American Eagle Outfitters (NYSE: AEO) is an American clothing and accessories retailer based in Pittsburgh, Pennsylvania. The American Eagle Outfitters brand targets 15 to 25 year old males and females, with 900+ retail locations in the U.S. and Canada and an online store. It was founded in 1977 by Mark and Jerry Silverman as a subsidiary of Retail Ventures, Inc., a company which also owned and operated Silverman's Menswear. The Silvermans sold their ownership interests in 1991.[3] On March 16, 2010, American Eagle Outfitters opened its first store in the Middle East at Mirdif City Centre in Dubai, United Arab Emirates.[4] Some of the best selling products of American Eagle Outfitters are low-rise jeans, polo shirts, graphic T-shirts (with the AE logo and year established), henleys, boxers and briefs, outerwear, and swimwear.

American Eagle Outfitters, Inc. offers on-trend clothing, accessories and personal care products. It operates under the American Eagle (AE), aerie by American Eagle, 77kids by american eagle and MARTIN+OSA (M+O) brands. As of January 30, 2010, it operated 938 American Eagle Outfitters stores in the United States and Canada, 137 aerie stand-alone stores and 28 MARTIN+OSA stores. During the fiscal year ended January 30, 2010 (fiscal 2009), the Company operated in all 50 states, Puerto Rico and Canada. During fiscal 2009, it opened 29 stores, consisting of eight United States AE stores and 21 aerie stores, including two Canadian aerie stores.
AE Brand
The American Eagle Outfitters brand targets 15- to 25-year old girls and guys. It offers Denim’s, sweaters, graphic t-shirts, fleece, outerwear and accessories.
aerie by American Eagle
The Company’s aerie by American Eagle (aerie) is used by 15- to 25-year-old AE girl. The collection is available in 137 standalone aerie stores throughout the country, online at aerie.com and at select American Eagle stores. aerie features a fitness line called aerie f.i.t., as well as a personal care collection that includes fragrance, body care and cosmetics to complement the aerie lifestyle.
77kids by american eagle
77kids by american eagle (77kids) offers on-trend, clothing and accessories for kids ages 2to 10. The Company focuses on opening five 77kids brick-and-mortar stores in Fiscal 2010.
MARTIN+OSA
MARTIN+OSA (M+O) provides clothing and accessories for 28- to 40-year old men and women. It offers clothing and accessories at its 28 stores
AEO Direct
The Company sells merchandise via its e-commerce operations, ae.com, aerie.com, 77kids.com and martinandosa.com. It ships these merchandise to 75 countries.

