AMERICAN EAGLE OUTFITTERS INC, 10-K filed on 3/14/2022
Annual Report
v3.22.0.1
Document and Entity Information - USD ($)
 12 Months Ended
Jan. 29, 2022
Mar. 10, 2022
Jul. 31, 2021
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Jan. 29, 2022    
Document Fiscal Year Focus 2021    
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 --01-30    
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   168,842,420  
Entity Public Float     $ 5,276,744,054
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    
Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s Proxy Statement for the 2022 Annual Meeting of Stockholders are incorporated into Part III herein.

    
Auditor Name Ernst & Young LLP    
Auditor Firm ID 42    
Auditor Location Pittsburgh, Pennsylvania    
v3.22.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Jan. 29, 2022
Jan. 30, 2021
Current assets:    
Cash and cash equivalents $ 434,770 $ 850,477
Merchandise inventory 553,458 405,445
Accounts receivable, net 286,683 146,102
Prepaid expenses and other 122,013 120,619
Total current assets 1,396,924 1,522,643
Operating lease right-of-use assets 1,193,021 1,155,965
Property and equipment, at cost, net of accumulated depreciation 728,272 623,808
Goodwill, net 271,416 13,267
Intangible assets,net 102,701 57,065
Non-current deferred income taxes 44,167 33,045
Other assets 50,142 29,013
Total assets 3,786,643 3,434,806
Current liabilities:    
Accounts payable 231,782 255,912
Current portion of operating lease liabilities 311,005 328,624
Accrued compensation and payroll taxes 141,817 142,272
Unredeemed gift cards and gift certificates 71,365 62,181
Accrued income and other taxes 16,274 14,150
Other current liabilities and accrued expenses 70,628 55,343
Total current liabilities 842,871 858,482
Non-current liabilities:    
Non-current operating lease liabilities 1,154,481 1,148,742
Long-term debt, net 341,002 325,290
Other non-current liabilities 24,617 15,627
Total non-current liabilities 1,520,100 1,489,659
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; 168,699 and 166,335 shares outstanding, respectively 2,496 2,496
Contributed capital 636,355 663,718
Accumulated other comprehensive loss, net of tax (40,845) (40,748)
Retained earnings 2,203,772 1,868,613
Treasury stock, 80,867 and 83,231 shares, respectively, at cost (1,378,106) (1,407,414)
Total stockholders' equity 1,423,672 1,086,665
Total liabilities and stockholders’ equity $ 3,786,643 $ 3,434,806
v3.22.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Feb. 02, 2019
Statement of Financial Position [Abstract]        
Preferred stock, par value $ 0.01 $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000 5,000,000 5,000,000
Preferred stock, issued 0 0 0 0
Preferred stock, outstanding 0 0 0 0
Common stock, par value $ 0.01 $ 0.01 $ 0.01 $ 0.01
Common stock, shares authorized 600,000,000 600,000,000 600,000,000 600,000,000
Common stock, shares issued 249,566,000 249,566,000 249,566,000 249,566,000
Common stock, shares outstanding 168,699,000 166,335,000 166,993,000 172,436,000
Treasury stock, shares 80,867,000 83,231,000 82,573,000  
v3.22.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Income Statement [Abstract]      
Total net revenue [1] $ 5,010,785 $ 3,759,113 $ 4,308,212
Cost of sales, including certain buying, occupancy and warehousing expenses 3,018,995 2,610,966 2,785,911
Gross profit 1,991,790 1,148,147 1,522,301
Selling, general and administrative expenses 1,222,000 977,264 1,029,412
Impairment, restructuring and COVID-19 related charges 11,944 279,826 [1] 80,494 [1]
Depreciation and amortization expense [1] 166,781 162,402 179,050
Operating income (loss) [1] 591,065 (271,345) 233,345
Interest expense (income), net 34,632 24,610 (6,202)
Other income, net (2,489) (3,682) (5,731)
income (loss) before income taxes 558,922 (292,273) 245,278
Provision (benefit) for income taxes 139,293 (82,999) 54,021
Net income (loss) $ 419,629 $ (209,274) $ 191,257
Basic net income (loss) per common share $ 2.50 $ (1.26) $ 1.13
Diluted net income (loss) per common share $ 2.03 $ (1.26) $ 1.12
Weighted average common shares outstanding - basic 168,156 166,455 169,711
Weighted average common shares outstanding - diluted 206,529 166,455 170,867
[1] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
v3.22.0.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Statement of Comprehensive Income [Abstract]      
Net income (loss) $ 419,629 $ (209,274) $ 191,257
Other comprehensive (loss) gain:      
Foreign currency translation (loss) gain (97) (7,580) 1,664
Other comprehensive (loss) gain (97) (7,580) 1,664
Comprehensive income (loss) $ 419,532 $ (216,854) $ 192,921
v3.22.0.1
Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Contributed Capital
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Treasury Stock
 [1]
Accumulated Other Comprehensive (Loss)
Beginning Balance at Feb. 02, 2019 $ 1,287,555   $ 2,496 $ 574,929 $ 2,054,654   $ (1,309,692) $ (34,832)
Beginning Balance (in shares) at Feb. 02, 2019 172,436   172,436 [2]          
Stock awards $ 22,742     22,742        
Repurchase of common stock as part of publicly announced programs (112,381)           (112,381)  
Repurchase of common stock as part of publicly announced programs (in shares) [2]     (6,336)          
Repurchase of common stock from employees (8,087)           (8,087)  
Repurchase of common stock from employees (in shares) [2]     (431)          
Reissuance of treasury stock $ 2,321     (22,175) 1,959   22,537  
Reissuance of treasury stock (in shares) 1,324   1,324 [2]          
Net (loss) income $ 191,257       191,257      
Other comprehensive income (loss) 1,664             1,664
Cash dividends and dividend equivalents (92,783)     2,360 (95,143)      
Ending Balance at Feb. 01, 2020 $ 1,247,853 $ (44,435) $ 2,496 577,856 2,108,292 $ (44,435) (1,407,623) (33,168)
Ending Balance (in shares) at Feb. 01, 2020 166,993   166,993 [2]          
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member              
Stock awards $ 32,298     32,298        
Repurchase of common stock as part of publicly announced programs (20,000)           (20,000)  
Repurchase of common stock as part of publicly announced programs (in shares) [2]     (1,720)          
Repurchase of common stock from employees (5,413)           (5,413)  
Repurchase of common stock from employees (in shares) [2]     (449)          
Convertible Notes - Equity portion, net of tax 68,330     68,330        
Reissuance of treasury stock $ 2,549     (15,522) (7,551)   25,622  
Reissuance of treasury stock (in shares) 1,511   1,511 [2]          
Net (loss) income $ (209,274)       (209,274)      
Other comprehensive income (loss) (7,580)             (7,580)
Cash dividends and dividend equivalents (22,098)     756 (22,854)      
Ending Balance at Jan. 30, 2021 $ 1,086,665   $ 2,496 663,718 1,868,613   (1,407,414) (40,748)
Ending Balance (in shares) at Jan. 30, 2021 166,335   166,335 [2]          
Stock awards $ 37,887     37,887        
Repurchase of common stock from employees (24,018)           (24,018)  
Repurchase of common stock from employees (in shares) [2]     (781)          
Reissuance of treasury stock $ 14,533     (59,384) 26,490   47,427  
Reissuance of treasury stock (in shares) 2,798   2,798 [2]          
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) [2]     347          
Net (loss) income 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   $ 2,496 $ 636,355 $ 2,203,772   $ (1,378,106) $ (40,845)
Ending Balance (in shares) at Jan. 29, 2022 168,699   168,699 [2]          
[1] 80,867 shares, 83,231 shares, and 82,573 shares at January 29, 2022, January 30, 2021, and February 1, 2020, respectively. During Fiscal 2021, Fiscal 2020, and Fiscal 2019, 2,798 shares, 1,511 shares, and 1,324 shares, respectively, were reissued from treasury stock for the issuance of share-based payments.
[2] 600,000 authorized, 249,566 issued and 168,699 outstanding, $0.01 par value common stock at January 29, 2022; 600,000 authorized, 249,566 issued and 166,335 outstanding, $0.01 par value common stock at January 30, 2021; 600,000 authorized, 249,566 issued and 166,993 outstanding, $0.01 par value common stock at February 1, 2020; 600,000 authorized, 249,566 issued and 172,436 outstanding, $0.01 par value common stock at February 2, 2019. The Company has 5,000 authorized, with none issued or outstanding, $0.01 par value preferred stock for all periods presented.
v3.22.0.1
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Statement of Stockholders' Equity [Abstract]      
Cash dividends and dividend equivalents, Per share $ 0.6775 $ 0.1375 $ 0.55
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 168,699,000 166,335,000 166,993,000
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 80,867,000 83,231,000 82,573,000
Reissuance of treasury stock, shares 2,798,000 1,511,000 1,324,000
v3.22.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Operating activities:      
Net income (loss) $ 419,629 $ (209,274) $ 191,257
Adjustments to reconcile net income (loss) to net cash provided by operating activities      
Depreciation and amortization 171,151 165,580 181,379
Share-based compensation 38,153 32,778 23,038
Deferred income taxes (12,850) (34,890) 6,541
Loss on impairment of assets 11,944 [1],[2] 249,163 [3] 66,252 [4]
Changes in assets and liabilities:      
Merchandise inventory (147,140) 42,156 (21,615)
Operating lease assets 296,652 226,376 261,303
Operating lease liabilities (352,547) (238,810) (271,519)
Other assets (134,152) (107,317) (32,845)
Accounts payable (36,192) (30,909) 44,949
Accrued compensation and payroll taxes (1,412) 95,116 (38,603)
Accrued and other liabilities 50,435 12,529 5,279
Net cash provided by operating activities 303,671 202,498 415,416
Investing activities:      
Acquisitions of businesses, net of cash acquired (358,151)    
Capital expenditures for property and equipment (233,847) (127,975) (210,360)
Purchase of available-for-sale investments (75,000) (14,956) (85,000)
Sale of available-for-sale investments 75,000 69,956 122,135
Other investing activities (2,603) (970) (1,669)
Net cash used for investing activities (594,601) (73,945) (174,894)
Financing activities:      
Cash dividends paid (113,945) (22,854) (92,783)
Repurchase of common stock from employees (24,018) (5,413) (8,087)
Other financing activities (299) (1,199) (94)
Net proceeds from stock options exercised 13,065 3,265 2,119
Repurchase of common stock as part of publicly announced programs   (20,000) (112,381)
Proceeds from revolving line of credit and convertible notes   736,108  
Principal payments on revolving line of credit   (330,000)  
Net cash (used for) provided by financing activities (125,197) 359,907 (211,226)
Effect of exchange rates on cash 420 87 (696)
Net change in cash and cash equivalents (415,707) 488,547 28,600
Cash and cash equivalents - beginning of period 850,477 361,930 333,330
Cash and cash equivalents - end of period $ 434,770 $ 850,477 $ 361,930
[1] The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.
[2] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
[3] In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.
[4] In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.
v3.22.0.1
Business Operations
 12 Months Ended
Jan. 29, 2022
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, a new brand with a focus on consciously-made slow fashion.

Founded in 1977, the Company is a leading multi-brand specialty retailer that operates more than 1,000 retail stores in the U.S. and internationally, online through our digital channels at www.ae.com and www.aerie.com, www.toddsnyder.com, www.unsubscribed.com and more than 200 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 81 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 it was 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 consist 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.

In Fiscal 2021, we acquired AirTerra, Inc. ("AirTerra") and Quiet Logistics, Inc. ("Quiet Logistics"), which together form the foundation of our "Supply Chain Platform".
v3.22.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Jan. 29, 2022
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. All intercompany transactions and balances have been eliminated in consolidation. At January 29, 2022, 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 2022” refers to the 52-week period that will end on January 28, 2023. “Fiscal 2021” refers to the 52-week period ended January 29, 2022. “Fiscal 2020” refers to the 52-week period ended January 30, 2021. “Fiscal 2019” refers to the 52-week period ended February 1, 2020.

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 December 2019, the Financial Accounting Standards Board ("FASB") amended Accounting Standards Codification ("ASC") 740, Income Taxes (issued under ASU 2019-12, Simplifying the Accounting for Income Taxes). This amendment removes certain exceptions to the general principles of ASC 740, and clarifies and amends the existing guidance to improve consistent application. The Company adopted the guidance effective January 31, 2021. The adoption did not have a material impact on the Company’s Consolidated Financial Statements.

In August 2020, the FASB issued 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 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 calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company will adopt ASU 2020-06 at the beginning of Fiscal 2022 using the full retrospective approach.

In April 2020, the Company issued a $415 million aggregate principal amount of convertible senior notes due 2025 (the "Notes"). The Notes are currently accounted for under the cash conversion model, which is one of the models being eliminated by ASU 2020-06. The adoption of ASU 2020-06 will result in the Notes being accounted for as a single balance in long-term debt, rather than being accounted for as separate debt and equity components.

Subsequently, the adoption of ASU 2020-06 is expected to reduce reported interest expense. For Fiscal 2021, interest expense would have decreased approximately $12 million and reported net income would have increased by $12 million, net of tax. Additionally, as a result of this adoption we are required to use the "if-converted" method of calculating EPS. This method requires us to consider the Notes as fully converted in shares in our diluted EPS denominator. The dilutive effect of the Notes will increase to approximately 49 million dilutive shares, or an incremental 15 million shares compared to the dilutive effect as of January 29, 2022. The "if-converted" method also requires us to add back interest expense of the Notes, net of tax, to the numerator when calculating diluted EPS.

Foreign Currency Translation

In accordance with ASC 830, Foreign Currency Matters, the Company translates assets and liabilities denominated in foreign currencies into United States 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 12 to the Consolidated Financial Statements for information regarding comprehensive income (loss).

Cash and Cash Equivalents

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

Refer to Note 4 to the Consolidated Financial Statements for information regarding cash and cash equivalents.

Receivables

The Company maintains an allowance for doubtful accounts for estimated losses from the failure of certain of our customers to make required payments for products or services delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical and expected future receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company’s reserves have approximated actual experience.

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, 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 - five years

 

As of January 29, 2022, the weighted average remaining useful life of our assets was approximately 6.3 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 (loss) within Impairment, restructuring and COVID-19 related charges in the Consolidated Statements of Operations.

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 8 to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note 17 to the Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2021, Fiscal 2020 and Fiscal 2019.

Goodwill and Intangible Assets, net

The Company’s goodwill is primarily related to the acquisition of its Supply Chain Platform, 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 it's 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 January 29, 2022. As a result, there was no goodwill impairment charge recorded during Fiscal 2021 or Fiscal 2020. During Fiscal 2019, the Company concluded that certain goodwill was impaired resulting in a $1.7 million charge included within Impairment, restructuring and COVID-19 related charges in the Consolidated Statements of Operations.

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. No definite-lived intangible asset impairment charges were recorded for all periods presented.

Refer to Note 3 to the Consolidated Financial Statements for additional information regarding acquisitions and Note 9 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets.

Gift Cards

Revenue is not recorded on the issuance of gift cards. The value of a gift card is recorded as a current liability upon issuance and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue.

The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. The Company recorded $10.3 million, $8.8 million, and $9.5 million during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, of revenue related to gift card breakage.

Construction Allowances

As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally comprised 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, 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, 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 11 to the Consolidated Financial Statements for additional information.

