AMERICAN EAGLE OUTFITTERS INC, 10-K filed on 3/15/2024
Annual Report
v3.24.0.1
Document and Entity Information - USD ($)
 12 Months Ended
Feb. 03, 2024
Mar. 11, 2024
Jul. 29, 2023
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Feb. 03, 2024    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Trading Symbol AEO    
Entity Registrant Name AMERICAN EAGLE OUTFITTERS, INC.    
Entity Central Index Key 0000919012    
Current Fiscal Year End Date --02-03    
Entity Well-known Seasoned Issuer Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Large Accelerated Filer    
Entity Shell Company false    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Common Stock, Shares Outstanding   197,156,524  
Entity Public Float     $ 2,550,643,168
Entity Interactive Data Current Yes    
Title of 12(b) Security Common Stock, $0.01 par value    
Security Exchange Name NYSE    
Entity File Number 1-33338    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 13-2721761    
Entity Address, Address Line One 77 Hot Metal Street    
Entity Address, City or Town Pittsburgh    
Entity Address, State or Province PA    
Entity Address, Postal Zip Code 15203-2329    
City Area Code 412    
Local Phone Number 432-3300    
Document Annual Report true    
Document Transition Report false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction false    
Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive proxy statement for the 2024 Annual Meeting of Stockholders are incorporated by reference into Part III herein of this Annual Report on Form 10-K. The registrant expects to file such definitive proxy statement with the Securities and Exchange Commission within 120 days of its fiscal year ended February 3, 2024.

    
Auditor Name Ernst & Young LLP    
Auditor Firm ID 42    
Auditor Location Pittsburgh, Pennsylvania    
v3.24.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
Current assets:    
Cash and cash equivalents $ 354,094 $ 170,209
Short-term investments 100,000  
Merchandise inventory 640,662 585,083
Accounts receivable, net 247,934 242,386
Prepaid expenses and other 90,660 102,563
Total current assets 1,433,350 1,100,241
Operating lease right-of-use assets 1,005,293 1,086,999
Property and equipment, at cost, net of accumulated depreciation 713,336 781,514
Goodwill, net 225,303 264,945 [1]
Non-current deferred income taxes 82,064 36,483
Intangible assets, net 46,109 94,536
Other assets 52,454 56,238
Total assets 3,557,909 3,420,956
Current liabilities:    
Accounts payable 268,308 234,340
Current portion of operating lease liabilities 284,508 337,258
Accrued compensation and payroll taxes 152,353 51,912
Unredeemed gift cards and gift certificates 66,285 67,618
Accrued income and other taxes 46,114 10,919
Other current liabilities and accrued expenses 73,604 66,901
Total current liabilities 891,172 768,948
Non-current liabilities:    
Non-current operating lease liabilities 901,122 1,021,200
Long-term debt, net   8,911
Other non-current liabilities 28,856 22,734
Total non-current liabilities 929,978 1,052,845
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 shares issued; 196,936 and 195,064 shares outstanding, respectively 2,496 2,496
Contributed capital 360,378 341,775
Accumulated other comprehensive loss (16,410) (32,630)
Retained earnings 2,214,159 2,137,126
Treasury stock, 52,630 and 54,502 shares, respectively, at cost (823,864) (849,604)
Total stockholders' equity 1,736,759 1,599,163
Total liabilities and stockholders’ equity $ 3,557,909 $ 3,420,956
[1] Beginning balances for both periods include accumulated impairment of $4.2 million.
v3.24.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Statement of Financial Position [Abstract]      
Preferred stock, par value $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000 5,000,000
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 600,000,000 600,000,000 600,000,000
Common stock, shares issued 249,566,000 249,566,000 249,566,000
Common stock, shares outstanding 196,936,000 195,064,000 168,699,000
Treasury stock, shares 52,630,000 54,502,000 80,867,000
v3.24.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Income Statement [Abstract]      
Total net revenue $ 5,261,770 $ 4,989,833 $ 5,010,785
Cost of sales, including certain buying, occupancy and warehousing expenses 3,237,192 3,244,585 3,018,995
Gross profit 2,024,578 1,745,248 1,991,790
Selling, general and administrative expenses 1,433,300 1,269,095 1,222,000
Impairment, restructuring and other charges 141,695 22,209 11,944
Depreciation and amortization expense 226,866 206,897 166,781
Operating income 222,717 247,047 591,065
Debt related charges   64,721  
Interest (income) expense, net (6,190) 14,297 34,632
Other income, net (10,951) (10,465) (2,489)
Income before income taxes 239,858 178,494 558,922
Provision for income taxes 69,820 53,358 139,293
Net income $ 170,038 $ 125,136 $ 419,629
Basic net income per common share $ 0.87 $ 0.69 $ 2.5
Diluted net income per common share $ 0.86 $ 0.64 $ 2.03
Weighted average common shares outstanding - basic 195,646 181,778 168,156
Weighted average common shares outstanding - diluted 196,863 205,226 206,529
v3.24.0.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Statement of Comprehensive Income [Abstract]      
Net Income (Loss) $ 170,038 $ 125,136 $ 419,629
Other comprehensive gain (loss):      
Foreign currency translation gain (loss) 16,220 8,215 (97)
Other comprehensive gain (loss) 16,220 8,215 (97)
Comprehensive income $ 186,258 $ 133,351 $ 419,532
v3.24.0.1
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Contributed Capital
Contributed Capital
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Treasury Stock
Accumulated Other Comprehensive (Loss)
Beginning Balance at Jan. 30, 2021 $ 1,086,665   $ 2,496 $ 663,718   $ 1,868,613   $ (1,407,414) $ (40,748)
Beginning Balance (in shares) at Jan. 30, 2021     166,335,000            
Stock awards 37,887     37,887          
Repurchase of common stock from employees (24,018)             (24,018)  
Repurchase of common stock from employees (in shares)     (781,000)            
Reissuance of treasury stock $ 14,533     (59,384)   26,490   47,427  
Reissuance of treasury stock (in shares) 2,798,000   2,798,000            
Equity portion of partial extinguishment of Convertible Senior Notes, net of tax $ 3,018     (9,876)   6,995   5,899  
Equity portion of partial extinguishment of Convertible Senior Notes, net of tax, (in shares)     347,000            
Net Income (Loss) 419,629         419,629      
Other comprehensive income (loss) (97)               (97)
Cash dividends and dividend equivalents (113,945)     4,010   (117,955)      
Ending Balance at Jan. 29, 2022 $ 1,423,672 $ (48,856) $ 2,496 636,355 $ (67,686) 2,203,772 $ 18,830 (1,378,106) (40,845)
Ending Balance (in shares) at Jan. 29, 2022 168,699,000   168,699,000            
Stock awards $ 38,148     38,148          
Repurchase of common stock from employees (9,780)             (9,780)  
Repurchase of common stock from employees (in shares)     (584,000)            
Reissuance of treasury stock $ 1,599     (24,642)   (1,624)   27,865  
Reissuance of treasury stock (in shares) 1,643,000   1,643,000            
Accounting Standards Update [Extensible Enumeration] Accounting Standards Update 2020-06 [Member]                
Accelerated share repurchase $ (200,000)                
Accelerated share repurchase (Shares)     (17,023,000)            
Redemption/Exchange of Convertible Senior Notes 323,482     (244,198)   (142,737)   710,417  
Redemption/Exchange of Convertible Senior Notes (in shares)     42,329,000            
Net Income (Loss) 125,136         125,136      
Other comprehensive income (loss) 8,215               8,215
Cash dividends and dividend equivalents (64,767)     1,484   (66,251)      
Contributions from non-controlling interests 2,314     2,314          
Ending Balance at Jan. 28, 2023 $ 1,599,163   $ 2,496 341,775   2,137,126   (849,604) (32,630)
Ending Balance (in shares) at Jan. 28, 2023 195,064,000   195,064,000            
Stock awards $ 50,445     50,445          
Repurchase of common stock as part of publicly announced programs (20,261)             (20,261)  
Repurchase of common stock as part of publicly announced programs (in shares)     (1,000,000)            
Repurchase of common stock from employees (10,666)             (10,666)  
Repurchase of common stock from employees (in shares)     (766,000)            
Reissuance of treasury stock $ 6,585     (28,038)   (4,936)   39,559  
Reissuance of treasury stock (in shares) 2,539,000   2,539,000            
Redemption/Exchange of Convertible Senior Notes $ 8,690     (6,281)   (2,137)   17,108  
Redemption/Exchange of Convertible Senior Notes (in shares)     1,099,000            
Net Income (Loss) 170,038         170,038      
Other comprehensive income (loss) 16,220               16,220
Cash dividends and dividend equivalents (83,825)     2,107   (85,932)      
Contributions from non-controlling interests 370     370          
Ending Balance at Feb. 03, 2024 $ 1,736,759   $ 2,496 $ 360,378   $ 2,214,159   $ (823,864) $ (16,410)
Ending Balance (in shares) at Feb. 03, 2024 196,936,000   196,936,000            
v3.24.0.1
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Statement of Stockholders' Equity [Abstract]      
Cash dividends and dividend equivalents, Per share $ 0.425 $ 0.36 $ 0.6775
Common stock, shares authorized 600,000,000 600,000,000 600,000,000
Common stock, shares issued 249,566,000 249,566,000 249,566,000
Common stock, shares outstanding 196,936,000 195,064,000 168,699,000
Common stock, par value $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000 5,000,000
Preferred stock, shares issued 0 0 0
Preferred stock, shares outstanding 0 0 0
Preferred stock, par value $ 0.01 $ 0.01 $ 0.01
Treasury stock, shares 52,630,000 54,502,000 80,867,000
Reissuance of treasury stock, shares 2,539,000 1,643,000 2,798,000
v3.24.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Operating activities:      
Net income $ 170,038 $ 125,136 $ 419,629
Adjustments to reconcile net income (loss) to net cash provided by operating activities      
Depreciation and amortization 235,213 212,499 171,151
Share-based compensation 51,067 38,986 38,153
Deferred income taxes (43,456) 31,049 (12,850)
Impairment of assets 116,365 20,633 11,944
Exchange of convertible senior notes   60,341  
Changes in assets and liabilities:      
Accounts receivable (5,820) 43,851 (117,840)
Merchandise inventory (46,304) (38,364) (147,140)
Operating lease assets 230,659 345,798 296,652
Operating lease liabilities (326,571) (361,142) (352,547)
Other assets 17,473 26,280 (16,312)
Accounts payable 33,432 2,019 (36,192)
Accrued compensation and payroll taxes 100,223 (90,114) (1,412)
Accrued and other liabilities 48,391 (10,676) 50,435
Net cash provided by operating activities 580,710 406,296 303,671
Investing activities:      
Acquisitions of businesses, net of cash acquired     (358,151)
Capital expenditures for property and equipment (174,437) (260,378) (233,847)
Purchase of available-for-sale investments (100,000)   (75,000)
Sale of available-for-sale investments     75,000
Other investing activities (12,995) (997) (2,603)
Net cash used for investing activities (287,432) (261,375) (594,601)
Financing activities:      
Accelerated share repurchase   (200,000)  
Principal paid in connection with exchange of convertible senior notes due 2025   (136,419)  
Cash dividends paid (83,825) (64,767) (113,945)
Repurchase of common stock from employees (10,666) (9,780) (24,018)
Repurchase of common stock as part of publicly announced programs (20,261)    
Net proceeds from stock options exercised 7,646 2,089 13,065
Proceeds from revolving line of credit and convertible senior notes, net 30,000    
Principal payments on revolving line of credit (30,000)    
Other financing activities (2,368) 984 (299)
Net cash (used for) financing activities (109,474) (407,893) (125,197)
Effect of exchange rates on cash 81 (1,589) 420
Net change in cash and cash equivalents 183,885 (264,561) (415,707)
Cash and cash equivalents - beginning of period 170,209 434,770 850,477
Cash and cash equivalents - end of period $ 354,094 $ 170,209 $ 434,770
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Pay vs Performance Disclosure      
Net Income (Loss) $ 170,038 $ 125,136 $ 419,629
v3.24.0.1
Insider Trading Arrangements
 12 Months Ended
Feb. 03, 2024
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement Rule 10b5-1 Trading Plans

During Fiscal 2023, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 105b-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Rule 10b5-1 Arr Modified [Flag] false
Non-Rule 10b5-1 Arr Modified [Flag] false
v3.24.0.1
Business Operations
 12 Months Ended
Feb. 03, 2024
Accounting Policies [Abstract]  
Business Operations

1. Business Operations

American Eagle Outfitters, Inc. (the “Company,” “we” and “our”), a Delaware corporation, operates under the American Eagle® (“AE”) and Aerie® brands. We also operate Todd Snyder New York, a premium menswear brand, and Unsubscribed, which focuses on consciously-made slow fashion.

Founded in 1977, the Company is a leading multi-brand specialty retailer that operates more than 1,500 retail stores in the United States and internationally, online through our digital channels at www.ae.com and www.aerie.com, www.toddsnyder.com, www.unsubscribed.com and more than 300 international store locations managed by third-party operators. Through its portfolio of brands, the Company offers high quality, on-trend clothing, accessories, and personal care products at affordable prices. The Company’s online business, AEO Direct, ships to approximately 80 countries worldwide.

AEO Direct reinforces each particular brand platform and is designed to complement the in-store experience. We offer the ability for customers to return products seamlessly via any channel regardless of where products were originally purchased. We also offer a variety of channels to fulfill customer orders. These include “ship to home,” - which can be fulfilled either through our distribution centers or our store sites (buy online, ship from stores) when purchased online or through our app; “store pick-up,” - which consists of online orders being fulfilled either in store or curbside, and we offer “store-to-door” capability where customers order within our store, and the goods are shipped directly to their home.

As e-commerce penetration and growth has normalized coming out of the COVID-19 pandemic, the supply chain landscape has continued to evolve. As a result of these changes, the Company has shifted strategy related to Quiet Platforms. Quiet Platforms is a regionalized fulfillment center network providing capacity, resilience, speed, and cost advantages. The network and related growth plans have been updated to reflect this refined focus.

v3.24.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Feb. 03, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
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 and consolidated entities where the Company's ownership percentage is less than 100%. Non-controlling interests are included as a component of contributed capital within the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity and was not material for any period presented. All intercompany transactions and balances have been eliminated in consolidation. At February 3, 2024, the Company operated in two reportable segments, American Eagle and Aerie.

Fiscal Year

Our fiscal year is a 52- or 53-week year that ends on the Saturday nearest to January 31. As used herein, "Fiscal 2025" refers to the 52 week period that will end on January 31, 2026. "Fiscal 2024" refers to the 52-week period that will end on February 1, 2025. “Fiscal 2023” refers to the 53-week period ended on February 3, 2024. “Fiscal 2022” refers to the 52-week period ended January 28, 2023. "Fiscal 2021" refers to the 52-week period ended January 29, 2022.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (“ASU 2020-06”), which simplifies the accounting for convertible debt instruments. The new guidance eliminates two of the three models in Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share (“EPS”) calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted ASU 2020-06 effective January 30, 2022 under the modified retrospective method.

In November 2023, the Financial Standards Board issued ASU 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires that segment expenses deemed significant to the chief operating decision maker (CODM) typically incorporated in measuring profit or loss of the segment should be disclosed. The guidance also requires that the difference between segment revenues and these significant segment expenses is disclosed. Any annually disclosed segment information is now required to be reported in interim periods as well. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Public entities are required to apply the amendment retrospectively to prior periods presented in the financial statements. The Company plans to adopt ASU 2023-07 effective for its Fiscal year 2024 and for the interim periods beginning in Fiscal 2025.

Refer to Note 15 to the Consolidated Financial Statements for additional information regarding Segment Reporting.

In December 2023, the Financial Standards Board issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires increased transparency in tax disclosures, specifically by expanding requirements for rate reconciliation and income taxes paid information. Additionally, the amendment requires disclosures of income/(loss) from continuing operations before taxes disaggregated between domestic and foreign, and income tax expense/(benefit), disaggregated by federal, state, and foreign. Disclosure requirements about the nature and estimated range of the reasonably possible change in unrecognized tax benefits over the next year have been removed as part of this amendment. The guidance is effective for fiscal years beginning after December 15, 2024. The Company plans to adopt ASU 2023-09 effective for Fiscal 2025.

Refer to Note 14 to the Consolidated Financial Statements for additional information regarding Income Taxes.

Foreign Currency Translation

In accordance with ASC 830, Foreign Currency Matters, the Company translates assets and liabilities denominated in foreign currencies into U.S. dollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. The Company translates revenues and expenses denominated in foreign currencies into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currency transactions are included in the consolidated results of operations, whereas related translation adjustments are reported as an element of other comprehensive income (loss) in accordance with ASC 220, Comprehensive Income. Refer to Note 11 to the Consolidated Financial Statements for information regarding accumulated other comprehensive income (loss).

Cash and Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Short-term investments classified as available-for-sale include certificates of deposit with an original maturity greater than three months, but less than one year.

Refer to Note 4 to the Consolidated Financial Statements for information regarding cash and cash equivalents, and short-term investments.

Accounts Receivable

The Company's receivables are primarily generated from product sales and royalties from our licensees. The primary indicators of the credit quality of our receivables are aging, payment history, economic sector information and outside credit monitoring, and are assessed on a quarterly basis. Our credit loss exposure is mainly concentrated in our accounts receivable portfolio. Our allowance for credit losses is calculated using a loss-rate method based on historical experience, current market conditions and reasonable forecasts. For the fiscal year ended February 3, 2024, we did not observe a significant deterioration of our receivable portfolio that required a significant increase in our allowance for credit losses. As of February 3, 2024 and January 28, 2023, our allowance for credit losses was $12.7 million and $3.7 million, respectively.

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or net realizable value, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the merchandise has transferred 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, or 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.

Property and Equipment

Property and equipment are recorded on the basis of cost 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

Five years

Information technology

Three to five years

 

As of February 3, 2024, the weighted average remaining useful life of our assets was approximately six years.

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company’s management evaluates the value of leasehold improvements, store fixtures, and operating lease right-of-use ("ROU") assets associated with retail stores. 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. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income within impairment, restructuring, and other charges in the Consolidated Statements of Operations.

Our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values. The significant assumption used in our fair value analysis is forecasted revenue. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected.

When the Company closes, remodels, or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense.

Refer to Note 7 to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note 16 to the Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2023, Fiscal 2022 and Fiscal 2021.

Goodwill and Intangible Assets

The Company’s goodwill is primarily related to the acquisitions of Quiet Logistics and AirTerra in Fiscal 2021, as well as its importing operations and Canadian business, and represents the excess of cost over fair value of net assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other, the Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge is recorded in the period of the evaluation based on that difference. The Company last performed an annual goodwill impairment test as of February 3, 2024. As a result of the annual impairment test, the Company concluded that the goodwill assigned to the Quiet Platforms reporting unit was impaired, resulting in a charge of $39.6M recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations, due to insufficient prospective cash flows to support the carrying value of the business. Significant, subjective assumptions used in the Company’s fair value estimate included forecasted cost of sales, forecasted operating expense and the discount rate. There were no goodwill impairment charges recorded during Fiscal 2022 or Fiscal 2021.

Definite-lived intangible assets are initially recorded at fair value, with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s definite-lived intangible assets, which consist primarily of trademark assets, are generally amortized over 10 to 15 years.

The Company evaluates definite-lived intangible assets for impairment in accordance with ASC 360 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 is less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. During Fiscal 2023, the Company recorded a $40.5M of definite-lived intangible asset impairment charge, related to the definite-lived intangible assets of Quiet Platforms, due to insufficient prospective cash flows to support the carrying value of the assets. No definite-lived intangible asset impairment charges were recorded during Fiscal 2022, or Fiscal 2021.

Refer to Note 8 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets and refer to Note 16 to the Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2023.

Construction Allowances

As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally composed of cash amounts. The Company records a receivable and an adjustment to the operating lease ROU asset at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized as part of the single lease cost over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the lessor.

Self-Insurance Liability

The Company uses a combination of insurance and self-insurance mechanisms for certain losses related to employee medical benefits and worker’s compensation. Costs for self-insurance claims filed and claims incurred but not reported are accrued based on known claims and historical experience. Management believes that it has adequately reserved for its self-insurance liability, which is capped by stop-loss contracts with insurance companies. However, any significant variation of future claims from historical trends could cause actual results to differ from the accrued liability.

Leases

The Company leases all store premises, its Canadian distribution center in Mississauga, Ontario, its regional distribution facilities, some of its office space and certain information technology and office equipment. These leases are generally classified as operating leases.

Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes and certain other expenses. When measuring operating lease ROU assets and operating lease liabilities, the Company only includes cash flows related to options to extend or terminate leases once those options are executed.

Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities.

When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.

For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.

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

Co-Branded and Private Label Credit Cards

The Company offers a co-branded credit card and a private-label credit card under the AE and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (the “Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this funding as we fulfill our performance obligations under the Agreement. This revenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations.

Customer Loyalty Program

The Company offers a highly digitized loyalty program called Real Rewards by American Eagle and Aerie™ (the “Program”). The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited.

Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The portion of the sales revenue attributed to the reward points is deferred and recognized when the reward is redeemed or when the points expire, using the relative stand-alone selling price method. Additionally, reward points earned using the co-branded credit card on non-AE or Aerie purchases are accounted for in accordance with ASC 606. As the points are earned, a current liability is recorded for the estimated cost of the reward, and the impact of adjustments is recorded in revenue.

The Company defers a portion of the sales revenue attributed to the loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606.

Sales Return Reserve

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 using historical average return percentages.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Beginning balance

 

$

10,369

 

 

$

9,168

 

 

$

8,377

 

Returns

 

 

(161,833

)

 

 

(150,987

)

 

 

(149,988

)

Provisions

 

 

162,230

 

 

 

152,188

 

 

 

150,779

 

Ending balance

 

$

10,766

 

 

$

10,369

 

 

$

9,168

 

 

The presentation on a gross basis consists of a separate right of return asset and liability. These amounts are recorded within (i) prepaid expenses and other and (ii) other current liabilities and accrued expenses, respectively, on the Consolidated Balance Sheets.

Long-Term Debt

In April 2020, the Company issued $415 million aggregate principal amount of convertible senior notes due 2025 (the "2025 Notes"). In accordance with ASU 2020-06 the 2025 Notes were accounted for as a single balance in long-term debt beginning in Fiscal 2022, throughout their final redemption in Fiscal 2023.

In June 2022, the Company entered into an amended and restated credit agreement (the “Credit Agreement”). The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations (the "Credit Facility"). The Credit Facility expires on June 24, 2027.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding Long-Term Debt.

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statements 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 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 requires management to make estimates and assumptions. The Company believes that its estimates and assumptions 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 14 to the Consolidated Financial Statements for additional information.

Accelerated Share Repurchase Agreement

On June 3, 2022, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with JPMorgan Chase Bank (“JPM”). Pursuant to the terms of the ASR Agreement, on June 3, 2022 the Company paid $200.0 million in cash and received an initial delivery of 13.4 million shares of its common stock on June 3, 2022. At final settlement, on July 28, 2022, an additional 3.7 million shares were received. The cumulative repurchase under the ASR Agreement was 17.0 million shares repurchased at an average price per share of $11.75. The aforementioned shares have been recorded as treasury stock.

Revenue Recognition

The Company recognizes revenue pursuant to ASC 606. Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the 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.

The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned and collection is probable.

The Company defers a portion of the sales revenue attributed to loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. Refer to Customer Loyalty Program above for additional information.

Revenue associated with Quiet Platforms is recognized as the services are performed.

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

Cost of sales consists of merchandise costs, including design costs, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, “merchandise costs”); Quiet Platforms costs to service its customers; and buying, occupancy and warehousing costs and services.

Design costs are related to the Company's design center operations and include compensation, travel and entertainment, supplies and samples for our design teams, as well as rent and depreciation for our design center. These costs are included in cost of sales as the respective inventory is sold.

Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel and entertainment 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. Additionally, selling, general and administrative expenses do not include rent and utilities, operating costs of our distribution centers, and shipping and handling costs related to our e-commerce operations, all of which are included in cost of sales.

Advertising Costs

Certain advertising costs, including direct mail, in-store photographs, and other promotional costs are expensed when the marketing campaign commences. As of February 3, 2024 the Company had prepaid advertising costs of $7.6 million. As of January 28, 2023, the Company had prepaid advertising expense of $6.1 million. All other advertising costs are expensed as incurred. The Company recognized $186.9 million, $175.2 million, and $173.6 million in advertising expense during Fiscal 2023, Fiscal 2022, and Fiscal 2021, respectively.

Store Pre-Opening Costs

Store pre-opening costs consist primarily of rent, advertising, supplies, and payroll expenses. These costs are expensed as incurred.

Debt-Related Charges

Debt-related charges consist primarily of a $60.4 million induced conversion expense on the exchanges of the 2025 Notes, along with certain other costs related to actions we took to strengthen our capital structure during Fiscal 2022. There were no debt related charges in Fiscal 2023. Refer to Note 9 to the Consolidated Financial Statements for additional information regarding the 2025 Notes.

Interest (Income) Expense, Net

Interest (income) expense, net primarily consists of interest income from cash and cash equivalents and short-term investments, partially offset by interest expense related to the Company’s 2025 Notes and borrowings under our five-year, syndicated, asset-based revolving credit facilities.

Other Income, Net

Other income, net consists primarily of foreign currency fluctuations and changes in other non-operating items. Non-controlling interest was not material for any period presented and is included within other income, net.

Legal Proceedings and Claims

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”), the Company 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, results of operations or cash flows of the Company. However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.

Supplemental Disclosures of Cash Flow Information

The table below shows supplemental cash flow information for cash amounts (received) paid during the respective periods:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Cash (received) paid during the periods for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

31,440

 

 

$

(22,109

)

 

$

182,656

 

Interest

 

$

2,494

 

 

$

15,435

 

 

$

8,729

 

Segment Information

The Company has identified two operating segments (American Eagle and Aerie brand) that also represent our reportable segments and reflect our Chief Operating Decision Maker's (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder and Unsubscribed brands and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosures they have

been included in the Corporate and Other category. For additional information regarding the Company’s segment and geographic information, refer to Note 15 to the Consolidated Financial Statements.
v3.24.0.1
Acquisitions
 12 Months Ended
Feb. 03, 2024
Business Combinations [Abstract]  
Acquisitions

3. Acquisitions

On December 29, 2021, the Company completed the acquisition of Quiet Logistics, Inc. and certain other strategic investments pursuant to a stock purchase agreement, dated as of November 1, 2021. Quiet Logistics operates a network of in-market fulfillment centers, locating products closer to need, creating inventory efficiencies, cost benefits and same-day and next-day delivery options to customers and stores.

At the closing of the transaction, the Company acquired from the sellers all of the issued and outstanding shares of capital stock of Quiet Logistics and certain equity interests in two related strategic investments.

The aggregate purchase price paid at the closing, after giving effect to estimated adjustments in respect of working capital and other customary matters, was approximately $360.6 million in cash.

In accordance with ASC 805, Business Combinations ("ASC 805"), the total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of the acquisition. Such estimated fair values require management to make estimates and judgments, especially with respect to intangible assets. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

The following table summarizes the final fair values of the Quiet Logistics assets acquired and liabilities assumed at the acquisition date:

Current assets:

 

 

Cash and cash equivalents

$

3,857

 

Accounts Receivable

 

23,207

 

Prepaid expenses

 

3,210

 

Total current assets

$

30,274

 

 

 

 

Property and equipment

$

28,728

 

Intangible assets

 

51,500

 

Goodwill

 

248,798

 

Other long-term assets

 

118,550

 

Total Assets

$

477,850

 

 

 

 

 

 

 

Current liabilities

$

29,819

 

Total long-term liabilities

 

87,415

 

Total Liabilities

$

117,234

 

 

 

 

Total purchase price

$

360,616

 

The purchase price allocation included $51.5 million of acquired intangible assets, of which $39.0 million was assigned to customer relationships and $12.5 million was assigned to trade names, which were both recognized at fair value on the acquisition date. The fair value of the identifiable intangible assets was estimated using the income approach through a discounted cash flow analysis. The cash flows were based on estimates used to price the Quiet Logistics acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return to the Company’s pricing model and the weighted-average cost of capital of 14.5%. Additionally, the significant assumption used to determine the fair value of the customer relationships intangible asset was revenue growth. This significant assumption is forward-looking and could be affected by future economic and market conditions. The customer relationships and trade name intangible assets are subject to useful lives of 10 and 15 years, respectively. Deferred tax assets were increased by $6.3 million in Fiscal 2022 related to the finalization of the net operating loss ("NOL") benefit.

In accordance with ASC 350, the $248.8 million of goodwill that was associated with the Quiet Logistics acquisition was assigned to the reporting units that benefited from the acquisition, namely the AE, Aerie and Quiet Platforms reporting units in the amounts of $101.6 million, $110.6 million and $36.6 million, respectively. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Quiet Logistics. None of the goodwill is expected to be deductible for income tax purposes.

On May 3, 2021, the Company completed the acquisition of AirTerra, Inc. AirTerra is a logistics and supply chain platform that solves e-commerce fulfillment and shipping challenges. The aggregate purchase price paid at closing was $3.0 million.

As e-commerce penetration and growth has normalized coming out of the COVID-19 pandemic, the supply chain landscape has continued to evolve. As a result of these changes, the Company has shifted strategy related to Quiet Platforms. Quiet Platforms is a regionalized fulfillment center network providing capacity, resilience, speed, and cost advantages. The network and related growth plans have been updated to reflect this refined focus.

The Company recorded $40.5 million impairment of intangible assets and $39.6 million goodwill impairment charge in Fiscal 2023. Refer to Note 16 to the Consolidated Financial Statements for additional information regarding this charge.
v3.24.0.1
Cash and Cash Equivalents and Short-term Investments
 12 Months Ended
Feb. 03, 2024
Cash and Cash Equivalents [Abstract]  
Cash and Cash Equivalents and Short-term Investments

4. Cash and Cash Equivalents and Short-term Investments

The following table summarizes the fair market value of our cash, cash equivalents, and short-term investments which are recorded on the Consolidated Balance Sheets:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2024

 

 

2023

 

Cash and cash equivalents:

 

 

 

 

 

 

Cash

 

$

162,279

 

 

$

84,960

 

Interest-bearing deposits

 

$

191,815

 

 

 

85,249

 

Total cash and cash equivalents

 

$

354,094

 

 

$

170,209

 

Short-term investments:

 

 

 

 

 

 

Certificates of deposits

 

$

100,000

 

 

 

—

 

Total short-term investments

 

$

100,000

 

 

 

—

 

Total cash and short-term investments

 

$

454,094

 

 

$

170,209

 
v3.24.0.1
Fair Value Measurements
 12 Months Ended
Feb. 03, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

5. 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.
•
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly.
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and short-term investments are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 4 to the Consolidated Financial Statements for additional information regarding cash equivalents and short-term investments.

The Company had no other financial instruments that required fair value measurement for any of the periods presented.

 

 

Fair Value Measurements at February 3, 2024

 

(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

$

162,279

 

 

$

162,279

 

 

 

—

 

 

 

—

 

Interest-bearing deposits

 

191,815

 

 

 

191,815

 

 

 

—

 

 

 

—

 

Total cash and cash equivalents

$

354,094

 

 

$

354,094

 

 

 

—

 

 

 

—

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposits

$

100,000

 

 

$

100,000

 

 

 

—

 

 

 

—

 

Total short-term investments

$

100,000

 

 

$

100,000

 

 

 

—

 

 

 

—

 

Total cash and short-term investments

$

454,094

 

 

$

454,094

 

 

 

—

 

 

 

—

 

Long-Term Debt

As of February 3, 2024, the Company had no outstanding borrowings under its Credit Facilities.

The Company's 2025 Notes were fully redeemed during Fiscal 2023. The fair value of the Company's 2025 Notes was not required to be measured at fair value on a recurring basis. Upon issuance, the fair value of the 2025 Notes was measured using two approaches that consider market-related conditions, including market benchmark rates and a secondary market quoted price, and is therefore within Level 2 of the fair value hierarchy.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements.

Non-Financial Assets

The Company’s non-financial assets, which include 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 and the Company is required to evaluate the non-financial asset for impairment, a resulting impairment would require that the non-financial asset be recorded at the estimated fair value.

Certain long-lived assets were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in ASC 820. During Fiscal 2023, the Company recorded asset impairment charges of $74.8 million primarily related to Quiet Platforms definite-lived intangible assets ($40.5 million), property and equipment and ROU assets ($24.7 million) and Japan ROU assets ($4.7 million), Japan store property and equipment ($3.6 million) and Hong Kong store property and equipment of ($1.3 million). During Fiscal 2022, the Company recorded asset impairment charges of $20.6 million, primarily related to retail store property and equipment, and operating lease ROU assets. These assets were adjusted to their fair value and the loss on impairment was recorded within impairment, restructuring and other charges in the Consolidated Statements of Operations. Refer to Note 16 to the Consolidated Financial Statements for additional information regarding impairment, restructuring and other charges.

The fair value of the Company’s store assets in Fiscal 2023 and Fiscal 2022 was determined by estimating the amount and timing of net future cash flows and discounting them using a risk-adjusted rate of interest. The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located.

The fair value of the Company's ROU assets was based upon market rent assumptions.
v3.24.0.1
Earnings per Share
 12 Months Ended
Feb. 03, 2024
Earnings Per Share [Abstract]  
Earnings per Share

6. Earnings per Share

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

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income and numerator for basic EPS

 

$

170,038

 

 

$

125,136

 

 

$

419,629

 

Add: Interest expense, net of tax, related to the 2025 Notes (1)

 

 

58

 

 

 

5,474

 

 

 

—

 

Numerator for diluted EPS

 

$

170,096

 

 

$

130,610

 

 

$

419,629

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic EPS - weighted average shares

 

 

195,646

 

 

 

181,778

 

 

 

168,156

 

Add: Dilutive effect of the 2025 Notes (1)

 

 

205

 

 

 

21,507

 

 

 

34,003

 

Add: Dilutive effect of stock options and non-vested restricted stock

 

 

1,012

 

 

 

1,941

 

 

 

4,370

 

Denominator for diluted EPS - adjusted weighted average shares

 

 

196,863

 

 

 

205,226

 

 

 

206,529

 

Anti-dilutive shares (2)

 

 

1,289

 

 

 

2,182

 

 

 

202

 

 

(1)
In Fiscal 2022, the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculating diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06.
(2)
For all periods presented, anti-dilutive shares relate to stock options and unvested restricted stock.

Refer to Note 9 and Note 12 to the Consolidated Financial Statements for additional information regarding the 2025 Notes and share-based compensation, respectively.
v3.24.0.1
Property and Equipment, net
 12 Months Ended
Feb. 03, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment, net

7. Property and Equipment, net

Property and equipment, net consists of the following:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2024

 

 

2023

 

Land

 

$

17,910

 

 

$

17,910

 

Buildings

 

 

222,660

 

 

 

222,857

 

Leasehold improvements

 

 

850,519

 

 

 

822,292

 

Fixtures and equipment

 

 

1,335,173

 

 

 

1,635,897

 

Construction in progress

 

 

852

 

 

 

8,105

 

Property and equipment, at cost

 

$

2,427,114

 

 

$

2,707,061

 

Less: Accumulated depreciation

 

 

(1,713,778

)

 

 

(1,925,547

)

Property and equipment, net

 

$

713,336

 

 

$

781,514

 

 

Depreciation expense is as follows:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Depreciation expense

 

$

230,833

 

 

$

208,014

 

 

$

161,492

 

 

Additionally, during Fiscal 2023, Fiscal 2022 and Fiscal 2021, the Company recorded $3.6 million, $4.4 million, and $4.4 million, respectively, related to asset write-offs within depreciation and amortization expense.
v3.24.0.1
Goodwill and Intangible Assets, net
 12 Months Ended
Feb. 03, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, net

8. Goodwill and Intangible Assets, net

Goodwill and definite-lived intangible assets, net consist of the following:

 

 

 

Fiscal Years Ending

 

 

 

February 3, 2024

 

 

January 28, 2023

 

(In thousands)

 

American Eagle

 

 

Aerie

 

 

Corporate and Other (3)

 

 

Total

 

 

American Eagle

 

 

Aerie

 

 

Corporate and Other (3)

 

 

Total

 

Goodwill, beginning balance(1)

 

$

114,747

 

 

$

110,600

 

 

$

39,598

 

 

$

264,945

 

 

$

114,883

 

 

$

110,600

 

 

$

45,933

 

 

$

271,416

 

Impairment(2)

 

 

—

 

 

 

—

 

 

 

(39,598

)

 

 

(39,598

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Purchase accounting adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,335

)

 

 

(6,335

)

Foreign currency fluctuation

 

 

(44

)

 

 

—

 

 

 

—

 

 

 

(44

)

 

 

(136

)

 

 

—

 

 

 

—

 

 

 

(136

)

Goodwill, ending balance

 

$

114,703

 

 

$

110,600

 

 

$

-

 

 

$

225,303

 

 

$

114,747

 

 

$

110,600

 

 

$

39,598

 

 

$

264,945

 

 

(1)
Beginning balances for both periods include accumulated impairment of $4.2 million.
(2)
Goodwill for the Quiet Platforms reporting unit was fully impaired during Fiscal 2023. Refer to Note 16 of the Consolidated Financial Statements for additional information.
(3)
Corporate and Other includes goodwill allocated to the Quiet Platforms reporting unit, which has been identified as a separate operating segment, but is not material to disclose as a separate reportable segment.

 

 

 

Fiscal Years Ending

 

(In thousands)

 

February 3, 2024

 

 

January 28, 2023

 

Intangible assets, beginning balance, at cost

 

$

94,536

 

 

$

102,701

 

Additions

 

 

826

 

 

 

985

 

Impairment(1)

 

 

(40,533

)

 

 

—

 

Amortization

 

 

(8,720

)

 

 

(9,150

)

Intangible assets, net (2)

 

$

46,109

 

 

$

94,536

 

 

(1)
Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
(2)
The ending balance includes accumulated amortization of $100.9 million and $51.7 million as of February 3, 2024 and January 28, 2023, respectively.

Amortization expense is as follows:

 

 

 

Fiscal Years Ending

 

(In thousands)

 

February 3, 2024

 

 

January 28, 2023

 

 

January 29, 2022

 

Amortization expense

 

$

8,748

 

 

$

9,162

 

 

$

6,468

 

 

The table below summarizes the estimated future amortization expense for intangible assets existing as of February 3, 2024 for the next five fiscal years:

 

 

 

Future

 

 

(In thousands)

 

Amortization

 

 

2024

 

$

4,232

 

 

2025

 

$

4,093

 

 

2026

 

$

3,970

 

 

2027

 

$

3,899

 

 

2028

 

$

3,817

 

 
v3.24.0.1
Long-Term Debt, Net
 12 Months Ended
Feb. 03, 2024
Debt Disclosure [Abstract]  
Long-Term Debt, Net

9. Long-Term Debt, Net

The Company’s long-term debt consisted of the following:

 

 

Fiscal Years Ending

 

 

February 3,

 

 

January 28,

 

(In thousands)

2024

 

 

2023

 

2025 Notes principal

$

—

 

 

$

8,791

 

Less: unamortized discount

 

—

 

 

 

105

 

2025 Notes, net

$

—

 

 

$

8,686

 

 

2025 Notes

In April 2020, the Company issued $415 million aggregate principal amount of 2025 Notes in a private placement to qualified institutional buyers in reliance on Rule 144A under the Securities Act. The 2025 Notes had a stated interest rate of 3.75%, payable semi-annually. The Company used the net proceeds from the issuance for general corporate purposes. The Company redeemed all of the remaining 2025 Notes during the 13 weeks ended April 29, 2023. See "Note Exchanges" and "Early Redemption" below.

 

The Company did not have the right to redeem the 2025 Notes prior to April 17, 2023. On or after April 17, 2023 and prior to the fortieth scheduled trading day immediately preceding the maturity date, the Company could redeem all or any portion of the 2025 Notes, at its option, for cash, if the last reported sale price of our common stock had been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period.

Note Exchanges

In June and December 2022, the Company entered into separate privately negotiated exchange agreements with certain holders of the 2025 Notes, to exchange $403.2 million in aggregate principal amount of the 2025 Notes for a combination of cash and shares of the Company's common stock, plus payment of accrued and unpaid interest (together, the "Note Exchanges").

In June 2022, the Company exchanged $342.4 million in aggregate principal amount of the 2025 Notes. The Company paid cash of $136.1 million to redeem a principal amount of the 2025 Notes with a carrying value of $339.2 million and issued approximately 34.7 million shares of the Company's common stock. In connection with these transactions, the Company recognized a pre-tax inducement charge of approximately $55.7 million during the 13 weeks ended July 30, 2022, which was recorded within debt-related charges on the Consolidated Statements of Operations.

In December 2022, the Company exchanged $60.8 million in aggregate principal amount of the 2025 Notes for shares of the Company's common stock, plus payment of accrued and unpaid interest. The Company issued approximately 7.6 million shares of the Company's common stock with a carrying value of $60.4 million. In connection with these transactions, the Company recognized a pre-tax inducement charge of approximately $4.7 million during the 13 weeks ending January 28, 2023, which was recorded within debt-related charges on the Consolidated Statements of Operations.

Following the Note Exchanges, the aggregate principal amount of the 2025 Notes was fully redeemed in Fiscal 2023.

Interest expense for the 2025 Notes was:

 

 

Fiscal Years Ending

 

 

February 3,

 

 

January 28,

 

(In thousands)

2024

 

 

2023

 

Accrued interest for interest payments

$

70

 

 

$

6,894

 

Amortization of discount

 

10

 

 

 

915

 

Total interest expense

$

80

 

 

$

7,809

 

 

Revolving Credit Facility

In June 2022, the Company entered into an amended and restated Credit Agreement (the "Credit Agreement"). The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to

customary borrowing base limitations (the "Credit Facility"). The Credit Facility expires on June 24, 2027. Before amendment and restatement, the Company's previous credit agreement provided senior secured asset-based revolving credit for loans and letters of credit up to $400 million and was scheduled to expire on January 30, 2024.

