6- On February 2, 2008 there are _____ thousand shares of common stock issued with a total cost

| June 13, 2016

Question
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K
¥

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended January 30, 2010
OR

n

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-33338

American Eagle Outfitters, Inc.
(Exact name of registrant as specified in its charter)

Delaware

No. 13-2721761

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

77 Hot Metal Street, Pittsburgh, PA

15203-2329

(Address of principal executive offices)

(Zip Code)

Registrants telephone number, including area code:
(412) 432-3300
Securities registered pursuant to Section 12(b) of the Act:
Common Shares, $0.01 par value
New York Stock Exchange
(Title of class)

(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. YES ¥
NO n
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Sections 15(d) of the
Act. YES n
NO ¥
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files), and (2) has been subject to the filing requirements for the past
90 days. YES ¥
NO n
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files). YES n
NO n
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this
chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. n
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¥

Accelerated filer n
Non-accelerated filer n
Smaller reporting company n
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). YES n
NO ¥
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of
August 1, 2009 was $2,583,043,775.
Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest
practicable date: 209,044,166 Common Shares were outstanding at March 19, 2010.
DOCUMENTS INCORPORATED BY REFERENCE
Part III Proxy Statement for 2010 Annual Meeting of Stockholders, in part, as indicated.

AMERICAN EAGLE OUTFITTERS, INC.
TABLE OF CONTENTS
Page
Number

Item
Item
Item
Item
Item
Item

1.
1A.
1B.
2.
3.
4.

PART I
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unresolved Staff Comments. . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

…………………..
…………………..
…………………..
…………………..
…………………..
…………………..

PART II
Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7.
Managements Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2
9
12
13
13
13

Item 5.

Item 13.
Item 14.

PART III
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . .
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 15.

PART IV
Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 10.
Item 11.
Item 12.

1

14
17
19
33
34
70
70
72
72
72
72
72
72
72

PART I
ITEM 1.

BUSINESS.

General
As used in this report, all references to we, our, and the Company refer to American Eagle Outfitters,
Inc. (AEO, Inc.) and its wholly-owned subsidiaries. American Eagle Outfitters, American Eagle, AE, and
the AE Brand refer to our U.S. and Canadian American Eagle Outfitters stores. AEO Direct refers to our
e-commerce operations, ae.com, aerie.com, martinandosa.com and 77kids.com. NLS refers to National Logistics
Services which we operated in Canada prior to its disposition during the 53 week period ended February 3, 2007.
Our financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, Fiscal
2010 refers to the 52 week period ending January 29, 2011. Fiscal 2009, Fiscal 2008 and Fiscal 2007 refer to
the 52 week periods ended January 30, 2010, January 31, 2009 and February 2, 2008, respectively. Fiscal 2006
refers to the 53 week period ended February 3, 2007. Fiscal 2005 refers to the 52 week period ended January 28,
2006.
American Eagle Outfitters, Inc., a Delaware corporation, operates under the American Eagle» (AE»), aerie»
by American Eagle», 77kids» by american eagle» and MARTIN+OSA» (M+O) brands.
Founded in 1977, American Eagle Outfitters» is a leading apparel and accessories retailer that operates more
than 1,000 retail stores in the U.S. and Canada, and online at ae.com». Through its family of brands, AEO, Inc.
offers high quality, on-trend clothing, accessories and personal care products at affordable prices. Our online
business, AEO Direct, ships to 75 countries worldwide.
American Eagle Outfitters» boasts a passionate and loyal customer base ranging from college students to
Hollywood celebrities. The Company focuses on delivering the right product at the right price, combined with a
philosophy of operational excellence and discipline across the organization.
As of January 30, 2010, we operated 938 American Eagle Outfitters stores in the United States and Canada,
137 aerie stand-alone stores and 28 MARTIN+OSA stores.
Subsequent to Fiscal 2009, on March 5, 2010, the Board of Directors (the Board) of the Company approved
managements recommendation to proceed with the closure of M+O. The decision to take this action resulted from
an extensive evaluation of M+O and review of strategic alternatives, which revealed that it was not achieving
performance levels that warranted further investment. As a result of this decision, the Company plans to close all 28
stores and cease all online and corporate operations for M+O in Fiscal 2010. Refer to Note 15 to the Consolidated
Financial Statements for additional information regarding the planned closure of M+O.
Growth Strategy
Our primary growth strategies are focused on the following key areas of opportunity:
AE Brand
The American Eagle Outfitters» brand targets 15- to 25-year old girls and guys, achieving the perfect
combination of American prep and current fashion. Denim is the cornerstone of the American Eagle» product
assortment, which is completed by other key categories including sweaters, graphic t-shirts, fleece, outerwear and
accessories. The American Eagle» attitude is honest, real, individual and fun. American Eagle» is priced to be worn
by everyone, everyday, delivering value through quality and style.
Gaining market share in key categories, such as graphic tees and fleece is a primary focus within the AE brand.
In addition, we will build upon our number one position in denim. Delivering value, variety and versatility to our
customers remains a top priority. While AE has always been a value brand, we will continue to underscore a value
message with customers. We will offer value at all levels of the assortment, punctuated with compelling, preplanned promotions that are profitable to the business. We are reducing production lead-times, which enables us to
2