 

Lease Modifications and COVID-19

The FASB staff issued a Q&A document in April 2020 providing guidance on how to apply the lease modification guidance in ASC 842 to rent concessions arising from the COVID-19 pandemic, allowing companies to elect accounting for the concessions as if enforceable rights and obligations existed, regardless of whether they are explicitly stated in the lease contract. Per the FASB staff Q&A guidance, entities may make the elections for any lessor-provided concessions related to the effects of the COVID-19 pandemic (e.g., deferrals of lease payments, cash payments made to the lessee, reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee.

During Fiscal 2020:

•
For concessions in the form of rent forgiveness, the Company invoked the accounting elections provided by the FASB staff; savings were recorded as a credit to variable rent in the period the amendments became fully executed.
•
For concessions in the form of deferred payments, the Company did not apply the FASB accounting elections; rent expense was recorded in accordance with ASC 842 and the unpaid amount remained accrued as part of the current operating lease liability.
•
All other forms of rent concessions followed our normal accounting policy for lease modifications, adhering to the guidance set forth in ASC 842.

Co-Branded Credit Card

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.

For further information on the Company’s loyalty program, refer to the Customer Loyalty Program caption below.

Customer Loyalty Program

In June 2020, the Company launched a highly-digitized loyalty program called Real Rewards by American Eagle and Aerie™ (the “Program”). This 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. Prior to this launch in June 2020, under our previous program, AEO Connected™, we also offered additional rewards for key items such as jeans and bras. 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 American Eagle 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 award points is deferred and recognized when the award 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.

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Beginning balance

 

$

8,377

 

 

$

5,825

 

 

$

4,620

 

Returns

 

 

(149,988

)

 

 

(107,700

)

 

 

(121,513

)

Provisions

 

 

150,779

 

 

 

110,252

 

 

 

122,718

 

Ending balance

 

$

9,168

 

 

$

8,377

 

 

$

5,825

 

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.

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 (loss).

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

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.

Revenue is recorded net of estimated and actual sales returns and promotional price reductions. 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.

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

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 the Customer Loyalty Program caption above for additional information.

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

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, “merchandise costs”) and buying, occupancy and warehousing costs.

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 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 related to our stores, 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 January 29, 2022 and January 30, 2021, the Company had prepaid advertising expense of $6.1 million and $5.7 million, respectively. All other advertising costs are expensed as incurred. The Company recognized $173.6 million, $150.0 million, and $151.5 million in advertising expense during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively.

Store Pre-Opening Costs

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

Interest Expense (Income), Net

Interest expense (income), net primarily consists of interest expense related to the Company’s convertible notes and borrowings under the revolving credit facility, as well as interest income from cash, cash equivalents and short-term investments.

Other Income, Net

Other income, net consists primarily of allowances for uncollectible receivables, foreign currency fluctuations and changes in other non-operating items

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 paid during the respective periods:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Cash paid during the periods for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

182,656

 

 

$

4,191

 

 

$

69,689

 

Interest

 

$

8,729

 

 

$

10,316

 

 

$

828

 

 

Segment Information

We have two reportable segments: American Eagle and Aerie. For additional information, regarding the Company’s segment and geographic information, refer to Note 16 to the Consolidated Financial Statements.
v3.22.0.1
Acquisitions
 12 Months Ended
Jan. 29, 2022
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 is a leading logistics company that operates a network of in-market fulfillment centers in Boston, Chicago, Los Angeles, Dallas, St. Louis and

Jacksonville, locating products closer to need, creating inventory efficiencies, cost benefits and affordable 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 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 preliminary purchase price allocation was based upon a preliminary valuation, and the Company's estimates and assumptions are subject to change within the measurement period (defined as one year following the acquisition date), as permitted by ASC 805.

 

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurements of intangible assets, goodwill and deferred income tax assets are subject to change:

 

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

 

255,133

 

Other long-term assets

 

112,215

 

Total Assets

$

477,850

 

 

 

 

 

 

 

Current liabilities

$

29,819

 

Total long-term liabilities

 

87,415

 

Total Liabilities

$

117,234

 

 

 

 

Total purchase price

$

360,616

 

 

The preliminary purchase price allocation included $51.5 million of acquired intangible assets, of which $39.0 million was provisionally assigned to customer relationships and $12.5 million was provisionally assigned to trade names, which were both recognized at fair value on the acquisition date. The preliminary fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. The cash flows are 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. The fair value of the acquired identifiable intangible assets is provisional pending receipt of the final valuations for these assets.

 

In accordance with ASC 350, the $255.1 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 the Supply Chain Platform reporting units in the amounts of $101.6 million, $110.6 million and $42.9 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 ecommerce fulfillment and shipping challenges in a unique and innovative way for retailers and brands of all sizes. The aggregate purchase price paid at closing was $3.0 million.

 

Together, the Quiet Logistics and AirTerra acquisitions represent an important step in building our Supply Chain Platform, as part our ongoing supply chain transformation strategy of leveraging scale and innovation to help us manage costs and improve service.

 

Pro forma results for acquisitions completed during the year ended January 29, 2022 were determined not to be material.
v3.22.0.1
Cash, Cash Equivalents
 12 Months Ended
Jan. 29, 2022
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents and Short-term Investments . Cash and Cash Equivalents

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

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Cash and cash equivalents:

 

 

 

 

 

 

Cash

 

$

138,758

 

 

$

524,970

 

Interest bearing deposits

 

 

296,012

 

 

 

275,507

 

Certificates of deposit

 

 

—

 

 

 

50,000

 

Total cash and cash equivalents

 

$

434,770

 

 

$

850,477

 
v3.22.0.1
Fair Value Measurements
 12 Months Ended
Jan. 29, 2022
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.

Long-Term Debt

As of January 29, 2022, the Company had no outstanding borrowings under its revolving credit facilities.

In April 2020, the Company issued $415 million aggregate principal amount of convertible senior notes due in 2025. The fair value of the Company's Notes is not required to be measured at fair value on a recurring basis. Upon issuance, the fair value of the 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 10 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 2021, the Company recorded asset impairment charges of $11.9 million, primarily related to retail store property and equipment, and operating lease ROU assets. The assets were adjusted to their fair value and the loss on impairment was recorded within impairment, restructuring and COVID-19 related charges in the Consolidated Statements of Operations.

During Fiscal 2020, the Company recorded asset impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million of impairment charges related to certain corporate property and equipment as well as $18.0 million of impairment charges of certain cost and equity method investments. The assets were adjusted to their fair value and the loss on impairment was recorded within impairment, restructuring and COVID-19 related charges in the Consolidated Statements of Operations. The fair value of the impaired assets, after the recorded loss, is approximately $93.2 million.

The fair value of the Company’s store assets in Fiscal 2021 and Fiscal 2020 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.
v3.22.0.1
Earnings per Share
 12 Months Ended
Jan. 29, 2022
Earnings Per Share [Abstract]  
Earnings per Share

6. Earnings per Share

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

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands, except per share amounts)

 

2022

 

 

2021

 

 

2020

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic number of common shares outstanding

 

 

168,156

 

 

 

166,455

 

 

 

169,711

 

Dilutive effect of convertible notes

 

 

34,003

 

 

 

—

 

 

 

—

 

Dilutive effect of stock options and non-vested
   restricted stock

 

 

4,370

 

 

 

—

 

 

 

1,156

 

Diluted number of common shares outstanding

 

 

206,529

 

 

 

166,455

 

 

 

170,867

 

 

 

 

 

 

 

 

 

 

 

Anti-Dilutive Shares*

 

 

202

 

 

 

14,259

 

 

 

700

 

*In Fiscal 2020, there were 1.9 million potentially dilutive equity awards and 12.4 million potentially dilutive shares from the Company’s Notes that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. For all other periods, anti-dilutive shares relate to stock options and unvested restricted stock.

The Company has the right to settle the Notes in any combination of cash and shares of common stock. However, the Company intends to settle the original principal portion of the Notes in cash and any conversion value above the principal

in stock. Because of this repayment policy election, only the conversion spread portion of the amount owed is reflected as dilutive in our weighted average diluted shares outstanding. The Company uses the average of the closing prices of its common stock (NYSE: AEO) as reported on the New York Stock Exchange to calculate the conversion spread. The Notes could have a potential dilutive effect in future periods.

Refer to Note 10 and Note 13 to the Consolidated Financial Statements for additional information regarding the Notes and share-based compensation.
v3.22.0.1
Accounts Receivable, net
 12 Months Ended
Jan. 29, 2022
Receivables [Abstract]  
Accounts Receivable, net

7. Accounts Receivable, net

Accounts receivable, net is comprised of the following:

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Tax and other government refunds

 

$

75,137

 

 

$

12,394

 

Franchise & license receivables

 

 

71,371

 

 

 

48,046

 

Credit card program receivable

 

 

39,507

 

 

 

19,481

 

Merchandise sell-offs and vendor receivables

 

 

37,707

 

 

 

45,096

 

Landlord construction allowances

 

 

24,285

 

 

 

12,844

 

Supply Chain Platform receivables

 

 

16,095

 

 

 

—

 

Gift card receivable

 

 

12,771

 

 

 

1,544

 

Other items

 

 

9,810

 

 

 

6,697

 

Total

 

$

286,683

 

 

$

146,102

 
v3.22.0.1
Property and Equipment, net
 12 Months Ended
Jan. 29, 2022
Property, Plant and Equipment [Abstract]  
Property and Equipment, net

8. Property and Equipment, net

Property and equipment, net consists of the following:

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Land

 

$

17,910

 

 

$

17,910

 

Buildings

 

 

219,194

 

 

 

216,429

 

Leasehold improvements

 

 

739,245

 

 

 

689,885

 

Fixtures and equipment

 

 

1,496,972

 

 

 

1,325,711

 

Construction in progress

 

 

7,117

 

 

 

1,039

 

Property and equipment, at cost

 

$

2,480,438

 

 

$

2,250,974

 

Less: Accumulated depreciation

 

 

(1,752,166

)

 

 

(1,627,166

)

Property and equipment, net

 

$

728,272

 

 

$

623,808

 

Depreciation expense is as follows:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Depreciation expense

 

$

161,492

 

 

$

159,413

 

 

$

178,038

 

 

Additionally, during Fiscal 2021, Fiscal 2020, and Fiscal 2019, the Company recorded $4.4 million, $2.2 million and $4.3 million, respectively, related to asset write-offs within depreciation and amortization expense.
v3.22.0.1
Goodwill and Intangible Assets, net
 12 Months Ended
Jan. 29, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, net

9. Goodwill and Intangible Assets, net

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

 

 

 

January 29, 2022

 

 

 

 

January 30, 2021

 

 

 

(In thousands)

 

American Eagle

 

 

Aerie

 

 

Corporate and Other(2)

 

Total

 

 

American Eagle

 

 

Aerie

 

 

Corporate and Other(2)

 

Total

 

Goodwill, net beginning balance

 

$

13,267

 

 

$

—

 

 

$

—

 

$

13,267

 

 

$

13,157

 

 

$

—

 

 

$

—

 

$

13,157

 

Additions from acquisitions

 

 

101,600

 

 

 

110,600

 

 

 

45,933

 

 

258,133

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

Foreign currency fluctuation

 

 

16

 

 

 

—

 

 

 

—

 

 

16

 

 

 

110

 

 

 

—

 

 

 

—

 

 

110

 

Goodwill, net ending balance

 

$

114,883

 

 

$

110,600

 

 

$

45,933

 

$

271,416

 

 

$

13,267

 

 

$

—

 

 

$

—

 

$

13,267

 

 

(1) Beginning balance for both periods include accumulated impairment of $4.2 million

(2) Corporate and Other includes goodwill allocated to the Supply Chain Platform reporting unit, which has been identified as a separate operating segment, but is not material to disclose as a separate reportable segment.

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Intangible assets, beginning balance, at cost

 

$

57,065

 

 

$

39,847

 

Additions

 

 

52,580

 

 

 

20,978

 

Amortization

 

 

(6,944

)

 

 

(3,760

)

Intangible assets, net (1)

 

$

102,701

 

 

$

57,065

 

(1) The ending balance includes accumulated amortization of $42.1 million and $35.6 million as of January 29, 2022 and January 30, 2021. respectively.

Amortization expense is as follows:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Amortization expense

 

$

6,468

 

 

$

3,752

 

 

$

4,184

 

 

The table below summarizes the estimated future amortization expense for intangible assets existing as of January 29, 2022 for the next five Fiscal Years:

 

 

 

Future

 

(In thousands)

 

Amortization

 

2022

 

$

6,935

 

2023

 

$

6,845

 

2024

 

$

6,722

 

2025

 

$

6,586

 

2026

 

$

6,463

 
v3.22.0.1
Long-Term Debt, Net
 12 Months Ended
Jan. 29, 2022
Debt Disclosure [Abstract]  
Long-Term Debt, Net

10. Long-Term Debt, Net

The Company’s long-term debt consisted of the following as of January 29, 2022:

 

January 29,

 

 

January 30,

 

(In thousands)

2022

 

 

2021

 

Convertible senior notes principal

$

412,025

 

 

$

415,025

 

Less: unamortized discount

 

71,023

 

 

 

89,735

 

Total long-term debt, net

$

341,002

 

 

$

325,290

 

 

 

 

 

 

 

Convertible Senior Notes - Equity portion, net of tax

 

58,454

 

 

 

68,330

 

 

Convertible notes

In April 2020, the Company issued $415 million aggregate principal amount of convertible senior notes due in 2025 in a private placement to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933. The Notes have a stated interest rate of 3.75%, payable semi-annually. The Company may redeem the Notes, in whole or in part, at any time beginning April 2023. The Company used the net proceeds from the offering for general corporate purposes.

The Company does not have the right to redeem the 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 may redeem all or any portion of the Notes, at its option, for cash, if the last reported sale price of AEO’s common stock has 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. Beginning January 2025, noteholders may convert their Notes for approximately 117.9 shares of common stock per $1,000 principal amount of the Notes, equivalent to a conversion price of approximately $8.48 per share.

The Company has the right to settle conversions in any combination of cash and shares of common stock. However, the Company intends to settle the original principal portion of the Notes in cash and any conversion value above the principal in stock. Because of this repayment policy, only the conversion spread portion of the amount owed is reflected as dilutive in earnings per share.

The effective interest rate for the Notes is 10.0% and we calculated the effective yield using a market approach. The remaining amortization period of the discount was 3.25 years as of January 29, 2022.

Interest expense for the Notes was:

 

January 29,

 

 

January 30,

 

(In thousands)

2022

 

 

2021

 

Cash based interest

$

15,431

 

 

$

11,857

 

Amortization of discount (non-cash)

 

18,520

 

 

 

12,517

 

Total interest expense

$

33,951

 

 

$

24,374

 

The following table discloses conversion amounts if the Notes were all converted as of the end of the period:

 

January 29,

 

(In thousands, except per share amounts)

2022

 

Number of shares convertible

 

48,574

 

Conversion price per share

 

8.48

 

Value in excess of principal if converted

 

807,470

 

 

Revolving credit facilities

In January 2019, the Company entered into an amended and restated Credit Agreement (“Credit Agreement”) for five-year, syndicated, asset-based revolving credit facilities (the “Credit Facilities”). The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400 million, subject to customary borrowing base limitations.

All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by a first-priority security interest in certain working capital assets of the borrowers and guarantors, consisting primarily of cash, receivables, inventory and certain other assets, and will be further secured by first-priority mortgages on certain real property.