All obligations under the Credit Facility are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by certain assets of the Company and certain subsidiaries.

As of February 3, 2024, the Company was in compliance with the terms of the Credit Agreement and had $7.7 million outstanding in stand-by letters of credit. No borrowings were outstanding under the Credit Agreement as of both February 3, 2024 and January 28, 2023.

Borrowings under the Credit Facility accrue interest at the election of the Company at an adjusted secured overnight financing rate ("SOFR") rate of SOFR plus 0.10% plus an applicable margin (ranging from 1.125% to 1.375%) or an alternate base rate plus an applicable margin (ranging from 0.125% to 0.375%), with each such applicable margin being based on average borrowing availability under the Credit Facility. Interest is payable quarterly and at the end of each applicable interest period. The weighted average interest rate for borrowings during Fiscal 2023 was 6.0%. The total interest expense related to the Credit Facility for Fiscal 2023 was $1.1 million. The total interest expense related to the Credit Facility for Fiscal 2022 was $5.9 million.

v3.24.0.1
Leases
 12 Months Ended
Feb. 03, 2024
Leases [Abstract]  
Leases

10. Leases

The Company leases all store premises, regional distribution facilities, some of its office space and certain information technology and office equipment. These leases are generally classified as operating leases.

Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes, and certain other expenses.

Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s discretion and is not reasonably certain at lease commencement. When measuring operating lease ROU assets and operating lease liabilities after the date of adoption of ASC 842, the Company only includes cash flows related to options to extend or terminate leases when those options are executed.

Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities.

When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.

For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.

The following table summarizes expense categories and cash payments for operating leases during the period. It also includes the total non-cash transaction activity for new operating lease ROU assets and related operating lease liabilities entered into during the period.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

January 28,

 

(In thousands)

 

2024

 

2023

 

Lease costs

 

 

 

 

 

Operating lease costs

 

$

335,420

 

$

368,483

 

Variable lease costs

 

 

121,061

 

 

121,604

 

Short-term leases and other lease costs

 

 

45,411

 

 

5,357

 

Total lease costs

 

$

501,892

 

$

495,444

 

 

 

 

 

 

 

Other information

 

 

 

 

 

Cash paid for operating lease liability

 

$

(403,355

)

$

(397,059

)

New operating lease ROU assets entered into during the period

 

$

153,236

 

$

254,290

 

 

The following table contains the average remaining lease term and discount rate, weighted by outstanding operating lease liability as of the end of the period:

 

Lease term and discount rate

 

February 3, 2024

Weighted-average remaining lease term - operating leases

 

4.99 years

Weighted-average discount rate - operating leases

 

4.6%

The table below is a maturity analysis of the operating leases in effect as of the end of the period. Undiscounted cash flows for finance leases and short-term leases are not material for the periods reported and are excluded from the table below:

 

 

 

Undiscounted
cash flows

 

(In thousands)

 

February 3, 2024

 

Fiscal years:

 

 

 

2024

 

 

304,062

 

2025

 

 

284,736

 

2026

 

 

232,307

 

2027

 

 

180,886

 

2028

 

 

146,568

 

Thereafter

 

 

185,682

 

Total undiscounted cash flows

 

$

1,334,241

 

Less: discount on lease liability

 

 

(148,611

)

Total lease liability

 

$

1,185,630

 

 
v3.24.0.1
Accumulated Other Comprehensive Loss
 12 Months Ended
Feb. 03, 2024
Equity [Abstract]  
Other Comprehensive Loss

11. Accumulated Other Comprehensive Loss

The accumulated balances of other comprehensive loss included as part of the Consolidated Statements of Stockholders’ Equity follow:

 

Accumulated

 



 

Other

 

 

Comprehensive

 

(In thousands)

Loss

 

Balance at January 30, 2021

$

(40,748

)

Foreign currency translation loss (1)

 

(1,003

)

Gain on long-term intra-entity foreign currency transactions

 

906

 

Balance at January 29, 2022

$

(40,845

)

Foreign currency translation gain (1)

 

9,749

 

Loss on long-term intra-entity foreign currency transactions

 

(1,534

)

Balance at January 28, 2023

$

(32,630

)

Foreign currency translation gain (1)

$

17,911

 

Loss on long-term intra-entity foreign currency transactions

$

(1,691

)

Balance at February 3, 2024

$

(16,410

)

 

(1)
Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.
v3.24.0.1
Share-Based Payments
 12 Months Ended
Feb. 03, 2024
Share-Based Payment Arrangement [Abstract]  
Share-Based Payments

12. Share-Based Payments

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation – Stock Compensation (“ASC 718”), which requires the Company 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 Fiscal 2023, Fiscal 2022, and Fiscal 2021 was $51.1 million ($36.2 million, net of tax), $39.0 million ($27.3 million, net of tax), and $38.2 million ($28.8 million, net of tax), respectively.

 

There was $20.1 million of share-based payment expense, consisting of both time- and performance-based awards, included in gross profit this year. This is compared to $16.8 million of share-based payment expense included in gross profit last year.

 

There was $31.0 million of share-based payment expense, consisting of time and performance-based awards, included in selling, general, and administrative expenses for Fiscal 2023. This is compared to $22.2 million of share-based payment expense included in selling, general, and administrative expenses for Fiscal 2022.

ASC 718 requires recognition of compensation cost under a non-substantive vesting period approach for awards containing provisions that accelerate or continue vesting upon retirement. Accordingly, for awards with such provisions, the Company recognizes compensation expense over the period from the grant date to the date that retirement eligibility is achieved, if that is expected to occur during the nominal vesting period. Additionally, for awards granted to retirement-eligible employees, the full compensation cost of an award must be recognized immediately upon grant.

At February 3, 2024, the Company had awards outstanding under two share-based compensation plans, which are described below.

Share-based compensation plans

2023 Stock Award and Incentive Plan (“2023 Plan”)

The 2023 Plan was approved by the stockholders on June 7, 2023. The 2023 Plan authorized 10.6 million shares for issuance, in the form of options, stock appreciation rights (“SARS”), restricted stock, restricted stock units, bonus stock and awards, performance awards, dividend equivalents and other stock-based awards. The 2023 Plan allows the Compensation Committee of the Board to determine which employees receive awards and the terms and conditions of the awards under the 2023 Plan. The 2023 Plan provides for grants to directors who are not officers or employees of the Company, which are not to exceed in value of $750,000 in any single fiscal year. Through February 3, 2024, approximately a nominal amount of shares of restricted stock and common stock had been granted under the 2023 Plan to employees and directors. Approximately 11% of the restricted stock awards are performance-based and are earned if the established performance goals are met. The remaining 89% of the restricted stock awards are time-based and 12% vest ratably over three years and 88% vest over one year.

 

2020 Stock Award and Incentive Plan (“2020 Plan”)

The 2020 Plan was approved by the stockholders on April 13, 2020. The 2020 Plan authorized 10.2 million shares for issuance, in the form of options, stock appreciation rights (“SARS”), restricted stock, restricted stock units, bonus stock and awards, performance awards, dividend equivalents and other stock-based awards. The 2020 Plan provides that for awards intended to qualify as “performance-based compensation” under Code Section 162(m), (i) the maximum number of shares awarded to any individual may not exceed 3.0 million shares per year for options and SARS and (ii) no more than 1.5 million shares may be granted with respect to each of restricted shares of stock and restricted stock units (subject to certain adjustments and exceptions provided therein). The 2020 Plan allows the Compensation Committee of the Board to determine which employees receive awards and the terms and conditions of the awards under the 2020 Plan. The 2020 Plan provides for grants to directors who are not officers or employees of the Company, which are not to exceed in value of $750,000 in any single fiscal year. Through February 3, 2024, approximately 7.2 million shares of restricted stock and approximately 3.4 million shares of common stock had been granted under the 2020 Plan to employees and directors. Approximately 40% of the restricted stock awards are performance-based and are earned if the established performance goals are met. The remaining 60% of the restricted stock awards are time-based and 97% vest ratably over three years and 3% vest over a period of one to two years. The 2020 Plan terminated on June 7, 2023 with all rights of the awardees and all unexpired awards continuing in force and operation after the termination.

Stock Option Grants

The Company has granted time-based stock options under the 2020 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.

A summary of the Company’s stock option activity under the 2020 Plan for Fiscal 2023 follows:

 

 

 

Fiscal Year Ending February 3, 2024

 

 

 

 

 

 

Weighted-
Average

 

 

Weighted-
Average
Remaining
Contractual

 

 

Aggregate
Intrinsic

 

 

 

Options

 

 

Exercise Price

 

 

Term

 

 

Value

 

 

 

(In thousands)

 

 

 

 

 

(In years)

 

 

(In thousands)

 

Outstanding - January 28, 2023

 

 

3,950

 

 

$

17.01

 

 

 

 

 

 

 

Granted

 

 

1,051

 

 

$

13.17

 

 

 

 

 

 

 

Exercised (1)

 

 

(491

)

 

$

12.18

 

 

 

 

 

 

 

Cancelled

 

 

(297

)

 

$

13.99

 

 

 

 

 

 

 

Outstanding - February 3, 2024

 

 

4,213

 

 

$

16.83

 

 

 

4.0

 

 

 

22,038

 

Vested and expected to vest - February 3, 2024

 

 

3,252

 

 

$

16.97

 

 

 

2.7

 

 

 

9,251

 

Exercisable - February 3, 2024 (2)

 

 

1,694

 

 

$

13.71

 

 

 

2.7

 

 

 

11,963

 

 

(1)
Options exercised during Fiscal 2023 ranged in price from $8.62 to $17.24.
(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 on February 3, 2024.

The weighted-average grant date fair value of stock options granted during Fiscal 2023 and Fiscal 2022 was $5.31 and $5.90, respectively. The aggregate intrinsic value of options exercised during Fiscal 2023 and Fiscal 2022 was $3.6 million, and $0.5 million, respectively. Cash received from the exercise of stock options and the actual tax detriment realized from share-based payments was $7.6 million and ($0.5) million, respectively, for Fiscal 2023. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $2.1 million and $0.3 million, respectively, for Fiscal 2022.

As of February 3, 2024, there was $0.4 million of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted average period of 1.8 years.

The fair value of stock options was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:

 

 

 

Fiscal Years Ending

 

 

February 3,

 

January 28,

Black-Scholes Option Valuation Assumptions

 

2024

 

2023

Risk-free interest rate (1)

 

3.4%

 

2.5%

Dividend yield

 

2.8%

 

3.8%

Volatility factor (2)

 

55.7%

 

52.2%

Weighted-average expected term (3)

 

4.5 years

 

4.5 years

 

(1)
Based on the United States 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 the historical volatility of the Company’s common stock.
(3)
Represents the period that options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.

Restricted Stock Grants

Time-based restricted stock awards are composed of time-based restricted stock units. These awards vest over three years. 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 awards.

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 awards.

The grant date fair value of time-based restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant. A Monte Carlo simulation was utilized for performance-based restricted stock awards.

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

 

 

 

Time-Based Restricted Stock Units

 

 

Performance-
Based Restricted Stock Units

 

 

 

Fiscal Year Ending

 

 

Fiscal Year Ending

 

 

 

February 3, 2024

 

 

February 3, 2024

 

(Shares in thousands)

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

Non-vested - January 28, 2023

 

 

2,749

 

 

$

17.00

 

 

 

1,574

 

 

$

20.11

 

Granted

 

 

1,939

 

 

 

13.42

 

 

 

958

 

 

 

15.04

 

Vested

 

 

(1,585

)

 

 

14.95

 

 

 

(421

)

 

 

15.95

 

Cancelled

 

 

(273

)

 

 

15.64

 

 

 

(88

)

 

 

22.90

 

Non-vested - February 3, 2024

 

 

2,830

 

 

$

15.83

 

 

 

2,023

 

 

$

18.45

 

 

 

As of February 3, 2024, there was $25.8 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 1.8 years. There is $3.6 million of unrecognized compensation expense related to performance-based restricted stock unit awards that is expected to be recognized over a weighted average period of 1.6 years.

As of February 3, 2024, the Company had 12.0 million shares available for all equity grants.

 

During Fiscal 2023 and Fiscal 2022, we repurchased approximately 0.8 million and 0.6 million shares, respectively, from certain employees at market prices totaling $10.7 million and $9.8 million, respectively. These shares were repurchased for the payment of taxes in connection with the vesting of share-based payments, as permitted under our equity incentive plans.

 

The aforementioned share repurchases have been recorded as treasury stock.
v3.24.0.1
Retirement Plan and Employee Stock Purchase Plan
 12 Months Ended
Feb. 03, 2024
Retirement Benefits [Abstract]  
Retirement Plan and Employee Stock Purchase Plan

13. Retirement Plan and Employee Stock Purchase Plan

The Company maintains a profit sharing and 401(k) plan (the “Retirement Plan”). Under the provisions of the Retirement Plan, full-time employees and part-time employees are automatically enrolled to contribute 3% of their salary if they have attained 20 years of age. In addition, full-time employees need to have completed 30 days of service and part-time employees must either complete 1,000 hours of service within a 12-month period or complete 500 hours of service in two consecutive 12-month periods (effective January 1, 2023). Individuals can decline enrollment or can contribute up to 50% of their eligible salary to the 401(k) plan on either a pretax or post-tax (Roth) basis, subject to Internal Revenue Service (“IRS) annual limitations. After one year of service, the Company will match 100% of the first 3% of pay plus an additional 25% of the next 3% of pay that is contributed to the plan. Employees are 100% vested in the Company match after two years. Contributions to the profit-sharing plan, as determined by the Board, are discretionary. The Company recognized $21.0 million, $15.1 million, and $14.7 million in expense during Fiscal 2023, Fiscal 2022, and Fiscal 2021, respectively, in connection with the Retirement Plan.

The Employee Stock Purchase Plan is a non-qualified plan that covers all full-time and part-time employees who are at least 18 years old and have completed 60 days of service. Contributions are determined by the employee ($5 minimum/pay period), with the Company matching 15% of the investment up to a maximum investment of $100 per pay period. These contributions are used to purchase shares of Company stock in the open market.
v3.24.0.1
Income Taxes
 12 Months Ended
Feb. 03, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

14. Income Taxes

On December 22, 2017, the United States government enacted comprehensive tax legislation in the form of the Tax Cuts and Jobs Act (the "Tax Act”). The Tax Act significantly changed United States international tax laws for tax years beginning after December 31, 2017 and included a provision designed to currently tax global intangible low-taxed income (“GILTI”) earned by non-United States corporate subsidiaries of large United States shareholders. The Company has elected to treat GILTI as a period expense, and the effect of the GILTI inclusion for Fiscal 2023 is not material.

The components of income (loss) before income taxes are:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

U.S.

 

$

208,283

 

 

$

138,023

 

 

$

520,952

 

Foreign

 

 

31,575

 

 

 

40,471

 

 

 

37,970

 

Total

 

$

239,858

 

 

$

178,494

 

 

$

558,922

 

The significant components of the Company’s deferred tax assets and liabilities are as follows:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease ROU assets

 

$

305,043

 

 

$

353,277

 

Employee compensation and benefits

 

 

25,576

 

 

 

2,896

 

Net Operating Loss

 

 

25,071

 

 

 

27,604

 

Capitalized research and development expenses

 

 

22,014

 

 

 

4,120

 

Accruals not currently deductible

 

 

10,041

 

 

 

11,442

 

Deferred compensation

 

 

9,737

 

 

 

9,498

 

Inventories

 

 

8,828

 

 

 

7,082

 

Other long-term assets

 

 

8,169

 

 

 

8,201

 

State tax credits

 

 

7,741

 

 

 

7,968

 

Gift card liability

 

 

5,723

 

 

 

4,871

 

Capital loss

 

 

4,673

 

 

 

4,210

 

Allowance for Doubtful Accounts

 

 

3,114

 

 

 

911

 

Foreign tax credits

 

 

955

 

 

 

2,761

 

Other

 

 

690

 

 

 

744

 

General Business Credits

 

 

116

 

 

 

1,586

 

Disallowed business interest expense

 

 

—

 

 

 

8,353

 

Gross deferred tax assets

 

 

437,491

 

 

 

455,524

 

Valuation allowance

 

 

(27,466

)

 

 

(25,902

)

Total deferred tax assets

 

 

410,025

 

 

 

429,622

 

Deferred tax liabilities:

 

 

 

 

 

 

Operating lease liabilities

 

$

(253,229

)

 

$

(287,061

)

Property and equipment

 

 

(69,030

)

 

 

(100,958

)

Prepaid expenses

 

 

(3,572

)

 

 

(2,988

)

Goodwill

 

 

(1,981

)

 

 

(1,996

)

Other

 

 

(149

)

 

 

(136

)

2025 Notes

 

 

—

 

 

 

—

 

Total deferred tax liabilities

 

$

(327,961

)

 

$

(393,139

)

Total deferred tax assets, net

 

$

82,064

 

 

$

36,483

 

 

The change in net deferred tax assets was primarily due to a decrease in the net deferred tax asset of Operating lease ROU assets, Operating lease liabilities, Property and equipment and disallowed business interest expense, partially offset by an increase in employee compensation and benefits and capitalized research and development expenses.

As of February 3, 2024, the Company had deferred tax assets related to federal, state and foreign net operating loss carryovers of $10.2 million, $5.4 million and $9.4 million, respectively, that could be utilized to reduce future years’ tax liabilities. A portion of these net operating loss carryovers expire in future years and some have an indefinite carryforward period. Management believes it is more likely than not that a portion of state net operating loss and the foreign net operating

loss carryovers will not reduce future years’ tax liabilities in certain jurisdictions. As such, valuation allowances of $2.8 and $2.7 have been recorded on the deferred tax assets related to a portion of the state net operating loss carryovers as of February 3, 2024 and January 28, 2023, respectively. Further, valuation allowances of $9.4 million and $6.7 million have been recorded on the deferred tax assets related to the cumulative foreign net operating loss carryovers as of February 3, 2024 and January 28, 2023, respectively. We also provided for valuation allowances of a nominal amount as of February 3, 2024 and $1.6 million as of January 28, 2023, related to other foreign deferred tax assets.

The Company had foreign tax credit carryovers in the amount of $1.0 million and $2.8 million as of February 3, 2024 and January 28, 2023, respectively. The foreign tax credit carryovers begin to expire in Fiscal 2028 to the extent not utilized. Management believes it is more likely than not that a certain category of foreign tax credit carryover will not reduce future years’ tax liabilities. As such, valuation allowances of $1.0 million have been recorded on the deferred tax assets related to the foreign tax credit carryovers as of both February 3, 2024 and January 28, 2023.

The Company had state income tax credit carryforwards of $8.0 million (net of federal tax) as of both February 3, 2024 and January 28, 2023, respectively. These income tax credits can be utilized to offset future state income taxes, with the majority having a carryforward period of 16 years. They will begin to expire in Fiscal 2024. Management believes it is more likely than not that a portion of the state income tax credit carryovers will not reduce future years’ tax liabilities in certain jurisdictions. As such, valuation allowances of $1.5 million have been recorded on the deferred tax assets related to the cumulative state income tax credit carryovers as of both February 3, 2024 and January 28, 2023.

The Company had United States federal and state capital loss carryforwards of $4.6 million and $4.2 million as of February 3, 2024 and January 28, 2023, respectively. Generally, the capital loss has a carryforward period of five years. The Company has recorded a valuation allowance of $4.6 million and $4.2 million as of February 3, 2024 and January 28, 2023, on the deferred tax asset attributable to these capital losses. The Company recorded deferred tax assets of $8.2 million as of both February 3, 2024 and January 28, 2023, for other long-term assets related to the acquisition of Quiet Logistics, Inc. and certain other strategic investments. Management believes it is more likely than not that these other long-term assets will not reduce future years’ tax liabilities. As such, valuation allowances of $8.2 million was recorded as of both February 3, 2024 and January 28, 2023 for the deferred tax asset attributable to these assets.

Significant components of the provision (benefit) for income taxes are as follows:

 

 

 

Fiscal Years Ending

 


 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

66,112

 

 

$

(986

)

 

$

107,493

 

Foreign taxes

 

 

27,958

 

 

 

19,701

 

 

 

19,671

 

State

 

 

19,206

 

 

 

3,594

 

 

 

24,979

 

Total current

 

 

113,276

 

 

 

22,309

 

 

 

152,143

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

$

(31,602

)

 

$

26,758

 

 

$

(12,637

)

Foreign taxes

 

 

(6,317

)

 

 

(1,374

)

 

 

(1,284

)

State

 

 

(5,537

)

 

 

5,665

 

 

 

1,071

 

Total deferred

 

 

(43,456

)

 

 

31,049

 

 

 

(12,850

)

Provision for income taxes

 

$

69,820

 

 

$

53,358

 

 

$

139,293

 

 

As of February 3, 2024, the undistributed earnings of the Company’s foreign subsidiaries were approximately $139.2 million. The Company intends to permanently reinvest a portion of its earnings outside of the United States for the foreseeable future. On the remaining earnings, the Company has not recognized deferred tax expense because we expect any potential distribution to be made from previously taxed earnings, or qualify for the 100% dividends received deduction, along with negligible foreign withholding taxes.