The year 1996 was a transitional one for American Eagle as it cut back drastically on its expansion plans in order to reposition the chain once again. In search of higher-margin merchandise to offer, Markfield and Kolber determined that the chain had to sell more women's apparel, which is typically more profitable. The leaders also decided to completely divorce American Eagle of its once-eclectic range of customers and target the lucrative youth market--ages 16 to 34--through a younger and hipper feel to the clothing and in the chain's marketing. The company launched a "magalog," a catalog of merchandise that also included editorial content of interest to this key demographic, including music and book reviews, feature stories, horoscopes, and advice columns. Finally, American Eagle would strongly emphasize value pricing through a commitment to private label merchandise. Remaining at the chain's core was its venerable rugged, outdoorsy style.
For fiscal 1996 (the first year of the company's new fiscal year, which now ended at the end of January), about 98 percent of the company's sales were generated from its private label brands, American Eagle Outfitters, AE, and AE Supply. Women's clothing, meantime--which in fiscal 1995 had accounted for only 30 percent of sales--accounted for 47 percent of sales by that time.
If 1996 was a transitional year for American Eagle, then the transition went exceedingly well, as 1997 turned into a breakout year. For the year, sales increased 24.3 percent to a record $405.7 million, while net income more than tripled, going from $5.9 million in 1996 to $19.5 million in 1997. Comparable store sales were very strong, increasing 15.1 percent in 1997 compared to the previous year.
In addition to opening 32 new stores in 1997, American Eagle that year also for the first time began manufacturing its own clothing through the acquisition of Prophecy Ltd., a New York-based contract apparel maker which had been majority owned by the Schottenstein family. This move toward further vertical integration was in keeping with the chain's desire to control costs and maintain quality. The terms of the purchase were $900,000 in cash plus a contingency payment of up to $700,000.
Early 1998 was a busy period for American Eagle as it introduced the AE Clear Card, the first clear credit card. By the end of 1999, the card accounted for 14 percent of total sales. The company also began to open new stores outside of enclosed malls, in airports, strip malls, and other locales. AE also undertook a West Coast expansion that year, with openings in Seattle and Tacoma, Washington as well as Portland, Oregon. AE also launched a Web site to appeal to the chain's youth-oriented customer base. The company envisioned its Internet outlet not so much as a primary sales vehicle, but more as a way for customers to "preshop" and for the company to track geographic areas that were ripe for retail expansion.
The company's growth strategies were well-timed, as AE rode a rising tide in the young men's clothing business. During the late 1990s, the U.S. teen population--AE's key demographic--expanded more rapidly than the general populace. Women's Wear Daily, a clothing industry periodical, called AE "one of the hottest retailers in the country," citing it as "a case study on how to build a brand." The renewed strength of American Eagle was also evident in two separate three-for-two stock splits, which occurred during the first five months of 1998. AE posted record results that fiscal year, as earnings increased more than 175 percent to $54.1 million on a 44.8 percent increase in sales, to $587.6 million.
AEO's success garnered the attention of upscale competitor Abercrombie & Fitch, which brought three lawsuits over the course of four years accusing AEO of "intentionally and systematically copying" everything from the paper its catalog was printed on to editorial content and product names like "vintage sweatshirts" and "field jerseys." American Eagle won each case, some by outright dismissal.
Having successfully repositioned its brand, AEO moved to fine-tune in-house efficiencies in the latter years of the 1990s. The company instituted a new computer system that would separate inventory and personnel management from sales transactions. Capturing up-to-the-minute information on fast and slow moving merchandise gave the company the ability to refine production schedules in line with demand. More efficient distribution meant that the company could keep up with the fast-changing tastes of U.S. teens. In 2000, AE announced its plans to open a distribution center near Kansas City, Missouri, to support its growth plans for the Western United States.
The company continued to hone its marketing strategy as well, becoming the official costumer for the television series Dawson's Creek and inking a deal with Dimension Films to provide the wardrobe for no fewer than four of its teen-oriented films in the years to come. AE subsequently signed a deal to provide clothing to the 10th anniversary season of MTV's Road Rules reality series as well. The company soon added national television advertising, primarily via cable.
Writing for WWD, Jennifer Weitzman attributed AE's success to its sole focus on the teen market, noting that the appeal to a particular clique--in this case, "jock-prep"--differentiated it from stores like the Gap, which had a broader pull. The pitfall of this niche marketing strategy was the fickle nature of teen tastes; if AE were to fall out of favor, it would have a difficult time regaining its following.
The company reached a milestone at the end of the 20th century, crossing the $1 billion sales mark in fiscal 2000 (the year ended February 2, 2000).
New Century, New Country
In 2000, American Eagle made a bold move into the Canadian market with the purchase of the a 172-store chain and its warehouse operations from Dylex Limited for $74 million. Like AE, the 115-store Thriftys chain offered "Bluenotes" private-label clothing at locations in major shopping malls. The acquisition provided an opportunity for AE to quickly convert the majority of these stores to its own format. By early 2002, it had made 46 such changes. As American Eagle CFO Laura Weil told Mortgage Banking, "It would have taken years to build up this kind of store location portfolio any other way."
The company chalked up another year of record earnings in fiscal 2001, with a net income of $105.5 million on sales of $1.37 billion. Despite a recession, sales continued to grow in fiscal 2002, increasing 6.7 percent to $1.5 billion. However, the Bluenotes/Thriftys operations proved a drag on results, with sales for that segment of the company falling 5.7 percent for the period.
After ten years at the helm, Jay L. Schottenstein relinquished the chief executive office to Roger S. Markfield and James V. O'Donnell, who served as co-CEOs beginning in December 2002. By early 2003, American Eagle appeared to be weathering the recession quite handsomely, but its new leaders faced the ongoing challenges of converting the remaining Canadian operations to the AE format, as well as continuing to correctly gauge the finicky tastes of North America's youth.
Principal Subsidiaries: Prophecy Ltd.; Eagle Trading (Mexico).
Principal Competitors: The Gap, Inc.; Eddie Bauer, Inc.; Abercrombie & Fitch Co.


OVERALL
Beta: 1.09
Market Cap (Mil.): $3,080.01
Shares Outstanding (Mil.): 194.69
Annual Dividend: 0.44
Yield (%): 2.78
FINANCIALS
AEO Industry Sector
P/E (TTM): 17.49 18.44 9.39
EPS (TTM): -11.10 -- --
ROI: 11.30 12.45 0.84
ROE: 12.42 14.44 1.53


Statistics:
Public Company
Incorporated: 1993
Employees: 10,892
Sales: $1.5 billion (2002)
Stock Exchanges: NASDAQ
Ticker Symbol: AEOS
NIAC: 448190 Other Clothing Stores; 448150 Clothing Accessories Stores


Key Dates:
1977: American Eagle Outfitters (AE) is launched as segment of Silvermans Menswear, Inc.
1991: AE grows to 153 stores.
1992: The company focuses on private-label merchandise.
1993: American Eagle Outfitters, Inc. is incorporated.
1994: AE goes public with a listing on the NASDAQ stock exchange.
2000: AE steps up its promotional campaign, gaining exposure for its clothing on the television series "Dawson's Creek" and in teen-oriented movies.
2001: AE generates record net income of $105.5 million.


Name Age Since Current Position
Schottenstein, Jay 56 2002 Chairman of the Board
O'Donnell, James 69 2003 Chief Executive Officer, Director
Markfield, Roger 68 2009 Vice Chairman of the Board, Executive Creative Director
Hilson, Joan 50 2009 Chief Financial Officer, Executive Vice President
DiDonato, Thomas 51 2005 Executive Vice President - Human Resources
Parodi, Dennis 58 2009 Executive Vice President - Store Operations
Rempell, Michael 36 2009 Executive Vice President, Chief Operating Officer of the New York Design Center
Jesselson, Michael 58 2008 Director
Wedren, Gerald 73 1997 Director
Page, Janice 61 2004 Director
McMillan, Cary 52 2007 Director
Ketteler, Thomas 65 2011 Independent Director

Address:
150 Thorn Hill Drive
Warrendale, Pennsylvania 15086-7528
U.S.A.
 
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