued Operations 77kids stores	Apr. 28, 2012 Segment, Discontinued Operations 77kids stores
Restructuring Cost and Reserve [Line Items]
Number of stores impaired								22
Percentage of cost paid for acquired inventory										65.00%
Assets held for sale	$ 4,528	$ 9,499	$ 19,039	$ 0	$ 0	$ 9,000			$ 0	$ 0	$ 9,000
Number of stores leases							21

XML

Summary of Restricted Stock Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013
Time Based Restricted Stock Units
Shares
Nonvested - beginning of period	1,386
Granted	846
Vested	(966)
Cancelled/Forfeited	(37)
Nonvested - End of period	1,229
Weighted-Average Grant Date Fair Value
Nonvested - beginning of period	$ 13.91
Granted	$ 22.47
Vested	$ 13.55
Canceled/Forfeited	$ 14.84
Nonvested - end of period	$ 20.05
Performance-Based Restricted Stock Units
Shares
Nonvested - beginning of period	2,086
Granted	814
Vested	(566)
Cancelled/Forfeited	(4)
Nonvested - End of period	2,330
Weighted-Average Grant Date Fair Value
Nonvested - beginning of period	$ 14.91
Granted	$ 21.01
Vested	$ 17.39
Canceled/Forfeited	$ 14.65
Nonvested - end of period	$ 16.78

XML

Cash and Cash Equivalents and Short-term Investments - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Schedule of Available-for-sale Securities [Line Items]
Proceeds from sale of available-for-sale securities	$ 23,778	$ 20,119
Purchase of available-for-sale securities	$ 15,217	$ 3,051

XML

Property and Equipment (Tables)

3 Months Ended

May 04, 2013

Property and Equipment

Property and equipment consists of the following:

(In thousands)	May 4,			February 2,			April 28,
	2013			2013			2012
Property and equipment, at cost	$	1,452,191		$	1,417,933		$	1,444,394
Less: Accumulated depreciation		(929,922	)		(917,799	)		(882,336	)
Property and equipment, net	$	522,269		$	500,134		$	562,058

XML

Major Classes of Assets & Liabilities Included in Consolidated Balance Sheets (Detail) (77kids stores, USD $) In Thousands, unless otherwise specified	Apr. 28, 2012
77kids stores
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Current assets	$ 10,077
Non-current assets	15,647
Total assets	25,724	[1]
Total current liabilities	6,166
Total non-current liabilities	2,686
Total liabilities	$ 8,852

[1] Current assets primarily relate to merchandise inventory classified as an asset held-for-sale on the Company's Consolidated Balance Sheets. Non-current assets relate primarily to property and equipment at cost, net of, accumulated depreciation.

XML

Share-Based Payments - Additional Information (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 5,289,000	$ 21,299,000
Share-based compensation expense, net of tax	3,300,000	13,100,000
Weighted-average grant date fair value of stock options granted	$ 3.42
Aggregate intrinsic value of options exercised	500,000	13,100,000
Cash received from the exercise of stock options	1,523,000	12,165,000
Tax benefit realized from stock option exercises	8,100,000	2,600,000
Shares available for all equity grants	17.8
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	1,800,000
Unrecognized compensation expense, weighted average period	1 year 6 months
Time Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, weighted average period	1 year 8 months 12 days
Vesting period	3 years
Unrecognized compensation expense	21,300,000
Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Unrecognized compensation expense	$ 23,000,000
Performance-Based Restricted Stock Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, weighted average period	1 year
Performance-Based Restricted Stock Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, weighted average period	3 years

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Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding (Detail) In Thousands, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Weighted average common shares outstanding:
Basic number of common shares outstanding	192,710	194,890
Dilutive effect of stock options and non-vested restricted stock	4,008	2,362
Diluted number of common shares outstanding	196,718	197,252

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Income Taxes - Additional Information (Detail)	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Income Taxes [Line Items]
Effective income tax rate from continuing operations	38.00%	35.10%

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Cash and Cash Equivalents and Short-term Investments

3 Months Ended

May 04, 2013

Cash and Cash Equivalents and Short-term Investments

3. Cash and Cash Equivalents and Short-term Investments

The following table summarizes the fair market values for the Company’s cash and marketable securities, which are recorded on the Consolidated Balance Sheets:

(In thousands)	May 4, 2013		February 2, 2013		April 28, 2012
Cash and cash equivalents:
Cash	$	302,188	$	257,191	$	625,398
Money-market		54,954		221,929		51,915
Commercial paper		20,000		29,999		19,999
Treasury bills		6,033		—		16,131
Total cash and cash equivalents	$	383,175	$	509,119	$	713,443
Short-term investments:
Treasury bills	$	103,144	$	109,305	$	3,087
Term-deposits		9,897		12,568		—
State and local government ARS		—		—		5,500
Total short-term investments	$	113,041	$	121,873	$	8,587
Total	$	496,216	$	630,992	$	722,030

Proceeds from the sale of investments were $23.8 million and $20.1 million for the 13 weeks ended May 4, 2013 and April 28, 2012, respectively. The purchase of investments was $15.2 million and $3.1 million for the 13 weeks ended May 4, 2013 and April 28, 2012, respectively.

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Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013
Options
Outstanding - beginning of period	4,629
Granted	376
Exercised	(107)	[1]
Cancelled	(12)
Outstanding- end of period	4,886
Vested and expected to vest-end of period	4,807
Exercisable-end of period	2,443	[2]
Weighted-Average Exercise Price
Outstanding-beginning of period	$ 16.29
Granted	$ 22.55
Exercised	$ 14.29	[1]
Cancelled	$ 22.15
Outstanding-end of period	$ 16.80
Vested and expected to vest-end of period	$ 16.80
Exercisable-end of period	$ 13.26	[2]
Weighted-Average Remaining Contractual Term (In years)
Outstanding-end of period	3 years 4 months 24 days
Vested and expected to vest-end of period	3 years 3 months 18 days
Exercisable-end of period	3 years 7 months 6 days	[2]
Aggregate Intrinsic Value
Outstanding-end of period	$ 16,531
Vested and expected to vest-end of period	16,053
Exercisable-end of period	$ 8,751	[2]

[1] Options exercised during the 13 weeks ended May 4, 2013 had exercise prices ranging from $4.24 to $19.28.

[2] Options exercisable represent "in-the-money" vested options based upon the weighted-average exercise price of vested options compared to the Company's stock price at May 4, 2013.

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended
	May 04, 2013 Segment	Apr. 28, 2012	Feb. 02, 2013
Significant Accounting Policies [Line Items]
Number of reportable segments	1
Assets Held-for-sale, Long Lived	$ 4,500,000	$ 19,000,000	$ 9,500,000
Assets held for sale	4,528,000	19,039,000	9,499,000
Finite-lived impairment charges	0	0
Revenue related to gift card breakage	1,900,000	1,900,000
77kids stores
Significant Accounting Policies [Line Items]
Assets held for sale	0	9,000,000	0
Investment Securities
Significant Accounting Policies [Line Items]
Net impairment loss recognized in earnings	$ 0	$ 0
Minimum
Significant Accounting Policies [Line Items]
Finite lived intangibles, useful life	15 years
Maximum
Significant Accounting Policies [Line Items]
Finite lived intangibles, useful life	25 years

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Discontinued Operations (Tables)

3 Months Ended

May 04, 2013

Significant Components Included in Loss from Discontinued Operation on Consolidated Statement of Operation

The table below presents the significant components of 77kids’ results included in Loss from Discontinued Operations on the Consolidated Statement of Operations for the 13 weeks ended April 28, 2012:

	13 Weeks Ended
(In thousands)	April 28, 2012
Total net revenue	$	10,398
Loss from discontinued operations, before income taxes		(7,048	)
Income tax benefit		2,710
Loss from discontinued operations, net of tax	($	4,338	)
Loss per common share from discontinued operations:
Basic		(0.02	)
Diluted		(0.02	)

Major Classes of Assets & Liabilities Included in Consolidated Balance Sheets

There were no assets or liabilities included in the Consolidated Balance Sheets for 77kids as of May 4, 2013 or February 2, 2013. The major classes of assets and liabilities included in the Consolidated Balance Sheet for 77kids as of April 28, 2012 are as follows:

(In thousands)	April 28, 2012
Current assets	$	10,077
Non-current assets		15,647
Total assets (1)	$	25,724
Total current liabilities	$	6,166
Total non-current liabilities		2,686
Total liabilities	$	8,852

(1) Current assets primarily relate to merchandise inventory classified as an asset held-for-sale on the Company’s Consolidated Balance Sheets. Non-current assets relate primarily to property and equipment at cost, net of, accumulated depreciation.