As of January 29, 2022, the Company was in compliance with the terms of the Credit Agreement and had $7.9 million outstanding in stand-by letters of credit. No loans were outstanding under the Credit Agreement as of January 29, 2022.
v3.22.0.1
Leases
 12 Months Ended
Jan. 29, 2022
Leases [Abstract]  
Leases

11. 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 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.

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.

 

 

 

For the Year Ended

 

 

 

January 29,

 

January 30,

 

(In thousands)

 

2022

 

2021

 

Lease costs

 

 

 

 

 

Operating lease costs

 

$

328,868

 

$

325,005

 

Variable lease costs

 

 

121,118

 

 

98,057

 

Short-term leases and other lease costs

 

 

11,927

 

 

11,090

 

Total lease costs

 

$

461,913

 

$

434,152

 

 

 

 

 

 

 

Other information

 

 

 

 

 

Cash paid for operating lease liability

 

$

(363,468

)

$

(331,543

)

New operating lease ROU assets entered into during the period

 

$

336,546

 

$

116,128

 

 

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

 

January 29, 2022

Weighted-average remaining lease term - operating leases

 

5.3 years

Weighted-average discount rate - operating leases

 

4.7%

 

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

 

 

 

January 29, 2022

 

(In thousands)

 

 

 

Fiscal years:

 

 

 

2022

 

$

335,219

 

2023

 

 

337,945

 

2024

 

 

252,800

 

2025

 

 

211,885

 

2026

 

 

174,747

 

Thereafter

 

 

340,353

 

Total undiscounted cash flows

 

$

1,652,949

 

Less: discount on lease liability

 

 

(187,463

)

Total lease liability

 

$

1,465,486

 

 
v3.22.0.1
Other Comprehensive Loss
 12 Months Ended
Jan. 29, 2022
Equity [Abstract]  
Other Comprehensive Loss

12. Other Comprehensive Loss

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

 

 

 

 

 

 

 

 

 

Accumulated

 



 

 

Before

 

 

Tax

 

 

Other

 

 

 

Tax

 

 

Benefit

 

 

Comprehensive

 

(In thousands)

 

Amount

 

 

(Expense)

 

 

Loss

 

Balance at February 2, 2019

 

$

(35,804

)

 

 

972

 

 

$

(34,832

)

Foreign currency translation gain (1)

 

 

2,094

 

 

 

—

 

 

 

2,094

 

Loss on long-term intra-entity foreign currency transactions

 

 

(577

)

 

 

147

 

 

 

(430

)

Balance at February 1, 2020

 

$

(34,287

)

 

$

1,119

 

 

$

(33,168

)

Foreign currency translation loss (1)

 

 

(7,053

)

 

 

—

 

 

 

(7,053

)

Loss on long-term intra-entity foreign currency transactions

 

 

592

 

 

 

(1,119

)

 

 

(527

)

Balance at January 30, 2021

 

$

(40,748

)

 

$

—

 

 

$

(40,748

)

Foreign currency translation loss (1)

 

 

(1,003

)

 

 

—

 

 

 

(1,003

)

Loss on long-term intra-entity foreign currency transactions

 

 

906

 

 

 

—

 

 

 

906

 

Balance at January 29, 2022

 

$

(40,845

)

 

$

—

 

 

$

(40,845

)

 

(1)
Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.
v3.22.0.1
Share-Based Payments
 12 Months Ended
Jan. 29, 2022
Share-based Payment Arrangement [Abstract]  
Share-Based Payments

13. 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 2021, Fiscal 2020 and Fiscal 2019 was $38.2 million ($28.8 million, net of tax), $32.8 million ($24.6 million, net of tax), and $23.0 million ($17.9 million, net of tax), respectively.

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 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 January 29, 2022, the Company had awards outstanding under two share-based compensation plans, which are described below.

Share-based compensation plans

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 $750,000 in any single fiscal year. Through January 29, 2022, approximately 2.0 million shares of restricted stock and approximately 1.2 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.

2017 Stock Award and Incentive Plan (“2017 Plan”)

The 2017 Plan was approved by the stockholders on May 23, 2017. The 2017 Plan authorized 11.2 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 2017 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 2017 Plan allows the Compensation Committee of the Board to determine which employees receive awards and the terms and conditions of the awards under the 2017 Plan. The 2017 Plan provides for grants to directors who are not officers or employees of the Company, which are not to exceed in value $750,000 in any single fiscal year. Through January 30, 2021, approximately 7.7 million shares of restricted stock and approximately 3.5 million shares of common stock had been granted under the 2017 Plan to employees and directors. Approximately 80% of the restricted stock awards are performance-based and are earned if the established performance goals are met. The remaining 20% of the restricted stock awards are time-based and 98% vest ratably over three years and 2% vest over a period of one to two years. After April 13, 2020, no new awards may be granted under the 2017 Plan and all outstanding awards at that time continued in force and operation in accordance with their respective terms.

 

Stock Option Grants

The Company has granted time-based stock options under the 2017 and 2020 Plans. 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 2017 and 2020 Plans for Fiscal 2021 follows:

 

 

 

For the Year Ended January 29, 2022

 

 

 

 

 

 

Weighted-
Average

 

 

Weighted-
Average
Remaining
Contractual

 

 

Aggregate
Intrinsic

 

 

 

Options

 

 

Exercise Price

 

 

Term

 

 

Value

 

 

 

(In thousands)

 

 

 

 

 

(In years)

 

 

(In thousands)

 

Outstanding - January 30, 2021

 

 

3,940

 

 

$

14.87

 

 

 

 

 

 

 

Granted

 

 

478

 

 

$

31.46

 

 

 

 

 

 

 

Exercised (1)

 

 

(771

)

 

$

16.33

 

 

 

 

 

 

 

Cancelled

 

 

—

 

 

$

—

 

 

 

 

 

 

 

Outstanding - January 29, 2022

 

 

3,647

 

 

$

16.74

 

 

 

4.3

 

 

$

24,980

 

Vested and expected to vest - January 29, 2022

 

 

2,513

 

 

$

16.62

 

 

 

3.1

 

 

$

13,231

 

Exercisable - January 29, 2022 (2)

 

 

1,788

 

 

$

16.28

 

 

 

1.6

 

 

$

10,949

 

 

(1)
Options exercised during Fiscal 2021 ranged in price from $8.62 to $21.41.
(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 January 29, 2022.

The weighted-average grant date fair value of stock options granted during Fiscal 2021 and Fiscal 2020 was $11.68 and $3.06, respectively. The aggregate intrinsic value of options exercised during Fiscal 2021, Fiscal 2020, and Fiscal 2019 was $12.8 million, $0.7 million and $0.8 million, respectively. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $13.1 million and $4.5 million, respectively, for Fiscal 2021. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $3.3 million and $1.2 million, respectively, for Fiscal 2020. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $2.1 million and $1.2 million, respectively, for Fiscal 2019.

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:

 

 

 

For the Years Ended

 

 

January 29,

January 30,

Black-Scholes Option Valuation Assumptions

 

2022

2021

Risk-free interest rates (1)

 

0.9%

0.3 - 0.6%

Dividend yield

 

1.6%

3.5 - 6.0%

Volatility factors of the expected market price of
   the Company's common stock (2)

 

50.7%

43.1 - 48.7%

Weighted-average expected term (3)

 

4.5 years

4.4 years

 

(1)
Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.
(2)
Based on the historical volatility of the Company’s common stock.
(3)
Represents the period of time options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.

As of January 29, 2022, there was $6.5 million of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted average period of 1.9 years.

Restricted Stock Grants

Time-based restricted stock awards are comprised 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 award.

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

The grant date fair value of some 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 the remaining performance 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

 

 

 

For the year ended

 

 

For the year ended

 

 

 

January 29, 2022

 

 

January 29, 2022

 

(Shares in thousands)

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

Non-vested - January 30, 2021

 

 

3,698

 

 

$

12.42

 

 

 

1,868

 

 

$

17.44

 

Granted

 

 

724

 

 

 

32.40

 

 

 

339

 

 

 

39.54

 

Vested

 

 

(1,483

)

 

 

14.92

 

 

 

(418

)

 

 

22.22

 

Cancelled/Forfeited

 

 

(237

)

 

 

14.20

 

 

 

(327

)

 

 

18.56

 

Non-vested - January 29, 2022

 

 

2,702

 

 

$

16.25

 

 

 

1,462

 

 

$

20.95

 

 

As of January 29, 2022, 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. Based on current probable performance, there is $6.9 million of unrecognized compensation expense related to performance-based restricted stock unit awards which will be recognized as achievement of performance goals is probable over a one to three-year period.

As of January 29, 2022, the Company had 7.5 million shares available for all equity grants.
v3.22.0.1
Retirement Plan and Employee Stock Purchase Plan
 12 Months Ended
Jan. 29, 2022
Retirement Benefits [Abstract]  
Retirement Plan and Employee Stock Purchase Plan

14. 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 complete 1,000 hours of service within a 12-month period. Individuals can decline enrollment or can contribute up to 50% of their salary to the 401(k) plan on a pretax basis, subject to Internal Revenue Service (“IRS) 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 2 years. Contributions to the profit sharing plan, as determined by the Board, are discretionary. The Company recognized $14.7 million, $13.3 million and $11.5 million in expense during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, in connection with the Retirement Plan.

The Employee Stock Purchase Plan is a non-qualified plan that covers all full-time employees and part-time employees who are at least 18 years old and have completed 60 days of service. Contributions are determined by the employee, 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.
v3.22.0.1
Income Taxes
 12 Months Ended
Jan. 29, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

15. Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation in the form of the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act significantly changed U.S. 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-U.S. corporate subsidiaries of large U.S. shareholders. The Company has elected to treat GILTI as a period expense, and the effect of the GILTI inclusion for Fiscal 2021 is not material.

 

In addition, on March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to address the COVID-19 pandemic. The CARES Act allows net operating losses (“NOL”) generated within tax years 2018 through 2020 to be carried back up to five years, including years in which the U.S. federal corporate income tax rate was 35%, as opposed to the current U.S federal corporate income tax rate of 21%. The CARES Act contains other key income and payroll tax provisions, including the immediate write-off of qualified improvement property.

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

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

U.S.

 

$

520,952

 

 

$

(294,208

)

 

$

229,906

 

Foreign

 

 

37,970

 

 

 

1,935

 

 

 

15,372

 

Total

 

$

558,922

 

 

$

(292,273

)

 

$

245,278

 

 

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

 

 

 

January 29,

 

 

January 30,

 

(in thousands)

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease ROU assets

 

$

380,117

 

 

$

389,604

 

Net Operating Loss

 

 

27,643

 

 

 

10,160

 

Employee compensation and benefits

 

 

20,521

 

 

 

3,124

 

Accruals not currently deductible

 

 

11,645

 

 

 

8,538

 

Deferred compensation

 

 

8,429

 

 

 

7,400

 

Other long term assets

 

 

8,208

 

 

 

—

 

State tax credits

 

 

7,546

 

 

 

7,407

 

Inventories

 

 

5,220

 

 

 

3,267

 

Capital Loss

 

 

4,213

 

 

 

4,471

 

Allowance for Doubtful Accounts

 

 

3,201

 

 

 

750

 

Foreign tax credits

 

 

2,982

 

 

 

943

 

Other

 

 

5,757

 

 

 

2,093

 

Gross deferred tax assets

 

 

485,482

 

 

 

437,757

 

Valuation allowance

 

 

(25,628

)

 

 

(12,263

)

Total deferred tax assets

 

 

459,854

 

 

 

425,494

 

Deferred tax liabilities:

 

 

 

 

 

 

Operating lease liabilities

 

$

(308,299

)

 

$

(310,888

)

Property and equipment

 

 

(87,192

)

 

 

(56,487

)

Convertible Senior Note

 

 

(15,384

)

 

 

(20,589

)

Prepaid expenses

 

 

(2,215

)

 

 

(2,294

)

Other

 

 

(2,597

)

 

 

(2,191

)

Total deferred tax liabilities

 

$

(415,687

)

 

$

(392,449

)

Total deferred tax assets, net

 

$

44,167

 

 

$

33,045

 

 

The increase in net deferred tax assets was primarily due to an increase in federal net operating loss carryovers related to the acquisition of Quiet Logistics, Inc. and employee compensation and benefits, partially offset by an increase in property and equipment.

 

As of January 29, 2022, the Company had deferred tax assets related to federal, state and foreign net operating loss carryovers of $15.3 million, $6.1 million and $6.2 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, a valuation allowance of $2.7 million has been recorded on the deferred tax assets related to a portion of the state net operating loss carryovers as of January 29, 2022. Further, valuation allowances of $6.1 million and $4.3 million have been recorded on the deferred tax assets related to the cumulative foreign net operating loss carryovers as of January 29, 2022 and January 30, 2021 respectively. We also provided for valuation allowances of approximately $1.6 million and $0.8 million related to other foreign deferred tax assets as of January 29, 2022 and January 30, 2021, respectively.

 

The Company had foreign tax credit carryovers in the amount of $3.0 million and $0.9 million as of January 29, 2022 and January 30, 2021, 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 and $0.9 million have been recorded on the deferred tax assets related to the foreign tax credit carryovers as of January 29, 2022 and January 30, 2021, respectively.

 

The Company had state income tax credit carryforwards of $7.5 million (net of federal tax) and $7.4 million (net of federal tax) as of January 29, 2022 and January 30, 2021, 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 $1.8 million and $1.8 million have been recorded on the deferred tax assets related to the cumulative state income tax credit carryovers as of January 29, 2022 and January 30, 2021, respectively.

The Company had U.S. and state capital losses carryforwards of $4.2 million and $4.5 million as of January 29, 2022 and January 30, 2021, respectively. Generally, the capital losses have a carryforward period of 5 years. The Company has recorded a valuation allowance for $4.2 million and $4.5 million as of January 29, 2022 and January 30, 2021, respectively, on the deferred tax asset attributable to these capital losses. In Fiscal 2021, the Company recorded a deferred tax asset of $8.2 million 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, the Company recorded a valuation allowance for $8.2 million as of January 29, 2022 for the deferred tax asset attributable to these assets.

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

 

 

 

For the Years Ended

 


 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

107,493

 

 

$

(59,080

)

 

$

25,745

 

Foreign taxes

 

 

19,671

 

 

 

7,443

 

 

 

8,137

 

State

 

 

24,979

 

 

 

3,528

 

 

 

13,598

 

Total current

 

 

152,143

 

 

 

(48,109

)

 

 

47,480

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

$

(12,637

)

 

$

(17,286

)

 

$

12,289

 

Foreign taxes

 

 

(1,284

)

 

 

(4,622

)

 

 

(1,213

)

State

 

 

1,071

 

 

 

(12,982

)

 

 

(4,535

)

Total deferred

 

 

(12,850

)

 

 

(34,890

)

 

 

6,541

 

(Benefit) Provision for income taxes

 

$

139,293

 

 

$

(82,999

)

 

$

54,021

 

 

As of January 29, 2022, the undistributed earnings of the Company’s foreign subsidiaries were approximately $87.8 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 percent dividends received deduction, along with negligible foreign withholding taxes.