The following table summarizes the activity related to our unrecognized tax benefits:

 

 

 

Fiscal Years Ending

 


 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Unrecognized tax benefits, beginning of the year
   balance

 

$

2,478

 

 

$

3,259

 

 

$

2,563

 

Increases in current period tax positions

 

 

2,371

 

 

 

681

 

 

 

251

 

Increases in tax positions of prior periods

 

 

10

 

 

 

—

 

 

 

688

 

Settlements

 

 

(275

)

 

 

(454

)

 

 

—

 

Lapse of statute of limitations

 

 

(75

)

 

 

(277

)

 

 

(93

)

Decreases in tax positions of prior periods

 

 

(535

)

 

 

(731

)

 

 

(150

)

Unrecognized tax benefits, end of the year balance

 

$

3,974

 

 

$

2,478

 

 

$

3,259

 

 

As of February 3, 2024, the gross amount of unrecognized tax benefits was $4.0 million, of which $3.6 million would affect the effective income tax rate if recognized. The gross amount of unrecognized tax benefits as of January 28, 2023 was $2.5 million, of which $2.0 million would affect the effective income tax rate if recognized.

Unrecognized tax benefits increased by $1.5 million during Fiscal 2023, and decreased by $0.8 million during Fiscal 2022. Over the next 12 months, the Company believes it is reasonably possible that the unrecognized tax benefits could decrease by as much as $1.1 million as a result of federal and state tax settlements, statute of limitations lapses, and other changes to the reserves.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense. Accrued interest and penalties related to unrecognized tax benefits included in the Consolidated Balance Sheets were $0.8 million as of both February 3, 2024 and January 28, 2023.

The Company and its subsidiaries file income tax returns in the United States and various state and foreign jurisdictions. The IRS has completed examinations through February 1, 2020. With respect to state and local jurisdictions and countries outside of the United States, with limited exceptions, generally, the Company and its subsidiaries are no longer subject to income tax audits for tax years before Fiscal 2017 (ended February 3, 2018). Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest, and penalties have been provided for any adjustments that are expected to result from these years.

A reconciliation between the statutory federal income tax rate and the effective income tax rate follows:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

 

 

2024

 

 

2023

 

 

2022

 

Federal income tax rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal income tax effect

 

 

4.4

 

 

 

3.6

 

 

 

4.1

 

Foreign rate differential

 

 

0.2

 

 

 

0.9

 

 

 

0.6

 

International provisions of Tax Act

 

 

(2.2

)

 

 

0.1

 

 

 

(0.5

)

Valuation allowance changes, net

 

 

0.5

 

 

 

0.5

 

 

 

0.2

 

Non-deductible executive compensation

 

 

3.8

 

 

 

2.0

 

 

 

1.3

 

Change in unrecognized tax benefits

 

 

0.8

 

 

 

(0.1

)

 

 

0.1

 

Share Based Payments

 

 

0.2

 

 

 

(0.2

)

 

 

(0.8

)

Note Exchanges

 

 

0.0

 

 

 

1.4

 

 

 

0.0

 

Non-deductible goodwill impairment

 

 

3.5

 

 

 

0.0

 

 

 

0.0

 

Federal Credits

 

 

(2.1

)

 

 

(0.4

)

 

 

(1.0

)

Other

 

 

(1.0

)

 

 

1.1

 

 

 

(0.1

)

 

 

 

29.1

%

 

 

29.9

%

 

 

24.9

%

 

The Company recorded income tax expense of $69.8 million (an effective tax rate of 29.1%) in Fiscal 2023, and income tax expense of $53.4 million (an effective tax rate of 29.9%) in Fiscal 2022.
v3.24.0.1
Segment Reporting
 12 Months Ended
Feb. 03, 2024
Segment Reporting [Abstract]  
Segment Reporting

15. Segment Reporting

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified two operating segments (American Eagle brand and Aerie brand) that also represent our reportable segments and reflect the Chief Operating Decision Maker’s (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder brand, Unsubscribed brand, and Quiet Platforms have been identified as separate operating segments; however,

as they do not meet the quantitative thresholds for separate disclosure, they are presented under the Other caption, as permitted by ASC 280.

 

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

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (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.

Reportable segment information is presented in the following table:

 

 

 

 

 

 

 

 

 

 

 

Fiscal Years Ending

 

 

February 3, 2024

 

 

January 28, 2023

 

 

January 29, 2022

 

Net Revenue:

 

 

 

 

 

 

 

 

    American Eagle

$

3,361,579

 

 

$

3,262,893

 

 

$

3,555,706

 

    Aerie

$

1,670,000

 

 

$

1,506,798

 

 

$

1,376,269

 

Total Segment Net Revenue

$

5,031,579

 

 

$

4,769,691

 

 

$

4,931,975

 

    Other

$

489,056

 

 

$

469,371

 

 

$

81,951

 

    Intersegment Elimination

$

(258,865

)

 

$

(249,229

)

 

$

(3,140

)

Total Net Revenue

$

5,261,770

 

 

$

4,989,833

 

 

$

5,010,785

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

    American Eagle

$

599,796

 

 

$

541,406

 

 

$

795,960

 

    Aerie

$

275,862

 

 

$

167,467

 

 

$

214,000

 

Total Segment Operating Income

$

875,658

 

 

$

708,873

 

 

$

1,009,960

 

    Other

$

(36,124

)

 

$

(56,793

)

 

$

(15,996

)

    Intersegment Elimination

$

-

 

 

$

-

 

 

$

-

 

    General corporate expenses

$

(464,172

)

 

$

(382,824

)

 

$

(390,955

)

Impairment, restructuring and other charges(1)

$

(152,645

)

 

$

(22,209

)

 

$

(11,944

)

Total Operating Income

$

222,717

 

 

$

247,047

 

 

$

591,065

 

 

 

 

 

 

 

 

 

 

    Debt related charges

$

-

 

 

$

64,721

 

 

$

-

 

    Interest (income) expense, net

$

(6,190

)

 

$

14,297

 

 

$

34,632

 

    Other (income), net

$

(10,951

)

 

$

(10,465

)

 

$

(2,489

)

Income before income taxes

$

239,858

 

 

$

178,494

 

 

$

558,922

 

 

 

 

 

 

 

 

 

 

Capital Expenditures

 

 

 

 

 

 

 

 

    American Eagle

$

61,139

 

 

$

85,033

 

 

$

47,106

 

    Aerie

$

40,746

 

 

$

107,084

 

 

$

80,062

 

    Other

$

32,235

 

 

$

32,717

 

 

$

3,932

 

   General corporate expenditures

$

40,317

 

 

$

35,544

 

 

$

102,747

 

Total Capital Expenditures

$

174,437

 

 

$

260,378

 

 

$

233,847

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

    American Eagle

$

77,195

 

 

$

66,820

 

 

$

59,641

 

    Aerie

$

61,249

 

 

$

53,921

 

 

$

33,834

 

    Other

$

18,874

 

 

$

16,067

 

 

$

2,023

 

   General corporate depreciation

$

69,548

 

 

$

70,089

 

 

$

71,284

 

Total Depreciation and amortization

$

226,866

 

 

$

206,897

 

 

$

166,781

 

 

(1) Refer to Note 16. 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 tables present summarized geographical information:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Total net revenue:

 

 

 

 

 

 

 

 

 

United States

 

$

4,424,345

 

 

$

4,268,114

 

 

$

4,336,806

 

Foreign (1)

 

 

837,425

 

 

 

721,719

 

 

 

673,979

 

Total net revenue

 

$

5,261,770

 

 

$

4,989,833

 

 

$

5,010,785

 

 

(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.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2024

 

 

2023

 

Long-lived assets, net:

 

 

 

 

 

 

United States

 

$

1,521,392

 

 

$

2,050,459

 

Foreign

 

 

468,649

 

 

 

177,535

 

Total long-lived assets, net

 

$

1,990,041

 

 

$

2,227,994

 

v3.24.0.1
Impairment, Restructuring and Other Charges
 12 Months Ended
Feb. 03, 2024
Restructuring and Related Activities [Abstract]  
Impairment, Restructuring and Other Charges

16. Impairment, Restructuring and Other Charges

The following table represents impairment, restructuring and other charges. All amounts were recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations, unless otherwise noted.

 

As e-commerce penetration and growth has normalized coming out of the COVID-19 pandemic, the supply chain landscape has continued to evolve and financial results were negatively impacted. In Fiscal 2023, as part of our profit improvement initiative, we began to streamline and shift the operations of Quiet Platforms to better align with AEO's long term strategy. As a result of these changes, Quiet Platforms has refined its focus on its core capabilities as a regionalized fulfillment center network. The network has been updated to reflect this refined focus. The impact of the Quiet platforms business changes resulted in $119.6 million impairment, restructuring and other charges in Fiscal 2023.

Our international business has also experienced changes in market conditions as a result of unbalanced recovery from the COVID-19 pandemic. The Company has made the decision to exit the Japan market fully as of the end of Fiscal 2023. Relative to Hong Kong, the Company has implemented a strategy to right-size our presence in the market given a slower than anticipated recovery. The impact of the change to our international strategy resulted in $21.8 million of impairment, restructuring and other charges recorded in Fiscal 2023.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Charges recorded in cost of sales:

 

 

 

 

 

 

 

 

 

       Inventory charges (1)

 

$

10,950

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Charges recorded in operating expenses:

 

 

 

 

 

 

 

 

 

    Quiet Platforms impairment, restructuring and other charges (2)

 

$

119,572

 

 

$

3,844

 

 

$

—

 

International impairment and restructuring costs (3)

 

$

10,882

 

 

$

7,997

 

 

$

6,174

 

    Corporate impairment and restructuring charges (4)

 

$

11,241

 

 

$

—

 

 

$

2,575

 

U.S. and Canada store impairment charges(5)

 

$

—

 

 

$

10,368

 

 

$

3,195

 

Total impairment, restructuring and other charges

 

$

141,695

 

 

$

22,209

 

 

$

11,944

 

 

 

 

 

 

 

 

 

 

 

Total Company impairment, restructuring and other charges

 

$

152,645

 

 

$

22,209

 

 

$

11,944

 

 

 

The following footnotes relate to the impairment, restructuring and other charges in Fiscal 2023:

 

(1)
$11.0 million of inventory write-down charges related to our international businesses as further described in paragraph 1 of note (3) below.

 

(2)
$119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

 

For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA.

 

(3)
$10.9 million of charges related to exiting the Japan market, including the closure of all 4 stores in January 2024, as well as impairment related to our Hong Kong retail operations. Of this amount, $4.7 million related to Japan ROU assets, $3.6 million of Japan store property and equipment, $1.3 million of Hong Kong store ROU assets, and $1.3 million of employee severance. All impairments were recorded due to insufficient prospective cash flows to support the asset values. Additionally, we recorded $11.0 million of inventory write-down charges related to restructuring our international operations, which was recorded separately in Cost of Sales and discussed in note (1) above.

 

For Fiscal 2022, $7.5 million of store impairment due to insufficient prospective cash flows to support the asset values and $0.5 million of severance related to down sizing Hong Kong retail operations.

 

For Fiscal 2021, $6.2 million of store impairment related to insufficient prospective cash flows to support the asset value.

 

(4)
$11.2 million, consisting of $6.0 million of employee severance related to corporate realignment and other asset impairment of $5.2 million of investments related to further strategic business changes.

 

For Fiscal 2021, impairment of $2.6 million of other assets.

 

(5)
For Fiscal 2022, $10.4 million of impairment charges, consisting of $9.2 million of ROU assets and $1.2 million of store property and equipment related to insufficient cash flows to support the asset value in the U.S. and Canada.

 

For Fiscal 2021, $3.2 million consisting of $2.2 million of store property and equipment and $1.0 million of ROU assets related to insufficient cash flows to support the asset value.

 

 

 

 

A rollforward of the restructuring liabilities recognized in the Consolidated Balance Sheet is as follows:

 

 

 

 

 

February 3,

 

(In thousands)

 

 

 

2024

 

Accrued liability as of January 28, 2023

 

 

 

$

—

 

Add: Costs incurred, excluding non-cash charges

 

 

 

 

17,407

 

Less: Cash payments and adjustments

 

 

 

 

(5,993

)

Accrued liability as of February 3, 2024

 

 

 

$

11,414

 
v3.24.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Feb. 03, 2024
Accounting Policies [Abstract]  
Principles of Consolidation

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and consolidated entities where the Company's ownership percentage is less than 100%. Non-controlling interests are included as a component of contributed capital within the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity and was not material for any period presented. All intercompany transactions and balances have been eliminated in consolidation. At February 3, 2024, the Company operated in two reportable segments, American Eagle and Aerie.
Fiscal Year

Fiscal Year

Our fiscal year is a 52- or 53-week year that ends on the Saturday nearest to January 31. As used herein, "Fiscal 2025" refers to the 52 week period that will end on January 31, 2026. "Fiscal 2024" refers to the 52-week period that will end on February 1, 2025. “Fiscal 2023” refers to the 53-week period ended on February 3, 2024. “Fiscal 2022” refers to the 52-week period ended January 28, 2023. "Fiscal 2021" refers to the 52-week period ended January 29, 2022.
Estimates

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (“ASU 2020-06”), which simplifies the accounting for convertible debt instruments. The new guidance eliminates two of the three models in Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share (“EPS”) calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted ASU 2020-06 effective January 30, 2022 under the modified retrospective method.

In November 2023, the Financial Standards Board issued ASU 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires that segment expenses deemed significant to the chief operating decision maker (CODM) typically incorporated in measuring profit or loss of the segment should be disclosed. The guidance also requires that the difference between segment revenues and these significant segment expenses is disclosed. Any annually disclosed segment information is now required to be reported in interim periods as well. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Public entities are required to apply the amendment retrospectively to prior periods presented in the financial statements. The Company plans to adopt ASU 2023-07 effective for its Fiscal year 2024 and for the interim periods beginning in Fiscal 2025.

Refer to Note 15 to the Consolidated Financial Statements for additional information regarding Segment Reporting.

In December 2023, the Financial Standards Board issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires increased transparency in tax disclosures, specifically by expanding requirements for rate reconciliation and income taxes paid information. Additionally, the amendment requires disclosures of income/(loss) from continuing operations before taxes disaggregated between domestic and foreign, and income tax expense/(benefit), disaggregated by federal, state, and foreign. Disclosure requirements about the nature and estimated range of the reasonably possible change in unrecognized tax benefits over the next year have been removed as part of this amendment. The guidance is effective for fiscal years beginning after December 15, 2024. The Company plans to adopt ASU 2023-09 effective for Fiscal 2025.

Refer to Note 14 to the Consolidated Financial Statements for additional information regarding Income Taxes.

Foreign Currency Translation

Foreign Currency Translation

In accordance with ASC 830, Foreign Currency Matters, the Company translates assets and liabilities denominated in foreign currencies into U.S. dollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. The Company translates revenues and expenses denominated in foreign currencies into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currency transactions are included in the consolidated results of operations, whereas related translation adjustments are reported as an element of other comprehensive income (loss) in accordance with ASC 220, Comprehensive Income. Refer to Note 11 to the Consolidated Financial Statements for information regarding accumulated other comprehensive income (loss).
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 an original maturity of three months or less to be cash equivalents. Short-term investments classified as available-for-sale include certificates of deposit with an original maturity greater than three months, but less than one year.

Refer to Note 4 to the Consolidated Financial Statements for information regarding cash and cash equivalents, and short-term investments.
Accounts Receivable

Accounts Receivable

The Company's receivables are primarily generated from product sales and royalties from our licensees. The primary indicators of the credit quality of our receivables are aging, payment history, economic sector information and outside credit monitoring, and are assessed on a quarterly basis. Our credit loss exposure is mainly concentrated in our accounts receivable portfolio. Our allowance for credit losses is calculated using a loss-rate method based on historical experience, current market conditions and reasonable forecasts. For the fiscal year ended February 3, 2024, we did not observe a significant deterioration of our receivable portfolio that required a significant increase in our allowance for credit losses. As of February 3, 2024 and January 28, 2023, our allowance for credit losses was $12.7 million and $3.7 million, respectively.
Merchandise Inventory

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or net realizable value, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the merchandise has transferred 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, or 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.
Property and Equipment

Property and Equipment

Property and equipment are recorded on the basis of cost 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

Five years

Information technology

Three to five years

 

As of February 3, 2024, the weighted average remaining useful life of our assets was approximately six years.

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company’s management evaluates the value of leasehold improvements, store fixtures, and operating lease right-of-use ("ROU") assets associated with retail stores. 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. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts. When events such as these occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income within impairment, restructuring, and other charges in the Consolidated Statements of Operations.

Our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values. The significant assumption used in our fair value analysis is forecasted revenue. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected.

When the Company closes, remodels, or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense.

Refer to Note 7 to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note 16 to the Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2023, Fiscal 2022 and Fiscal 2021.
Goodwill and Intangible Assets

Goodwill and Intangible Assets

The Company’s goodwill is primarily related to the acquisitions of Quiet Logistics and AirTerra in Fiscal 2021, as well as its importing operations and Canadian business, and represents the excess of cost over fair value of net assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other, the Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may be below its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge is recorded in the period of the evaluation based on that difference. The Company last performed an annual goodwill impairment test as of February 3, 2024. As a result of the annual impairment test, the Company concluded that the goodwill assigned to the Quiet Platforms reporting unit was impaired, resulting in a charge of $39.6M recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations, due to insufficient prospective cash flows to support the carrying value of the business. Significant, subjective assumptions used in the Company’s fair value estimate included forecasted cost of sales, forecasted operating expense and the discount rate. There were no goodwill impairment charges recorded during Fiscal 2022 or Fiscal 2021.

Definite-lived intangible assets are initially recorded at fair value, with amortization computed utilizing the straight-line method over the assets’ estimated useful lives. The Company’s definite-lived intangible assets, which consist primarily of trademark assets, are generally amortized over 10 to 15 years.

The Company evaluates definite-lived intangible assets for impairment in accordance with ASC 360 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 is less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. During Fiscal 2023, the Company recorded a $40.5M of definite-lived intangible asset impairment charge, related to the definite-lived intangible assets of Quiet Platforms, due to insufficient prospective cash flows to support the carrying value of the assets. No definite-lived intangible asset impairment charges were recorded during Fiscal 2022, or Fiscal 2021.

Refer to Note 8 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets and refer to Note 16 to the Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2023.
Construction Allowances

Construction Allowances

As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally composed of cash amounts. The Company records a receivable and an adjustment to the operating lease ROU asset at the lease commencement date (date of initial possession of the store). The deferred lease credit is amortized as part of the single lease cost over the term of the original lease (including the pre-opening build-out period). The receivable is reduced as amounts are received from the lessor.
Self-Insurance Liability

Self-Insurance Liability

The Company uses a combination of insurance and self-insurance mechanisms for certain losses related to employee medical benefits and worker’s compensation. Costs for self-insurance claims filed and claims incurred but not reported are accrued based on known claims and historical experience. Management believes that it has adequately reserved for its self-insurance liability, which is capped by stop-loss contracts with insurance companies. However, any significant variation of future claims from historical trends could cause actual results to differ from the accrued liability.
Leases

Leases

The Company leases all store premises, its Canadian distribution center in Mississauga, Ontario, its regional distribution facilities, some of its office space and certain information technology and office equipment. These leases are generally classified as operating leases.

Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including maintenance costs, common area charges, real estate taxes and certain other expenses. When measuring operating lease ROU assets and operating lease liabilities, the Company only includes cash flows related to options to extend or terminate leases once those options are executed.

Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of operating lease ROU assets and operating lease liabilities.

When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.

For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.

Refer to Note 10 to the Consolidated Financial Statements for additional information.
Co-Branded and Private Label Credit Cards

Co-Branded and Private Label Credit Cards

The Company offers a co-branded credit card and a private-label credit card under the AE and Aerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (the “Agreement”). The Company has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this funding as we fulfill our performance obligations under the Agreement. This revenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations.
Customer Loyalty Program

Customer Loyalty Program

The Company offers a highly digitized loyalty program called Real Rewards by American Eagle and Aerie™ (the “Program”). The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited.

Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The portion of the sales revenue attributed to the reward points is deferred and recognized when the reward is redeemed or when the points expire, using the relative stand-alone selling price method. Additionally, reward points earned using the co-branded credit card on non-AE or Aerie purchases are accounted for in accordance with ASC 606. As the points are earned, a current liability is recorded for the estimated cost of the reward, and the impact of adjustments is recorded in revenue.