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Summary of Stock Option Activity (Parenthetical) (Detail) (USD $)	3 Months Ended
	May 04, 2013
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Options exercised, exercise price range, lower limit	$ 4.24
Options exercised, exercise price range, upper limit	$ 19.28

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Useful Lives of Major Classes of Assets (Detail)	3 Months Ended
	May 04, 2013
Buildings
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]
Useful lives in asset class	25 years
Leasehold Improvements
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]
Useful lives in asset class	Lesser of 10 years or the term of the lease
Fixtures and equipment
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]
Useful lives in asset class	5 years

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Useful Lives of Major Classes of Assets (Parenthetical) (Detail) (Maximum, Leasehold Improvements)	3 Months Ended
	May 04, 2013
Maximum | Leasehold Improvements
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]
Useful lives in asset class	10 years

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Summary of Significant Accounting Policies

3 Months Ended

May 04, 2013

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At May 4, 2013, the Company operated in one reportable segment.

In Fiscal 2012, the Company announced plans to exit the 77kids business, which included all 22 stores and related e-commerce operations. These Consolidated Financial Statements reflect the results of 77kids as a discontinued operation for all periods presented. Refer to Note 12 to the Consolidated Financial Statements for additional information regarding the discontinued operations of 77kids.

Fiscal Year

The Company’s financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2013” refers to the 52 week period ending February 1, 2014. “Fiscal 2012” refers to the 53 week period ended February 2, 2013. “Fiscal 2011” and “Fiscal 2010” refer to the 52 week periods ended January 28, 2012 and January 29, 2011, respectively.

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to provide additional information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The amendments are effective prospectively for reporting periods beginning after December 15, 2012. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income. Because the standard only affects the presentation of comprehensive income and does not impact what is included in comprehensive income, ASU 2013-02 did not have an impact on the Company’s Consolidated Financial Statements.

Foreign Currency Translation

The Canadian dollar (“CAD”) is the functional currency for our Canadian business and the Mexican Peso is the functional currency for our Mexican business. In accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters, assets and liabilities denominated in foreign currencies were translated into United States dollars (“USD”) (the reporting currency) at the exchange rate prevailing at the balance sheet date. Revenues and expenses denominated in foreign currencies were translated into USD at the monthly average exchange rate for the period. Gains or losses resulting from foreign currency transactions are included in the results of operations, whereas, related translation adjustments are reported as an element of other comprehensive income in accordance with ASC 220, Comprehensive Income.

Revenue Recognition

Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets.

Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages.

Revenue is not recorded on the purchase of gift cards. A current liability is recorded upon purchase, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion to actual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cards caption below.

The Company recognizes royalty revenue generated from its Country License Agreements based on a percentage of merchandise sales by the franchisee. This revenue is recorded as a component of total net revenue when earned.

Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs. Buying, occupancy and warehousing costs 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 operation. Gross profit is the difference between total net revenue and cost of sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales.

Other (Expense) Income, Net

Other (expense) income, net consists primarily of interest income/expense, foreign currency transaction gain/loss and realized investment gains/losses.

Other-than-Temporary Impairment

The Company evaluates its investments for impairment in accordance with ASC 320, Investments – Debt and Equity Securities (“ASC 320”). ASC 320 provides guidance for determining when an investment is considered impaired, whether impairment is other-than-temporary, and measurement of an impairment loss. An investment is considered impaired if the fair value of the investment is less than its cost. If, after consideration of all available evidence to evaluate the realizable value of its investment, impairment is determined to be other-than-temporary, then an impairment loss is recognized in the Consolidated Statement of Operations equal to the difference between the investment’s cost and its fair value. Additionally, ASC 320 requires additional disclosures relating to debt and equity securities both in the interim and annual periods as well as requires the Company to present total other-than-temporary impairment (“OTTI”) with an offsetting reduction for any non-credit loss impairment amount recognized in other comprehensive income (“OCI”). There was no net impairment loss for investment securities recognized in earnings during the 13 weeks ended May 4, 2013 or April 28, 2012.

Cash and Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

As of May 4, 2013, short-term investments include treasury bills and term-deposits with a maturity of greater than three months, but less than one year.

Unrealized gains and losses on the Company’s available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity, within accumulated other comprehensive income, until realized. When available-for-sale securities are sold, the cost of the securities is specifically identified and is used to determine any realized gain or loss.

Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents, short-term investments and long-term investments.

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts at the time at which title and risk of loss for the merchandise transfers to the Company.

The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends.

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits may materially impact the Company’s effective income tax rate.

The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits.

The calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance require management to make estimates and assumptions. The Company believes that its assumptions and estimates are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income.

Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes.

Property and Equipment

Property and equipment is recorded on the basis of cost, including costs to prepare the asset for use, with depreciation computed utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows:

Buildings	25 years
Leasehold improvements	Lesser of 10 years or the term of the lease
Fixtures and equipment	5 years

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company evaluates long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified, for stores that have been open for a period of time sufficient to reach maturity. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets are impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded.

The Company had $4.5 million, $9.5 million and $19.0 million of long-lived assets held-for-sale as of May 4, 2013, February 2, 2013 and April 28, 2012, respectively. The $19.0 million of long-lived assets held for sale as of April 28, 2012 includes $9.0 million of merchandise inventory related to 77kids in addition to other long-lived corporate assets. There were no inventory balances for 77kids included in assets held-for-sale as of May 4, 2013 or February 2, 2013.

These long-lived corporate assets held-for-sale are recorded at their estimated net realizable value, less disposal costs. The Company believes it is probable that these assets will be sold within one year.

Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property, plant and equipment and Note 12 for additional information regarding 77 kids as a discontinued operation.

Goodwill

The Company’s goodwill is primarily related to the acquisition of its importing operations and Canadian business. In accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment on at least an annual basis and last performed an annual impairment test as of February 2, 2013. As a result of the Company’s annual goodwill impairment test, the Company concluded that its goodwill was not impaired.

Intangible Assets

Intangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s intangible assets, which primarily include trademark assets, are amortized over 15 to 25 years.

The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows are less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No intangible asset impairment charges were recorded in the 13 weeks ended May 4, 2013 or April 28, 2012.

Refer to Note 7 to the Consolidated Financial Statements for additional information regarding intangible assets.

Gift Cards

The value of a gift card is recorded as a current liability upon purchase, and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. During both of the 13 weeks ended May 4, 2013 and April 28, 2012, the Company recorded $1.9 million of revenue related to gift card breakage.

Deferred Lease Credits

Deferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores. Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms. The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-opening build-out period) and any subsequent renewal terms. The receivable is reduced as amounts are received from the landlord.

Co-branded Credit Card and Customer Loyalty Program

The Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”). These credit cards are issued by a third-party bank (the “Bank”), and the Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participate in the credit card rewards program. Customers who make purchases earn discounts in the form of savings certificates when certain purchase levels are reached. Also, AEO Visa Card customers who make purchases at other retailers where the card is accepted earn additional discounts. Savings certificates are valid for 90 days from issuance.

