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Segment Reporting
 6 Months Ended
Aug. 03, 2024
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 CODM's internal view of analyzing results and allocating resources. Additionally, our Todd Snyder brand, Unsubscribed brand, and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they are presented under the Other caption, as permitted by ASC 280.

 

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

 

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

Reportable segment information is presented in the following table:

 

 

13 weeks ended

 

 

26 weeks ended

 

 

August 3, 2024

 

 

July 29, 2023

 

 

August 3, 2024

 

 

July 29, 2023

 

 

Dollars in thousands

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

    American Eagle

$

827,638

 

 

$

767,018

 

 

$

1,552,382

 

 

$

1,438,110

 

    Aerie

 

415,646

 

 

 

380,413

 

 

 

788,298

 

 

 

739,495

 

Total Segment Net Revenue

$

1,243,284

 

 

$

1,147,431

 

 

$

2,340,680

 

 

$

2,177,605

 

    Other

 

57,457

 

 

 

108,318

 

 

 

112,441

 

 

 

217,675

 

    Intersegment Elimination

 

(9,683

)

 

 

(54,870

)

 

 

(18,196

)

 

 

(113,475

)

Total Net Revenue

$

1,291,058

 

 

$

1,200,879

 

 

$

2,434,925

 

 

$

2,281,805

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

    American Eagle

$

144,889

 

 

$

128,664

 

 

$

283,473

 

 

$

234,203

 

    Aerie

 

69,640

 

 

 

57,253

 

 

 

130,967

 

 

 

112,922

 

Total Segment Operating Income

$

214,529

 

 

$

185,917

 

 

$

414,440

 

 

$

347,125

 

    Other

 

(10,155

)

 

 

(10,341

)

 

 

(25,003

)

 

 

(26,648

)

    Intersegment Elimination

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

    General corporate expenses

 

(103,265

)

 

 

(110,286

)

 

 

(210,493

)

 

 

(211,081

)

Impairment, restructuring and other charges(1)

 

-

 

 

 

-

 

 

 

-

 

 

 

(21,275

)

Total Operating Income

$

101,109

 

 

$

65,290

 

 

$

178,944

 

 

$

88,121

 

 

 

 

 

 

 

 

 

 

 

 

 

    Interest (income) expense, net

 

(730

)

 

 

951

 

 

 

(4,168

)

 

 

1,642

 

    Other (income) expense, net

 

(1,715

)

 

 

(2,150

)

 

 

(3,111

)

 

 

(5,461

)

Income before income taxes

$

103,554

 

 

$

66,489

 

 

$

186,223

 

 

$

91,940

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures

 

 

 

 

 

 

 

 

 

 

 

    American Eagle

$

24,087

 

 

$

16,249

 

 

$

36,721

 

 

$

31,192

 

    Aerie

 

15,874

 

 

 

10,889

 

 

 

27,616

 

 

 

22,077

 

    Other

 

4,593

 

 

 

6,154

 

 

 

7,457

 

 

 

11,730

 

   General corporate expenditures

 

16,182

 

 

 

12,810

 

 

 

25,151

 

 

 

26,960

 

Total Capital Expenditures

$

60,736

 

 

$

46,102

 

 

$

96,945

 

 

$

91,959

 

(1) Refer to Note 13 to the Consolidated Financial Statements for additional information.

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

 

Total net revenue for the American Eagle and Aerie reportable segments in the table above represents revenue attributable to each brand's merchandise, which comprises approximately 96% of total net revenue.

The following table presents summarized geographical information:

 

 

13 Weeks Ended

 

 

26 Weeks Ended

 

 

August 3, 2024

 

 

July 29, 2023

 

 

August 3, 2024

 

 

July 29, 2023

 

 

Dollars in thousands

 

Total net revenue:

 

 

 

 

 

 

 

 

 

 

 

United States

$

1,088,870

 

 

$

1,005,197

 

 

$

2,048,604

 

 

$

1,919,588

 

Foreign (1)

 

202,188

 

 

 

195,682

 

 

 

386,321

 

 

 

362,217

 

Total net revenue

$

1,291,058

 

 

$

1,200,879

 

 

$

2,434,925

 

 

$

2,281,805

 

 

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