react more quickly and profit from emerging trends. Finally, we continue to innovate our store experience to be
more impactful from front to back.
aerie by American Eagle
In the fall of 2006, the Company launched aerie» by American Eagle (aerie), a collection of Dormwear»,
intimates and personal care products for the 15- to 25-year-old AE» girl. What started as a sub-brand quickly
became a standalone concept in its own right. The collection is available in 137 standalone aerie stores throughout
the United States and Canada, online at www.aerie.com, and at select American Eagle» stores. aerie» features a
complete fitness line called aerie f.i.t.TM, as well as a personal care collection that includes fragrance, body care and
cosmetics to complement the aerie lifestyle. Designed to be sexy, comfortable and cozy, aerie» offers AE»
customers a new way to express their personal style everyday.
77kids by american eagle
Introduced in October of 2008 as an online-only brand, 77kids by american eagle» (77kids) offers on-trend,
high-quality clothing and accessories for kids ages two to 10. We plan to open five 77kids» brick-and-mortar stores
in Fiscal 2010. The brand draws from the strong heritage of American Eagle Outfitters», with a point-of-view thats
thoughtful, playful and real. Like American Eagle» clothing, 77kids focuses on great fit, value and style. All
77kids» clothing is backed by the brands 77washTM and 77softTM guarantees to maintain size, shape and quality and
to be extremely soft and comfortable through dozens of washes.
AEO Direct
We sell merchandise via our e-commerce operations, ae.com, aerie.com, 77kids.com and martinandosa.com,
which are extensions of the lifestyle that we convey in our stores. We currently ship to 75 countries. In addition to
purchasing items online, customers can experience AEO Direct in-store through Store-to-Door. Store-to-Door
enables store associates to sell any item available online to an in-store customer in a single transaction, without
placing a phone call. Customers are taking advantage of Store-to-Door by purchasing extended sizes that are not
available in-store, as well as finding a certain size or color that happens to be out-of-stock at the time of their visit.
The ordered items are shipped to the customers home free of charge. We accept PayPal as a means of payment from
our ae.com, aerie.com and 77kids.com customers. We are continuing to focus on the growth of AEO Direct through
various initiatives, including improved site efficiency and faster check-out, expansion of sizes and styles, and
targeted marketing strategies.
Information concerning our segments and certain geographic information is contained in Note 2 of the
Consolidated Financial Statements included in this Form 10-K and is incorporated herein by reference.
Real Estate
During Fiscal 2009 and continuing into Fiscal 2010, we are taking a more cautious stance on real estate growth
in light of a slow-down in the economy. However, we remain focused on several well-defined strategies that we have
in place to grow our business and strengthen our financial performance.
We are continuing the expansion of our brands throughout the United States. At the end of Fiscal 2009, we
operated in all 50 states, Puerto Rico and Canada. During Fiscal 2009, we opened 29 new stores, consisting of eight
U.S. AE stores and 21 aerie stores, including two Canadian aerie stores. These store openings, offset by 24 store
closings, increased our total store base to 1,103 stores.
Additionally, our gross square footage increased by approximately 1% during Fiscal 2009, with approximately
58% attributable to the incremental square footage from 22 AE U.S. and Canadian store remodels and the remaining
42% attributable to new store openings.
In Fiscal 2010, we plan to open 14 AE and 20 aerie stores and remodel approximately 20 existing AE stores. We
plan to close all 28 M+O stores and 15 to 25 AE stores. We also plan to open five 77kids stores with an average size of
5,000 gross square feet. Our consolidated square footage growth is expected to be relatively flat compared to Fiscal
3

2009. We believe that there are attractive retail locations where we can continue to open American Eagle stores and our
other brands in enclosed regional malls, urban areas and lifestyle centers.
The tables below show certain information relating to our historical store growth in the U.S. and Canada:
Fiscal
2009

Fiscal
2008

987
122
(11)

Fiscal
2007

Fiscal
2006

Fiscal
2005

911
80
(4)

869
50
(8)

846
36
(13)

Consolidated stores at beginning of period . . . . . . . . . . . .
Consolidated stores opened during the period . . . . . . . . . .
Consolidated stores closed during the period . . . . . . . . . . .

1,098
29
(24)

Total consolidated stores at end of period . . . . . . . . . . .

1,103

1,098

987

911

869

Fiscal
2009

Fiscal
2008

Fiscal
2007

Fiscal
2006

Fiscal
2005

AE Brand stores at beginning of period . . . . . . . . . . . . . . .
AE Brand stores opened during the period . . . . . . . . . . . . .
AE Brand stores closed during the period . . . . . . . . . . . . . .