Points earned under the credit card rewards program on purchases are accounted for by analogy to ASC 605-25, Revenue Recognition, Multiple Element Arrangements (“ASC 605-25”). The Company believes that points earned under its point and loyalty programs represent deliverables in a multiple element arrangement rather than a rebate or refund of cash. Accordingly, the portion of the sales revenue attributed to the award points is deferred and recognized when the award is redeemed or when the points expire. Additionally, credit card reward points earned on non-AE or aerie purchases are accounted for in accordance with ASC 605-25. As the points are earned, a current liability is recorded for the estimated cost of the award, and the impact of adjustments is recorded in cost of sales.

The Company offers its customers the AEREWARD$^sm loyalty program (the “Program”). Under the Program, customers accumulate points based on purchase activity and earn rewards by reaching certain point thresholds during three-month earning periods. Rewards earned during these periods are valid through the stated expiration date, which is approximately one month from the mailing date of the reward. These rewards can be redeemed for a discount on a purchase of merchandise. Rewards not redeemed during the one-month redemption period are forfeited. The Company determined that rewards earned using the Program should be accounted for in accordance with ASC 605-25. Accordingly, the portion of the sales revenue attributed to the award credits is deferred and recognized when the awards are redeemed or expire.

Segment Information

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified three operating segments (American Eagle Brand US and Canadian retail stores, aerie retail stores and AEO Direct) that reflect the basis used internally to review performance and allocate resources. All of the operating segments have been aggregated and are presented as one reportable segment, as permitted by ASC 280.

Reclassification

Certain reclassifications have been made to the Consolidated Financial Statements for prior periods in order to conform to the current period presentation.

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Fair Market Values for Cash and Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012	Jan. 28, 2012
Cash and cash equivalents:
Cash and cash equivalents	$ 383,175	$ 509,119	$ 713,443	$ 719,545
Short-term investments:
Short-term investments	113,041	121,873	8,587
Fair Value, Measurements, Recurring
Cash and cash equivalents:
Cash and cash equivalents	383,175	509,119	713,443
Short-term investments:
Short-term investments	113,041	121,873	8,587
Total	496,216	630,992	722,030
Fair Value, Measurements, Recurring | Cash
Cash and cash equivalents:
Cash and cash equivalents	302,188	257,191	625,398
Fair Value, Measurements, Recurring | Money-market
Cash and cash equivalents:
Cash and cash equivalents	54,954	221,929	51,915
Fair Value, Measurements, Recurring | Commercial paper
Cash and cash equivalents:
Cash and cash equivalents	20,000	29,999	19,999
Fair Value, Measurements, Recurring | Treasury bills
Cash and cash equivalents:
Cash and cash equivalents	6,033		16,131
Short-term investments:
Short-term investments	103,144	109,305	3,087
Fair Value, Measurements, Recurring | Term-deposits
Short-term investments:
Short-term investments	9,897	12,568
Fair Value, Measurements, Recurring | ARS | State and local government
Short-term investments:
Short-term investments			$ 5,500

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Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012
Finite-Lived Intangible Assets [Line Items]
Trademarks, at cost	$ 44,561	$ 44,272	$ 44,362
Less: Accumulated amortization	(6,630)	(6,136)	(4,806)
Intangible assets, net	$ 37,931	$ 38,136	$ 39,556

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012
Current assets:
Cash and cash equivalents	$ 383,175	$ 509,119	$ 713,443
Short-term investments	113,041	121,873	8,587
Merchandise inventory	340,508	332,452	367,695
Assets held for sale	4,528	9,499	19,039
Accounts receivable	55,193	46,321	37,472
Prepaid expenses and other	97,512	73,805	75,433
Deferred income taxes	42,649	58,230	48,358
Total current assets	1,036,606	1,151,299	1,270,027
Property and equipment, at cost, net of accumulated depreciation	522,269	500,134	562,058
Intangible assets, at cost, net of accumulated amortization	37,931	38,136	39,556
Goodwill	11,434	11,484	11,544
Non-current deferred income taxes	23,325	31,282	16,579
Other assets	35,479	23,718	16,688
Total assets	1,667,044	1,756,053	1,916,452
Current liabilities:
Accounts payable	161,778	176,874	133,861
Accrued compensation and payroll taxes	27,993	65,533	21,970
Accrued rent	74,034	77,873	76,550
Accrued income and other taxes	7,948	29,155	14,333
Unredeemed gift cards and gift certificates	33,435	46,458	30,783
Current portion of deferred lease credits	14,219	13,381	14,945
Other liabilities and accrued expenses	27,728	26,628	25,779
Total current liabilities	347,135	435,902	318,221
Non-current liabilities:
Deferred lease credits	69,399	59,571	73,350
Non-current accrued income taxes	19,321	19,011	31,806
Other non-current liabilities	24,064	20,382	22,544
Total non-current liabilities	112,784	98,964	127,700
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding
Common stock, $0.01 par value; 600,000 shares authorized; 249,566, 249,566 and 249,566 shares issued; 192,617, 192,604 and 195,841 shares outstanding, respectively	2,496	2,496	2,496
Contributed capital	583,795	627,065	567,700
Accumulated other comprehensive income	28,795	29,297	30,532
Retained earnings	1,592,706	1,553,058	1,774,205
Treasury stock, 56,949, 56,962 and 53,725 shares, respectively	(1,000,667)	(990,729)	(904,402)
Total stockholders' equity	1,207,125	1,221,187	1,470,531
Total liabilities and stockholders' equity	$ 1,667,044	$ 1,756,053	$ 1,916,452

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Black-Scholes Option Valuation Assumptions (Detail)	3 Months Ended
	May 04, 2013		Apr. 28, 2012
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
Risk-free interest rate	0.30%	[1]	0.60%	[1]
Dividend yield	2.00%		2.80%
Volatility factor	34.40%	[2]	41.20%	[2]
Weighted-average expected term	2 years 6 months	[3]	4 years	[3]
Expected forfeiture rate	8.00%	[4]	8.00%	[4]

[1] Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.

[2] Based on a combination of historical volatility of the Company's common stock and implied volatility.

[3] Represents the period of time options are expected to be outstanding, based on historical experience.

[4] Based upon historical experience.

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Operating activities:
Net income	$ 27,976	$ 39,697
Loss from discontinued operations, net of tax		4,338
Income from continuing operations	27,976	44,035
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	35,926	32,591
Share-based compensation	5,289	21,299
Provision for deferred income taxes	23,446	(2,772)
Tax benefit from share-based payments	7,890	4,422
Excess tax benefit from share-based payments	(8,101)	(2,643)
Foreign currency transaction loss (gain)	640	(145)
Changes in assets and liabilities:
Merchandise inventory	(8,375)	426
Accounts receivable	(8,942)	2,570
Prepaid expenses and other	(20,497)	(379)
Other assets	(12,524)	(426)
Accounts payable	(15,811)	(46,766)
Unredeemed gift cards and gift certificates	(12,981)	(14,260)
Deferred lease credits	10,752	1,149
Accrued compensation and payroll taxes	(37,537)	(20,577)
Accrued income and other taxes	(24,103)	(9,527)
Accrued liabilities	(1,732)	9,327
Total adjustments	(66,660)	(25,711)
Net cash (used for) provided by operating activities	(38,684)	18,324
Investing activities:
Capital expenditures for property and equipment	(45,657)	(24,054)
Acquisition of intangible assets	(295)	(220)
Purchase of available-for-sale securities	(15,217)	(3,051)
Sale of available-for-sale securities	23,778	20,119
Net cash used for investing activities	(37,391)	(7,206)
Financing activities:
Payments on capital leases	(2,564)	(923)
Repurchase of common stock as part of publicly announced programs	(33,051)
Repurchase of common stock from employees	(23,291)	(4,100)
Net proceeds from stock options exercised	1,523	12,165
Excess tax benefit from share-based payments	8,101	2,643
Cash dividends paid		(21,524)
Net cash used for financing activities	(49,282)	(11,739)
Effect of exchange rates changes on cash	(587)	960
Cash flows of discontinued operations
Net cash used for operating activities		(5,664)
Net cash used for investing activities		(777)
Net cash used for financing activities
Effect of exchange rates changes on cash
Net cash used for discontinued operations		(6,441)
Net decrease in cash and cash equivalents	(125,944)	(6,102)
Cash and cash equivalents-beginning of period	509,119	719,545
Cash and cash equivalents-end of period	383,175	713,443
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	33,023	34,782
Cash paid during the period for interest	$ 100	$ 33