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

 

 

 

For the Years Ended

 


 

 

January 29,

 

 

January 30,

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

2020

 

Unrecognized tax benefits, beginning of the year
   balance

 

$

2,563

 

 

$

2,781

 

$

6,534

 

Increases in current period tax positions

 

 

251

 

 

 

602

 

 

422

 

Increases in tax positions of prior periods

 

 

688

 

 

 

1

 

 

151

 

Settlements

 

 

0

 

 

 

(450

)

 

(2,223

)

Lapse of statute of limitations

 

 

(93

)

 

 

(289

)

 

(720

)

Decreases in tax positions of prior periods

 

 

(150

)

 

 

(82

)

 

(1,383

)

Unrecognized tax benefits, end of the year balance

 

$

3,259

 

 

$

2,563

 

$

2,781

 

 

As of January 29, 2022, the gross amount of unrecognized tax benefits was $3.3 million, of which $2.6 million would affect the effective income tax rate if recognized. The gross amount of unrecognized tax benefits as of January 30, 2021 was $2.6 million, of which $2.0 million would affect the effective income tax rate if recognized.

 

Unrecognized tax benefits increased by $0.7 million during Fiscal 2021, decreased by $0.2 million during Fiscal 2020, and increased by $3.8 million during Fiscal 2019. Over the next twelve months, the Company believes it is reasonably possible that the unrecognized tax benefits could decrease by as much as $1.0 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 $0.9 million and $0.7 million as of January 29, 2022 and January 30, 2021, respectively. An immaterial amount of interest and penalties was recognized in the provision (benefit) for income taxes during Fiscal 2021, Fiscal 2020, and Fiscal 2019.

 

The Company and its subsidiaries file income tax returns in the U.S. federal 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 2016 (ended January 28, 2017). 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:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

Federal income tax rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal income tax effect

 

 

4.1

 

 

 

3.1

 

 

 

3.6

 

Foreign rate differential

 

 

0.6

 

 

 

0.3

 

 

 

(0.6

)

International provisions of Tax Act

 

 

(0.5

)

 

 

0.0

 

 

 

(2.1

)

Rate differential on CARES Act NOL carryback

 

 

0.0

 

 

 

8.1

 

 

 

0.0

 

Valuation allowance changes, net

 

 

0.2

 

 

 

(2.6

)

 

 

0.3

 

Non-deductible executive compensation

 

 

1.3

 

 

 

(2.1

)

 

 

0.6

 

Change in unrecognized tax benefits

 

 

0.1

 

 

 

(0.1

)

 

 

0.1

 

Share Based Payments

 

 

(0.8

)

 

 

0.4

 

 

 

(0.5

)

Other

 

 

(1.1

)

 

 

0.3

 

 

 

(0.4

)

 

 

 

24.9

%

 

 

28.4

%

 

 

22.0

%

 

The Company recorded income tax expense of $139.3 million (an effective tax rate of 24.9%) in Fiscal 2021, compared to an income tax benefit of $83.0 million (an effective tax benefit rate of 28.4%) in Fiscal 2020, and income tax expense of $54.0 million (an effective tax rate of 22.0%) in Fiscal 2019.
v3.22.0.1
Segment Reporting
 12 Months Ended
Jan. 29, 2022
Segment Reporting [Abstract]  
Segment Reporting

16. 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 Supply Chain Platform have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they have been included in the Corporate and Other category, as permitted by ASC 280.

 

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (loss) 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 COVID-19 related charges. Adjusted operating income (loss) is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP consolidated financial statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. Adjusted operating income (loss) on a consolidated basis is presented in the following table to reconcile the segment operating performance measure to operating income (loss) as presented on the Consolidated Financial Statements.

 

Reportable segment information is presented in the following table:

(in thousands)

American Eagle

 

 

Aerie

 

 

Corporate and Other(1)

 

 

Total(2)

 

For the year ended January 29, 2022

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$

3,555,706

 

 

$

1,376,269

 

 

$

78,810

 

 

$

5,010,785

 

Operating income (Ioss)

$

785,729

 

 

$

212,287

 

 

$

(406,951

)

 

$

591,065

 

Asset Impairment

$

10,231

 

 

$

1,713

 

 

$

-

 

 

$

11,944

 

Adjusted operating income (loss)

$

795,960

 

 

$

214,000

 

 

$

(406,951

)

 

$

603,009

 

Depreciation and Amortization

$

59,641

 

 

$

33,834

 

 

$

73,306

 

 

$

166,781

 

Capital expenditures

$

47,106

 

 

$

80,062

 

 

$

106,679

 

 

$

233,847

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended January 30, 2021

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$

2,733,849

 

 

$

989,989

 

 

$

35,275

 

 

$

3,759,113

 

Operating income (Ioss)

$

93,029

 

 

$

60,298

 

 

$

(424,672

)

 

$

(271,345

)

Impairment, restructuring and COVID-19 related charges

$

144,486

 

 

$

52,849

 

 

$

82,491

 

 

$

279,826

 

Adjusted operating income (loss)

$

237,515

 

 

$

113,147

 

 

$

(342,181

)

 

$

8,481

 

Depreciation and Amortization

$

63,019

 

 

$

26,647

 

 

$

72,736

 

 

$

162,402

 

Capital expenditures

$

36,606

 

 

$

32,723

 

 

$

58,646

 

 

$

127,975

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended February 1, 2020

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$

3,479,592

 

 

$

801,035

 

 

$

27,585

 

 

$

4,308,212

 

Operating income (loss)

$

484,078

 

 

$

47,465

 

 

$

(298,198

)

 

$

233,345

 

Impairment and restructuring charges

$

41,657

 

 

$

20,261

 

 

$

18,576

 

 

$

80,494

 

Adjusted operating Income (loss)

$

525,735

 

 

$

67,726

 

 

$

(279,622

)

 

$

313,839

 

Depreciation and Amortization

$

75,889

 

 

$

22,578

 

 

$

80,583

 

 

$

179,050

 

Capital expenditures

$

98,699

 

 

$

56,283

 

 

$

55,378

 

 

$

210,360

 

 

(1)
Corporate and Other includes revenue and operating results of the Todd Snyder brand, Unsubscribed brand, and Supply Chain Platform, which have been identified as separate operating segments, but are not material to disclose as separate reportable segments. Corporate operating costs represents certain costs that are not directly attributable to another reportable segment.

 

(2)
The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million

 

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 brands merchandise which comprises approximately 98% of total net revenue.

 

The following tables present summarized geographical information.

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Total net revenue:

 

 

 

 

 

 

 

 

 

United States

 

$

4,336,806

 

 

$

3,295,028

 

 

$

3,710,270

 

Foreign (1)

 

 

673,979

 

 

 

464,085

 

 

 

597,942

 

Total net revenue

 

$

5,010,785

 

 

$

3,759,113

 

 

$

4,308,212

 

 

(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.

 

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Long-lived assets, net:

 

 

 

 

 

 

United States

 

$

2,137,835

 

 

$

1,705,561

 

Foreign

 

 

157,575

 

 

 

144,544

 

Total long-lived assets, net

 

$

2,295,410

 

 

$

1,850,105

 

 
v3.22.0.1
Impairment, Restructuring and COVID-19 Related Charges
 12 Months Ended
Jan. 29, 2022
Restructuring and Related Activities [Abstract]  
Impairment, Restructuring and COVID-19 Related Charges
17.
Impairment, Restructuring and COVID-19 Related Charges

The following table represents impairment, restructuring and COVID-19 related charges. All amounts were recorded within impairment, restructuring and COVID-19 related charges on the Consolidated Statements of Operations, unless otherwise noted.

 

 

For the years ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Long-lived asset Impairment charges (1)

 

$

11,944

 

 

$

249,163

 

 

$

66,252

 

Incremental COVID-19 related expenses(2)

 

 

—

 

 

 

26,930

 

 

 

—

 

Severance and related employee
   costs

 

 

—

 

 

 

3,733

 

 

 

6,691

 

Other restructuring charges(3)

 

 

—

 

 

 

—

 

 

 

7,551

 

Total impairment, restructuring, and COVID-19 related
   charges

 

$

11,944

 

 

$

279,826

 

 

$

80,494

 

 

 

(1)
The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.

 

(2)
In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.

 

(3)
In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.

 

(4)
Incremental COVID-19 related expenses consisting of personal protective equipment and supplies for our associates and customers.

 

(5)
Other restructuring charges consists of $4.2 million of joint business venture exit charges, $1.8 million of Japan market transition costs and $1.5 million of China restructuring in Fiscal 2019.

 

 

 

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

 

 

 

 

 

January 29,

 

(In thousands)

 

 

 

2022

 

Accrued liability as of January 30, 2021

 

 

 

$

2,812

 

Add: Costs incurred, excluding non-cash
   charges

 

 

 

 

1,367

 

Less: Cash payments and adjustments

 

 

 

 

(2,812

)

Accrued liability as of January 29, 2022

 

 

 

$

1,367

 

 

The accrued liability as of January 30, 2021 relates to previous restructuring activities disclosed in the Company’s Fiscal 2020 Form 10-K, which remained unpaid at the beginning of Fiscal 2021.
v3.22.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Jan. 29, 2022
Accounting Policies [Abstract]  
Principles of Consolidation

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At January 29, 2022, 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 2022” refers to the 52-week period that will end on January 28, 2023. “Fiscal 2021” refers to the 52-week period ended January 29, 2022. “Fiscal 2020” refers to the 52-week period ended January 30, 2021. “Fiscal 2019” refers to the 52-week period ended February 1, 2020.
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 December 2019, the Financial Accounting Standards Board ("FASB") amended Accounting Standards Codification ("ASC") 740, Income Taxes (issued under ASU 2019-12, Simplifying the Accounting for Income Taxes). This amendment removes certain exceptions to the general principles of ASC 740, and clarifies and amends the existing guidance to improve consistent application. The Company adopted the guidance effective January 31, 2021. The adoption did not have a material impact on the Company’s Consolidated Financial Statements.

In August 2020, the FASB issued 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 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 calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company will adopt ASU 2020-06 at the beginning of Fiscal 2022 using the full retrospective approach.

In April 2020, the Company issued a $415 million aggregate principal amount of convertible senior notes due 2025 (the "Notes"). The Notes are currently accounted for under the cash conversion model, which is one of the models being eliminated by ASU 2020-06. The adoption of ASU 2020-06 will result in the Notes being accounted for as a single balance in long-term debt, rather than being accounted for as separate debt and equity components.

Subsequently, the adoption of ASU 2020-06 is expected to reduce reported interest expense. For Fiscal 2021, interest expense would have decreased approximately $12 million and reported net income would have increased by $12 million, net of tax. Additionally, as a result of this adoption we are required to use the "if-converted" method of calculating EPS. This method requires us to consider the Notes as fully converted in shares in our diluted EPS denominator. The dilutive effect of the Notes will increase to approximately 49 million dilutive shares, or an incremental 15 million shares compared to the dilutive effect as of January 29, 2022. The "if-converted" method also requires us to add back interest expense of the Notes, net of tax, to the numerator when calculating diluted EPS.

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 United States 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 12 to the Consolidated Financial Statements for information regarding comprehensive income (loss).
Cash and Cash Equivalents

Cash and Cash Equivalents

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

Refer to Note 4 to the Consolidated Financial Statements for information regarding cash and cash equivalents.
Receivables

Receivables

The Company maintains an allowance for doubtful accounts for estimated losses from the failure of certain of our customers to make required payments for products or services delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical and expected future receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company’s reserves have approximated actual experience.
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, 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 - five years

 

As of January 29, 2022, the weighted average remaining useful life of our assets was approximately 6.3 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 (loss) within Impairment, restructuring and COVID-19 related charges in the Consolidated Statements of Operations.

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 8 to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note 17 to the Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2021, Fiscal 2020 and Fiscal 2019.
Goodwill and Intangible Assets, net

Goodwill and Intangible Assets, net

The Company’s goodwill is primarily related to the acquisition of its Supply Chain Platform, 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 it's 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 January 29, 2022. As a result, there was no goodwill impairment charge recorded during Fiscal 2021 or Fiscal 2020. During Fiscal 2019, the Company concluded that certain goodwill was impaired resulting in a $1.7 million charge included within Impairment, restructuring and COVID-19 related charges in the Consolidated Statements of Operations.

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. No definite-lived intangible asset impairment charges were recorded for all periods presented.

Refer to Note 3 to the Consolidated Financial Statements for additional information regarding acquisitions and Note 9 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets.
Gift Cards

Gift Cards

Revenue is not recorded on the issuance of gift cards. The value of a gift card is recorded as a current liability upon issuance and revenue is recognized when the gift card is redeemed for merchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component of total net revenue.

The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. The Company recorded $10.3 million, $8.8 million, and $9.5 million during Fiscal 2021, Fiscal 2020, and Fiscal 2019, respectively, of revenue related to gift card breakage.
Construction Allowances

Construction Allowances

As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally comprised 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, 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, 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 11 to the Consolidated Financial Statements for additional information.

 

Lease Modifications and COVID-19

The FASB staff issued a Q&A document in April 2020 providing guidance on how to apply the lease modification guidance in ASC 842 to rent concessions arising from the COVID-19 pandemic, allowing companies to elect accounting for the concessions as if enforceable rights and obligations existed, regardless of whether they are explicitly stated in the lease contract. Per the FASB staff Q&A guidance, entities may make the elections for any lessor-provided concessions related to the effects of the COVID-19 pandemic (e.g., deferrals of lease payments, cash payments made to the lessee, reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee.

During Fiscal 2020:

•
For concessions in the form of rent forgiveness, the Company invoked the accounting elections provided by the FASB staff; savings were recorded as a credit to variable rent in the period the amendments became fully executed.
•
For concessions in the form of deferred payments, the Company did not apply the FASB accounting elections; rent expense was recorded in accordance with ASC 842 and the unpaid amount remained accrued as part of the current operating lease liability.
•
All other forms of rent concessions followed our normal accounting policy for lease modifications, adhering to the guidance set forth in ASC 842.
Co-Branded Credit Card

Co-Branded Credit Card

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.

For further information on the Company’s loyalty program, refer to the Customer Loyalty Program caption below.
Customer Loyalty Program

Customer Loyalty Program

In June 2020, the Company launched a highly-digitized loyalty program called Real Rewards by American Eagle and Aerie™ (the “Program”). This 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. Prior to this launch in June 2020, under our previous program, AEO Connected™, we also offered additional rewards for key items such as jeans and bras. 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 American Eagle 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 award points is deferred and recognized when the award 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.

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Beginning balance

 

$

8,377

 

 

$

5,825

 

 

$

4,620

 

Returns

 

 

(149,988

)

 

 

(107,700

)

 

 

(121,513

)

Provisions

 

 

150,779

 

 

 

110,252

 

 

 

122,718

 

Ending balance

 

$

9,168

 

 

$

8,377

 

 

$

5,825

 

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.
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 (loss).

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

Revenue is recorded net of estimated and actual sales returns and promotional price reductions. 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.

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

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 the Customer Loyalty Program caption above for additional information.
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, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage and certain promotional costs (collectively, “merchandise costs”) and buying, occupancy and warehousing costs.

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 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 related to our stores, 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 January 29, 2022 and January 30, 2021, the Company had prepaid advertising expense of $6.1 million and $5.7 million, respectively. All other advertising costs are expensed as incurred. The Company recognized $173.6 million, $150.0 million, and $151.5 million in advertising expense during Fiscal 2021, Fiscal 2020, and Fiscal 2019, 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.
Interest Expense (Income), Net

Interest Expense (Income), Net

Interest expense (income), net primarily consists of interest expense related to the Company’s convertible notes and borrowings under the revolving credit facility, as well as interest income from cash, cash equivalents and short-term investments.
Other Income, Net

Other Income, Net

Other income, net consists primarily of allowances for uncollectible receivables, foreign currency fluctuations and changes in other non-operating items
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 paid during the respective periods:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Cash paid during the periods for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

182,656

 

 

$

4,191

 

 

$

69,689

 

Interest

 

$

8,729

 

 

$

10,316

 

 

$

828

 
Segment Information

Segment Information

We have two reportable segments: American Eagle and Aerie. For additional information, regarding the Company’s segment and geographic information, refer to Note 16 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.
v3.22.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Jan. 29, 2022
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 - 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.

