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Segment Reporting
 3 Months Ended
Apr. 29, 2023
Segment Reporting [Abstract]  
Segment Reporting

12. Segment Reporting

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

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (loss), or the operating income (loss) in periods where there are no adjustments, of each segment. Adjusted operating income (loss) is a non-GAAP financial measure ("non-GAAP" or "adjusted") that is defined by the Company as operating income excluding impairment, restructuring and other charges. Adjusted operating income (loss) is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP consolidated financial statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. Adjusted operating income (loss) on a consolidated basis is presented in the following table to reconcile the segment operating performance measure to operating income (loss) as presented on the Consolidated Financial Statements.

Reportable segment information is presented in the following table:

 

(In thousands)

 

American Eagle

 

 

Aerie

 

 

Corporate and Other(1)

 

 

Total(2)

 

13 weeks ended April 29, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

 

$

671,092

 

 

$

359,082

 

 

$

50,752

 

 

$

1,080,926

 

Operating income (loss)

 

$

107,167

 

 

$

56,604

 

 

$

(140,940

)

 

$

22,831

 

Impairment, restructuring and other charges

 

$

—

 

 

$

—

 

 

$

21,275

 

 

$

21,275

 

Adjusted operating income (loss)

 

$

107,167

 

 

$

56,604

 

 

$

(119,665

)

 

$

44,106

 

Capital expenditures

 

$

14,943

 

 

$

11,188

 

 

$

19,726

 

 

$

45,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 weeks ended April 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

 

$

685,579

 

 

$

321,712

 

 

$

47,746

 

 

$

1,055,037

 

Operating income (loss)

 

$

103,905

 

 

$

43,073

 

 

$

(105,076

)

 

$

41,902

 

Capital expenditures

 

$

15,770

 

 

$

31,015

 

 

$

11,609

 

 

$

58,394

 

 

(1)
Corporate and Other includes revenue and operating results of the Todd Snyder brand, Unsubscribed brand, and Quiet Platforms (net of intersegment eliminations), which have been identified as separate operating segments, but are not material to disclose as separate reportable segments. Corporate operating costs represent certain costs that are not directly attributable to another reportable segment.
(2)
The difference between Operating income (loss) and Income before income taxes includes the following, which are not allocated to our reportable segments:
•
For the 13 weeks ended April 29, 2023: interest expense, net of $0.7 million and other income, net of $3.3 million.
•
For the 13 weeks ended April 30, 2022: interest expense, net of $4.6 million and other income, net of $4.4 million.

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

The following table presents summarized geographical information:

 

 

 

13 Weeks Ended

 

(In thousands)

 

April 29,
2023

 

 

April 30,
2022

 

Total net revenue:

 

 

 

 

 

 

United States

 

$

914,391

 

 

$

908,166

 

Foreign (1)

 

 

166,535

 

 

 

146,871

 

Total net revenue

 

$

1,080,926

 

 

$

1,055,037

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