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Fair Value Measurements - Additional Information (Detail) (Significant Unobservable Inputs (Level 3))	3 Months Ended
	Apr. 28, 2012
Fair Value, Measurement Inputs, Disclosure [Line Items]
Discounted cash flow model to value Level 3 investments, assumptions, illiquidity	0.50%
Maximum
Fair Value, Measurement Inputs, Disclosure [Line Items]
Discounted cash flow model to value Level 3 investments, assumptions, recovery period	2 months
Discounted cash flow model to value Level 3 investments, assumptions, discount yield	0.10%

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Cash and Cash Equivalents and Short-term Investments (Tables)

3 Months Ended

May 04, 2013

Fair Market Values for Cash and Marketable Securites

The following table summarizes the fair market values for the Company’s cash and marketable securities, which are recorded on the Consolidated Balance Sheets:

(In thousands)	May 4, 2013		February 2, 2013		April 28, 2012
Cash and cash equivalents:
Cash	$	302,188	$	257,191	$	625,398
Money-market		54,954		221,929		51,915
Commercial paper		20,000		29,999		19,999
Treasury bills		6,033		—		16,131
Total cash and cash equivalents	$	383,175	$	509,119	$	713,443
Short-term investments:
Treasury bills	$	103,144	$	109,305	$	3,087
Term-deposits		9,897		12,568		—
State and local government ARS		—		—		5,500
Total short-term investments	$	113,041	$	121,873	$	8,587
Total	$	496,216	$	630,992	$	722,030

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Reconciliation of Assets Measured at Fair Value On Recurring Basis Using Unobservable Inputs (Level 3) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 04, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	$ 5,500
Settlements
Ending Balance	5,500
ARS | State and local government
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	5,500
Settlements
Ending Balance	$ 5,500

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Earnings per Share (Tables)

3 Months Ended

May 04, 2013

Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding

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

	13 Weeks Ended
(In thousands)	May 4,		April 28,
	2013		2012
Weighted average common shares outstanding:
Basic number of common shares outstanding		192,710		194,890
Dilutive effect of stock options and non-vested restricted stock		4,008		2,362
Diluted number of common shares outstanding		196,718		197,252

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Interim Financial Statements

3 Months Ended

May 04, 2013

Interim Financial Statements

1. Interim Financial Statements

The accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the “Company”) at May 4, 2013 and April 28, 2012 and for the 13 week periods ended May 4, 2013 and April 28, 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Certain notes and other information have been condensed or omitted from the interim Consolidated Financial Statements presented in this Quarterly Report on Form 10-Q. Therefore, these Consolidated Financial Statements should be read in conjunction with the Company’s Fiscal 2012 Annual Report. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and those described in the footnotes that follow) considered necessary for a fair presentation have been included. The existence of subsequent events has been evaluated through the filing date of this Quarterly Report on Form 10-Q.

As used in this report, all references to “we,” “our” and the “Company” refer to American Eagle Outfitters, Inc. and its wholly owned subsidiaries. “American Eagle Outfitters,” “American Eagle,” “AEO” and the “AE Brand” refer to our American Eagle Outfitters stores. “aerie” refers to our aerie^® by American Eagle^® stores. “AEO Direct” refers to our e-commerce operations, ae.com and aerie.com. “77kids” refers to the 77kids by american eagle^® stores and related e-commerce operations which the Company exited in Fiscal 2012.

The Company’s business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are not necessarily indicative of future financial results.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012
Preferred stock, par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000	5,000	5,000
Preferred stock, issued	0	0	0
Preferred stock, outstanding	0	0	0
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	600,000	600,000	600,000
Common stock, shares issued	249,566	249,566	249,566
Common stock, shares outstanding	192,617	192,604	195,841
Treasury stock, shares	56,949	56,962	53,725

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Legal Proceedings

3 Months Ended

May 04, 2013

Legal Proceedings

11. Legal Proceedings

The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450, Contingencies (“ASC 450”), management records a reserve for estimated losses when the loss is probable and the amount can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with ASC 450. As the Company believes that it has provided adequate reserves, it anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial position or results of operations of the Company.

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Document and Entity Information	3 Months Ended
	May 04, 2013	May 24, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 04, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	AEO
Entity Registrant Name	AMERICAN EAGLE OUTFITTERS INC
Entity Central Index Key	0000919012
Current Fiscal Year End Date	--02-01
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		192,671,985

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Discontinued Operations

3 Months Ended

May 04, 2013

Discontinued Operations

12. Discontinued Operations

During Fiscal 2012, the Company exited the 77kids business which included all 22 stores and related e-commerce operations. These Consolidated Financial Statements reflect the results of 77kids as a discontinued operation for all periods presented.

Additionally, the third party purchaser assumed certain liabilities associated with the 77kids business and paid the Company an amount equal to 65% of the cost of the acquired inventory. A $9.0 million inventory balance for 77kids has been recorded as a component of assets held-for-sale on the Company’s Consolidated Balance Sheets as of April 28, 2012. There were no inventory balances for 77kids included in assets held-for-sale as of May 4, 2013 or February 2, 2013.

In connection with the exit of the 77kids business, the Company is secondarily liable for obligations under the lease agreements for 21 store leases assumed by the third party purchaser. These obligations will remain in effect until the leases expire through 2022, unless the Company otherwise is released by the applicable landlord. In the event that the third party purchaser does not fulfill its obligations under any of the leases and the Company is required to make any such payments, the Company would seek full reimbursement from the third party purchaser in accordance with the asset purchase agreement. The third party purchaser has provided a stand-by letter of credit to the Company in order to secure payment of obligations under the leases.

In accordance with ASC 460, Guarantees (“ASC 460”), as we became secondarily liable under the leases at the time that we transferred them to the third party, no amounts have been accrued in our Consolidated Financial Statements related to these guarantees.

The table below presents the significant components of 77kids’ results included in Loss from Discontinued Operations on the Consolidated Statement of Operations for the 13 weeks ended April 28, 2012:

	13 Weeks Ended
(In thousands)	April 28, 2012
Total net revenue	$	10,398
Loss from discontinued operations, before income taxes		(7,048	)
Income tax benefit		2,710
Loss from discontinued operations, net of tax	($	4,338	)
Loss per common share from discontinued operations:
Basic		(0.02	)
Diluted		(0.02	)

There were no assets or liabilities included in the Consolidated Balance Sheets for 77kids as of May 4, 2013 or February 2, 2013. The major classes of assets and liabilities included in the Consolidated Balance Sheet for 77kids as of April 28, 2012 are as follows:

(In thousands)	April 28, 2012
Current assets	$	10,077
Non-current assets		15,647
Total assets (1)	$	25,724
Total current liabilities	$	6,166
Total non-current liabilities		2,686
Total liabilities	$	8,852

(1) Current assets primarily relate to merchandise inventory classified as an asset held-for-sale on the Company’s Consolidated Balance Sheets. Non-current assets relate primarily to property and equipment at cost, net of, accumulated depreciation.