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Beginning balance

 

$

8,377

 

 

$

5,825

 

 

$

4,620

 

Returns

 

 

(149,988

)

 

 

(107,700

)

 

 

(121,513

)

Provisions

 

 

150,779

 

 

 

110,252

 

 

 

122,718

 

Ending balance

 

$

9,168

 

 

$

8,377

 

 

$

5,825

 
Supplemental Cash Flow Information for Cash Amounts Paid

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

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Cash paid during the periods for:

 

 

 

 

 

 

 

 

 

Income taxes

 

$

182,656

 

 

$

4,191

 

 

$

69,689

 

Interest

 

$

8,729

 

 

$

10,316

 

 

$

828

 
v3.22.0.1
Acquisitions (Tables)
 12 Months Ended
Jan. 29, 2022
Business Combinations [Abstract]  
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurements of intangible assets, goodwill and deferred income tax assets are subject to change:

 

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

 

255,133

 

Other long-term assets

 

112,215

 

Total Assets

$

477,850

 

 

 

 

 

 

 

Current liabilities

$

29,819

 

Total long-term liabilities

 

87,415

 

Total Liabilities

$

117,234

 

 

 

 

Total purchase price

$

360,616

 
v3.22.0.1
Cash, Cash Equivalents (Tables)
 12 Months Ended
Jan. 29, 2022
Cash and Cash Equivalents [Abstract]  
Fair Market Values for Cash and Short-term Investments

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

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Cash and cash equivalents:

 

 

 

 

 

 

Cash

 

$

138,758

 

 

$

524,970

 

Interest bearing deposits

 

 

296,012

 

 

 

275,507

 

Certificates of deposit

 

 

—

 

 

 

50,000

 

Total cash and cash equivalents

 

$

434,770

 

 

$

850,477

 
v3.22.0.1
Earnings per Share (Tables)
 12 Months Ended
Jan. 29, 2022
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:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands, except per share amounts)

 

2022

 

 

2021

 

 

2020

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic number of common shares outstanding

 

 

168,156

 

 

 

166,455

 

 

 

169,711

 

Dilutive effect of convertible notes

 

 

34,003

 

 

 

—

 

 

 

—

 

Dilutive effect of stock options and non-vested
   restricted stock

 

 

4,370

 

 

 

—

 

 

 

1,156

 

Diluted number of common shares outstanding

 

 

206,529

 

 

 

166,455

 

 

 

170,867

 

 

 

 

 

 

 

 

 

 

 

Anti-Dilutive Shares*

 

 

202

 

 

 

14,259

 

 

 

700

 
v3.22.0.1
Accounts Receivable, net (Tables)
 12 Months Ended
Jan. 29, 2022
Receivables [Abstract]  
Accounts receivable, net

Accounts receivable, net is comprised of the following:

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Tax and other government refunds

 

$

75,137

 

 

$

12,394

 

Franchise & license receivables

 

 

71,371

 

 

 

48,046

 

Credit card program receivable

 

 

39,507

 

 

 

19,481

 

Merchandise sell-offs and vendor receivables

 

 

37,707

 

 

 

45,096

 

Landlord construction allowances

 

 

24,285

 

 

 

12,844

 

Supply Chain Platform receivables

 

 

16,095

 

 

 

—

 

Gift card receivable

 

 

12,771

 

 

 

1,544

 

Other items

 

 

9,810

 

 

 

6,697

 

Total

 

$

286,683

 

 

$

146,102

 
v3.22.0.1
Property and Equipment, net (Tables)
 12 Months Ended
Jan. 29, 2022
Property, Plant and Equipment [Abstract]  
Property and Equipment, net

Property and equipment, net consists of the following:

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Land

 

$

17,910

 

 

$

17,910

 

Buildings

 

 

219,194

 

 

 

216,429

 

Leasehold improvements

 

 

739,245

 

 

 

689,885

 

Fixtures and equipment

 

 

1,496,972

 

 

 

1,325,711

 

Construction in progress

 

 

7,117

 

 

 

1,039

 

Property and equipment, at cost

 

$

2,480,438

 

 

$

2,250,974

 

Less: Accumulated depreciation

 

 

(1,752,166

)

 

 

(1,627,166

)

Property and equipment, net

 

$

728,272

 

 

$

623,808

 
Depreciation Expense

Depreciation expense is as follows:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Depreciation expense

 

$

161,492

 

 

$

159,413

 

 

$

178,038

 
v3.22.0.1
Goodwill and Intangible Assets, net (Tables)
 12 Months Ended
Jan. 29, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Definite-lived intangible assets, net

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

 

 

 

January 29, 2022

 

 

 

 

January 30, 2021

 

 

 

(In thousands)

 

American Eagle

 

 

Aerie

 

 

Corporate and Other(2)

 

Total

 

 

American Eagle

 

 

Aerie

 

 

Corporate and Other(2)

 

Total

 

Goodwill, net beginning balance

 

$

13,267

 

 

$

—

 

 

$

—

 

$

13,267

 

 

$

13,157

 

 

$

—

 

 

$

—

 

$

13,157

 

Additions from acquisitions

 

 

101,600

 

 

 

110,600

 

 

 

45,933

 

 

258,133

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

Foreign currency fluctuation

 

 

16

 

 

 

—

 

 

 

—

 

 

16

 

 

 

110

 

 

 

—

 

 

 

—

 

 

110

 

Goodwill, net ending balance

 

$

114,883

 

 

$

110,600

 

 

$

45,933

 

$

271,416

 

 

$

13,267

 

 

$

—

 

 

$

—

 

$

13,267

 

 

(1) Beginning balance for both periods include accumulated impairment of $4.2 million

(2) Corporate and Other includes goodwill allocated to the Supply Chain Platform reporting unit, which has been identified as a separate operating segment, but is not material to disclose as a separate reportable segment.

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Intangible assets, beginning balance, at cost

 

$

57,065

 

 

$

39,847

 

Additions

 

 

52,580

 

 

 

20,978

 

Amortization

 

 

(6,944

)

 

 

(3,760

)

Intangible assets, net (1)

 

$

102,701

 

 

$

57,065

 

(1) The ending balance includes accumulated amortization of $42.1 million and $35.6 million as of January 29, 2022 and January 30, 2021. respectively.
Amortization Expense

Amortization expense is as follows:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Amortization expense

 

$

6,468

 

 

$

3,752

 

 

$

4,184

 
Estimated Future Amortization Expense

The table below summarizes the estimated future amortization expense for intangible assets existing as of January 29, 2022 for the next five Fiscal Years:

 

 

 

Future

 

(In thousands)

 

Amortization

 

2022

 

$

6,935

 

2023

 

$

6,845

 

2024

 

$

6,722

 

2025

 

$

6,586

 

2026

 

$

6,463

 
v3.22.0.1
Long-Term Debt, Net (Tables)
 12 Months Ended
Jan. 29, 2022
Debt Disclosure [Abstract]  
Components of Long-Term Debt

The Company’s long-term debt consisted of the following as of January 29, 2022:

 

January 29,

 

 

January 30,

 

(In thousands)

2022

 

 

2021

 

Convertible senior notes principal

$

412,025

 

 

$

415,025

 

Less: unamortized discount

 

71,023

 

 

 

89,735

 

Total long-term debt, net

$

341,002

 

 

$

325,290

 

 

 

 

 

 

 

Convertible Senior Notes - Equity portion, net of tax

 

58,454

 

 

 

68,330

 
Schedule of Interest Expense for Notes

Interest expense for the Notes was:

 

January 29,

 

 

January 30,

 

(In thousands)

2022

 

 

2021

 

Cash based interest

$

15,431

 

 

$

11,857

 

Amortization of discount (non-cash)

 

18,520

 

 

 

12,517

 

Total interest expense

$

33,951

 

 

$

24,374

 
Schedule of Notes Conversion Amounts

The following table discloses conversion amounts if the Notes were all converted as of the end of the period:

 

January 29,

 

(In thousands, except per share amounts)

2022

 

Number of shares convertible

 

48,574

 

Conversion price per share

 

8.48

 

Value in excess of principal if converted

 

807,470

 
v3.22.0.1
Leases (Tables)
 12 Months Ended
Jan. 29, 2022
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.

 

 

 

For the Year Ended

 

 

 

January 29,

 

January 30,

 

(In thousands)

 

2022

 

2021

 

Lease costs

 

 

 

 

 

Operating lease costs

 

$

328,868

 

$

325,005

 

Variable lease costs

 

 

121,118

 

 

98,057

 

Short-term leases and other lease costs

 

 

11,927

 

 

11,090

 

Total lease costs

 

$

461,913

 

$

434,152

 

 

 

 

 

 

 

Other information

 

 

 

 

 

Cash paid for operating lease liability

 

$

(363,468

)

$

(331,543

)

New operating lease ROU assets entered into during the period

 

$

336,546

 

$

116,128

 

 

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

 

January 29, 2022

Weighted-average remaining lease term - operating leases

 

5.3 years

Weighted-average discount rate - operating leases

 

4.7%
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

 

 

 

January 29, 2022

 

(In thousands)

 

 

 

Fiscal years:

 

 

 

2022

 

$

335,219

 

2023

 

 

337,945

 

2024

 

 

252,800

 

2025

 

 

211,885

 

2026

 

 

174,747

 

Thereafter

 

 

340,353

 

Total undiscounted cash flows

 

$

1,652,949

 

Less: discount on lease liability

 

 

(187,463

)

Total lease liability

 

$

1,465,486

 
v3.22.0.1
Other Comprehensive Loss (Tables)
 12 Months Ended
Jan. 29, 2022
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

 



 

 

Before

 

 

Tax

 

 

Other

 

 

 

Tax

 

 

Benefit

 

 

Comprehensive

 

(In thousands)

 

Amount

 

 

(Expense)

 

 

Loss

 

Balance at February 2, 2019

 

$

(35,804

)

 

 

972

 

 

$

(34,832

)

Foreign currency translation gain (1)

 

 

2,094

 

 

 

—

 

 

 

2,094

 

Loss on long-term intra-entity foreign currency transactions

 

 

(577

)

 

 

147

 

 

 

(430

)

Balance at February 1, 2020

 

$

(34,287

)

 

$

1,119

 

 

$

(33,168

)

Foreign currency translation loss (1)

 

 

(7,053

)

 

 

—

 

 

 

(7,053

)

Loss on long-term intra-entity foreign currency transactions

 

 

592

 

 

 

(1,119

)

 

 

(527

)

Balance at January 30, 2021

 

$

(40,748

)

 

$

—

 

 

$

(40,748

)

Foreign currency translation loss (1)

 

 

(1,003

)

 

 

—

 

 

 

(1,003

)

Loss on long-term intra-entity foreign currency transactions

 

 

906

 

 

 

—

 

 

 

906

 

Balance at January 29, 2022

 

$

(40,845

)

 

$

—

 

 

$

(40,845

)

 

(1)
Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.
v3.22.0.1
Share-Based Payments (Tables)
 12 Months Ended
Jan. 29, 2022
Share-based Payment Arrangement [Abstract]  
Summary of Stock Option Activity

A summary of the Company’s stock option activity under the 2017 and 2020 Plans for Fiscal 2021 follows:

 

 

 

For the Year Ended January 29, 2022

 

 

 

 

 

 

Weighted-
Average

 

 

Weighted-
Average
Remaining
Contractual

 

 

Aggregate
Intrinsic

 

 

 

Options

 

 

Exercise Price

 

 

Term

 

 

Value

 

 

 

(In thousands)

 

 

 

 

 

(In years)

 

 

(In thousands)

 

Outstanding - January 30, 2021

 

 

3,940

 

 

$

14.87

 

 

 

 

 

 

 

Granted

 

 

478

 

 

$

31.46

 

 

 

 

 

 

 

Exercised (1)

 

 

(771

)

 

$

16.33

 

 

 

 

 

 

 

Cancelled

 

 

—

 

 

$

—

 

 

 

 

 

 

 

Outstanding - January 29, 2022

 

 

3,647

 

 

$

16.74

 

 

 

4.3

 

 

$

24,980

 

Vested and expected to vest - January 29, 2022

 

 

2,513

 

 

$

16.62

 

 

 

3.1

 

 

$

13,231

 

Exercisable - January 29, 2022 (2)

 

 

1,788

 

 

$

16.28

 

 

 

1.6

 

 

$

10,949

 

 

(1)
Options exercised during Fiscal 2021 ranged in price from $8.62 to $21.41.
(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 January 29, 2022.
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:

 

 

 

For the Years Ended

 

 

January 29,

January 30,

Black-Scholes Option Valuation Assumptions

 

2022

2021

Risk-free interest rates (1)

 

0.9%

0.3 - 0.6%

Dividend yield

 

1.6%

3.5 - 6.0%

Volatility factors of the expected market price of
   the Company's common stock (2)

 

50.7%

43.1 - 48.7%

Weighted-average expected term (3)

 

4.5 years

4.4 years

 

(1)
Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.
(2)
Based on the historical volatility of the Company’s common stock.
(3)
Represents the period of time 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

 

 

 

For the year ended

 

 

For the year ended

 

 

 

January 29, 2022

 

 

January 29, 2022

 

(Shares in thousands)

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

 

Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

Non-vested - January 30, 2021

 

 

3,698

 

 

$

12.42

 

 

 

1,868

 

 

$

17.44

 

Granted

 

 

724

 

 

 

32.40

 

 

 

339

 

 

 

39.54

 

Vested

 

 

(1,483

)

 

 

14.92

 

 

 

(418

)

 

 

22.22

 

Cancelled/Forfeited

 

 

(237

)

 

 

14.20

 

 

 

(327

)

 

 

18.56

 

Non-vested - January 29, 2022

 

 

2,702

 

 

$

16.25

 

 

 

1,462

 

 

$

20.95

 
v3.22.0.1
Income Taxes (Tables)
 12 Months Ended
Jan. 29, 2022
Income Tax Disclosure [Abstract]  
Components of Income (Loss) Before Income Taxes

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

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

U.S.