The Company defers a portion of the sales revenue attributed to the loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606.
Sales Return Reserve

Sales Return Reserve

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 using historical average return percentages.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Beginning balance

 

$

10,369

 

 

$

9,168

 

 

$

8,377

 

Returns

 

 

(161,833

)

 

 

(150,987

)

 

 

(149,988

)

Provisions

 

 

162,230

 

 

 

152,188

 

 

 

150,779

 

Ending balance

 

$

10,766

 

 

$

10,369

 

 

$

9,168

 

 

The presentation on a gross basis consists of a separate right of return asset and liability. These amounts are recorded within (i) prepaid expenses and other and (ii) other current liabilities and accrued expenses, respectively, on the Consolidated Balance Sheets.
Long-Term Debt

Long-Term Debt

In April 2020, the Company issued $415 million aggregate principal amount of convertible senior notes due 2025 (the "2025 Notes"). In accordance with ASU 2020-06 the 2025 Notes were accounted for as a single balance in long-term debt beginning in Fiscal 2022, throughout their final redemption in Fiscal 2023.

In June 2022, the Company entered into an amended and restated credit agreement (the “Credit Agreement”). The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations (the "Credit Facility"). The Credit Facility expires on June 24, 2027.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding Long-Term Debt.

Income Taxes

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statements 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 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 requires management to make estimates and assumptions. The Company believes that its estimates and assumptions 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 14 to the Consolidated Financial Statements for additional information.
Accelerated Share Repurchase Agreement

Accelerated Share Repurchase Agreement

On June 3, 2022, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with JPMorgan Chase Bank (“JPM”). Pursuant to the terms of the ASR Agreement, on June 3, 2022 the Company paid $200.0 million in cash and received an initial delivery of 13.4 million shares of its common stock on June 3, 2022. At final settlement, on July 28, 2022, an additional 3.7 million shares were received. The cumulative repurchase under the ASR Agreement was 17.0 million shares repurchased at an average price per share of $11.75. The aforementioned shares have been recorded as treasury stock.
Revenue Recognition

Revenue Recognition

The Company recognizes revenue pursuant to ASC 606. Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon the 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.

The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned and collection is probable.

The Company defers a portion of the sales revenue attributed to loyalty points and recognizes revenue when the points are redeemed or expire, consistent with the requirements of ASC 606. Refer to Customer Loyalty Program above for additional information.

Revenue associated with Quiet Platforms is recognized as the services are performed.
Cost of Sales, Including Certain Buying, Occupancy and Warehousing Expenses

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

Cost of sales consists of merchandise costs, including design costs, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, “merchandise costs”); Quiet Platforms costs to service its customers; and buying, occupancy and warehousing costs and services.

Design costs are related to the Company's design center operations and include compensation, travel and entertainment, supplies and samples for our design teams, as well as rent and depreciation for our design center. These costs are included in cost of sales as the respective inventory is sold.

Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel and entertainment 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. Additionally, selling, general and administrative expenses do not include rent and utilities, operating costs of our distribution centers, and shipping and handling costs related to our e-commerce operations, all of which are included in cost of sales.
Advertising Costs

Advertising Costs

Certain advertising costs, including direct mail, in-store photographs, and other promotional costs are expensed when the marketing campaign commences. As of February 3, 2024 the Company had prepaid advertising costs of $7.6 million. As of January 28, 2023, the Company had prepaid advertising expense of $6.1 million. All other advertising costs are expensed as incurred. The Company recognized $186.9 million, $175.2 million, and $173.6 million in advertising expense during Fiscal 2023, Fiscal 2022, and Fiscal 2021, respectively.
Store Pre-Opening Costs

Store Pre-Opening Costs

Store pre-opening costs consist primarily of rent, advertising, supplies, and payroll expenses. These costs are expensed as incurred.
Debt Related Charges

Debt-Related Charges

Debt-related charges consist primarily of a $60.4 million induced conversion expense on the exchanges of the 2025 Notes, along with certain other costs related to actions we took to strengthen our capital structure during Fiscal 2022. There were no debt related charges in Fiscal 2023. Refer to Note 9 to the Consolidated Financial Statements for additional information regarding the 2025 Notes.
Interest (Income) Expense, Net

Interest (Income) Expense, Net

Interest (income) expense, net primarily consists of interest income from cash and cash equivalents and short-term investments, partially offset by interest expense related to the Company’s 2025 Notes and borrowings under our five-year, syndicated, asset-based revolving credit facilities.
Other Income, Net

Other Income, Net

Other income, net consists primarily of foreign currency fluctuations and changes in other non-operating items. Non-controlling interest was not material for any period presented and is included within other income, net.
Legal Proceedings and Claims

Legal Proceedings and Claims

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”), the Company 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, results of operations or cash flows of the Company. However, our assessment of any litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.
Supplemental Disclosures of Cash Flow Information

Supplemental Disclosures of Cash Flow Information

The table below shows supplemental cash flow information for cash amounts (received) paid during the respective periods:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Cash (received) paid during the periods for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

31,440

 

 

$

(22,109

)

 

$

182,656

 

Interest

 

$

2,494

 

 

$

15,435

 

 

$

8,729

 
Segment Information

Segment Information

The Company has identified two operating segments (American Eagle and Aerie brand) that also represent our reportable segments and reflect our Chief Operating Decision Maker's (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd Snyder and Unsubscribed brands and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosures they have

been included in the Corporate and Other category. For additional information regarding the Company’s segment and geographic information, refer to Note 15 to the Consolidated Financial Statements.
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.
•
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly.
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
v3.24.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Feb. 03, 2024
Accounting Policies [Abstract]  
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

Five years

Information technology

Three to five years
Sales Return Reserve The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined using historical average return percentages.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Beginning balance

 

$

10,369

 

 

$

9,168

 

 

$

8,377

 

Returns

 

 

(161,833

)

 

 

(150,987

)

 

 

(149,988

)

Provisions

 

 

162,230

 

 

 

152,188

 

 

 

150,779

 

Ending balance

 

$

10,766

 

 

$

10,369

 

 

$

9,168

 

 
Supplemental Cash Flow Information for Cash Amounts (Received) Paid

The table below shows supplemental cash flow information for cash amounts (received) paid during the respective periods:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Cash (received) paid during the periods for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

31,440

 

 

$

(22,109

)

 

$

182,656

 

Interest

 

$

2,494

 

 

$

15,435

 

 

$

8,729

 
v3.24.0.1
Acquisitions (Tables)
 12 Months Ended
Feb. 03, 2024
Business Combinations [Abstract]  
Summary of Estimated Final Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date

The following table summarizes the final fair values of the Quiet Logistics assets acquired and liabilities assumed at the acquisition date:

Current assets:

 

 

Cash and cash equivalents

$

3,857

 

Accounts Receivable

 

23,207

 

Prepaid expenses

 

3,210

 

Total current assets

$

30,274

 

 

 

 

Property and equipment

$

28,728

 

Intangible assets

 

51,500

 

Goodwill

 

248,798

 

Other long-term assets

 

118,550

 

Total Assets

$

477,850

 

 

 

 

 

 

 

Current liabilities

$

29,819

 

Total long-term liabilities

 

87,415

 

Total Liabilities

$

117,234

 

 

 

 

Total purchase price

$

360,616

 
v3.24.0.1
Cash and Cash Equivalents and Short-term Investments (Tables)
 12 Months Ended
Feb. 03, 2024
Cash and Cash Equivalents [Abstract]  
Fair Market Value of Cash, Cash Equivalents, and Short-term Investments

The following table summarizes the fair market value of our cash, cash equivalents, and short-term investments which are recorded on the Consolidated Balance Sheets:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2024

 

 

2023

 

Cash and cash equivalents:

 

 

 

 

 

 

Cash

 

$

162,279

 

 

$

84,960

 

Interest-bearing deposits

 

$

191,815

 

 

 

85,249

 

Total cash and cash equivalents

 

$

354,094

 

 

$

170,209

 

Short-term investments:

 

 

 

 

 

 

Certificates of deposits

 

$

100,000

 

 

 

—

 

Total short-term investments

 

$

100,000

 

 

 

—

 

Total cash and short-term investments

 

$

454,094

 

 

$

170,209

 
v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Feb. 03, 2024
Fair Value Disclosures [Abstract]  
Summary of Financial Assets Measured at Fair Value on a Recurring Basis

The Company’s cash equivalents and short-term investments are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 4 to the Consolidated Financial Statements for additional information regarding cash equivalents and short-term investments.

The Company had no other financial instruments that required fair value measurement for any of the periods presented.

 

 

Fair Value Measurements at February 3, 2024

 

(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

$

162,279

 

 

$

162,279

 

 

 

—

 

 

 

—

 

Interest-bearing deposits

 

191,815

 

 

 

191,815

 

 

 

—

 

 

 

—

 

Total cash and cash equivalents

$

354,094

 

 

$

354,094

 

 

 

—

 

 

 

—

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposits

$

100,000

 

 

$

100,000

 

 

 

—

 

 

 

—

 

Total short-term investments

$

100,000

 

 

$

100,000

 

 

 

—

 

 

 

—

 

Total cash and short-term investments

$

454,094

 

 

$

454,094

 

 

 

—

 

 

 

—

 
v3.24.0.1
Earnings per Share (Tables)
 12 Months Ended
Feb. 03, 2024
Earnings Per Share [Abstract]  
Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding

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

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income and numerator for basic EPS

 

$

170,038

 

 

$

125,136

 

 

$

419,629

 

Add: Interest expense, net of tax, related to the 2025 Notes (1)

 

 

58

 

 

 

5,474

 

 

 

—

 

Numerator for diluted EPS

 

$

170,096

 

 

$

130,610

 

 

$

419,629

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic EPS - weighted average shares

 

 

195,646

 

 

 

181,778

 

 

 

168,156

 

Add: Dilutive effect of the 2025 Notes (1)

 

 

205

 

 

 

21,507

 

 

 

34,003

 

Add: Dilutive effect of stock options and non-vested restricted stock

 

 

1,012

 

 

 

1,941

 

 

 

4,370

 

Denominator for diluted EPS - adjusted weighted average shares

 

 

196,863

 

 

 

205,226

 

 

 

206,529

 

Anti-dilutive shares (2)

 

 

1,289

 

 

 

2,182

 

 

 

202

 

 

(1)
In Fiscal 2022, the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculating diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06.
(2)
For all periods presented, anti-dilutive shares relate to stock options and unvested restricted stock.
v3.24.0.1
Property and Equipment, net (Tables)
 12 Months Ended
Feb. 03, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment, net

Property and equipment, net consists of the following:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2024

 

 

2023

 

Land

 

$

17,910

 

 

$

17,910

 

Buildings

 

 

222,660

 

 

 

222,857

 

Leasehold improvements

 

 

850,519

 

 

 

822,292

 

Fixtures and equipment

 

 

1,335,173

 

 

 

1,635,897

 

Construction in progress

 

 

852

 

 

 

8,105

 

Property and equipment, at cost

 

$

2,427,114

 

 

$

2,707,061

 

Less: Accumulated depreciation

 

 

(1,713,778

)

 

 

(1,925,547

)

Property and equipment, net

 

$

713,336

 

 

$

781,514

 

 
Depreciation Expense

Depreciation expense is as follows:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Depreciation expense

 

$

230,833

 

 

$

208,014

 

 

$

161,492

 
v3.24.0.1
Goodwill and Intangible Assets, net (Tables)
 12 Months Ended
Feb. 03, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Definite-lived intangible assets, net

Goodwill and definite-lived intangible assets, net consist of the following:

 

 

 

Fiscal Years Ending

 

 

 

February 3, 2024

 

 

January 28, 2023

 

(In thousands)

 

American Eagle

 

 

Aerie

 

 

Corporate and Other (3)

 

 

Total

 

 

American Eagle

 

 

Aerie

 

 

Corporate and Other (3)

 

 

Total

 

Goodwill, beginning balance(1)

 

$

114,747

 

 

$

110,600

 

 

$

39,598

 

 

$

264,945

 

 

$

114,883

 

 

$

110,600

 

 

$

45,933

 

 

$

271,416

 

Impairment(2)

 

 

—

 

 

 

—

 

 

 

(39,598

)

 

 

(39,598

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Purchase accounting adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,335

)

 

 

(6,335

)

Foreign currency fluctuation

 

 

(44

)

 

 

—

 

 

 

—

 

 

 

(44

)

 

 

(136

)

 

 

—

 

 

 

—

 

 

 

(136

)

Goodwill, ending balance

 

$

114,703

 

 

$

110,600

 

 

$

-

 

 

$

225,303

 

 

$

114,747

 

 

$

110,600

 

 

$

39,598

 

 

$

264,945

 

 

(1)
Beginning balances for both periods include accumulated impairment of $4.2 million.
(2)
Goodwill for the Quiet Platforms reporting unit was fully impaired during Fiscal 2023. Refer to Note 16 of the Consolidated Financial Statements for additional information.
(3)
Corporate and Other includes goodwill allocated to the Quiet Platforms reporting unit, which has been identified as a separate operating segment, but is not material to disclose as a separate reportable segment.

 

 

 

Fiscal Years Ending

 

(In thousands)

 

February 3, 2024

 

 

January 28, 2023

 

Intangible assets, beginning balance, at cost

 

$

94,536

 

 

$

102,701

 

Additions

 

 

826

 

 

 

985

 

Impairment(1)

 

 

(40,533

)

 

 

—

 

Amortization

 

 

(8,720

)

 

 

(9,150

)

Intangible assets, net (2)

 

$

46,109

 

 

$

94,536

 

 

(1)
Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
(2)
The ending balance includes accumulated amortization of $100.9 million and $51.7 million as of February 3, 2024 and January 28, 2023, respectively.
Amortization Expense

Amortization expense is as follows:

 

 

 

Fiscal Years Ending

 

(In thousands)

 

February 3, 2024

 

 

January 28, 2023

 

 

January 29, 2022

 

Amortization expense

 

$

8,748

 

 

$

9,162

 

 

$

6,468

 
Estimated Future Amortization Expense

The table below summarizes the estimated future amortization expense for intangible assets existing as of February 3, 2024 for the next five fiscal years:

 

 

 

Future

 

 

(In thousands)

 

Amortization

 

 

2024

 

$

4,232

 

 

2025

 

$

4,093

 

 

2026

 

$

3,970

 

 

2027

 

$

3,899

 

 

2028

 

$

3,817

 

 
v3.24.0.1
Long-Term Debt, Net (Tables)
 12 Months Ended
Feb. 03, 2024
Debt Disclosure [Abstract]  
Components of Long-Term Debt

The Company’s long-term debt consisted of the following:

 

 

Fiscal Years Ending

 

 

February 3,

 

 

January 28,

 

(In thousands)

2024

 

 

2023

 

2025 Notes principal

$

—

 

 

$

8,791

 

Less: unamortized discount

 

—

 

 

 

105

 

2025 Notes, net

$

—

 

 

$

8,686

 

 
Schedule of Interest Expense for Notes

Interest expense for the 2025 Notes was:

 

 

Fiscal Years Ending

 

 

February 3,

 

 

January 28,

 

(In thousands)

2024

 

 

2023

 

Accrued interest for interest payments

$

70

 

 

$

6,894

 

Amortization of discount

 

10

 

 

 

915

 

Total interest expense

$

80

 

 

$

7,809

 
v3.24.0.1
Leases (Tables)
 12 Months Ended
Feb. 03, 2024
Leases [Abstract]  
Summary of Expense Categories and Cash Payments for Operating Leases, Average Remaining Lease Term and Discount Rate

The following table summarizes expense categories and cash payments for operating leases during the period. It also includes the total non-cash transaction activity for new operating lease ROU assets and related operating lease liabilities entered into during the period.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

January 28,

 

(In thousands)

 

2024

 

2023

 

Lease costs

 

 

 

 

 

Operating lease costs

 

$

335,420

 

$

368,483

 

Variable lease costs

 

 

121,061

 

 

121,604

 

Short-term leases and other lease costs

 

 

45,411

 

 

5,357

 

Total lease costs

 

$

501,892

 

$

495,444

 

 

 

 

 

 

 

Other information

 

 

 

 

 

Cash paid for operating lease liability

 

$

(403,355

)

$

(397,059

)

New operating lease ROU assets entered into during the period

 

$

153,236

 

$

254,290

 

 

The following table contains the average remaining lease term and discount rate, weighted by outstanding operating lease liability as of the end of the period:

 

Lease term and discount rate

 

February 3, 2024

Weighted-average remaining lease term - operating leases

 

4.99 years

Weighted-average discount rate - operating leases

 

4.6%
Summary of Maturity Analysis of Operating Leases

The table below is a maturity analysis of the operating leases in effect as of the end of the period. Undiscounted cash flows for finance leases and short-term leases are not material for the periods reported and are excluded from the table below:

 

 

 

Undiscounted
cash flows

 

(In thousands)

 

February 3, 2024

 

Fiscal years:

 

 

 

2024

 

 

304,062

 

2025

 

 

284,736

 

2026

 

 

232,307

 

2027

 

 

180,886

 

2028

 

 

146,568

 

Thereafter

 

 

185,682

 

Total undiscounted cash flows

 

$

1,334,241

 

Less: discount on lease liability

 

 

(148,611

)

Total lease liability

 

$

1,185,630

 

 
v3.24.0.1
Accumulated Other Comprehensive Loss (Tables)
 12 Months Ended
Feb. 03, 2024
Equity [Abstract]  
Accumulated Balances of Other Comprehensive Loss

The accumulated balances of other comprehensive loss included as part of the Consolidated Statements of Stockholders’ Equity follow:

 

Accumulated

 



 

Other

 

 

Comprehensive

 

(In thousands)

Loss

 

Balance at January 30, 2021

$

(40,748

)

Foreign currency translation loss (1)

 

(1,003

)

Gain on long-term intra-entity foreign currency transactions

 

906

 

Balance at January 29, 2022

$

(40,845

)

Foreign currency translation gain (1)

 

9,749

 

Loss on long-term intra-entity foreign currency transactions

 

(1,534

)

Balance at January 28, 2023

$

(32,630

)

Foreign currency translation gain (1)

$

17,911

 

Loss on long-term intra-entity foreign currency transactions

$

(1,691

)

Balance at February 3, 2024

$

(16,410

)

 

(1)
Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.
v3.24.0.1
Share-Based Payments (Tables)
 12 Months Ended
Feb. 03, 2024
Share-Based Payment Arrangement [Abstract]  
Summary of Stock Option Activity

A summary of the Company’s stock option activity under the 2020 Plan for Fiscal 2023 follows:

 

 

 

Fiscal Year Ending February 3, 2024

 

 

 

 

 

 

Weighted-
Average

 

 

Weighted-
Average
Remaining
Contractual

 

 

Aggregate
Intrinsic

 

 

 

Options

 

 

Exercise Price

 

 

Term

 

 

Value

 

 

 

(In thousands)

 

 

 

 

 

(In years)

 

 

(In thousands)

 

Outstanding - January 28, 2023

 

 

3,950

 

 

$

17.01

 

 

 

 

 

 

 

Granted

 

 

1,051

 

 

$

13.17

 

 

 

 

 

 

 

Exercised (1)

 

 

(491

)

 

$

12.18

 

 

 

 

 

 

 

Cancelled

 

 

(297

)

 

$

13.99

 

 

 

 

 

 

 

Outstanding - February 3, 2024

 

 

4,213

 

 

$

16.83

 

 

 

4.0

 

 

 

22,038

 

Vested and expected to vest - February 3, 2024

 

 

3,252

 

 

$

16.97

 

 

 

2.7

 

 

 

9,251

 

Exercisable - February 3, 2024 (2)

 

 

1,694

 

 

$

13.71

 

 

 

2.7

 

 

 

11,963

 

 

(1)
Options exercised during Fiscal 2023 ranged in price from $8.62 to $17.24.
(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 on February 3, 2024.
Black-Scholes Option Valuation Assumptions

The fair value of stock options was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:

 

 

 

Fiscal Years Ending

 

 

February 3,

 

January 28,

Black-Scholes Option Valuation Assumptions

 

2024

 

2023

Risk-free interest rate (1)

 

3.4%

 

2.5%

Dividend yield

 

2.8%

 

3.8%

Volatility factor (2)

 

55.7%

 

52.2%

Weighted-average expected term (3)

 

4.5 years

 

4.5 years

 

(1)
Based on the United States 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 the historical volatility of the Company’s common stock.
(3)
Represents the period that options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.
Summary of Restricted Stock Activity

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

 

 

 

Time-Based Restricted Stock Units

 

 

Performance-
Based Restricted Stock Units

 

 

 

Fiscal Year Ending

 

 

Fiscal Year Ending

 

 

 

February 3, 2024

 

 

February 3, 2024

 

(Shares in thousands)

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

Non-vested - January 28, 2023

 

 

2,749

 

 

$

17.00

 

 

 

1,574

 

 

$

20.11

 

Granted

 

 

1,939

 

 

 

13.42

 

 

 

958

 

 

 

15.04

 

Vested

 

 

(1,585

)

 

 

14.95

 

 

 

(421

)

 

 

15.95

 

Cancelled

 

 

(273

)

 

 

15.64

 

 

 

(88

)

 

 

22.90

 

Non-vested - February 3, 2024

 

 

2,830

 

 

$

15.83

 

 

 

2,023

 

 

$

18.45

 

 
v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Feb. 03, 2024
Income Tax Disclosure [Abstract]  
Components of Income (Loss) Before Income Taxes

The components of income (loss) before income taxes are:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

U.S.