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Consolidated Statements Of Operations And Retained Earnings (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Total net revenue	$ 679,477	$ 708,695
Cost of sales, including certain buying, occupancy and warehousing expenses	415,868	433,782
Gross profit	263,609	274,913
Selling, general and administrative expenses	182,253	178,539
Depreciation and amortization expense	35,539	32,066
Operating income	45,817	64,308
Other (expense) income, net	(682)	3,507
Income before income taxes	45,135	67,815
Provision for income taxes	17,159	23,780
Income from continuing operations	27,976	44,035
Loss from discontinued operations, net of tax		(4,338)
Net income	27,976	39,697
Basic income per common share:
Income from continuing operations	$ 0.14	$ 0.22
Loss from discontinued operations		$ (0.02)
Net income per basic share	$ 0.14	$ 0.20
Diluted income per common share:
Income from continuing operations	$ 0.14	$ 0.22
Loss from discontinued operations		$ (0.02)
Net income per diluted share	$ 0.14	$ 0.20
Cash dividends per common share		$ 0.11
Weighted average common shares outstanding-basic	192,710	194,890
Weighted average common shares outstanding-diluted	196,718	197,252
Retained earnings, beginning	1,553,058	1,771,464
Net income	27,976	39,697
Cash dividends and dividend equivalents		(21,945)
Reissuance of treasury stock	11,672	(15,011)
Retained earnings, ending	$ 1,592,706	$ 1,774,205

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Property and Equipment

3 Months Ended

May 04, 2013

Property and Equipment

6. Property and Equipment

Property and equipment consists of the following:

(In thousands)	May 4,			February 2,			April 28,
	2013			2013			2012
Property and equipment, at cost	$	1,452,191		$	1,417,933		$	1,444,394
Less: Accumulated depreciation		(929,922	)		(917,799	)		(882,336	)
Property and equipment, net	$	522,269		$	500,134		$	562,058

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Earnings per Share

3 Months Ended

May 04, 2013

Earnings per Share

5. Earnings per Share

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

	13 Weeks Ended
(In thousands)	May 4,		April 28,
	2013		2012
Weighted average common shares outstanding:
Basic number of common shares outstanding		192,710		194,890
Dilutive effect of stock options and non-vested restricted stock		4,008		2,362
Diluted number of common shares outstanding		196,718		197,252

Equity awards to purchase approximately 1.0 million shares of common stock during the 13 weeks ended May 4, 2013 and approximately 7.7 million shares of common stock during the 13 weeks ended April 28, 2012, respectively, were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would be anti-dilutive.

There were approximately 0.8 million shares for the 13 weeks ended May 4, 2013 and approximately 0.9 million shares for the 13 weeks ended April 28, 2012 of restricted stock units that were outstanding, but not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive. Additionally, approximately 0.6 million shares of restricted stock units for the 13 weeks ended May 4, 2013 were not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on the Company’s performance compared to pre-established annual performance goals.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding share-based compensation.

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Fair Value Measurements (Tables)

3 Months Ended

May 04, 2013

Fair Value Hierarchy for Financial Assets (Cash Equivalents and Investments) Measured at Fair Value on a Recurring Basis

In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of May 4, 2013 and April 28, 2012:

	Fair Value Measurements at May 4, 2013
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	302,188	$	302,188	$	—	$	—
Money-market		54,954		54,954		—		—
Commercial paper		20,000		20,000		—		—
Treasury bills		6,033		6,033		—		—
Total cash and cash equivalents	$	383,175	$	383,175	$	—	$	—
Short-term investments:
Treasury bills	$	103,144	$	103,144	$	—	$	—
Term-deposits		9,897		9,897		—		—
Total short-term investments	$	113,041	$	113,041	$	—	$	—
Total	$	496,216	$	496,216	$	—	$	—

	Fair Value Measurements at April 28, 2012
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	625,398	$	625,398	$	—	$	—
Money-market		51,915		51,915		—		—
Commercial paper		19,999		19,999		—		—
Treasury bills		16,131		16,131		—		—
Total cash and cash equivalents	$	713,443	$	713,443	$	—	$	—
Short-term investments:
State and local government ARS	$	5,500	$	—	$	—	$	5,500
Treasury bills		3,087		3,087		—		—
Total short-term investments	$	8,587	$	3,087	$	—	$	5,500
Total	$	722,030	$	716,530	$	—	$	5,500

Reconciliation of Assets Measured at Fair Value on Recurring Basis Using Unobservable Inputs (Level 3)

The reconciliation of the Company’s assets measured at fair value on a recurring basis using unobservable inputs (Level 3) for the 13 weeks ended April 28, 2012 is as follows:

	Level 3 (Unobservable inputs)
(In thousands)	Total		Auction-Rate Municipal Securities
Carrying value at January 28, 2012	$	5,500	$	5,500
Settlements		—		—
Balance at April 28, 2012	$	5,500	$	5,500

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Acquisitions and Dispositions

3 Months Ended

May 04, 2013

Acquisitions and Dispositions

13. Acquisitions and Dispositions

Effective February 4, 2013, the Company mutually terminated its store license agreement (the “Agreement”) with Dickson Concepts (International) Limited (“Dickson”) for Hong Kong, Macau, China and other designated territories in Asia (the “Territory”).

Pursuant to an amendment to the Agreement, the Company paid to Dickson $10.0 million USD to terminate their right to open additional stores in the Territory, beyond the six existing American Eagle Outfitters stores in Hong Kong and China (the “Six Stores”).

A separate agreement, dated February 4, 2013 (the “Termination Agreement”), terminates all of Dickson’s remaining rights under the Agreement. Under the Termination Agreement, the Company will acquire the Six Stores and related assets operated by Dickson. It is anticipated that the Company will pay Dickson approximately $11.0 million USD under the Termination Agreement, subject to adjustments. The Company entered into the Termination Agreement in order to further support its long-term global expansion strategy.

This transaction is expected to close, following completion of customary conditions, in the second quarter of Fiscal 2013. The $10.0 million USD amount paid to Dickson for the termination of their rights is recorded as a long-term asset within other assets on the Company’s Consolidated Balance Sheet as of May 4, 2013.

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Share-Based Compensation

3 Months Ended

May 04, 2013

Share-Based Compensation

9. Share-Based Compensation

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires companies to measure and recognize compensation expense for all share-based payments at fair value. Total share-based compensation expense included in the Consolidated Statements of Operations for the 13 weeks ended May 4, 2013 and April 28, 2012 was $5.3 million ($3.3 million, net of tax) and $21.3 million ($13.1 million, net of tax), respectively.

Stock Option Grants

The Company grants both time-based and performance-based stock options under its 2005 Stock Award and Incentive Plan. Time-based stock option awards vest over the requisite service period of the award or to an employee’s eligible retirement date, if earlier. Performance-based stock option awards vest over one year and are earned if the Company meets pre-established performance goals.

A summary of the Company’s stock option activity for the 13 weeks ended May 4, 2013 follows:

				Weighted- Average		Weighted- Average Remaining Contractual		Aggregate
	Options			Exercise Price		Term		Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding—February 2, 2013		4,629		$	16.29
Granted		376		$	22.55
Exercised (1)		(107	)	$	14.29
Cancelled		(12	)	$	22.15
Outstanding—May 4, 2013		4,886		$	16.80		3.4	$	16,531
Vested and expected to vest—May 4, 2013		4,807		$	16.80		3.3	$	16,053
Exercisable—May 4, 2013 (2)		2,443		$	13.26		3.6	$	8,751

(1) Options exercised during the 13 weeks ended May 4, 2013 had exercise prices ranging from $4.24 to $19.28.

(2) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price at May 4, 2013.

The weighted-average grant date fair value of stock options granted during the 13 weeks ended May 4, 2013 was $3.42. The aggregate intrinsic value of options exercised during the 13 weeks ended May 4, 2013 and April 28, 2012 was $0.5 million and $13.1 million, respectively.

Cash received from the exercise of stock options was $1.5 million for the 13 weeks ended May 4, 2013 and $12.2 million for the 13 weeks ended April 28, 2012. The actual tax benefit realized from stock option exercises totaled $8.1 million for the 13 weeks ended May 4, 2013 and $2.6 million for the 13 weeks ended April 28, 2012.

The fair value of stock options was estimated based on the closing market price of the Company’s common stock on the date of the grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	13 Weeks Ended
Black-Scholes Option Valuation Assumptions	May 4,			April 28,
	2013			2012
Risk-free interest rate (1)		0.3	%		0.6	%
Dividend yield		2.0	%		2.8	%
Volatility factor (2)		34.4	%		41.2	%
Weighted-average expected term (3)		2.5 years			4.0 years
Expected forfeiture rate (4)		8.0	%		8.0	%

(1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.