 

$

520,952

 

 

$

(294,208

)

 

$

229,906

 

Foreign

 

 

37,970

 

 

 

1,935

 

 

 

15,372

 

Total

 

$

558,922

 

 

$

(292,273

)

 

$

245,278

 
Components of Deferred Tax Assets and Liabilities

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

 

 

 

January 29,

 

 

January 30,

 

(in thousands)

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease ROU assets

 

$

380,117

 

 

$

389,604

 

Net Operating Loss

 

 

27,643

 

 

 

10,160

 

Employee compensation and benefits

 

 

20,521

 

 

 

3,124

 

Accruals not currently deductible

 

 

11,645

 

 

 

8,538

 

Deferred compensation

 

 

8,429

 

 

 

7,400

 

Other long term assets

 

 

8,208

 

 

 

—

 

State tax credits

 

 

7,546

 

 

 

7,407

 

Inventories

 

 

5,220

 

 

 

3,267

 

Capital Loss

 

 

4,213

 

 

 

4,471

 

Allowance for Doubtful Accounts

 

 

3,201

 

 

 

750

 

Foreign tax credits

 

 

2,982

 

 

 

943

 

Other

 

 

5,757

 

 

 

2,093

 

Gross deferred tax assets

 

 

485,482

 

 

 

437,757

 

Valuation allowance

 

 

(25,628

)

 

 

(12,263

)

Total deferred tax assets

 

 

459,854

 

 

 

425,494

 

Deferred tax liabilities:

 

 

 

 

 

 

Operating lease liabilities

 

$

(308,299

)

 

$

(310,888

)

Property and equipment

 

 

(87,192

)

 

 

(56,487

)

Convertible Senior Note

 

 

(15,384

)

 

 

(20,589

)

Prepaid expenses

 

 

(2,215

)

 

 

(2,294

)

Other

 

 

(2,597

)

 

 

(2,191

)

Total deferred tax liabilities

 

$

(415,687

)

 

$

(392,449

)

Total deferred tax assets, net

 

$

44,167

 

 

$

33,045

 
Components of Provision (Benefit) for Income Taxes

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

 

 

 

For the Years Ended

 


 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

107,493

 

 

$

(59,080

)

 

$

25,745

 

Foreign taxes

 

 

19,671

 

 

 

7,443

 

 

 

8,137

 

State

 

 

24,979

 

 

 

3,528

 

 

 

13,598

 

Total current

 

 

152,143

 

 

 

(48,109

)

 

 

47,480

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

$

(12,637

)

 

$

(17,286

)

 

$

12,289

 

Foreign taxes

 

 

(1,284

)

 

 

(4,622

)

 

 

(1,213

)

State

 

 

1,071

 

 

 

(12,982

)

 

 

(4,535

)

Total deferred

 

 

(12,850

)

 

 

(34,890

)

 

 

6,541

 

(Benefit) Provision for income taxes

 

$

139,293

 

 

$

(82,999

)

 

$

54,021

 
Activity Related to Unrecognized Tax Benefits

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

 

 

 

For the Years Ended

 


 

 

January 29,

 

 

January 30,

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

2020

 

Unrecognized tax benefits, beginning of the year
   balance

 

$

2,563

 

 

$

2,781

 

$

6,534

 

Increases in current period tax positions

 

 

251

 

 

 

602

 

 

422

 

Increases in tax positions of prior periods

 

 

688

 

 

 

1

 

 

151

 

Settlements

 

 

0

 

 

 

(450

)

 

(2,223

)

Lapse of statute of limitations

 

 

(93

)

 

 

(289

)

 

(720

)

Decreases in tax positions of prior periods

 

 

(150

)

 

 

(82

)

 

(1,383

)

Unrecognized tax benefits, end of the year balance

 

$

3,259

 

 

$

2,563

 

$

2,781

 
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:

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

 

 

2022

 

 

2021

 

 

2020

 

Federal income tax rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State income taxes, net of federal income tax effect

 

 

4.1

 

 

 

3.1

 

 

 

3.6

 

Foreign rate differential

 

 

0.6

 

 

 

0.3

 

 

 

(0.6

)

International provisions of Tax Act

 

 

(0.5

)

 

 

0.0

 

 

 

(2.1

)

Rate differential on CARES Act NOL carryback

 

 

0.0

 

 

 

8.1

 

 

 

0.0

 

Valuation allowance changes, net

 

 

0.2

 

 

 

(2.6

)

 

 

0.3

 

Non-deductible executive compensation

 

 

1.3

 

 

 

(2.1

)

 

 

0.6

 

Change in unrecognized tax benefits

 

 

0.1

 

 

 

(0.1

)

 

 

0.1

 

Share Based Payments

 

 

(0.8

)

 

 

0.4

 

 

 

(0.5

)

Other

 

 

(1.1

)

 

 

0.3

 

 

 

(0.4

)

 

 

 

24.9

%

 

 

28.4

%

 

 

22.0

%
v3.22.0.1
Segment Reporting (Tables)
 12 Months Ended
Jan. 29, 2022
Segment Reporting [Abstract]  
Summary of Reportable Segment Information

Reportable segment information is presented in the following table:

(in thousands)

American Eagle

 

 

Aerie

 

 

Corporate and Other(1)

 

 

Total(2)

 

For the year ended January 29, 2022

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$

3,555,706

 

 

$

1,376,269

 

 

$

78,810

 

 

$

5,010,785

 

Operating income (Ioss)

$

785,729

 

 

$

212,287

 

 

$

(406,951

)

 

$

591,065

 

Asset Impairment

$

10,231

 

 

$

1,713

 

 

$

-

 

 

$

11,944

 

Adjusted operating income (loss)

$

795,960

 

 

$

214,000

 

 

$

(406,951

)

 

$

603,009

 

Depreciation and Amortization

$

59,641

 

 

$

33,834

 

 

$

73,306

 

 

$

166,781

 

Capital expenditures

$

47,106

 

 

$

80,062

 

 

$

106,679

 

 

$

233,847

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended January 30, 2021

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$

2,733,849

 

 

$

989,989

 

 

$

35,275

 

 

$

3,759,113

 

Operating income (Ioss)

$

93,029

 

 

$

60,298

 

 

$

(424,672

)

 

$

(271,345

)

Impairment, restructuring and COVID-19 related charges

$

144,486

 

 

$

52,849

 

 

$

82,491

 

 

$

279,826

 

Adjusted operating income (loss)

$

237,515

 

 

$

113,147

 

 

$

(342,181

)

 

$

8,481

 

Depreciation and Amortization

$

63,019

 

 

$

26,647

 

 

$

72,736

 

 

$

162,402

 

Capital expenditures

$

36,606

 

 

$

32,723

 

 

$

58,646

 

 

$

127,975

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended February 1, 2020

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$

3,479,592

 

 

$

801,035

 

 

$

27,585

 

 

$

4,308,212

 

Operating income (loss)

$

484,078

 

 

$

47,465

 

 

$

(298,198

)

 

$

233,345

 

Impairment and restructuring charges

$

41,657

 

 

$

20,261

 

 

$

18,576

 

 

$

80,494

 

Adjusted operating Income (loss)

$

525,735

 

 

$

67,726

 

 

$

(279,622

)

 

$

313,839

 

Depreciation and Amortization

$

75,889

 

 

$

22,578

 

 

$

80,583

 

 

$

179,050

 

Capital expenditures

$

98,699

 

 

$

56,283

 

 

$

55,378

 

 

$

210,360

 

 

(1)
Corporate and Other includes revenue and operating results of the Todd Snyder brand, Unsubscribed brand, and Supply Chain Platform, which have been identified as separate operating segments, but are not material to disclose as separate reportable segments. Corporate operating costs represents certain costs that are not directly attributable to another reportable segment.

 

(2)
The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million

Summary of Geographical Information

The following tables present summarized geographical information.

 

 

 

For the Years Ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Total net revenue:

 

 

 

 

 

 

 

 

 

United States

 

$

4,336,806

 

 

$

3,295,028

 

 

$

3,710,270

 

Foreign (1)

 

 

673,979

 

 

 

464,085

 

 

 

597,942

 

Total net revenue

 

$

5,010,785

 

 

$

3,759,113

 

 

$

4,308,212

 

 

(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.

 

 

 

 

January 29,

 

 

January 30,

 

(In thousands)

 

2022

 

 

2021

 

Long-lived assets, net:

 

 

 

 

 

 

United States

 

$

2,137,835

 

 

$

1,705,561

 

Foreign

 

 

157,575

 

 

 

144,544

 

Total long-lived assets, net

 

$

2,295,410

 

 

$

1,850,105

 
v3.22.0.1
Impairment, Restructuring and COVID-19 Related Charges (Tables)
 12 Months Ended
Jan. 29, 2022
Restructuring and Related Activities [Abstract]  
Summary of Impairment,Restructuring and COVID-19 Related Charges

The following table represents impairment, restructuring and COVID-19 related charges. All amounts were recorded within impairment, restructuring and COVID-19 related charges on the Consolidated Statements of Operations, unless otherwise noted.

 

 

For the years ended

 

 

 

January 29,

 

 

January 30,

 

 

February 1,

 

(In thousands)

 

2022

 

 

2021

 

 

2020

 

Long-lived asset Impairment charges (1)

 

$

11,944

 

 

$

249,163

 

 

$

66,252

 

Incremental COVID-19 related expenses(2)

 

 

—

 

 

 

26,930

 

 

 

—

 

Severance and related employee
   costs

 

 

—

 

 

 

3,733

 

 

 

6,691

 

Other restructuring charges(3)

 

 

—

 

 

 

—

 

 

 

7,551

 

Total impairment, restructuring, and COVID-19 related
   charges

 

$

11,944

 

 

$

279,826

 

 

$

80,494

 

 

 

(1)
The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.

 

(2)
In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.

 

(3)
In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.

 

(4)
Incremental COVID-19 related expenses consisting of personal protective equipment and supplies for our associates and customers.

 

(5)
Other restructuring charges consists of $4.2 million of joint business venture exit charges, $1.8 million of Japan market transition costs and $1.5 million of China restructuring in Fiscal 2019.
Rollforward of Restructuring Liabilities Recognized in Consolidated Balance Sheet

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

 

 

 

 

 

January 29,

 

(In thousands)

 

 

 

2022

 

Accrued liability as of January 30, 2021

 

 

 

$

2,812

 

Add: Costs incurred, excluding non-cash
   charges

 

 

 

 

1,367

 

Less: Cash payments and adjustments

 

 

 

 

(2,812

)

Accrued liability as of January 29, 2022

 

 

 