 

$

208,283

 

 

$

138,023

 

 

$

520,952

 

Foreign

 

 

31,575

 

 

 

40,471

 

 

 

37,970

 

Total

 

$

239,858

 

 

$

178,494

 

 

$

558,922

 
Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities are as follows:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease ROU assets

 

$

305,043

 

 

$

353,277

 

Employee compensation and benefits

 

 

25,576

 

 

 

2,896

 

Net Operating Loss

 

 

25,071

 

 

 

27,604

 

Capitalized research and development expenses

 

 

22,014

 

 

 

4,120

 

Accruals not currently deductible

 

 

10,041

 

 

 

11,442

 

Deferred compensation

 

 

9,737

 

 

 

9,498

 

Inventories

 

 

8,828

 

 

 

7,082

 

Other long-term assets

 

 

8,169

 

 

 

8,201

 

State tax credits

 

 

7,741

 

 

 

7,968

 

Gift card liability

 

 

5,723

 

 

 

4,871

 

Capital loss

 

 

4,673

 

 

 

4,210

 

Allowance for Doubtful Accounts

 

 

3,114

 

 

 

911

 

Foreign tax credits

 

 

955

 

 

 

2,761

 

Other

 

 

690

 

 

 

744

 

General Business Credits

 

 

116

 

 

 

1,586

 

Disallowed business interest expense

 

 

—

 

 

 

8,353

 

Gross deferred tax assets

 

 

437,491

 

 

 

455,524

 

Valuation allowance

 

 

(27,466

)

 

 

(25,902

)

Total deferred tax assets

 

 

410,025

 

 

 

429,622

 

Deferred tax liabilities:

 

 

 

 

 

 

Operating lease liabilities

 

$

(253,229

)

 

$

(287,061

)

Property and equipment

 

 

(69,030

)

 

 

(100,958

)

Prepaid expenses

 

 

(3,572

)

 

 

(2,988

)

Goodwill

 

 

(1,981

)

 

 

(1,996

)

Other

 

 

(149

)

 

 

(136

)

2025 Notes

 

 

—

 

 

 

—

 

Total deferred tax liabilities

 

$

(327,961

)

 

$

(393,139

)

Total deferred tax assets, net

 

$

82,064

 

 

$

36,483

 
Components of Provision (Benefit) for Income Taxes

Significant components of the provision (benefit) for income taxes are as follows:

 

 

 

Fiscal Years Ending

 


 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

66,112

 

 

$

(986

)

 

$

107,493

 

Foreign taxes

 

 

27,958

 

 

 

19,701

 

 

 

19,671

 

State

 

 

19,206

 

 

 

3,594

 

 

 

24,979

 

Total current

 

 

113,276

 

 

 

22,309

 

 

 

152,143

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

$

(31,602

)

 

$

26,758

 

 

$

(12,637

)

Foreign taxes

 

 

(6,317

)

 

 

(1,374

)

 

 

(1,284

)

State

 

 

(5,537

)

 

 

5,665

 

 

 

1,071

 

Total deferred

 

 

(43,456

)

 

 

31,049

 

 

 

(12,850

)

Provision for income taxes

 

$

69,820

 

 

$

53,358

 

 

$

139,293

 

 
Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits:

 

 

 

Fiscal Years Ending

 


 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Unrecognized tax benefits, beginning of the year
   balance

 

$

2,478

 

 

$

3,259

 

 

$

2,563

 

Increases in current period tax positions

 

 

2,371

 

 

 

681

 

 

 

251

 

Increases in tax positions of prior periods

 

 

10

 

 

 

—

 

 

 

688

 

Settlements

 

 

(275

)

 

 

(454

)

 

 

—

 

Lapse of statute of limitations

 

 

(75

)

 

 

(277

)

 

 

(93

)

Decreases in tax positions of prior periods

 

 

(535

)

 

 

(731

)

 

 

(150

)

Unrecognized tax benefits, end of the year balance

 

$

3,974

 

 

$

2,478

 

 

$

3,259

 

 
Reconciliation Between Statutory Federal Income Tax Rate and Effective Income Tax Rate

A reconciliation between the statutory federal income tax rate and the effective income tax rate follows:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

 

 

2024

 

 

2023

 

 

2022

 

Federal income tax rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal income tax effect

 

 

4.4

 

 

 

3.6

 

 

 

4.1

 

Foreign rate differential

 

 

0.2

 

 

 

0.9

 

 

 

0.6

 

International provisions of Tax Act

 

 

(2.2

)

 

 

0.1

 

 

 

(0.5

)

Valuation allowance changes, net

 

 

0.5

 

 

 

0.5

 

 

 

0.2

 

Non-deductible executive compensation

 

 

3.8

 

 

 

2.0

 

 

 

1.3

 

Change in unrecognized tax benefits

 

 

0.8

 

 

 

(0.1

)

 

 

0.1

 

Share Based Payments

 

 

0.2

 

 

 

(0.2

)

 

 

(0.8

)

Note Exchanges

 

 

0.0

 

 

 

1.4

 

 

 

0.0

 

Non-deductible goodwill impairment

 

 

3.5

 

 

 

0.0

 

 

 

0.0

 

Federal Credits

 

 

(2.1

)

 

 

(0.4

)

 

 

(1.0

)

Other

 

 

(1.0

)

 

 

1.1

 

 

 

(0.1

)

 

 

 

29.1

%

 

 

29.9

%

 

 

24.9

%
v3.24.0.1
Segment Reporting (Tables)
 12 Months Ended
Feb. 03, 2024
Segment Reporting [Abstract]  
Summary of Reportable Segment Information

Reportable segment information is presented in the following table:

 

 

 

 

 

 

 

 

 

 

 

Fiscal Years Ending

 

 

February 3, 2024

 

 

January 28, 2023

 

 

January 29, 2022

 

Net Revenue:

 

 

 

 

 

 

 

 

    American Eagle

$

3,361,579

 

 

$

3,262,893

 

 

$

3,555,706

 

    Aerie

$

1,670,000

 

 

$

1,506,798

 

 

$

1,376,269

 

Total Segment Net Revenue

$

5,031,579

 

 

$

4,769,691

 

 

$

4,931,975

 

    Other

$

489,056

 

 

$

469,371

 

 

$

81,951

 

    Intersegment Elimination

$

(258,865

)

 

$

(249,229

)

 

$

(3,140

)

Total Net Revenue

$

5,261,770

 

 

$

4,989,833

 

 

$

5,010,785

 

 

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

    American Eagle

$

599,796

 

 

$

541,406

 

 

$

795,960

 

    Aerie

$

275,862

 

 

$

167,467

 

 

$

214,000

 

Total Segment Operating Income

$

875,658

 

 

$

708,873

 

 

$

1,009,960

 

    Other

$

(36,124

)

 

$

(56,793

)

 

$

(15,996

)

    Intersegment Elimination

$

-

 

 

$

-

 

 

$

-

 

    General corporate expenses

$

(464,172

)

 

$

(382,824

)

 

$

(390,955

)

Impairment, restructuring and other charges(1)

$

(152,645

)

 

$

(22,209

)

 

$

(11,944

)

Total Operating Income

$

222,717

 

 

$

247,047

 

 

$

591,065

 

 

 

 

 

 

 

 

 

 

    Debt related charges

$

-

 

 

$

64,721

 

 

$

-

 

    Interest (income) expense, net

$

(6,190

)

 

$

14,297

 

 

$

34,632

 

    Other (income), net

$

(10,951

)

 

$

(10,465

)

 

$

(2,489

)

Income before income taxes

$

239,858

 

 

$

178,494

 

 

$

558,922

 

 

 

 

 

 

 

 

 

 

Capital Expenditures

 

 

 

 

 

 

 

 

    American Eagle

$

61,139

 

 

$

85,033

 

 

$

47,106

 

    Aerie

$

40,746

 

 

$

107,084

 

 

$

80,062

 

    Other

$

32,235

 

 

$

32,717

 

 

$

3,932

 

   General corporate expenditures

$

40,317

 

 

$

35,544

 

 

$

102,747

 

Total Capital Expenditures

$

174,437

 

 

$

260,378

 

 

$

233,847

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

    American Eagle

$

77,195

 

 

$

66,820

 

 

$

59,641

 

    Aerie

$

61,249

 

 

$

53,921

 

 

$

33,834

 

    Other

$

18,874

 

 

$

16,067

 

 

$

2,023

 

   General corporate depreciation

$

69,548

 

 

$

70,089

 

 

$

71,284

 

Total Depreciation and amortization

$

226,866

 

 

$

206,897

 

 

$

166,781

 

 

(1) Refer to Note 16. to the Consolidated Financial Statements for additional information.
Summary of Geographical Information

The following tables present summarized geographical information:

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Total net revenue:

 

 

 

 

 

 

 

 

 

United States

 

$

4,424,345

 

 

$

4,268,114

 

 

$

4,336,806

 

Foreign (1)

 

 

837,425

 

 

 

721,719

 

 

 

673,979

 

Total net revenue

 

$

5,261,770

 

 

$

4,989,833

 

 

$

5,010,785

 

 

(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.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

(In thousands)

 

2024

 

 

2023

 

Long-lived assets, net:

 

 

 

 

 

 

United States

 

$

1,521,392

 

 

$

2,050,459

 

Foreign

 

 

468,649

 

 

 

177,535

 

Total long-lived assets, net

 

$

1,990,041

 

 

$

2,227,994

 

v3.24.0.1
Impairment, Restructuring and Other Charges (Tables)
 12 Months Ended
Feb. 03, 2024
Restructuring and Related Activities [Abstract]  
Summary of Impairment and Restructuring Charges

The following table represents impairment, restructuring and other charges. All amounts were recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations, unless otherwise noted.

 

As e-commerce penetration and growth has normalized coming out of the COVID-19 pandemic, the supply chain landscape has continued to evolve and financial results were negatively impacted. In Fiscal 2023, as part of our profit improvement initiative, we began to streamline and shift the operations of Quiet Platforms to better align with AEO's long term strategy. As a result of these changes, Quiet Platforms has refined its focus on its core capabilities as a regionalized fulfillment center network. The network has been updated to reflect this refined focus. The impact of the Quiet platforms business changes resulted in $119.6 million impairment, restructuring and other charges in Fiscal 2023.

Our international business has also experienced changes in market conditions as a result of unbalanced recovery from the COVID-19 pandemic. The Company has made the decision to exit the Japan market fully as of the end of Fiscal 2023. Relative to Hong Kong, the Company has implemented a strategy to right-size our presence in the market given a slower than anticipated recovery. The impact of the change to our international strategy resulted in $21.8 million of impairment, restructuring and other charges recorded in Fiscal 2023.

 

 

 

Fiscal Years Ending

 

 

 

February 3,

 

 

January 28,

 

 

January 29,

 

(In thousands)

 

2024

 

 

2023

 

 

2022

 

Charges recorded in cost of sales:

 

 

 

 

 

 

 

 

 

       Inventory charges (1)

 

$

10,950

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Charges recorded in operating expenses:

 

 

 

 

 

 

 

 

 

    Quiet Platforms impairment, restructuring and other charges (2)

 

$

119,572

 

 

$

3,844

 

 

$

—

 

International impairment and restructuring costs (3)

 

$

10,882

 

 

$

7,997

 

 

$

6,174

 

    Corporate impairment and restructuring charges (4)

 

$

11,241

 

 

$

—

 

 

$

2,575

 

U.S. and Canada store impairment charges(5)

 

$

—

 

 

$

10,368

 

 

$

3,195

 

Total impairment, restructuring and other charges

 

$

141,695

 

 

$

22,209

 

 

$

11,944

 

 

 

 

 

 

 

 

 

 

 

Total Company impairment, restructuring and other charges

 

$

152,645

 

 

$

22,209

 

 

$

11,944

 

 

 

The following footnotes relate to the impairment, restructuring and other charges in Fiscal 2023:

 

(1)
$11.0 million of inventory write-down charges related to our international businesses as further described in paragraph 1 of note (3) below.

 

(2)
$119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

 

For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA.

 

(3)
$10.9 million of charges related to exiting the Japan market, including the closure of all 4 stores in January 2024, as well as impairment related to our Hong Kong retail operations. Of this amount, $4.7 million related to Japan ROU assets, $3.6 million of Japan store property and equipment, $1.3 million of Hong Kong store ROU assets, and $1.3 million of employee severance. All impairments were recorded due to insufficient prospective cash flows to support the asset values. Additionally, we recorded $11.0 million of inventory write-down charges related to restructuring our international operations, which was recorded separately in Cost of Sales and discussed in note (1) above.

 

For Fiscal 2022, $7.5 million of store impairment due to insufficient prospective cash flows to support the asset values and $0.5 million of severance related to down sizing Hong Kong retail operations.

 

For Fiscal 2021, $6.2 million of store impairment related to insufficient prospective cash flows to support the asset value.

 

(4)
$11.2 million, consisting of $6.0 million of employee severance related to corporate realignment and other asset impairment of $5.2 million of investments related to further strategic business changes.

 

For Fiscal 2021, impairment of $2.6 million of other assets.

 

(5)
For Fiscal 2022, $10.4 million of impairment charges, consisting of $9.2 million of ROU assets and $1.2 million of store property and equipment related to insufficient cash flows to support the asset value in the U.S. and Canada.

 

For Fiscal 2021, $3.2 million consisting of $2.2 million of store property and equipment and $1.0 million of ROU assets related to insufficient cash flows to support the asset value.
Rollforward of Restructuring Liabilities Recognized in Consolidated Balance Sheet

A rollforward of the restructuring liabilities recognized in the Consolidated Balance Sheet is as follows:

 

 

 

 

 

February 3,

 

(In thousands)

 

 

 

2024

 

Accrued liability as of January 28, 2023

 

 

 

$

—

 

Add: Costs incurred, excluding non-cash charges

 

 

 

 

17,407

 

Less: Cash payments and adjustments

 

 

 

 

(5,993

)

Accrued liability as of February 3, 2024

 

 

 

$

11,414

 
v3.24.0.1
Business Operations - Additional Information (Detail)
Feb. 03, 2024
Country
Store
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of retail stores 1,500
Number of international store locations 300
Number of countries company operates in | Country 80
v3.24.0.1
Summary of Significant Accounting Policies - Additional Information (Detail)
$ / shares in Units, shares in Thousands
 1 Months Ended 12 Months Ended
Jul. 28, 2022
$ / shares
shares
Jun. 03, 2022
USD ($)
shares
Apr. 30, 2020
USD ($)
Jan. 31, 2019
USD ($)
Feb. 03, 2024
USD ($)
Segment
shares
Jan. 28, 2023
USD ($)
shares
Jan. 29, 2022
USD ($)
shares
Oct. 28, 2023
Jun. 30, 2022
USD ($)
Significant Accounting Policies [Line Items]                  
Maximum ownership percentage in consolidated entities and subsidiaries         100.00%        
Number of reportable segments | Segment         2        
Allowance for credit losses         $ 12,700,000 $ 3,700,000      
Impairment, restructuring and other charges         141,695,000 22,209,000 $ 11,944,000    
Increase in net income, net of tax         $ 170,038,000 $ 125,136,000 $ 419,629,000    
Add: Dilutive effect of the 2025 Notes | shares [1]         205 21,507 34,003    
Weighted average remaining useful life, assets         6 years        
Goodwill impairment charge         $ 39,598,000 [2] $ 0 $ 0    
Definite-lived impairment charges         40,533,000 [3] $ 0 $ 0    
Payments for accelerated share repurchase         $ 20,261,000        
Cumulative treasury stock, shares | shares         52,630 54,502 80,867    
Debt related charges           $ 64,721,000      
Credit Card Reward Program Description         The Program features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited.        
Prepaid advertising expense         $ 7,600,000 6,100,000      
Advertising expense         186,900,000 175,200,000 $ 173,600,000    
ASR Agreement | JPM                  
Significant Accounting Policies [Line Items]                  
Payments for accelerated share repurchase   $ 200,000,000              
Number of shares repurchased | shares 3,700 13,400              
Cumulative treasury stock, shares | shares 17,000                
Shares repurchased price per share | $ / shares $ 11.75                
Credit Agreement | Credit Facilities                  
Significant Accounting Policies [Line Items]                  
Loans and letters of credit maximum borrowing capacity       $ 400,000,000 $ 700,000,000       $ 700,000,000
Line of credit facility, expiration date       Jan. 30, 2024 Jun. 24, 2027        
Quiet Platforms                  
Significant Accounting Policies [Line Items]                  
Impairment, restructuring and other charges [4]         $ 119,572,000 3,844,000      
Goodwill impairment charge         39,600,000        
Definite-lived impairment charges         40,500,000        
2025 Notes                  
Significant Accounting Policies [Line Items]                  
Aggregate principal amount of debt issued     $ 415,000,000            
Debt instrument, maturity year     2025            
Debt related charges         $ 0 $ 60,400,000      
Minimum                  
Significant Accounting Policies [Line Items]                  
Definite-lived intangibles, useful life         10 years        
Maximum                  
Significant Accounting Policies [Line Items]                  
Definite-lived intangibles, useful life         15 years        
ASU 2020-06                  
Significant Accounting Policies [Line Items]                  
Change in accounting principle, accounting standards update, adopted               true  
Change in accounting principle, accounting standards update, adoption date               Jan. 30, 2022  
[1] In Fiscal 2022, the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculating diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06.
[2] Goodwill for the Quiet Platforms reporting unit was fully impaired during Fiscal 2023. Refer to Note 16 of the Consolidated Financial Statements for additional information.
[3] Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
[4] $119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

 