(2) Based on a combination of historical volatility of the Company’s common stock and implied volatility.

(3) Represents the period of time options are expected to be outstanding, based on historical experience.

(4) Based upon historical experience.

As of May 4, 2013, there was $1.8 million of unrecognized compensation expense related to non-vested time-based stock option awards that is expected to be recognized over a weighted average period of 1.5 years.

Restricted Stock Grants

Time-based restricted stock awards are comprised of time-based restricted stock units. These awards vest over three years; however, they may be accelerated to vest over one year if the Company meets pre-established performance goals in the year of grant. Time-based restricted stock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award.

Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three year period based upon the Company’s achievement of pre-established goals throughout the term of the award. Performance-based restricted stock units receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions and forfeiture provisions as the original award.

The grant date fair value of all restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant.

A summary of the Company’s restricted stock activity is presented in the following tables:

	Time-Based Restricted Stock Units					Performance-Based Restricted Stock Units
	13 Weeks Ended					13 Weeks Ended
	May 4, 2013					May 4, 2013
(Shares in thousands)	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Nonvested—February 2, 2013		1,386		$	13.91		2,086		$	14.91
Granted		846			22.47		814			21.01
Vested		(966	)		13.55		(566	)		17.39
Cancelled		(37	)		14.84		(4	)		14.65
Nonvested—May 4, 2013		1,229		$	20.05		2,330		$	16.78

As of May 4, 2013, there was $21.3 million of unrecognized compensation expense related to non-vested time-based restricted stock unit awards that is expected to be recognized over a weighted-average period of 1.7 years. Additionally, there was $23.0 million of unrecognized compensation expense related to performance-based restricted stock unit awards which will be recognized as achievement of performance goals that is probable over a one to three year period.

As of May 4, 2013, the Company had 17.8 million shares available for all equity grants.

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Intangible Assets

3 Months Ended

May 04, 2013

Intangible Assets

7. Intangible Assets

Intangible assets consist of the following:

(In thousands)	May 4,			February 2,			April 28,
	2013			2013			2012
Trademarks, at cost	$	44,561		$	44,272		$	44,362
Less: Accumulated amortization		(6,630	)		(6,136	)		(4,806	)
Intangible assets, net	$	37,931		$	38,136		$	39,556

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Other Credit Arrangements

3 Months Ended

May 04, 2013

Other Credit Arrangements

8. Other Credit Arrangements

In Fiscal 2012, the Company entered into a five-year, $150.0 million syndicated, unsecured, revolving credit agreement (the “Credit Agreement”). The primary purpose of the Credit Agreement is to provide additional access to capital for general corporate purposes, growth initiatives and the issuance of letters of credit.

The Credit Agreement contains financial covenants that require the Company to maintain certain coverage and leverage ratios, and various customary affirmative and negative covenants such as the ability to incur additional debt not otherwise permitted under the Credit Agreement.

The Credit Agreement has various borrowing options, including rates of interest that are based on (i) an Adjusted London Interbank Offered Rate (“LIBOR” as defined in the Credit Agreement) plus a margin ranging from 1.00% to 1.75% based on a defined leverage ratio, payable at the end of the applicable interest period; and (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.75% based on a defined leverage ratio, payable quarterly.

Under the Credit Agreement, the Company is also required to pay a commitment fee ranging from 0.175% to 0.30%, based on the defined leverage ratio, on the unused portion of the total lender commitments.

As of May 4, 2013, the Company was in compliance with the terms of the Credit Agreement and had $7.9 million outstanding in letters of credit and no borrowings.

The Credit Agreement replaced uncommitted demand lines in the aggregate amount of $110.0 million USD and $25.0 million CAD.

Additionally, the Company has borrowing agreements with two separate financial institutions under which it may borrow an aggregate of $135.0 million USD for the purposes of trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by the respective financial institutions.

As of May 4, 2013, the Company had outstanding trade letters of credit of $28.1 million.

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Income Taxes

3 Months Ended

May 04, 2013

Income Taxes

10. Income Taxes

The provision for income taxes from continuing operations 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 from continuing operations based on actual operating results for the 13 weeks ended May 4, 2013 was 38.0% compared to 35.1% for the 13 weeks ended April 28, 2012. The lower effective income tax rate for the 13 weeks ended April 28, 2012 was primarily due to state income tax settlements and proceeds on the sale of certain ARS investments for which no income tax expense was recognized.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense.

The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as the result of the evaluation of new information not previously available. Unrecognized tax benefits did not change significantly during the 13 weeks ended May 4, 2013 or April 28, 2012. Over the next twelve months the Company does not anticipate any significant changes to unrecognized tax benefits

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Fair Value Hierarchy for Financial Assets (Cash Equivalents and Investments) Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012	Jan. 28, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 383,175	$ 509,119	$ 713,443	$ 719,545
Short-term investments	113,041	121,873	8,587
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	383,175	509,119	713,443
Short-term investments	113,041	121,873	8,587
Total	496,216	630,992	722,030
Fair Value, Measurements, Recurring | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	302,188	257,191	625,398
Fair Value, Measurements, Recurring | Money-market
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	54,954	221,929	51,915
Fair Value, Measurements, Recurring | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	20,000	29,999	19,999
Fair Value, Measurements, Recurring | Treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	6,033		16,131
Short-term investments	103,144	109,305	3,087
Fair Value, Measurements, Recurring | Term-deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	9,897	12,568
Fair Value, Measurements, Recurring | ARS | State and local government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments			5,500
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	383,175		713,443
Short-term investments	113,041		3,087
Total	496,216		716,530
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	302,188		625,398
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Money-market
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	54,954		51,915
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	20,000		19,999
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	6,033		16,131
Short-term investments	103,144		3,087
Fair Value, Measurements, Recurring | Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Term-deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	9,897
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments			5,500
Total			5,500
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ARS | State and local government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments			$ 5,500

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Acquisitions and Dispositions - Additional Information (Detail) (USD $)				1 Months Ended
	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012	Feb. 04, 2013 Contract Termination Store	May 04, 2013 Contract Termination
Significant Acquisitions and Disposals [Line Items]
Payment to terminate Dickson Right				$ 10,000,000
Number of stores to be acquired				6
Payment to acquire assets operated by Dickson on termination of agreement				11,000,000
Other assets	$ 35,479,000	$ 23,718,000	$ 16,688,000		$ 10,000,000

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

May 04, 2013

Useful Lives of Major Classes of Assets

The useful lives of our major classes of assets are as follows:

Buildings	25 years
Leasehold improvements	Lesser of 10 years or the term of the lease
Fixtures and equipment	5 years

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Intangible Assets (Tables)

3 Months Ended

May 04, 2013

Intangible Assets

Intangible assets consist of the following:

(In thousands)	May 4,			February 2,			April 28,
	2013			2013			2012
Trademarks, at cost	$	44,561		$	44,272		$	44,362
Less: Accumulated amortization		(6,630	)		(6,136	)		(4,806	)
Intangible assets, net	$	37,931		$	38,136		$	39,556

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Significant Components of 77kid's results included in Loss from Discontinued Operations on Consolidated Statement of Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Discontinued Operations [Line Items]
Total net revenue	$ 679,477	$ 708,695
Loss from discontinued operations, net of tax		(4,338)
Loss per common share from discontinued operations:
Basic		$ (0.02)
Diluted		$ (0.02)
77kids stores
Discontinued Operations [Line Items]
Total net revenue		10,398
Loss from discontinued operations, before income taxes		(7,048)
Income tax benefit		2,710
Loss from discontinued operations, net of tax		$ (4,338)
Loss per common share from discontinued operations:
Basic		$ (0.02)
Diluted		$ (0.02)