$

1,367

 
v3.22.0.1
Business Operations - Additional Information (Detail)
Jan. 29, 2022
Country
Store
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of retail stores 1,000
Number of international store locations 200
Number of countries company operates in | Country 81
v3.22.0.1
Summary of Significant Accounting Policies - Additional Information (Detail)
shares in Thousands
 1 Months Ended 12 Months Ended
Jan. 30, 2022
USD ($)
shares
Apr. 30, 2020
USD ($)
Jan. 29, 2022
USD ($)
Segment
shares
Jan. 30, 2021
USD ($)
Feb. 01, 2020
USD ($)
Significant Accounting Policies [Line Items]          
Number of reportable segments | Segment     2    
Decrease in interest expense     $ 34,632,000 $ 24,610,000 $ (6,202,000)
Increase in net income, net of tax     $ 419,629,000 (209,274,000) 191,257,000
Dilutive effect of convertible notes | shares     34,003    
Weighted average remaining useful life, assets     6 years 3 months 18 days    
Goodwill impairment charge     $ 0 0 1,700,000
Definite-lived impairment charges     0 0  
Revenue related to gift card breakage     $ 10,300,000 8,800,000 9,500,000
Reward expiration period     60 days    
Credit Card Reward Program Description     This 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. Prior to this launch in June 2020, under our previous program, AEO Connected™, we also offered additional rewards for key items such as jeans and bras. 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     $ 6,100,000 5,700,000  
Advertising expense     $ 173,600,000 $ 150,000,000.0 $ 151,500,000
Convertible Senior Notes Due 2025          
Significant Accounting Policies [Line Items]          
Aggregate principal amount of debt issued   $ 415,000,000      
Debt instrument, maturity year   2025      
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    
Accounting Standards Update 2019-12          
Significant Accounting Policies [Line Items]          
Change in accounting principle, accounting standards update, adopted     true    
Change in accounting principle, accounting standards update, adoption date     Jan. 31, 2021    
Change in accounting principle, accounting standards update, immaterial effect     true    
ASU 2020-06          
Significant Accounting Policies [Line Items]          
Dilutive effect of convertible notes | shares     15,000    
ASU 2020-06 | Subsequent Event          
Significant Accounting Policies [Line Items]          
Decrease in interest expense $ 12,000,000        
Increase in net income, net of tax $ 12,000,000        
Dilutive effect of convertible notes | shares 49,000        
v3.22.0.1
Summary of Significant Accounting Policies - Useful Lives of Major Classes of Assets (Detail)
 12 Months Ended
Jan. 29, 2022
Buildings  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 25 years
Leasehold Improvements  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class Lesser of 10 years or the term of the lease
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
v3.22.0.1
Summary of Significant Accounting Policies - Useful Lives of Major Classes of Assets (Parenthetical) (Detail)
 12 Months Ended
Jan. 29, 2022
Maximum | Leasehold Improvements  
Property, Plant and Equipment, Estimated Useful Lives, Lease Terms [Line Items]  
Useful lives in asset class 10 years
v3.22.0.1
Summary of Significant Accounting Policies - Sales Return Reserve (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Accounting Policies [Abstract]      
Beginning balance $ 8,377 $ 5,825 $ 4,620
Returns (149,988) (107,700) (121,513)
Provisions 150,779 110,252 122,718
Ending balance $ 9,168 $ 8,377 $ 5,825
v3.22.0.1
Summary of Significant Accounting Policies - Supplemental Cash Flow Information for Cash Amounts Paid (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Cash paid during the periods for:      
Income taxes $ 182,656 $ 4,191 $ 69,689
Interest $ 8,729 $ 10,316 $ 828
v3.22.0.1
Acquisitions - Additional Information (Detail) - USD ($)
Dec. 29, 2021
May 03, 2021
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Business Acquisition [Line Items]          
Goodwill     $ 271,416,000 $ 13,267,000 $ 13,157,000
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 $ 255,100,000   255,133,000    
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 42,900,000        
Quiet Logistics | Customer Relationships          
Business Acquisition [Line Items]          
Acquired intangible assets $ 39,000,000.0        
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   $ 3,000,000.0      
v3.22.0.1
Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed at Acquisition Date (Detail) - USD ($)
$ in Thousands
Jan. 29, 2022
Dec. 29, 2021
Jan. 30, 2021
Feb. 01, 2020
Current assets        
Goodwill $ 271,416   $ 13,267 $ 13,157
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 255,133 $ 255,100    
Other long term assets 112,215      
Total Assets 477,850      
Current liabilities 29,819      
Total long-term liabilities 87,415      
Total Liabilities 117,234      
Total purchase price $ 360,616      
v3.22.0.1
Cash and Cash Equivalents - Fair Market Values for Cash and Short-term Investments (Detail) - USD ($)
$ in Thousands
Jan. 29, 2022
Jan. 30, 2021
Cash and cash equivalents:    
Cash and cash equivalents $ 434,770 $ 850,477
Cash    
Cash and cash equivalents:    
Cash and cash equivalents 138,758 524,970
Interest Bearing Deposits    
Cash and cash equivalents:    
Cash and cash equivalents $ 296,012 275,507
Certificates of Deposit    
Cash and cash equivalents:    
Cash and cash equivalents   $ 50,000
v3.22.0.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
 1 Months Ended 12 Months Ended
Apr. 30, 2020
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Fair Value Measurements Disclosure [Line Items]        
Financial instruments required at fair value measurements   $ 0    
Asset impairment charges   11,944,000 [1],[2] $ 249,163,000 [3] $ 66,252,000 [4]
Goodwill impairment   0 0 1,700,000
Retail Stores        
Fair Value Measurements Disclosure [Line Items]        
Asset impairment charges     203,200,000 64,500,000
Impairment of operating lease ROU assets     154,800,000 $ 25,000,000.0
Impairment of certain cost and equity method investments     18,000,000.0  
Fair value of impaired asset     93,200,000  
Corporate Property and Equipment | Retail Stores        
Fair Value Measurements Disclosure [Line Items]        
Asset impairment charges     28,000,000.0  
Store Property and Equipment (Fixtures and Equipment and Leasehold Improvements) | Retail Stores        
Fair Value Measurements Disclosure [Line Items]        
Asset impairment charges     $ 48,400,000  
Convertible Senior Notes Due 2025        
Fair Value Measurements Disclosure [Line Items]        
Aggregate principal amount of debt issued $ 415,000,000      
Debt instrument, maturity year 2025      
Revolving Credit Facility        
Fair Value Measurements Disclosure [Line Items]        
Outstanding borrowings   $ 0    
[1] The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.
[2] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
[3] In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.
[4] In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.
v3.22.0.1
Earnings per Share - Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding (Detail) - shares
shares in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Weighted average common shares outstanding:      
Basic number of common shares outstanding 168,156 166,455 169,711
Dilutive effect of convertible notes 34,003    
Dilutive effect of stock options and non-vested restricted stock 4,370   1,156
Diluted number of common shares outstanding 206,529 166,455 170,867
Anti-Dilutive Shares [1] 202 14,259 700
[1] In Fiscal 2020, there were 1.9 million potentially dilutive equity awards and 12.4 million potentially dilutive shares from the Company’s Notes that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. For all other periods, anti-dilutive shares relate to stock options and unvested restricted stock.
v3.22.0.1
Earnings per Share - Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding (Parenthetical) (Detail) - shares
shares in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]      
Awards excluded from diluted earnings per share calculation [1] 202 14,259 700
Equity Awards      
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]      
Awards excluded from diluted earnings per share calculation   1,900  
Notes      
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]      
Awards excluded from diluted earnings per share calculation   12,400  
[1] In Fiscal 2020, there were 1.9 million potentially dilutive equity awards and 12.4 million potentially dilutive shares from the Company’s Notes that were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive. For all other periods, anti-dilutive shares relate to stock options and unvested restricted stock.
v3.22.0.1
Accounts Receivable, net (Detail) - USD ($)
$ in Thousands
Jan. 29, 2022
Jan. 30, 2021
Receivables [Abstract]    
Tax and other government refunds $ 75,137 $ 12,394
Franchise & license receivables 71,371 48,046
Credit card program receivable 39,507 19,481
Merchandise sell-offs and vendor receivables 37,707 45,096
Landlord construction allowances 24,285 12,844
Supply Chain platform receivables 16,095  
Gift card receivable 12,771 1,544
Other items 9,810 6,697
Total $ 286,683 $ 146,102
v3.22.0.1
Property and Equipment, net (Detail) - USD ($)
$ in Thousands
Jan. 29, 2022
Jan. 30, 2021
Property, Plant and Equipment [Abstract]    
Land $ 17,910 $ 17,910
Buildings 219,194 216,429
Leasehold improvements 739,245 689,885
Fixtures and equipment 1,496,972 1,325,711
Construction in progress 7,117 1,039
Property and equipment, at cost 2,480,438 2,250,974
Less: Accumulated depreciation (1,752,166) (1,627,166)
Property and equipment, net $ 728,272 $ 623,808
v3.22.0.1
Depreciation Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 161,492 $ 159,413 $ 178,038
v3.22.0.1
Property and Equipment, net - Additional Information (Detail) - USD ($)
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Property, Plant and Equipment [Abstract]      
Asset write-offs $ 4.4 $ 2.2 $ 4.3
v3.22.0.1
Goodwill and Intangible Assets, net - Summary of Goodwill and Definite-lived Intangible Assets, Net (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Goodwill [Line Items]    
Goodwill, beginning balance $ 13,267 $ 13,157
Additions from acquisitions 258,133  
Foreign currency fluctuation 16 110
Goodwill, net 271,416 13,267
Intangible assets, beginning balance, at cost 57,065 [1] 39,847
Additions 52,580 20,978
Amortization 6,944 3,760
Intangible assets, net [1] 102,701 57,065
Operating Segments | American Eagle    
Goodwill [Line Items]    
Goodwill, beginning balance 13,267 13,157
Additions from acquisitions 101,600  
Foreign currency fluctuation 16 110
Goodwill, net 114,883 $ 13,267
Operating Segments | Aerie    
Goodwill [Line Items]    
Additions from acquisitions 110,600  
Goodwill, net 110,600  
Corporate and Other, Non-Segment    
Goodwill [Line Items]    
Additions from acquisitions [2] 45,933  
Goodwill, net [2] $ 45,933  
[1] The ending balance includes accumulated amortization of $42.1 million and $35.6 million as of January 29, 2022 and January 30, 2021. respectively.
[2] Corporate and Other includes goodwill allocated to the Supply Chain Platform reporting unit, which has been identified as a separate operating segment, but is not material to disclose as a separate reportable segment.
v3.22.0.1
Goodwill and Intangible Assets, net - Summary of Goodwill and Definite-lived Intangible Assets, Net, (Parenthetical) (Detail) - USD ($)
$ in Millions
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Intangible Assets, Net (Including Goodwill) [Abstract]    
Accumulated impairment $ 4.2 $ 4.2
Accumulated amortization $ 42.1 $ 35.6
v3.22.0.1
Goodwill and Intangible Assets, net - Amortization Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Goodwill and Intangible Assets Disclosure [Abstract]      
Amortization expense $ 6,468 $ 3,752 $ 4,184
v3.22.0.1
Goodwill and Intangible Assets, net - Estimated Future Amortization Expense (Detail)
$ in Thousands
Jan. 29, 2022
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2022 $ 6,935
2023 6,845
2024 6,722
2025 6,586
2026 $ 6,463
v3.22.0.1
Long-Term Debt, Net - Components of Long-Term Debt (Detail) - USD ($)
Jan. 29, 2022
Jan. 30, 2021
Debt Instrument [Line Items]    
Convertible Senior Notes - Equity portion, net of tax $ 58,454 $ 68,330
Convertible Senior Notes Due 2025    
Debt Instrument [Line Items]    
Convertible senior notes principal 412,025 415,025
Less: unamortized discount 71,023 89,735
Total long-term debt, net $ 341,002 $ 325,290
v3.22.0.1
Long-Term Debt, Net - Additional Information (Detail)
 1 Months Ended 12 Months Ended
Apr. 30, 2020
USD ($)
TradingDay
$ / shares
shares
Jan. 31, 2019
USD ($)
Jan. 29, 2022
USD ($)
$ / shares
Jan. 30, 2021
USD ($)
Line Of Credit Facility [Line Items]        
Repayments of lines of credit       $ 330,000,000
Revolving Credit Facility        
Line Of Credit Facility [Line Items]        
Outstanding borrowings     $ 0  
Credit Agreement | Credit Facilities        
Line Of Credit Facility [Line Items]        
Line of credit facility, expiration period   5 years    
Loans and letters of credit maximum borrowing capacity   $ 400,000,000    
Credit Agreement | Stand-by Letters of Credit        
Line Of Credit Facility [Line Items]        
Letters of credit outstanding amount     7.9  
Credit Agreement | Credit Agreement Loans        
Line Of Credit Facility [Line Items]        
Outstanding borrowings     $ 0  
Convertible Senior Notes Due 2025        
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 Notes have a stated interest rate of 3.75%, payable semi-annually.      
Debt instrument, frequency of periodic payment of interest payable semi-annually      
Debt instrument, redemption period beginning month and year 2023-04      
Debt instrument, redemption earliest date Apr. 17, 2023      
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      
Debt instrument, conversion period beginning month and year 2025-01      
Debt conversion, original debt, principal amount converted $ 1,000      
Debt instrument, conversion price per share | $ / shares $ 8.48   $ 8.48  
Debt instrument, effective interest rate 10.00%      
Debt instrument, remaining amortization period of discount     3 years 3 months  
Convertible Senior Notes Due 2025 | Common Stock        
Line Of Credit Facility [Line Items]        
Debt conversion, converted instruments, shares issued | shares 117.9      
v3.22.0.1
Long-Term Debt, Net - Schedule of Interest Expense for Notes (Detail) - Convertible Senior Notes Due 2025 - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Debt Instrument [Line Items]    
Cash based interest $ 15,431 $ 11,857
Amortization of discount (non-cash) 18,520 12,517
Total interest expense $ 33,951 $ 24,374
v3.22.0.1
Long-Term Debt, Net - Schedule of Notes Conversion Amounts (Detail) - Convertible Senior Notes Due 2025 - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Jan. 29, 2022
Apr. 30, 2020
Debt Instrument [Line Items]    
Number of shares convertible 48,574  
Conversion price per share $ 8.48 $ 8.48
Value in excess of principal if converted $ 807,470  
v3.22.0.1
Leases - Summary of Expense Categories and Cash Payments for Operating Leases (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Lease costs    
Operating lease costs $ 328,868 $ 325,005
Variable lease costs 121,118 98,057
Short-term leases and other lease costs 11,927 11,090
Total lease costs 461,913 434,152
Other information    
Cash paid for operating lease liability (363,468) (331,543)
New operating lease ROU assets entered into during the period $ 336,546 $ 116,128
v3.22.0.1
Leases - Summary of Average Remaining Lease Term and Discount Rate (Detail)
Jan. 29, 2022
Lease term and discount rate  
Weighted-average remaining lease term - operating leases 5 years 3 months 18 days
Weighted-average discount rate - operating leases 4.70%
v3.22.0.1
Leases - Summary of Maturity Analysis of Operating Leases (Detail)
$ in Thousands
Jan. 29, 2022
USD ($)
Leases [Abstract]  
2022 $ 335,219
2023 337,945
2024 252,800
2025 211,885
2026 174,747
Thereafter 340,353
Total undiscounted cash flows 1,652,949
Less: discount on lease liability (187,463)
Total lease liability $ 1,465,486
v3.22.0.1
Accumulated Balances of Other Comprehensive Loss (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Before Tax Amount      
Beginning Balance $ (40,748) $ (34,287) $ (35,804)
Foreign currency translation gain (loss) [1] (1,003) (7,053) 2,094
Loss on long-term intra-entity foreign currency transactions 906 592 (577)
Ending Balance (40,845) (40,748) (34,287)
Tax Benefit (Expense)      
Beginning Balance   1,119 972
Foreign currency translation gain (loss) [1]   0 0
Loss on long-term intra-entity foreign currency transactions   (1,119) 147
Ending Balance     1,119
Accumulated Other Comprehensive Income (Loss)      
Beginning Balance (40,748) (33,168) (34,832)
Foreign currency translation gain (loss) [1] (1,003) (7,053) 2,094
Loss on long-term intra-entity foreign currency transactions 906 (527) (430)
Ending Balance $ (40,845) $ (40,748) $ (33,168)
[1] Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.
v3.22.0.1
Share-Based Payments - Additional Information (Detail)
 12 Months Ended
Apr. 13, 2020
USD ($)
shares
May 23, 2017
USD ($)
shares
Jan. 29, 2022
USD ($)
CompensationPlan
$ / shares
shares
Jan. 30, 2021
USD ($)
$ / shares
shares
Feb. 01, 2020
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Share-based compensation | $     $ 38,153,000 $ 32,778,000 $ 23,038,000
Share-based compensation, net of tax | $     $ 28,800,000 24,600,000 17,900,000
Number of share-based compensation plans | CompensationPlan     2    
Stock awards | $     $ 37,887,000 $ 32,298,000 22,742,000
Weighted-average grant date fair value of stock options granted | $ / shares     $ 11.68 $ 3.06  
Aggregate intrinsic value of options exercised | $     $ 12,800,000 $ 700,000 800,000
Net proceeds from stock options exercised | $     13,065,000 3,265,000 2,119,000
Tax benefit realized from stock option exercises | $     $ 4,500,000 $ 1,200,000 $ 1,200,000
Shares available for all equity grants     7,500,000    
2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Authorized shares under the plan 10,200,000        
Shares of common stock granted     1,200,000    
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        
2017 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Authorized shares under the plan   11,200,000      
Shares of common stock granted       3,500,000  
2017 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 3,000,000.0        
Stock options, SAR, dividend equivalents, performance awards or other non-full value stock awards | 2017 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   3,000,000.0      
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 1,500,000        
Restricted stock awards, restricted stock units or other full value stock awards | 2017 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   1,500,000      
Restricted Stock | 2020 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted     2,000,000.0    
Restricted Stock | 2017 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted       7,700,000  
Performance-Based Restricted Stock Units          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted     339,000    
Vesting period     3 years    