For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA.
v3.24.0.1
Summary of Significant Accounting Policies - Useful Lives of Major Classes of Assets (Detail)
Feb. 03, 2024
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] Leasehold Improvements
Buildings  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 25 years
Leasehold Improvements | Maximum  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 10 years
Fixtures and Equipment  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 5 years
Information Technology | Minimum  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 3 years
Information Technology | Maximum  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 5 years
v3.24.0.1
Summary of Significant Accounting Policies - Useful Lives of Major Classes of Assets (Parenthetical) (Detail)
Feb. 03, 2024
Maximum | Leasehold Improvements  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 10 years
v3.24.0.1
Summary of Significant Accounting Policies - Sales Return Reserve (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Accounting Policies [Abstract]      
Beginning balance $ 10,369 $ 9,168 $ 8,377
Returns (161,833) (150,987) (149,988)
Provisions 162,230 152,188 150,779
Ending balance $ 10,766 $ 10,369 $ 9,168
v3.24.0.1
Summary of Significant Accounting Policies - Supplemental Cash Flow Information for Cash Amounts (Received) Paid (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Cash (received) paid during the periods for:      
Income taxes $ 31,440 $ (22,109) $ 182,656
Interest $ 2,494 $ 15,435 $ 8,729
v3.24.0.1
Acquisitions - Additional Information (Detail) - USD ($)
 12 Months Ended
Dec. 29, 2021
May 03, 2021
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Business Acquisition [Line Items]          
Goodwill     $ 225,303,000 $ 264,945,000 [1] $ 271,416,000 [1]
Impairment     40,533,000 [2] 0 0
Goodwill impairment charge     39,598,000 [3] 0 $ 0
Quiet Logistics          
Business Acquisition [Line Items]          
Acquisition date Dec. 29, 2021        
Aggregate purchase price in cash $ 360,600,000        
Acquired intangible assets $ 51,500,000   51,500,000    
Weighted average cost of capital 14.50%        
Goodwill $ 248,800,000   248,798,000    
Increase decrease in deferred tax asset       $ 6,300,000  
Goodwill deductible for income tax purposes     $ 0    
Quiet Logistics | American Eagle          
Business Acquisition [Line Items]          
Goodwill 101,600,000        
Quiet Logistics | Aerie          
Business Acquisition [Line Items]          
Goodwill 110,600,000        
Quiet Logistics | Supply Chain Platform          
Business Acquisition [Line Items]          
Goodwill 36,600,000        
Quiet Logistics | Customer Relationships          
Business Acquisition [Line Items]          
Acquired intangible assets $ 39,000,000        
Definite-lived intangibles, useful life 10 years        
Quiet Logistics | Trade Names          
Business Acquisition [Line Items]          
Acquired intangible assets $ 12,500,000        
Definite-lived intangibles, useful life 15 years        
AirTerra          
Business Acquisition [Line Items]          
Acquisition date   May 03, 2021      
Aggregate purchase price paid   $ 3,000,000      
[1] Beginning balances for both periods include accumulated impairment of $4.2 million.
[2] Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
[3] Goodwill for the Quiet Platforms reporting unit was fully impaired during Fiscal 2023. Refer to Note 16 of the Consolidated Financial Statements for additional information.
v3.24.0.1
Acquisitions - Summary of Estimated Final Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date (Detail) - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
 [1]
Jan. 29, 2022
 [1]
Dec. 29, 2021
Current assets        
Goodwill $ 225,303 $ 264,945 $ 271,416  
Quiet Logistics        
Current assets        
Cash and cash equivalents 3,857      
Accounts Receivable 23,207      
Prepaid expenses 3,210      
Total current assets 30,274      
Property and equipment 28,728      
Intangible assets 51,500     $ 51,500
Goodwill 248,798     $ 248,800
Other long term assets 118,550      
Total Assets 477,850      
Current liabilities 29,819      
Total long-term liabilities 87,415      
Total Liabilities 117,234      
Total purchase price $ 360,616      
[1] Beginning balances for both periods include accumulated impairment of $4.2 million.
v3.24.0.1
Cash and Cash Equivalents and Short-term Investments - Fair Market Value of Cash, Cash Equivalents, and Short-term Investments (Detail) - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
Cash and cash equivalents:    
Cash and cash equivalents $ 354,094 $ 170,209
Short-term investments:    
Short-term investments 100,000  
Total cash and short-term investments 454,094 170,209
Cash    
Cash and cash equivalents:    
Cash and cash equivalents 162,279 84,960
Interest Bearing Deposits    
Cash and cash equivalents:    
Cash and cash equivalents 191,815 $ 85,249
Certificates of Deposit    
Short-term investments:    
Short-term investments $ 100,000  
v3.24.0.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
 1 Months Ended 12 Months Ended
Apr. 30, 2020
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Fair Value Measurements Disclosure [Line Items]        
Financial instruments required at fair value measurements   $ 0    
Impairment charges   116,365,000 $ 20,633,000 $ 11,944,000
Definite-lived impairment charges   $ 40,533,000 [1] $ 0 $ 0
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration]   Restructuring Costs and Asset Impairment Charges Restructuring Costs and Asset Impairment Charges Restructuring Costs and Asset Impairment Charges
2025 Notes        
Fair Value Measurements Disclosure [Line Items]        
Aggregate principal amount of debt issued $ 415,000,000      
Debt instrument, maturity year 2025      
Japan        
Fair Value Measurements Disclosure [Line Items]        
Impairment of property and equipment   $ 3,600,000    
Impairment of operating lease ROU assets   4,700,000    
Hong Kong        
Fair Value Measurements Disclosure [Line Items]        
Impairment of property and equipment   1,300,000    
Quiet Platforms        
Fair Value Measurements Disclosure [Line Items]        
Impairment charges   74,800,000 $ 2,800,000  
Definite-lived impairment charges   40,500,000    
Impairment of property and equipment and ROU assets   24,700,000    
Impairment of property and equipment   24,700,000    
Impairment of operating lease ROU assets     $ 2,300,000  
Revolving Credit Facility        
Fair Value Measurements Disclosure [Line Items]        
Outstanding borrowings   $ 0    
[1] Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
v3.24.0.1
Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on a Recurring Basis (Details) (Details) - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents $ 354,094 $ 170,209
Fair Value Measurements, Recurring | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 354,094  
Short-term investments 100,000  
Total cash and short-term investments 454,094  
Fair Value Measurements, Recurring | Cash | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 162,279  
Fair Value Measurements, Recurring | Interest Bearing Deposits | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 191,815  
Fair Value Measurements, Recurring | Certificates of Deposit | Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 100,000  
Fair Value Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 354,094  
Short-term investments 100,000  
Total cash and short-term investments 454,094  
Fair Value Measurements, Recurring | Level 1 | Cash    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 162,279  
Fair Value Measurements, Recurring | Level 1 | Interest Bearing Deposits    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 191,815  
Fair Value Measurements, Recurring | Level 1 | Certificates of Deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments $ 100,000  
v3.24.0.1
Earnings per Share - Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding (Detail) - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Numerator      
Net Income (Loss) $ 170,038 $ 125,136 $ 419,629
Add: Interest expense, net of tax, related to the 2025 Notes [1] 58 5,474  
Numerator for diluted EPS $ 170,096 $ 130,610 $ 419,629
Denominator:      
Denominator for basic EPS - weighted average shares 195,646 181,778 168,156
Add: Dilutive effect of the 2025 Notes [1] 205 21,507 34,003
Add: Dilutive effect of stock options and non-vested restricted stock 1,012 1,941 4,370
Denominator for diluted EPS - adjusted weighted average shares 196,863 205,226 206,529
Anti-dilutive shares [2] 1,289 2,182 202
[1] In Fiscal 2022, the Company adopted ASU 2020-06. The Company utilizes the "if-converted" method of calculating diluted EPS. Refer to Note 2 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06.
[2] For all periods presented, anti-dilutive shares relate to stock options and unvested restricted stock
v3.24.0.1
Accounts Receivable, net - Accounts receivable, net (Detail) - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
Receivables [Abstract]    
Total $ 247,934 $ 242,386
v3.24.0.1
Property and Equipment, net - Property and Equipment, net (Detail) - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
Property, Plant and Equipment [Abstract]    
Land $ 17,910 $ 17,910
Buildings 222,660 222,857
Leasehold improvements 850,519 822,292
Fixtures and equipment 1,335,173 1,635,897
Construction in progress 852 8,105
Property and equipment, at cost 2,427,114 2,707,061
Less: Accumulated depreciation (1,713,778) (1,925,547)
Property and equipment, net $ 713,336 $ 781,514
v3.24.0.1
Property and Equipment, net - Depreciation Expense (Detail) (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 230,833 $ 208,014 $ 161,492
v3.24.0.1
Property and Equipment, net - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Property, Plant and Equipment [Abstract]      
Asset write-offs $ 3.6 $ 4.4 $ 4.4
v3.24.0.1
Goodwill and Intangible Assets, net - Summary of Goodwill and Definite-lived Intangible Assets, Net (Detail) - USD ($)
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Jan. 29, 2023
Goodwill [Line Items]        
Goodwill, beginning balance [1] $ 264,945,000 $ 271,416,000    
Impairment (39,598,000) [2] 0 $ 0  
Purchase accounting adjustment   (6,335,000)    
Foreign currency fluctuation (44,000) (136,000)    
Goodwill, ending balance 225,303,000 264,945,000 [1] 271,416,000 [1]  
Intangible assets, beginning balance, at cost 94,536,000 [3] 102,701,000    
Additions 826,000 985,000    
Impairment (40,533,000) [4] 0 0  
Amortization (8,720,000) (9,150,000)    
Intangible assets, net 46,109,000 [3] 94,536,000 [3] 102,701,000 $ 94,536,000
Operating Segments | American Eagle        
Goodwill [Line Items]        
Goodwill, beginning balance [1] 114,747,000 114,883,000    
Foreign currency fluctuation (44,000) (136,000)    
Goodwill, ending balance 114,703,000 114,747,000 [1] 114,883,000 [1]  
Operating Segments | Aerie        
Goodwill [Line Items]        
Goodwill, beginning balance [1] 110,600,000 110,600,000    
Goodwill, ending balance 110,600,000 110,600,000 [1] 110,600,000 [1]  
Corporate and Other, Non-Segment        
Goodwill [Line Items]        
Goodwill, beginning balance [1],[5] 39,598,000 45,933,000    
Impairment [2],[5] $ (39,598,000)      
Purchase accounting adjustment [5]   (6,335,000)    
Goodwill, ending balance [1],[5]   $ 39,598,000 $ 45,933,000  
[1] Beginning balances for both periods include accumulated impairment of $4.2 million.
[2] Goodwill for the Quiet Platforms reporting unit was fully impaired during Fiscal 2023. Refer to Note 16 of the Consolidated Financial Statements for additional information.
[3] The ending balance includes accumulated amortization of $100.9 million and $51.7 million as of February 3, 2024 and January 28, 2023, respectively.
[4] Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
[5] Corporate and Other includes goodwill allocated to the Quiet Platforms reporting unit, which has been identified as a separate operating segment, but is not material to disclose as a separate reportable segment.
v3.24.0.1
Goodwill and Intangible Assets, net - Summary of Goodwill and Definite-lived Intangible Assets, Net, (Parenthetical) (Detail) - USD ($)
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Finite-Lived Intangible Assets [Line Items]      
Accumulated impairment $ 4,200,000 $ 4,200,000  
Impairment 40,533,000 [1] 0 $ 0
Accumulated amortization 100,900,000 $ 51,700,000  
Quiet Platforms      
Finite-Lived Intangible Assets [Line Items]      
Impairment 40,500,000    
Customer Relationships | Quiet Platforms      
Finite-Lived Intangible Assets [Line Items]      
Impairment 31,200,000    
Trade Names | Quiet Platforms      
Finite-Lived Intangible Assets [Line Items]      
Impairment $ 9,300,000    
[1] Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
v3.24.0.1
Goodwill and Intangible Assets, net - Amortization Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Goodwill and Intangible Assets Disclosure [Abstract]      
Amortization expense $ 8,748 $ 9,162 $ 6,468
v3.24.0.1
Goodwill and Intangible Assets, net - Estimated Future Amortization Expense (Detail)
$ in Thousands
Feb. 03, 2024
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2024 $ 4,232
2025 4,093
2026 3,970
2027 3,899
2028 $ 3,817
v3.24.0.1
Long-Term Debt, Net - Components of Long-Term Debt (Detail) - 2025 Notes
$ in Thousands
Jan. 28, 2023
USD ($)
Debt Instrument [Line Items]  
2025 Notes principal $ 8,791
Less: unamortized discount 105
2025 Notes, net $ 8,686
v3.24.0.1
Long-Term Debt, Net - Additional Information (Detail)
 1 Months Ended 3 Months Ended 7 Months Ended 12 Months Ended
Dec. 31, 2022
USD ($)
shares
Jun. 30, 2022
USD ($)
shares
Apr. 30, 2020
USD ($)
TradingDay
Jan. 31, 2019
USD ($)
Jan. 28, 2023
USD ($)
Jul. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Feb. 03, 2024
USD ($)
shares
Jan. 28, 2023
USD ($)
shares
Credit Facilities                  
Line Of Credit Facility [Line Items]                  
Credit facility interest rate               0.10  
Weighted average interest rate for borrowings               6.00%  
Interest expense               $ 1,100,000 $ 5,900,000
Credit Facilities | SOFR | Minimum                  
Line Of Credit Facility [Line Items]                  
Accrued interest margin rate               1.125%  
Credit Facilities | SOFR | Maximum                  
Line Of Credit Facility [Line Items]                  
Accrued interest margin rate               1.375%  
Credit Facilities | Alternate Base Rate | Minimum                  
Line Of Credit Facility [Line Items]                  
Accrued interest margin rate               0.125%  
Credit Facilities | Alternate Base Rate | Maximum                  
Line Of Credit Facility [Line Items]                  
Accrued interest margin rate               0.375%  
Credit Agreement | Credit Facilities                  
Line Of Credit Facility [Line Items]                  
Loans and letters of credit maximum borrowing capacity   $ 700,000,000   $ 400,000,000       $ 700,000,000  
Line of credit facility, expiration date       Jan. 30, 2024       Jun. 24, 2027  
Credit Agreement | Stand-by Letters of Credit                  
Line Of Credit Facility [Line Items]                  
Letters of credit outstanding amount               $ 7,700,000  
Credit Agreement | Credit Agreement Loans                  
Line Of Credit Facility [Line Items]                  
Outstanding borrowings         $ 0     $ 0 $ 0
Common Stock                  
Line Of Credit Facility [Line Items]                  
Exchange of Convertible Senior Notes (in shares) | shares               1,099,000 42,329,000
2025 Notes                  
Line Of Credit Facility [Line Items]                  
Aggregate principal amount of debt issued     $ 415,000,000            
Debt instrument, stated interest rate     3.75%            
Debt instrument, maturity year     2025            
Debt instrument, interest terms     The 2025 Notes had a stated interest rate of 3.75%, payable semi-annually.            
Debt instrument, redemption earliest date     Apr. 17, 2023            
Debt instrument, frequency of periodic payment of interest     payable semi-annually            
Notes exchange aggregate principal amount $ 60,800,000 342,400,000         $ 403,200,000    
Cash paid to noteholders   136,100,000              
Carrying value of notes $ 60,400,000 $ 339,200,000         $ 60,400,000    
Pre-tax inducement charge         $ 4,700,000 $ 55,700,000      
Debt instrument, redemption, scheduled trading day immediately preceding maturity date | TradingDay     40            
Debt instrument, redemption percentage of common stock price to conversion price     130.00%            
Debt instrument, redemption, effect for trading days | TradingDay     20            
Debt instrument, redemption, consecutive trading day period | TradingDay     30            
2025 Notes | Common Stock                  
Line Of Credit Facility [Line Items]                  
Exchange of Convertible Senior Notes (in shares) | shares 7,600,000 34,700,000              
v3.24.0.1
Long-Term Debt, Net - Schedule of Interest Expense for Notes (Detail) - 2025 Notes - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Debt Instrument [Line Items]    
Accrued interest for interest payments $ 70 $ 6,894
Amortization of discount 10 915
Total interest expense $ 80 $ 7,809
v3.24.0.1
Leases - Summary of Expense Categories and Cash Payments for Operating Leases (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Lease costs    
Operating lease costs $ 335,420 $ 368,483
Variable lease costs 121,061 121,604
Short-term leases and other lease costs 45,411 5,357
Total lease costs 501,892 495,444
Other information    
Cash paid for operating lease liability (403,355) (397,059)
New operating lease ROU assets entered into during the period $ 153,236 $ 254,290
v3.24.0.1
Leases - Summary of Average Remaining Lease Term and Discount Rate (Detail)
Feb. 03, 2024
Lease term and discount rate  
Weighted-average remaining lease term - operating leases 4 years 11 months 26 days
Weighted-average discount rate - operating leases 4.60%
v3.24.0.1
Leases - Summary of Maturity Analysis of Operating Leases (Detail)
$ in Thousands
Feb. 03, 2024
USD ($)
Leases [Abstract]  
2024 $ 304,062
2025 284,736
2026 232,307
2027 180,886
2028 146,568
Thereafter 185,682
Total undiscounted cash flows 1,334,241
Less: discount on lease liability (148,611)
Total lease liability $ 1,185,630
v3.24.0.1
Accumulated Other Comprehensive Loss - Accumulated Balances of Other Comprehensive Loss (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Accumulated Other Comprehensive Income (Loss)      
Beginning Balance $ (32,630) $ (40,845) $ (40,748)
Foreign currency translation gain (loss) [1] 17,911 9,749 (1,003)
Gain (loss) on long-term intra-entity foreign currency transactions (1,691) (1,534) 906
Ending Balance $ (16,410) $ (32,630) $ (40,845)
[1] Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.
v3.24.0.1
Share-Based Payments - Additional Information (Detail)
 12 Months Ended
Jun. 07, 2023
USD ($)
shares
Apr. 13, 2020
USD ($)
shares
Feb. 03, 2024
USD ($)
CompensationPlan
$ / shares
shares
Jan. 28, 2023
USD ($)
$ / shares
shares
Jan. 29, 2022
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Share-based compensation     $ 51,067,000 $ 38,986,000 $ 38,153,000
Share-based compensation, net of tax     $ 36,200,000 27,300,000 28,800,000
Number of share-based compensation plans | CompensationPlan     2    
Stock awards     $ 50,445,000 $ 38,148,000 37,887,000
Weighted-average grant date fair value of stock options granted | $ / shares     $ 5.31 $ 5.9  
Aggregate intrinsic value of options exercised     $ 3,600,000 $ 500,000  
Net proceeds from stock options exercised     7,646,000 2,089,000 $ 13,065,000
Tax benefit (detriment) realized from stock option exercises     (500,000) 300,000  
Stock repurchased during period, value     $ 10,700,000 $ 9,800,000  
Stock repurchased during period, shares | shares     800,000 600,000  
Shares available for all equity grants | shares     12,000,000    
2023 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Authorized shares under the plan | shares 10,600,000        
2023 Stock Award and Incentive Plan | Director | In any single calendar year          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock awards $ 750,000        
2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Authorized shares under the plan | shares   10,200,000      
Shares of common stock granted | shares     3,400,000    
Terminated date   Jun. 07, 2023      
2020 Stock Award and Incentive Plan | Director | In any single calendar year          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock awards   $ 750,000      
Stock options, SAR, dividend equivalents, performance awards or other non-full value stock awards | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Maximum number of options that may be granted to any individual | shares   3,000,000      
Restricted stock awards, restricted stock units or other full value stock awards | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Maximum number of options that may be granted to any individual | shares   1,500,000      
Restricted Stock | 2023 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted | shares     7,200,000    
Performance-Based Restricted Stock Units          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted | shares     958,000    
Vesting period     3 years    
Unrecognized compensation expense, weighted average period     1 year 7 months 6 days    
Unrecognized compensation expense, restricted stock grants     $ 3,600,000    
Performance-Based Restricted Stock Units | 2023 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     11.00%    
Performance-Based Restricted Stock Units | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     40.00%    
Time-based restricted stock awards | 2023 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     89.00%    
Time-based restricted stock awards | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     60.00%    
Employee Stock Option          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation expense     $ 400,000    
Unrecognized compensation expense, weighted average period     1 year 9 months 18 days    
Time Based Restricted Stock Units          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted | shares     1,939,000    
Vesting period     3 years    
Unrecognized compensation expense, weighted average period     1 year 9 months 18 days    
Unrecognized compensation expense, restricted stock grants     $ 25,800,000    
Time and performance-based awards          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Share-based compensation     20,100,000 $ 16,800,000  
Time and performance-based awards | Selling general and administrative expenses          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Share-based compensation     $ 31,000,000 $ 22,200,000  
Vest Ratably | 2023 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     12.00%    
Vesting period     3 years    
Vest Ratably | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     97.00%    
Vesting period     3 years    
Vest Ratably 1 | 2023 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     88.00%    
Vesting period     1 year    
Vest Ratably 1 | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     3.00%    
Vest Ratably 1 | 2020 Stock Award and Incentive Plan | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     1 year    
Vest Ratably 1 | 2020 Stock Award and Incentive Plan | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     2 years    
v3.24.0.1
Share-Based Payments - Summary of Stock Option Activity (Detail)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Feb. 03, 2024
USD ($)
$ / shares
shares
Options  
Outstanding - beginning of period | shares 3,950
Granted | shares 1,051
Exercised | shares (491) [1]
Cancelled | shares (297)
Outstanding - end of period | shares 4,213
Vested and expected to vest - end of period | shares 3,252
Exercisable - end of period | shares 1,694 [2]
Weighted-Average Exercise Price  
Outstanding - beginning of period | $ / shares $ 17.01
Granted | $ / shares 13.17
Exercised | $ / shares 12.18 [1]
Cancelled | $ / shares 13.99
Outstanding - end of period | $ / shares 16.83
Vested and expected to vest - end of period | $ / shares 16.97
Exercisable - end of period | $ / shares $ 13.71 [2]
Weighted-Average Remaining Contractual Term (In years)  
Outstanding - end of period 4 years
Vested and expected to vest - end of period 2 years 8 months 12 days
Exercisable - end of period 2 years 8 months 12 days [2]
Aggregate Intrinsic Value  
Outstanding - end of period | $ $ 22,038
Vested and expected to vest - end of period | $ 9,251
Exercisable - end of period | $ $ 11,963 [2]
[1] Options exercised during Fiscal 2023 ranged in price from $8.62 to $17.24.
[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 on February 3, 2024.
v3.24.0.1
Share-Based Payments - Summary of Stock Option Activity (Parenthetical) (Detail)
 12 Months Ended
Feb. 03, 2024
$ / shares
Share-Based Payment Arrangement [Abstract]  
Options exercised, exercise price range, lower limit $ 8.62
Options exercised, exercise price range, upper limit $ 17.24
v3.24.0.1
Share-Based Payments - Black-Scholes Option Valuation Assumptions (Detail)
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rates [1] 3.40% 2.50%
Dividend yield 2.80% 3.80%
Volatility factors of the expected market price of the Company's common stock [2] 55.70% 52.20%
Weighted-average expected term [3] 4 years 6 months 4 years 6 months
[1] Based on the United States 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 the historical volatility of the Company’s common stock.
[3] Represents the period that options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.
v3.24.0.1
Share-Based Payments - Summary of Restricted Stock Activity (Detail)
shares in Thousands
 12 Months Ended
Feb. 03, 2024
$ / shares
shares
Time Based Restricted Stock Units  
Shares  
Nonvested - beginning of period | shares 2,749
Granted | shares 1,939
Vested | shares (1,585)
Cancelled | shares (273)
Nonvested - end of period | shares 2,830
Weighted-Average Grant Date Fair Value  
Nonvested - beginning of period | $ / shares $ 17
Granted | $ / shares 13.42
Vested | $ / shares 14.95
Cancelled | $ / shares 15.64
Nonvested - end of period | $ / shares $ 15.83
Performance-Based Restricted Stock Units  
Shares  
Nonvested - beginning of period | shares 1,574
Granted | shares 958
Vested | shares (421)
Cancelled | shares (88)
Nonvested - end of period | shares 2,023
Weighted-Average Grant Date Fair Value  
Nonvested - beginning of period | $ / shares $ 20.11
Granted | $ / shares 15.04
Vested | $ / shares 15.95
Cancelled | $ / shares 22.9
Nonvested - end of period | $ / shares $ 18.45
v3.24.0.1
Retirement Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($)
 12 Months Ended
Jan. 01, 2023
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Defined Benefit Plan Disclosure [Line Items]        
Employee contribution percentage   3.00%    
Years of age attained   20 years    
Vesting percentage in matching contribution to defined contribution plan   100.00%    
Vesting period in matching contribution to defined contribution plan   2 years    
Compensation expense   $ 21,000,000 $ 15,100,000 $ 14,700,000
First 3 Percent of Each Participant's Contributions        
Defined Benefit Plan Disclosure [Line Items]        
Matching contribution to defined contribution plan   100.00%    
Next 3 Percent of Each Participant's Contributions        
Defined Benefit Plan Disclosure [Line Items]        
Matching contribution to defined contribution plan   25.00%    
Full-time employees        
Defined Benefit Plan Disclosure [Line Items]        
Periods of service to be eligible   30 days    
Part-time employees        
Defined Benefit Plan Disclosure [Line Items]        
Periods of service to be eligible 500 hours 1000 hours    
Defined Contribution Pension Plan 401k | Maximum        
Defined Benefit Plan Disclosure [Line Items]        
Employee contribution percentage   50.00%    
Employee Stock Purchase Plan        
Defined Benefit Plan Disclosure [Line Items]        
Periods of service to be eligible   60 days    
Employee Stock Purchase Plan | Maximum        
Defined Benefit Plan Disclosure [Line Items]        
Matching investment per pay period   $ 100    
Employee Stock Purchase Plan | Minimum        
Defined Benefit Plan Disclosure [Line Items]        
Qualifying age   18 years    
Matching percent of investment   15.00%    
Matching investment per pay period   $ 5    
v3.24.0.1
Income Taxes - Additional Information (Detail) - USD ($)
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Jan. 29, 2023
Jan. 30, 2021
Income Taxes [Line Items]          
U.S. federal corporate tax rate 21.00% 21.00% 21.00%    
Net operating loss $ 25,071,000 $ 27,604,000      
Valuation allowances 27,466,000 25,902,000      
Foreign tax credit carryovers $ 1,000,000 2,800,000      
Foreign tax credit carryovers expiration date 2028        
Deferred tax asset related to State income tax credit carryforwards, net of federal tax $ 8,000,000 8,000,000      
Deferred tax asset related to State income tax credit, net of federal tax, minimum carryforwards years 16 years        
Deferred tax asset related to State income tax credit carryforwards, net of federal tax, expiration period begins 2024        
Valuation allowances of state income tax credit carryovers $ 1,500,000 1,500,000      
Federal and state capital loss carryforwards 4,600,000        
Deferred tax assets, capital losses $ 4,673,000 4,210,000      
Capital loss, carryforward period 5 years        
Valuation allowance on deferred tax asset to capital losses $ 4,600,000 4,200,000      
Deferred tax assets, Other long term assets 8,169,000 8,201,000      
Valuation allowances on deferred tax assets to other long term assets 8,200,000 8,200,000      
Undistributed foreign earnings 139,200,000        
Deferred income taxes $ (43,456,000) 31,049,000 $ (12,850,000)    
Percent of dividends received as deduction for tax act 100.00%        
Unrecognized tax benefits $ 3,974,000 2,478,000 3,259,000 $ 2,478,000 $ 2,563,000
Unrecognized tax benefits that would affect effective income tax rate if recognized 3,600,000 2,000,000      
Increase (decrease) in unrecognized tax benefits 1,500,000 (800,000)      
Reasonably possible amount of reduction in unrecognized tax benefit over the next twelve months 1,100,000        
Accrued interest and penalties related to unrecognized tax benefits 800,000 800,000      
Income tax expense (benefit) $ 69,820,000 $ 53,358,000 $ 139,293,000    
Effective income tax benefit rate 29.10% 29.90% 24.90%    
Retained Earnings          
Income Taxes [Line Items]          
Deferred income taxes $ 0        
Federal          
Income Taxes [Line Items]          
Net operating loss 10,200,000        
State          
Income Taxes [Line Items]          
Net operating loss 5,400,000        
Foreign          
Income Taxes [Line Items]          
Net operating loss 9,400,000        
Deferred Tax Asset Operating Loss Carryforwards State          
Income Taxes [Line Items]          
Valuation allowances 2,800,000 $ 2,700,000      
Deferred Tax Asset Operating Loss Carryforwards Foreign          
Income Taxes [Line Items]          
Valuation allowances 9,400,000 6,700,000      
Deferred Tax Asset Other Foreign          
Income Taxes [Line Items]          
Valuation allowances   1,600,000      
Deferred Tax Asset Tax Credit Carryforwards Foreign          
Income Taxes [Line Items]          
Valuation allowances $ 1,000,000 $ 1,000,000      
v3.24.0.1
Income Taxes - Components of Income (Loss) Before Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Income Tax Disclosure [Abstract]      
U.S. $ 208,283 $ 138,023 $ 520,952
Foreign 31,575 40,471 37,970
Income before income taxes $ 239,858 $ 178,494 $ 558,922
v3.24.0.1
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Feb. 03, 2024
Jan. 28, 2023
Deferred tax assets:    
Operating lease ROU assets $ 305,043 $ 353,277
Employee compensation and benefits 25,576 2,896
Net Operating Loss 25,071 27,604
Capitalized research and development expenses 22,014 4,120
Accruals not currently deductible 10,041 11,442
Deferred compensation 9,737 9,498
Inventories 8,828 7,082
Other long-term assets 8,169 8,201
State tax credits 7,741 7,968
Gift card liability 5,723 4,871
Capital loss 4,673 4,210
Allowance for Doubtful Accounts 3,114 911
Foreign tax credits 955 2,761
Other 690 744
General Business Credits 116 1,586
Disallowed business interest expense 0 8,353
Gross deferred tax assets 437,491 455,524
Valuation allowance (27,466) (25,902)
Total deferred tax assets 410,025 429,622
Deferred tax liabilities:    
Operating lease liabilities (253,229) (287,061)
Property and equipment (69,030) (100,958)
Prepaid expenses (3,572) (2,988)
Goodwill (1,981) (1,996)
Other (149) (136)
Total deferred tax liabilities (327,961) (393,139)
Total deferred tax assets, net $ 82,064 $ 36,483
v3.24.0.1
Income Taxes - Components of Provision (Benefit) for Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Current:      
Federal $ 66,112 $ (986) $ 107,493
Foreign taxes 27,958 19,701 19,671
State 19,206 3,594 24,979
Total current 113,276 22,309 152,143
Deferred:      
Federal (31,602) 26,758 (12,637)
Foreign taxes (6,317) (1,374) (1,284)
State (5,537) 5,665 1,071
Total deferred (43,456) 31,049 (12,850)
Provision for income taxes $ 69,820 $ 53,358 $ 139,293
v3.24.0.1
Income Taxes - Activity Related to Unrecognized Tax Benefits (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Income Tax Disclosure [Abstract]      
Unrecognized tax benefits, beginning of the year balance $ 2,478 $ 3,259 $ 2,563
Increases in current period tax positions 2,371 681 251
Increases in tax positions of prior periods 10   688
Settlements (275) (454)  
Lapse of statute of limitations (75) (277) (93)
Decreases in tax positions of prior periods (535) (731) (150)
Unrecognized tax benefits, end of the year balance $ 3,974 $ 2,478 $ 3,259
v3.24.0.1
Income Taxes - Reconciliation Between Statutory Federal Income Tax Rate and Effective Income Tax Rate (Detail)
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Income Tax Disclosure [Abstract]      
Federal income tax rate 21.00% 21.00% 21.00%
State income taxes, net of federal income tax effect 4.40% 3.60% 4.10%
Foreign rate differential 0.20% 0.90% 0.60%
International provisions of Tax Act (2.20%) 0.10% (0.50%)
Valuation allowance changes, net 0.50% 0.50% 0.20%
Non-deductible executive compensation 3.80% 2.00% 1.30%
Change in unrecognized tax benefits 0.80% (0.10%) 0.10%
Share Based Payments 0.20% (0.20%) (0.80%)
Note Exchanges 0.00% 1.40% 0.00%
Non-deductible goodwill impairment 3.50% 0.00% 0.00%
Federal Credits (2.10%) (0.40%) (1.00%)
Other (1.00%) 1.10% (0.10%)
Effective Income Tax Rate Reconciliation, Percent, Total 29.10% 29.90% 24.90%
v3.24.0.1
Segment Reporting - Additional Information (Detail)
 12 Months Ended
Feb. 03, 2024
Segment
Segment Reporting Information [Line Items]  
Number of operating segments 2
Number of reportable segments 2
v3.24.0.1
Segment Reporting - Summary of Reportable Segment Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Segment Reporting Information [Line Items]      
Total net revenue $ 5,261,770 $ 4,989,833 $ 5,010,785
Impairment, restructuring and other charges [1] (152,645) (22,209) (11,944)
Operating income 222,717 247,047 591,065
Debt related charges   64,721  
Interest (income) expense, net (6,190) 14,297 34,632
Other (income), net (10,951) (10,465) (2,489)
Income before income taxes 239,858 178,494 558,922
Capital expenditures 174,437 260,378 233,847
Depreciation and amortization 226,866 206,897 166,781
General Corporate Expenses      
Segment Reporting Information [Line Items]      
Operating income (464,172) (382,824) (390,955)
International      
Segment Reporting Information [Line Items]      
Total net revenue [2] 837,425 721,719 673,979
Operating Segments      
Segment Reporting Information [Line Items]      
Total net revenue 5,031,579 4,769,691 4,931,975
Operating income 875,658 708,873 1,009,960
Operating Segments | American Eagle      
Segment Reporting Information [Line Items]      
Total net revenue 3,361,579 3,262,893 3,555,706
Operating income 599,796 541,406 795,960
Capital expenditures 61,139 85,033 47,106
Depreciation and amortization 77,195 66,820 59,641
Operating Segments | Aerie      
Segment Reporting Information [Line Items]      
Total net revenue 1,670,000 1,506,798 1,376,269
Operating income 275,862 167,467 214,000
Capital expenditures 40,746 107,084 80,062
Depreciation and amortization 61,249 53,921 33,834
Other      
Segment Reporting Information [Line Items]      
Total net revenue 489,056 469,371 81,951
Operating income (36,124) (56,793) (15,996)
Capital expenditures 32,235 32,717 3,932
Depreciation and amortization 18,874 16,067 2,023
Intersegment Elimination      
Segment Reporting Information [Line Items]      
Total net revenue (258,865) (249,229) (3,140)
Capital expenditures 40,317 35,544 102,747
Depreciation and amortization $ 69,548 $ 70,089 $ 71,284
[1] Refer to Note 16. to the Consolidated Financial Statements for additional information.
[2] 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.
v3.24.0.1
Segment Reporting - Summary of Geographical Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Revenues From External Customers And Long Lived Assets [Line Items]      
Total net revenue $ 5,261,770 $ 4,989,833 $ 5,010,785
Long-lived assets, net:      
Total long-lived assets, net 1,990,041 2,227,994  
United States      
Revenues From External Customers And Long Lived Assets [Line Items]      
Total net revenue 4,424,345 4,268,114 4,336,806
Long-lived assets, net:      
Total long-lived assets, net 1,521,392 2,050,459  
Foreign      
Revenues From External Customers And Long Lived Assets [Line Items]      
Total net revenue [1] 837,425 721,719 $ 673,979
Long-lived assets, net:      
Total long-lived assets, net $ 468,649 $ 177,535  
[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.
v3.24.0.1
Impairment, Restructuring and Other Charges - Summary of Impairment and Restructuring Charges (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Charges recorded in operating expenses:      
Impairment and restructuring charges $ 141,695 $ 22,209 $ 11,944
Asset impairment charges 116,365 20,633 11,944
Impairment, restructuring and other charges 141,695 22,209 11,944
Total Company impairment, restructuring and other charges [1] 152,645 22,209 11,944
U.S. and Canada Store Asset      
Charges recorded in operating expenses:      
Asset impairment charges [2]   10,368 3,195
Corporate      
Charges recorded in operating expenses:      
Impairment and restructuring charges [3] 11,241   2,575
International      
Charges recorded in cost of sales:      
Inventory charges [4] 10,950    
Charges recorded in operating expenses:      
Impairment, restructuring and other charges 21,800    
Hong Kong      
Charges recorded in operating expenses:      
Impairment and restructuring charges [5] 10,882 7,997 $ 6,174
Japan Market Exit Costs      
Charges recorded in operating expenses:      
Impairment and restructuring charges 10,900    
Quiet Platforms      
Charges recorded in operating expenses:      
Asset impairment charges 74,800 2,800  
Impairment, restructuring and other charges [6] $ 119,572 $ 3,844  
[1] Refer to Note 16. to the Consolidated Financial Statements for additional information.
[2] For Fiscal 2022, $10.4 million of impairment charges, consisting of $9.2 million of ROU assets and $1.2 million of store property and equipment related to insufficient cash flows to support the asset value in the U.S. and Canada.