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Other Credit Arrangements - Additional Information (Detail) In Millions, unless otherwise specified					12 Months Ended				12 Months Ended
	May 04, 2013 Entity	May 04, 2013 Demand letter of credit facilities USD ($)	May 04, 2013 Demand letter of credit facilities CAD	May 04, 2013 Trade Letter of Credit USD ($)	Feb. 02, 2013 Unsecured Revolving Credit Facility USD ($)	May 04, 2013 Unsecured Revolving Credit Facility USD ($)	Feb. 02, 2013 Unsecured Revolving Credit Facility LIBOR Minimum	Feb. 02, 2013 Unsecured Revolving Credit Facility LIBOR Maximum	Feb. 02, 2013 Unsecured Revolving Credit Facility Base Rate Minimum	Feb. 02, 2013 Unsecured Revolving Credit Facility Base Rate Maximum
Debt Disclosure [Line Items]
Line of credit facility, expiration period					5 years
Borrowing agreements with financial institutions		$ 135.0			$ 150.0
Credit facility interest rate description					The Credit Agreement has various borrowing options, including rates of interest that are based on (i) an Adjusted London Interbank Offered Rate ("LIBOR" as defined in the Credit Agreement) plus a margin ranging from 1.00% to 1.75% based on a defined leverage ratio, payable at the end of the applicable interest period; and (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.75% based on a defined leverage ratio, payable quarterly.
Frequency of payments for interest on borrowing					Quarterly
Interest rate margin							1.00%	1.75%	0.00%	0.75%
Commitment fee payable on the unused portion of total lender commitments									0.175%	0.30%
Letters of credit outstanding amount						7.9
Borrowings						0
Borrowing agreements with financial institutions		110.0	25.0
Borrowing agreements, number of financial institutions	2
Outstanding borrowings				$ 28.1

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Net income	$ 27,976	$ 39,697
Other comprehensive income:
Foreign currency translation (loss) gain	(502)	1,873
Other comprehensive (loss) income	(502)	1,873
Comprehensive income	$ 27,474	$ 41,570

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Fair Value Measurements

3 Months Ended

May 04, 2013

Fair Value Measurements

4. Fair Value Measurements

ASC 820, Fair Value Measurement Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.

Financial Instruments

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs (i.e., projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of May 4, 2013 and April 28, 2012, the Company held certain assets that are required to be measured at fair value on a recurring basis. These include cash equivalents and short-term investments.

In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of May 4, 2013 and April 28, 2012:

	Fair Value Measurements at May 4, 2013
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	302,188	$	302,188	$	—	$	—
Money-market		54,954		54,954		—		—
Commercial paper		20,000		20,000		—		—
Treasury bills		6,033		6,033		—		—
Total cash and cash equivalents	$	383,175	$	383,175	$	—	$	—
Short-term investments:
Treasury bills	$	103,144	$	103,144	$	—	$	—
Term-deposits		9,897		9,897		—		—
Total short-term investments	$	113,041	$	113,041	$	—	$	—
Total	$	496,216	$	496,216	$	—	$	—

	Fair Value Measurements at April 28, 2012
(In thousands)	Carrying Amount		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents:
Cash	$	625,398	$	625,398	$	—	$	—
Money-market		51,915		51,915		—		—
Commercial paper		19,999		19,999		—		—
Treasury bills		16,131		16,131		—		—
Total cash and cash equivalents	$	713,443	$	713,443	$	—	$	—
Short-term investments:
State and local government ARS	$	5,500	$	—	$	—	$	5,500
Treasury bills		3,087		3,087		—		—
Total short-term investments	$	8,587	$	3,087	$	—	$	5,500
Total	$	722,030	$	716,530	$	—	$	5,500

The Company uses a discounted cash flow model to value its Level 3 investments. There were no Level 3 investments at May 4, 2013. At April 28, 2012, the assumptions in the Company’s model for Level 3 investments, included a recovery period of two months, a discount factor for yield of 0.1% and illiquidity of 0.5%. These assumptions are subjective. They are based on the Company’s current judgment and its view of current market conditions. The use of different reasonable assumptions would not result in a material change to the valuation.

As a result of the discounted cash flow analysis, no impairment loss was recorded for the 13 weeks ended April 28, 2012.

The reconciliation of the Company’s assets measured at fair value on a recurring basis using unobservable inputs (Level 3) for the 13 weeks ended April 28, 2012 is as follows:

	Level 3 (Unobservable inputs)
(In thousands)	Total		Auction-Rate Municipal Securities
Carrying value at January 28, 2012	$	5,500	$	5,500
Settlements		—		—
Balance at April 28, 2012	$	5,500	$	5,500

Non-Financial Assets

The Company’s non-financial assets, which include goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required and the Company is required to evaluate the non-financial instrument for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the estimated fair value. As a result of the Company’s annual goodwill impairment test performed as of February 2, 2013, the Company concluded that its goodwill was not impaired.

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Share-Based Compensation (Tables)

3 Months Ended

May 04, 2013

Summary of Stock Option Activity

A summary of the Company’s stock option activity for the 13 weeks ended May 4, 2013 follows:

				Weighted- Average		Weighted- Average Remaining Contractual		Aggregate
	Options			Exercise Price		Term		Intrinsic Value
	(In thousands)					(In years)		(In thousands)
Outstanding—February 2, 2013		4,629		$	16.29
Granted		376		$	22.55
Exercised (1)		(107	)	$	14.29
Cancelled		(12	)	$	22.15
Outstanding—May 4, 2013		4,886		$	16.80		3.4	$	16,531
Vested and expected to vest—May 4, 2013		4,807		$	16.80		3.3	$	16,053
Exercisable—May 4, 2013 (2)		2,443		$	13.26		3.6	$	8,751

(1) Options exercised during the 13 weeks ended May 4, 2013 had exercise prices ranging from $4.24 to $19.28.

(2) Options exercisable represent “in-the-money” vested options based upon the weighted-average exercise price of vested options compared to the Company’s stock price at May 4, 2013.

Black-Scholes Option Valuation Assumptions

The fair value of stock options was estimated based on the closing market price of the Company’s common stock on the date of the grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	13 Weeks Ended
Black-Scholes Option Valuation Assumptions	May 4,			April 28,
	2013			2012
Risk-free interest rate (1)		0.3	%		0.6	%
Dividend yield		2.0	%		2.8	%
Volatility factor (2)		34.4	%		41.2	%
Weighted-average expected term (3)		2.5 years			4.0 years
Expected forfeiture rate (4)		8.0	%		8.0	%

(1) Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.

(2) Based on a combination of historical volatility of the Company’s common stock and implied volatility.

(3) Represents the period of time options are expected to be outstanding, based on historical experience.

(4) Based upon historical experience.

Summary of Restricted Stock Activity

A summary of the Company’s restricted stock activity is presented in the following tables:

	Time-Based Restricted Stock Units					Performance-Based Restricted Stock Units
	13 Weeks Ended					13 Weeks Ended
	May 4, 2013					May 4, 2013
(Shares in thousands)	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Nonvested—February 2, 2013		1,386		$	13.91		2,086		$	14.91
Granted		846			22.47		814			21.01
Vested		(966	)		13.55		(566	)		17.39
Cancelled		(37	)		14.84		(4	)		14.65
Nonvested—May 4, 2013		1,229		$	20.05		2,330		$	16.78

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Earnings per Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Outstanding Stock Awards
Earnings Per Share Disclosure [Line Items]
Shares that were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive	1.0	7.7
Restricted Stock Units (RSUs)
Earnings Per Share Disclosure [Line Items]
Shares that were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive	0.8	0.9
Shares of restricted stock units not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on performance	0.6

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 04, 2013

Principles of Consolidation

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At May 4, 2013, the Company operated in one reportable segment.

In Fiscal 2012, the Company announced plans to exit the 77kids business, which included all 22 stores and related e-commerce operations. These Consolidated Financial Statements reflect the results of 77kids as a discontinued operation for all periods presented. Refer to Note 12 to the Consolidated Financial Statements for additional information regarding the discontinued operations of 77kids.