Unrecognized compensation expense, restricted stock grants | $     $ 6,900,000    
Performance-Based Restricted Stock Units | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation expense, weighted average period     1 year    
Performance-Based Restricted Stock Units | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation expense, weighted average period     3 years    
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%    
Performance-Based Restricted Stock Units | 2017 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     80.00%    
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%    
Time-based restricted stock awards | 2017 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     20.00%    
Employee Stock Option          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation expense | $     $ 6,500,000    
Unrecognized compensation expense, weighted average period     1 year 10 months 24 days    
Time Based Restricted Stock Units          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares granted     724,000    
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    
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 | 2017 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     98.00%    
Vesting period     3 years    
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    
Vest Ratably 1 | 2017 Stock Award and Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of shares vested     2.00%    
Vest Ratably 1 | 2017 Stock Award and Incentive Plan | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     1 year    
Vest Ratably 1 | 2017 Stock Award and Incentive Plan | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     2 years    
v3.22.0.1
Share-Based Payments - Summary of Stock Option Activity (Detail)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Jan. 29, 2022
USD ($)
$ / shares
shares
Options  
Outstanding - beginning of period | shares 3,940
Granted | shares 478
Exercised | shares (771) [1]
Cancelled | shares 0
Outstanding - end of period | shares 3,647
Vested and expected to vest - end of period | shares 2,513
Exercisable - end of period | shares 1,788 [2]
Weighted-Average Exercise Price  
Outstanding - beginning of period | $ / shares $ 14.87
Granted | $ / shares 31.46
Exercised | $ / shares 16.33 [1]
Cancelled | $ / shares 0
Outstanding - end of period | $ / shares 16.74
Vested and expected to vest - end of period | $ / shares 16.62
Exercisable - end of period | $ / shares $ 16.28 [2]
Weighted-Average Remaining Contractual Term (In years)  
Outstanding - end of period 4 years 3 months 18 days
Vested and expected to vest - end of period 3 years 1 month 6 days
Exercisable - end of period 1 year 7 months 6 days [2]
Aggregate Intrinsic Value  
Outstanding - end of period | $ $ 24,980
Vested and expected to vest - end of period | $ 13,231
Exercisable - end of period | $ $ 10,949 [2]
[1] Options exercised during Fiscal 2021 ranged in price from $8.62 to $21.41.
[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 January 29, 2022.
v3.22.0.1
Share-Based Payments - Summary of Stock Option Activity (Parenthetical) (Detail)
 12 Months Ended
Jan. 29, 2022
$ / shares
Share-based Payment Arrangement [Abstract]  
Options exercised, exercise price range, lower limit $ 8.62
Options exercised, exercise price range, upper limit $ 21.41
v3.22.0.1
Share-Based Payments - Black-Scholes Option Valuation Assumptions (Detail)
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rates [1] 0.90%  
Risk-free interest rates, minimum [1]   0.30%
Risk-free interest rates, maximum [1]   0.60%
Dividend yield 1.60%  
Volatility factors of the expected market price of the Company's common stock [2] 50.70%  
Volatility factors of the expected market price of the Company's common stock, minimum [2]   43.10%
Volatility factors of the expected market price of the Company's common stock, maximum [2]   48.70%
Weighted-average expected term [3] 4 years 6 months 4 years 4 months 24 days
Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Dividend yield   3.50%
Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Dividend yield   6.00%
[1] Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock options.
[2] Based on the historical volatility of the Company’s common stock.
[3] Represents the period of time options are expected to be outstanding. The weighted average expected option terms were determined based on historical experience.
v3.22.0.1
Share-Based Payments - Summary of Restricted Stock Activity (Detail)
shares in Thousands
 12 Months Ended
Jan. 29, 2022
$ / shares
shares
Time Based Restricted Stock Units  
Shares  
Nonvested - beginning of period | shares 3,698
Granted | shares 724
Vested | shares (1,483)
Cancelled/Forfeited | shares (237)
Nonvested - end of period | shares 2,702
Weighted-Average Grant Date Fair Value  
Nonvested - beginning of period | $ / shares $ 12.42
Granted | $ / shares 32.40
Vested | $ / shares 14.92
Cancelled/Forfeited | $ / shares 14.20
Nonvested - end of period | $ / shares $ 16.25
Performance-Based Restricted Stock Units  
Shares  
Nonvested - beginning of period | shares 1,868
Granted | shares 339
Vested | shares (418)
Cancelled/Forfeited | shares (327)
Nonvested - end of period | shares 1,462
Weighted-Average Grant Date Fair Value  
Nonvested - beginning of period | $ / shares $ 17.44
Granted | $ / shares 39.54
Vested | $ / shares 22.22
Cancelled/Forfeited | $ / shares 18.56
Nonvested - end of period | $ / shares $ 20.95
v3.22.0.1
Retirement Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($)
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
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 $ 14,700,000 $ 13,300,000 $ 11,500,000
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 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%    
v3.22.0.1
Income Taxes - Additional Information (Detail) - USD ($)
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Feb. 03, 2018
Feb. 02, 2019
Income Taxes [Line Items]          
U.S. federal corporate tax rate 21.00% 21.00% 21.00% 35.00%  
CARES act of 2020, net operating loss carryback period 5 years        
Net operating loss $ 27,643,000 $ 10,160,000      
Valuation allowances 25,628,000 12,263,000      
Foreign tax credit carryovers $ 3,000,000.0 900,000      
Foreign tax credit carryovers expiration date 2028        
Deferred tax asset related to State income tax credit carryforwards, net of federal tax $ 7,500,000 7,400,000      
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 $ 1,800,000 1,800,000      
Deferred tax assets, capital losses $ 4,213,000 4,471,000      
Capital losses, carryforward period 5 years        
Valuation allowance on deferred tax asset to capital losses $ 4,200,000 4,500,000      
Deferred tax assets, Other long term assets 8,208,000        
Valuation allowance on deferred tax assets to other long term assets 8,200,000        
Undistributed foreign earnings 87,800,000        
Deferred income taxes $ (12,850,000) (34,890,000) $ 6,541,000    
Percent of dividends received as deduction for tax act 100.00%        
Unrecognized tax benefits $ 3,259,000 2,563,000 2,781,000   $ 6,534,000
Unrecognized tax benefits that would affect effective income tax rate if recognized 2,600,000 2,000,000.0      
Increase (decrease) in unrecognized tax benefits 700,000 (200,000) 3,800,000    
Reasonably possible amount of reduction in unrecognized tax benefit over the next twelve months 1,000,000.0        
Accrued interest and penalties related to unrecognized tax benefits 900,000 700,000      
Income tax expense (benefit) $ 139,293,000 $ (82,999,000) $ 54,021,000    
Effective income tax benefit rate 24.90% 28.40% 22.00%    
Retained Earnings          
Income Taxes [Line Items]          
Deferred income taxes $ 0        
Federal          
Income Taxes [Line Items]          
Net operating loss 15,300,000        
State          
Income Taxes [Line Items]          
Net operating loss 6,100,000        
Foreign          
Income Taxes [Line Items]          
Net operating loss 6,200,000        
Deferred Tax Asset Operating Loss Carryforwards State          
Income Taxes [Line Items]          
Valuation allowances 2,700,000        
Deferred Tax Asset Operating Loss Carryforwards Foreign          
Income Taxes [Line Items]          
Valuation allowances 6,100,000 $ 4,300,000      
Deferred Tax Asset Other Foreign          
Income Taxes [Line Items]          
Valuation allowances 1,600,000 800,000      
Deferred Tax Asset Tax Credit Carryforwards Foreign          
Income Taxes [Line Items]          
Valuation allowances $ 1,000,000.0 $ 900,000      
v3.22.0.1
Income Taxes - Components of Income (Loss) Before Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Income Tax Disclosure [Abstract]      
U.S. $ 520,952 $ (294,208) $ 229,906
Foreign 37,970 1,935 15,372
income (loss) before income taxes $ 558,922 $ (292,273) $ 245,278
v3.22.0.1
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Jan. 29, 2022
Jan. 30, 2021
Deferred tax assets:    
Operating lease ROU assets $ 380,117 $ 389,604
Net Operating Loss 27,643 10,160
Employee compensation and benefits 20,521 3,124
Accruals not currently deductible 11,645 8,538
Deferred compensation 8,429 7,400
Other long term assets 8,208  
State tax credits 7,546 7,407
Inventories 5,220 3,267
Capital Loss 4,213 4,471
Allowance for Doubtful Accounts 3,201 750
Foreign tax credits 2,982 943
Other 5,757 2,093
Gross deferred tax assets 485,482 437,757
Valuation allowance (25,628) (12,263)
Total deferred tax assets 459,854 425,494
Deferred tax liabilities:    
Operating lease liabilities (308,299) (310,888)
Property and equipment (87,192) (56,487)
Convertible Senior Note (15,384) (20,589)
Prepaid expenses (2,215) (2,294)
Other (2,597) (2,191)
Total deferred tax liabilities (415,687) (392,449)
Total deferred tax assets, net $ 44,167 $ 33,045
v3.22.0.1
Income Taxes - Components of Provision (Benefit) for Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Current:      
Federal $ 107,493 $ (59,080) $ 25,745
Foreign taxes 19,671 7,443 8,137
State 24,979 3,528 13,598
Total current 152,143 (48,109) 47,480
Deferred:      
Federal (12,637) (17,286) 12,289
Foreign taxes (1,284) (4,622) (1,213)
State 1,071 (12,982) (4,535)
Total deferred (12,850) (34,890) 6,541
(Benefit) Provision for income taxes $ 139,293 $ (82,999) $ 54,021
v3.22.0.1
Income Taxes - Activity Related to Unrecognized Tax Benefits (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Income Tax Disclosure [Abstract]      
Unrecognized tax benefits, beginning of the year balance $ 2,563 $ 2,781 $ 6,534
Increases in current period tax positions 251 602 422
Increases in tax positions of prior periods 688 1 151
Settlements 0 (450) (2,223)
Lapse of statute of limitations (93) (289) (720)
Decreases in tax positions of prior periods (150) (82) (1,383)
Unrecognized tax benefits, end of the year balance $ 3,259 $ 2,563 $ 2,781
v3.22.0.1
Income Taxes - Reconciliation Between Statutory Federal Income Tax Rate and Effective Income Tax Rate (Detail)
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Feb. 03, 2018
Income Tax Disclosure [Abstract]        
Federal income tax rate 21.00% 21.00% 21.00% 35.00%
State income taxes, net of federal income tax effect 4.10% 3.10% 3.60%  
Foreign rate differential 0.60% 0.30% (0.60%)  
International provisions of Tax Act (0.50%) 0.00% (2.10%)  
Rate differential on CARES Act NOL carryback 0.00% 8.10% 0.00%  
Valuation allowance changes, net 0.20% (2.60%) 0.30%  
Non-deductible executive compensation 1.30% (2.10%) 0.60%  
Change in unrecognized tax benefits 0.10% (0.10%) 0.10%  
Share Based Payments (0.80%) 0.40% (0.50%)  
Other (1.10%) 0.30% (0.40%)  
Effective Income Tax Rate Reconciliation, Percent, Total 24.90% 28.40% 22.00%  
v3.22.0.1
Segment Reporting - Additional Information (Detail)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
USD ($)
Segment
Jan. 30, 2021
USD ($)
Segment Reporting Information [Line Items]    
Number of operating segments 2  
Number of reportable segments 2  
Operating lease right-of-use assets | $ $ 1,193,021 $ 1,155,965
v3.22.0.1
Segment Reporting - Summary of Reportable Segment Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Segment Reporting Information [Line Items]      
Total net revenue [1] $ 5,010,785 $ 3,759,113 $ 4,308,212
Operating income (Ioss) [1] 591,065 (271,345) 233,345
Asset impairment charges 11,944 [1],[2] 249,163 [3] 66,252 [4]
Impairment, restructuring and COVID-19 related charges 11,944 279,826 [1] 80,494 [1]
Adjusted operating income (loss) [1] 603,009 8,481 313,839
Depreciation and amortization [1] 166,781 162,402 179,050
Capital expenditures [1] 233,847 127,975 210,360
Operating Segments | American Eagle      
Segment Reporting Information [Line Items]      
Total net revenue 3,555,706 2,733,849 3,479,592
Operating income (Ioss) 785,729 93,029 484,078
Asset impairment charges 10,231    
Impairment, restructuring and COVID-19 related charges   144,486 41,657
Adjusted operating income (loss) 795,960 237,515 525,735
Depreciation and amortization 59,641 63,019 75,889
Capital expenditures 47,106 36,606 98,699
Operating Segments | Aerie      
Segment Reporting Information [Line Items]      
Total net revenue 1,376,269 989,989 801,035
Operating income (Ioss) 212,287 60,298 47,465
Asset impairment charges 1,713    
Impairment, restructuring and COVID-19 related charges   52,849 20,261
Adjusted operating income (loss) 214,000 113,147 67,726
Depreciation and amortization 33,834 26,647 22,578
Capital expenditures 80,062 32,723 56,283
Corporate and Other, Non-Segment      
Segment Reporting Information [Line Items]      
Total net revenue [5] 78,810 35,275 27,585
Operating income (Ioss) [5] (406,951) (424,672) (298,198)
Impairment, restructuring and COVID-19 related charges [5]   82,491 18,576
Adjusted operating income (loss) [5] (406,951) (342,181) (279,622)
Depreciation and amortization [5] 73,306 72,736 80,583
Capital expenditures [5] $ 106,679 $ 58,646 $ 55,378
[1] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
[2] The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.
[3] In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.
[4] In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.
[5] Corporate and Other includes revenue and operating results of the Todd Snyder brand, Unsubscribed brand, and Supply Chain Platform, which have been identified as separate operating segments, but are not material to disclose as separate reportable segments. Corporate operating costs represents certain costs that are not directly attributable to another reportable segment.
v3.22.0.1
Segment Reporting - Summary of Reportable Segment Information (Parenthetical) (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Segment Reporting [Abstract]      
Interest expense (income), net $ 34,632 $ 24,610 $ (6,202)
Other income, net $ 2,489 $ 3,682 $ 5,731
v3.22.0.1
Segment Reporting - Summary of Geographical Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Revenues From External Customers And Long Lived Assets [Line Items]      
Total net revenue [1] $ 5,010,785 $ 3,759,113 $ 4,308,212
Long-lived assets, net:      
Total long-lived assets, net 2,295,410 1,850,105  
United States      
Revenues From External Customers And Long Lived Assets [Line Items]      
Total net revenue 4,336,806 3,295,028 3,710,270
Long-lived assets, net:      
Total long-lived assets, net 2,137,835 1,705,561  
Foreign      
Revenues From External Customers And Long Lived Assets [Line Items]      
Total net revenue [2] 673,979 464,085 $ 597,942
Long-lived assets, net:      
Total long-lived assets, net $ 157,575 $ 144,544  
[1] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
[2] Amounts represent sales from American Eagle and Aerie international retail stores, and e-commerce sales that are billed to and/or shipped to foreign countries and international franchise royalty revenue.
v3.22.0.1
Summary of Impairment,Restructuring and COVID-19 Related Charges (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
Jan. 30, 2021
Feb. 01, 2020
Restructuring Cost And Reserve [Line Items]      
Long-lived asset Impairment charges $ 11,944 [1],[2] $ 249,163 [3] $ 66,252 [4]
Incremental COVID-19 related expenses [5]   26,930  
Severance and related employee costs   3,733 6,691
Other restructuring charges [6]     7,551
Total impairment, restructuring, and COVID-19 related charges $ 11,944 $ 279,826 [2] $ 80,494 [2]
[1] The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.
[2] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
[3] In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.
[4] In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.
[5] Incremental COVID-19 related expenses consisting of personal protective equipment and supplies for our associates and customers.
[6] Other restructuring charges consists of $4.2 million of joint business venture exit charges, $1.8 million of Japan market transition costs and $1.5 million of China restructuring in Fiscal 2019.
v3.22.0.1
Summary of Impairment,Restructuring and COVID-19 Related Charges (Parenthetical) (Detail)
 12 Months Ended
Jan. 29, 2022
USD ($)
Store
Jan. 30, 2021
USD ($)
Feb. 01, 2020
USD ($)
Store
Restructuring Cost And Reserve [Line Items]      
Asset impairment charges $ 11,944,000 [1],[2] $ 249,163,000 [3] $ 66,252,000 [4]
Number of retail stores | Store 1,000    
Goodwill impairment $ 0 0 1,700,000
Joint business venture exit charges     4,200,000
Japan      
Restructuring Cost And Reserve [Line Items]      
Market transition costs     1,800,000
China      
Restructuring Cost And Reserve [Line Items]      
Restructuring     1,500,000
Retail Stores      
Restructuring Cost And Reserve [Line Items]      
Asset impairment charges   203,200,000 $ 64,500,000
Number of retail stores | Store     20
Impairment of operating lease ROU assets   154,800,000 $ 25,000,000.0
Leasehold Improvements and Store Fixtures | Retail Stores      
Restructuring Cost And Reserve [Line Items]      
Asset impairment charges     $ 39,500,000
Corporate Property and Equipment | Retail Stores      
Restructuring Cost And Reserve [Line Items]      
Asset impairment charges   28,000,000.0  
Store Property and Equipment (Fixtures and Equipment and Leasehold Improvements) | Retail Stores      
Restructuring Cost And Reserve [Line Items]      
Asset impairment charges   48,400,000  
Cost And Equity Method Investments | Retail Stores      
Restructuring Cost And Reserve [Line Items]      
Asset impairment charges   $ 18,000,000.0  
[1] The Company recorded impairment charges of $11.9 million in Fiscal 2021, primarily related to store property and equipment and operating lease ROU assets.
[2] The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to our reportable segments:

- For Fiscal 2021: interest expense (income), net of $34.6 million and other income, net of $2.5 million

- For Fiscal 2020: interest expense (income), net of $24.6 million and other income, net of $3.7 million

- For Fiscal 2019: interest expense (income), net of ($6.2) million and other income, net of $5.7 million
[3] In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments.
[4] In Fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in Fiscal 2019.
v3.22.0.1
Rollforward of Restructuring Liabilities Recognized in Consolidated Balance Sheets (Detail)
$ in Thousands
 12 Months Ended
Jan. 29, 2022
USD ($)
Restructuring and Related Activities [Abstract]  
Accrued liability as of January 30, 2021 $ 2,812
Add: Costs incurred, excluding non-cash charges 1,367
Less: Cash payments and adjustments (2,812)
Accrued liability as of January 29, 2022 $ 1,367