Financial Analysis

"11. Commitments and Contingencies Legal proceedings 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, as of the date of this Quarterly Report, 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 consolidated 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 which are not in accord with managements evaluation of the possible liability or outcome of such litigation or claims. U.S. Tariff Update On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (""IEEPA""). The Court of International Trade (CIT) subsequently issued an interim order requiring U.S. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"9. Share-Based Payments The Company accounts for share-based compensation under the provisions of ASC 718, Compensation - Stock Compensation , 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 the 13 weeks ended May 2, 2026 was $ 22.1 milli on ($ 18.4 million, net of tax) , and for the 13 weeks ended May 3, 2025 was $ 20.6 million ($ 15.8 million, net of tax) . Stock Option Grants The Company grants time-based stock option awards, which vest over the requisite service period of the award or at an employee's eligible retirement date, if earlier. A summary of the Companys stock option activity for the 13 weeks ended May 2, 2026 follows: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In years) (In thousands) Outstanding - January 31, 2026 4,543 $ 16.34 Granted 934 $ 16.52 Exercised - $ - Cancelled ( 267 ) $ 21.41 Outstanding - May 2, 2026 5,210 $ 16.11 4.6 13,771 Vested and expected to vest - May 2, 2026 5,052 $ 16.03 4.4 13,708 Exercisable - May 2, 2026 (1) 1,973 $ 12.10 3.4 9,557 (1) Options exercisable represent ""in-the-money"" vested options based upon the weighted-average exercise price of vested options compared to the Companys stock price on May 2, 2026 . As of May 2, 2026, there was $ 1.4 million of unrecognized compensation expen …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"4. 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 Companys cash equivalents are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 3, Cash and Cash Equivalents to the Consolidated Financial Statements for additional information regarding cash equivalents. Long-Term Debt As of May 2, 2026, the fair value of the Company's $ 85.0 million in outstanding borrowings under its Credit Facility approximated the carrying value. As of May 3, 2025, the fa …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

7. Goodwill and Intangible Assets, Net Goodwill and definite-lived intangible assets, net consist of the following: May 2, January 31, May 3, (In thousands) 2026 2026 2025 Goodwill, gross (1) $ 269,069 $ 269,063 $ 269,019 Accumulated impairment (2) ( 43,794 ) ( 43,794 ) ( 43,794 ) Goodwill, net $ 225,275 $ 225,269 $ 225,225 (1) The change in Goodwill, gross from period to period includes the effect of foreign currency rate fluctuations. (2) Accumulated impairment includes $ 43.8 million recorded prior to Fiscal 2025. May 2, January 31, May 3, (In thousands) 2026 2026 2025 Intangible assets, gross $ 148,402 $ 147,968 $ 147,558 Accumulated amortization ( 69,672 ) ( 68,626 ) ( 65,476 ) Accumulated impairment (1) ( 41,874 ) ( 41,874 ) ( 40,533 ) Intangible assets, net $ 36,855 $ 37,468 $ 41,549 (1) Accumulated impairment includes $ 1.3 million related to Quiet Platforms trade names recorded in Fiscal 2025, and $ 40.5 million of customer relationships and trade names related to Quiet Platforms recorded prior to Fiscal 2025.

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10. Income Taxes The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 13 weeks ended May 2, 2026 was 16.9 % compared to 23.2 % for the 13 weeks ended May 3, 2025. The change in the effective tax rate, as compared to the prior period, is primarily due to share-based payments and tax audit adjustments. The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense, which were insignificant for both the 13 weeks ended May 2, 2026, and May 3, 2025. The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Unrecognized tax benefits did no t change significantly during the 13 weeks ended May 2, 2026, and May 3, 2025.

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"8. Long-Term Debt, Net Revolving Credit Facility In June 2022, the Company entered into an amended and restated Credit Agreement. The Credit Agreement provides senior secured asset-based revolving credit for loans and letters of credit up to $ 700 million, subject to customary borrowing base limitations. The Credit Facility expires on June 24, 2027 . All obligations under the Credit Facility are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by certain assets of the Company and certain subsidiaries. As of May 2, 2026 , the Company was in compliance with the terms of the Credit Agreement and had $ 85 million in outstanding borrowings a nd $ 12 million outstanding in stand-by letters of credit. As of May 3, 2025, the Company was in compliance with the terms of the Credit Agreement and had $ 110.0 million in outstanding borrowings and $ 12 million outstanding in stand-by letters of credit Borrowings under the Credit Facility accrue interest at the election of the Company at an adjusted secured overnight financing rate (""SOFR"") plus 0.10 % plus an applicable margin (ranging from 1.125 % to 1.375 %) or an alternate base rate plus an applicable margin (ranging from 0.125 % to 0.375 %), with each such applicable margin being based on average borrowing availability under the Credit Facility. Interest is payable quarterly and at the end of each applicable interest period. The total interest expense related to the Credit Fa …