 

For Fiscal 2021, $3.2 million consisting of $2.2 million of store property and equipment and $1.0 million of ROU assets related to insufficient cash flows to support the asset value.
[3] $11.2 million, consisting of $6.0 million of employee severance related to corporate realignment and other asset impairment of $5.2 million of investments related to further strategic business changes.

 

For Fiscal 2021, impairment of $2.6 million of other assets.
[4] $11.0 million of inventory write-down charges related to our international businesses as further described in paragraph 1 of note (3) below.
[5] $10.9 million of charges related to exiting the Japan market, including the closure of all 4 stores in January 2024, as well as impairment related to our Hong Kong retail operations. Of this amount, $4.7 million related to Japan ROU assets, $3.6 million of Japan store property and equipment, $1.3 million of Hong Kong store ROU assets, and $1.3 million of employee severance. All impairments were recorded due to insufficient prospective cash flows to support the asset values. Additionally, we recorded $11.0 million of inventory write-down charges related to restructuring our international operations, which was recorded separately in Cost of Sales and discussed in note (1) above.

 

For Fiscal 2022, $7.5 million of store impairment due to insufficient prospective cash flows to support the asset values and $0.5 million of severance related to down sizing Hong Kong retail operations.

 

For Fiscal 2021, $6.2 million of store impairment related to insufficient prospective cash flows to support the asset value.
[6] $119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

 

For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA.
v3.24.0.1
Impairment, Restructuring and Other Charges - Summary of Impairment and Restructuring Charges (Parenthetical) (Detail)
 12 Months Ended
Feb. 03, 2024
USD ($)
Store
Jan. 28, 2023
USD ($)
Jan. 29, 2022
USD ($)
Restructuring Cost And Reserve [Line Items]      
Impairment, restructuring and other charges $ 141,695,000 $ 22,209,000 $ 11,944,000
Impairment and restructuring charges 141,695,000 22,209,000 11,944,000
Impairment charges 116,365,000 20,633,000 11,944,000
Definite-lived impairment charges $ 40,533,000 [1] $ 0 $ 0
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] Impairment and restructuring charges Impairment and restructuring charges Impairment and restructuring charges
Goodwill impairment $ 39,598,000 [2] $ 0 $ 0
Number of retail stores | Store 1,500    
International      
Restructuring Cost And Reserve [Line Items]      
Inventory write-down charges [3] $ 10,950,000    
Impairment, restructuring and other charges 21,800,000    
Japan      
Restructuring Cost And Reserve [Line Items]      
Long-term asset impairment 3,600,000    
Impairment of operating lease ROU assets 4,700,000    
Hong Kong      
Restructuring Cost And Reserve [Line Items]      
Impairment and restructuring charges [4] 10,882,000 7,997,000 6,174,000
Long-term asset impairment 1,300,000    
Severance costs 1,300,000    
Corporate      
Restructuring Cost And Reserve [Line Items]      
Impairment and restructuring charges [5] 11,241,000   2,575,000
Severance costs 6,000,000    
Other assets 5,200,000   2,600,000
Down Sizing Hong Kong Retail Operations | International      
Restructuring Cost And Reserve [Line Items]      
Severance costs   500,000  
Japan Market Exit Costs      
Restructuring Cost And Reserve [Line Items]      
Impairment and restructuring charges $ 10,900,000    
Number of retail stores | Store 4    
Japan Market Exit Costs | Japan      
Restructuring Cost And Reserve [Line Items]      
Impairment of operating lease ROU assets $ 4,700,000    
Retail Stores | International      
Restructuring Cost And Reserve [Line Items]      
Impairment and restructuring charges   7,500,000 6,200,000
Retail Stores | Hong Kong      
Restructuring Cost And Reserve [Line Items]      
Impairment of operating lease ROU assets 1,300,000    
Quiet Platforms      
Restructuring Cost And Reserve [Line Items]      
Impairment, restructuring and other charges [6] 119,572,000 3,844,000  
Impairment charges 74,800,000 2,800,000  
Definite-lived impairment charges $ 40,500,000    
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] Impairment and restructuring charges    
Long-term asset impairment $ 24,700,000    
Goodwill impairment 39,600,000    
Contract related charges 4,900,000    
Severance costs 9,900,000    
Impairment of operating lease ROU assets   2,300,000  
Quiet Platforms | Jacksonville, FL Distribution Center      
Restructuring Cost And Reserve [Line Items]      
Severance costs   1,000,000  
Customer Relationships | Quiet Platforms      
Restructuring Cost And Reserve [Line Items]      
Definite-lived impairment charges 31,200,000    
Trade Names | Quiet Platforms      
Restructuring Cost And Reserve [Line Items]      
Definite-lived impairment charges 9,300,000    
U.S. and Canada Store Asset      
Restructuring Cost And Reserve [Line Items]      
Impairment charges [7]   10,368,000 3,195,000
Impairment of operating lease ROU assets   9,200,000 1,000,000
Store Property and Equipment | Retail Stores | Japan Market Exit Costs | Japan      
Restructuring Cost And Reserve [Line Items]      
Impairment charges $ 3,600,000    
Store Property and Equipment | U.S. and Canada Store Asset      
Restructuring Cost And Reserve [Line Items]      
Impairment charges   1,200,000 $ 2,200,000
Property and Equipment | Quiet Platforms | Jacksonville, FL Distribution Center      
Restructuring Cost And Reserve [Line Items]      
Impairment charges   $ 500,000  
[1] Impairment included $31.2 million of customer relationships and $9.3 million of trade names related to Quiet Platforms. Refer to Note 16 of the Consolidated Financial Statements for additional information
[2] Goodwill for the Quiet Platforms reporting unit was fully impaired during Fiscal 2023. Refer to Note 16 of the Consolidated Financial Statements for additional information.
[3] $11.0 million of inventory write-down charges related to our international businesses as further described in paragraph 1 of note (3) below.
[4] $10.9 million of charges related to exiting the Japan market, including the closure of all 4 stores in January 2024, as well as impairment related to our Hong Kong retail operations. Of this amount, $4.7 million related to Japan ROU assets, $3.6 million of Japan store property and equipment, $1.3 million of Hong Kong store ROU assets, and $1.3 million of employee severance. All impairments were recorded due to insufficient prospective cash flows to support the asset values. Additionally, we recorded $11.0 million of inventory write-down charges related to restructuring our international operations, which was recorded separately in Cost of Sales and discussed in note (1) above.

 

For Fiscal 2022, $7.5 million of store impairment due to insufficient prospective cash flows to support the asset values and $0.5 million of severance related to down sizing Hong Kong retail operations.

 

For Fiscal 2021, $6.2 million of store impairment related to insufficient prospective cash flows to support the asset value.
[5] $11.2 million, consisting of $6.0 million of employee severance related to corporate realignment and other asset impairment of $5.2 million of investments related to further strategic business changes.

 

For Fiscal 2021, impairment of $2.6 million of other assets.
[6] $119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

 

For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA.
[7] For Fiscal 2022, $10.4 million of impairment charges, consisting of $9.2 million of ROU assets and $1.2 million of store property and equipment related to insufficient cash flows to support the asset value in the U.S. and Canada.

 

For Fiscal 2021, $3.2 million consisting of $2.2 million of store property and equipment and $1.0 million of ROU assets related to insufficient cash flows to support the asset value.
v3.24.0.1
Impairment, Restructuring and Other Charges - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
Jan. 28, 2023
Jan. 29, 2022
Restructuring Cost and Reserve [Line Items]      
Impairment, restructuring and other charges $ 141,695 $ 22,209 $ 11,944
International      
Restructuring Cost and Reserve [Line Items]      
Impairment, restructuring and other charges 21,800    
Quiet Platforms      
Restructuring Cost and Reserve [Line Items]      
Impairment, restructuring and other charges [1] $ 119,572 $ 3,844  
[1] $119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, we impaired definite lived intangible assets of $40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. We also impaired $39.6 million of goodwill. We recorded $24.7 million of long-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. We recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

 

For Fiscal 2022, impairment of $2.8 million consisting of $2.3 million of ROU asset and $0.5 million of property and equipment related to the closure of the Jacksonville, FL distribution center and severance of $1.0 million related to employees of that distribution center. The Jacksonville distribution center was replaced with a higher productivity location in Atlanta, GA.
v3.24.0.1
Impairment, Restructuring and Other Charges - Rollforward of Restructuring Liabilities Recognized in Consolidated Balance Sheets (Detail)
$ in Thousands
 12 Months Ended
Feb. 03, 2024
USD ($)
Restructuring and Related Activities [Abstract]  
Add: Costs incurred, excluding non-cash charges $ 17,407
Less: Cash payments and adjustments (5,993)
Accrued liability as of February 3, 2024 $ 11,414