Fiscal Year

Fiscal Year

The Company’s financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2013” refers to the 52 week period ending February 1, 2014. “Fiscal 2012” refers to the 53 week period ended February 2, 2013. “Fiscal 2011” and “Fiscal 2010” refer to the 52 week periods ended January 28, 2012 and January 29, 2011, respectively.

Estimates

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to provide additional information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The amendments are effective prospectively for reporting periods beginning after December 15, 2012. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income. Because the standard only affects the presentation of comprehensive income and does not impact what is included in comprehensive income, ASU 2013-02 did not have an impact on the Company’s Consolidated Financial Statements.

Foreign Currency Translation

Foreign Currency Translation

The Canadian dollar (“CAD”) is the functional currency for our Canadian business and the Mexican Peso is the functional currency for our Mexican business. In accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters, assets and liabilities denominated in foreign currencies were translated into United States dollars (“USD”) (the reporting currency) at the exchange rate prevailing at the balance sheet date. Revenues and expenses denominated in foreign currencies were translated into USD at the monthly average exchange rate for the period. Gains or losses resulting from foreign currency transactions are included in the results of operations, whereas, related translation adjustments are reported as an element of other comprehensive income in accordance with ASC 220, Comprehensive Income.

Revenue Recognition

Revenue Recognition

Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance Sheets.

Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages.

Revenue is not recorded on the purchase of gift cards. A current liability is recorded upon purchase, and revenue is recognized when the gift card is redeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion to actual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cards caption below.

The Company recognizes royalty revenue generated from its Country License Agreements based on a percentage of merchandise sales by the franchisee. This revenue is recorded as a component of total net revenue when earned.

Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs. Buying, occupancy and warehousing costs 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 operation. Gross profit is the difference between total net revenue and cost of sales.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs, supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased. Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales.

Other (Expense) Income, Net

Other (Expense) Income, Net

Other (expense) income, net consists primarily of interest income/expense, foreign currency transaction gain/loss and realized investment gains/losses.

Other-than-Temporary Impairment

Other-than-Temporary Impairment

The Company evaluates its investments for impairment in accordance with ASC 320, Investments – Debt and Equity Securities (“ASC 320”). ASC 320 provides guidance for determining when an investment is considered impaired, whether impairment is other-than-temporary, and measurement of an impairment loss. An investment is considered impaired if the fair value of the investment is less than its cost. If, after consideration of all available evidence to evaluate the realizable value of its investment, impairment is determined to be other-than-temporary, then an impairment loss is recognized in the Consolidated Statement of Operations equal to the difference between the investment’s cost and its fair value. Additionally, ASC 320 requires additional disclosures relating to debt and equity securities both in the interim and annual periods as well as requires the Company to present total other-than-temporary impairment (“OTTI”) with an offsetting reduction for any non-credit loss impairment amount recognized in other comprehensive income (“OCI”). There was no net impairment loss for investment securities recognized in earnings during the 13 weeks ended May 4, 2013 or April 28, 2012.

Cash and Cash Equivalents and Short-term Investments

Cash and Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

As of May 4, 2013, short-term investments include treasury bills and term-deposits with a maturity of greater than three months, but less than one year.

Unrealized gains and losses on the Company’s available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity, within accumulated other comprehensive income, until realized. When available-for-sale securities are sold, the cost of the securities is specifically identified and is used to determine any realized gain or loss.

Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents, short-term investments and long-term investments.

Merchandise Inventory

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts at the time at which title and risk of loss for the merchandise transfers to the Company.

The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends.

Income Taxes

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings, tax laws or the deferred tax valuation allowance, as well as the results of tax audits may materially impact the Company’s effective income tax rate.

The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits.

The calculation of the deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish a valuation allowance require management to make estimates and assumptions. The Company believes that its assumptions and estimates are reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation allowances or net income.

Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes.

Property and Equipment

Property and Equipment

Property and equipment is recorded on the basis of cost, including costs to prepare the asset for use, with depreciation computed utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows:

Buildings	25 years
Leasehold improvements	Lesser of 10 years or the term of the lease
Fixtures and equipment	5 years

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company evaluates long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified, for stores that have been open for a period of time sufficient to reach maturity. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets are impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded.

The Company had $4.5 million, $9.5 million and $19.0 million of long-lived assets held-for-sale as of May 4, 2013, February 2, 2013 and April 28, 2012, respectively. The $19.0 million of long-lived assets held for sale as of April 28, 2012 includes $9.0 million of merchandise inventory related to 77kids in addition to other long-lived corporate assets. There were no inventory balances for 77kids included in assets held-for-sale as of May 4, 2013 or February 2, 2013.

These long-lived corporate assets held-for-sale are recorded at their estimated net realizable value, less disposal costs. The Company believes it is probable that these assets will be sold within one year.

Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property, plant and equipment and Note 12 for additional information regarding 77 kids as a discontinued operation.

Goodwill

Goodwill

The Company’s goodwill is primarily related to the acquisition of its importing operations and Canadian business. In accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), the Company evaluates goodwill for possible impairment on at least an annual basis and last performed an annual impairment test as of February 2, 2013. As a result of the Company’s annual goodwill impairment test, the Company concluded that its goodwill was not impaired.

Intangible Assets

Intangible Assets

Intangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s intangible assets, which primarily include trademark assets, are amortized over 15 to 25 years.

The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash flows are less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No intangible asset impairment charges were recorded in the 13 weeks ended May 4, 2013 or April 28, 2012.

Refer to Note 7 to the Consolidated Financial Statements for additional information regarding intangible assets.

Gift Cards

Gift Cards

The value of a gift card is recorded as a current liability upon purchase, and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. During both of the 13 weeks ended May 4, 2013 and April 28, 2012, the Company recorded $1.9 million of revenue related to gift card breakage.

Deferred Lease Credits

Deferred Lease Credits

Deferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores. Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms. The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-opening build-out period) and any subsequent renewal terms. The receivable is reduced as amounts are received from the landlord.

Co-branded Credit Card and Customer Loyalty Program

Co-branded Credit Card and Customer Loyalty Program

The Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”). These credit cards are issued by a third-party bank (the “Bank”), and the Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participate in the credit card rewards program. Customers who make purchases earn discounts in the form of savings certificates when certain purchase levels are reached. Also, AEO Visa Card customers who make purchases at other retailers where the card is accepted earn additional discounts. Savings certificates are valid for 90 days from issuance.

Points earned under the credit card rewards program on purchases are accounted for by analogy to ASC 605-25, Revenue Recognition, Multiple Element Arrangements (“ASC 605-25”). The Company believes that points earned under its point and loyalty programs represent deliverables in a multiple element arrangement rather than a rebate or refund of cash. Accordingly, the portion of the sales revenue attributed to the award points is deferred and recognized when the award is redeemed or when the points expire. Additionally, credit card reward points earned on non-AE or aerie purchases are accounted for in accordance with ASC 605-25. As the points are earned, a current liability is recorded for the estimated cost of the award, and the impact of adjustments is recorded in cost of sales.

The Company offers its customers the AEREWARD$^sm loyalty program (the “Program”). Under the Program, customers accumulate points based on purchase activity and earn rewards by reaching certain point thresholds during three-month earning periods. Rewards earned during these periods are valid through the stated expiration date, which is approximately one month from the mailing date of the reward. These rewards can be redeemed for a discount on a purchase of merchandise. Rewards not redeemed during the one-month redemption period are forfeited. The Company determined that rewards earned using the Program should be accounted for in accordance with ASC 605-25. Accordingly, the portion of the sales revenue attributed to the award credits is deferred and recognized when the awards are redeemed or expire.

Segment Information

Segment Information

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified three operating segments (American Eagle Brand US and Canadian retail stores, aerie retail stores and AEO Direct) that reflect the basis used internally to review performance and allocate resources. All of the operating segments have been aggregated and are presented as one reportable segment, as permitted by ASC 280.

Reclassification

Reclassification

Certain reclassifications have been made to the Consolidated Financial Statements for prior periods in order to conform to the current period presentation.