LongTermDebtTextBlock · excerpt; the full note is in the filing

"Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2024-03, Disaggregation of Income Statement Expenses (""ASU 2024-03""), which requires disclosure of additional information for specific expense categories in the notes to financial statements for interim and annual periods. Specifically, the amendment requires quantitative disclosure for purchases of inventory, employee compensation, depreciation, and intangible asset amortization within an expense caption. For any remaining amounts within an expense caption, a qualitative description must be included. In all reporting periods, a total selling expense amount must be disclosed, with an annual disclosure of the entity's definition of selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company plans to adopt ASU 2024-03 effective for Fiscal 2027. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (""ASU 2025-05""), which amends the guidance under Topic 326. This amendment provides the option to use a practical expedient to assume balance sheet conditions remain unchanged when developing forecasts for estimating expected credit losses. The guidance is effective for fiscal years beginning after December 15, 2025. The Company has adopted ASU 2025-05, which did not have a material impact to the Consolidat …

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"12. Segment Reporting In accordance with ASC 280, Segment Reporting (""ASC 280""), the Company has identified two operating segments (American Eagle brand and Aerie brand) that also represent our reportable segments and reflect the CODMs internal view of analyzing results and allocating resources. Additionally, our Todd Snyder and Unsubscribed brands, as well as Quiet Platforms until the completion of its operational wind-down, have been identified as separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they are presented under the ""Other"" caption, as permitted by ASC 280. Unallocated corporate expenses are comprised of general and administrative costs that management does not attribute to any of our operating segments. These costs primarily relate to corporate administration, information and technology resources, finance and human resources functional and organizational costs, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects. Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (loss), or the operating income (loss) in periods where there are no adjustments, of each segment. Adjusted operating income (loss) is a non-GAAP financial measure (""non-GAAP"" or ""adjusted"") that is defined by the Company as operating income excluding impairment and restructuri …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"2. Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and consolidated entities where the Company's ownership percentage is less than 100 %. Non-controlling interests (NCI) share of net income (loss) is presented as net income (loss) attributable to NCI on the Consolidated Statements of Operations and Comprehensive Income and the NCI share of stockholders equity is presented as a component of Total stockholders' equity on the Consolidated Balance Sheets. Certain prior-period amounts have been reclassified to conform to the current-period presentation, including the separate presentation of non-controlling interests. These reclassifications had no impact on the Companys operating income, net income attributable to NCI, net income per common share attributable to AEO or cash flows. All intercompany transactions and balances have been eliminated in consolidation. At May 2, 2026 , 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 2028 refers to the 53-week period that will end on February 3, 2029. ""Fiscal 2027"" refers to the 52-week period that will end on January 29, 2028. ""Fiscal 2026"" refers to the 52-week period that will end on January 30, 2027. ""Fiscal 2025"" refers to the 52-week period ended J …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"14. Subsequent Events U.S. Tariff Refund Update Beginning on May 12, 2026, the Company began to receive refunds of its tariff claims submitted through CBPs CAPE system. As of the date of this Quarterly Report, the Company has received refunds of $ 108.3 million. This amount, plus any additional refunds received will be recorded as a reduction of cost of sales for the 13 weeks ending August 1, 2026. The timing and ultimate availability of any additional refunds remains uncertain. During Fiscal 2025, prior to the U.S. Supreme Court decision invalidating the IEEPA tariffs, the Company entered into a participation agreement with a third-party buyer (the ""buyer"") pursuant to which the Company sold a portion of its claims for refunds of previously paid tariffs imposed under the IEEPA (the ""Participation Agreement""). Under the terms of the Participation Agreement, the third-party purchased $ 68.9 million of the Company's refund claims for $ 18.6 million in cash, which was accounted for under ASC 470, Debt . Accretion expense related to the Participation Agreement is recorded as interest expense. Any benefit associated with the claims included in the Participation Agreement are owed to the buyer when a refund is received from CBP. As a result of refunds received subsequent to May 2, 2026, $ 33.1 million was paid to the buyer as of the filing date of this Quarterly Report."

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