954
8
(24)

929
35
(10)

903
30
(4)

869
42
(8)

846
36
(13)

Total AE Brand stores at end of period . . . . . . . . . . . . . .

938

954

929

903

869

Fiscal
2009

Fiscal
2008

Fiscal
2007

Fiscal
2006

Fiscal
2005

aerie stores at beginning of period . . . . . . . . . . . . . . . . . . .
aerie stores opened during the period . . . . . . . . . . . . . . . . .
aerie stores closed during the period. . . . . . . . . . . . . . . . . .

116
21

39
77

3
36

3

Total aerie stores at end of period . . . . . . . . . . . . . . . . . .

137

116

39

3

Fiscal
2009

Fiscal
2008

Fiscal
2007

Fiscal
2006

Fiscal
2005

M+O stores at beginning of period . . . . . . . . . . . . . . . . . . .
M+O stores opened during the period . . . . . . . . . . . . . . . . .
M+O stores closed during the period . . . . . . . . . . . . . . . . .

28

19
10
(1)

5
14

5

Total M+O stores at end of period . . . . . . . . . . . . . . . . .

28

28

19

5

Remodeling of our AE stores into our current store format is important to enhance our customers shopping
experience. In order to maintain a balanced presentation and to accommodate additional product categories, we
selectively enlarge our stores during the remodeling process to an average 7,000 gross square feet, either within
their existing location or by upgrading the store location within the mall. We believe the larger format can better
accommodate our expansion of merchandise categories. We select stores for expansion or relocation based on
market demographics and store volume forecasts.
During Fiscal 2009, we remodeled 22 AE U.S. and Canadian stores. Of the 22 remodeled stores, 10 stores were
remodeled and expanded within their existing locations, nine stores were relocated to a larger space within the mall
and three stores were remodeled within their existing locations. Additionally, three stores were refurbished as
discussed below.
We maintain a cost effective store refurbishment program targeted towards our lower volume stores, typically
located in smaller markets. Stores selected as part of this program maintain their current location and size but are
updated to include certain aspects of our current store format, including paint and certain new fixtures.
4

Consolidated Store Locations
Our stores average approximately 5,800 gross square feet and approximately 4,700 on a selling square foot
basis. As of January 30, 2010, we operated 1,103 stores in the United States and Canada under the American Eagle
Outfitters, aerie and MARTIN+OSA brands as shown below:
United States, including the Commonwealth of Puerto Rico 1,015 stores
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois

18
5
16
9
89
14
18
5
50
34
4
4
37

Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana

22
13
10
13
14
4
21
33
35
22
8
19
2

Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico

8
6
8
28
3
62
31
4
40
12
11
66
5

Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

4
16
3
24
72
12
3
29
20
9
18
2

Canada 88 stores
Alberta . . . . . . . . . . 11 New Brunswick
British Columbia . . . 12 Newfoundland
Manitoba . . . . . . . . . 2 Nova Scotia

4 Ontario
2 Quebec
2 Saskatchewan

44
9
2

Purchasing
We purchase merchandise from suppliers who either manufacture their own merchandise, supply merchandise
manufactured by others or both. During Fiscal 2009, we purchased a majority of our merchandise from non-North
American suppliers.
All of our merchandise suppliers receive a vendor compliance manual that describes our quality standards and
shipping instructions. We maintain a quality control department at our distribution centers to inspect incoming
merchandise shipments for uniformity of sizes and colors and for overall quality of manufacturing. Periodic
inspections are also made by our employees and agents at manufacturing facilities to identify quality problems prior
to shipment of merchandise.
Corporate Responsibility
The Company is firmly committed to the principle that the people who make our clothes should be treated with
dignity and respect. We seek to work with apparel suppliers throughout the world who share our commitment to
providing safe and healthy workplaces. At a minimum, we require our suppliers to maintain a workplace
environment that complies with local legal requirements and meets universally-accepted human rights standards.
Our Vendor Code of Conduct (the Code), which is based on universally-accepted human rights principles,
sets forth our expectations for suppliers. The Code must be posted in every factory that manufactures our clothes in
the local language of the workers. All suppliers must agree to abide by the terms of our Code before we will place
production with them.
We maintain an extensive factory inspection program to monitor compliance with our Code. New garment
factories must pass an initial inspection in order to do business with us. Once new factories are approved, we then
strive to re-inspect them at least once a year. We review the outcome of these inspections with factory management
5

with the goal of helping them to continuously improve their performance. In cases where a factory is unable or
unwilling to meet our standards, we will take steps up to and including the severance of our business relationship.
In Fiscal 2007, we opened a compliance office in Hong Kong. Today, the Hong Kong-based team validates the
inspection reporting of our third-party vendor compliance auditors and works with new and existing factories on
remediation of issues. Also in Fiscal 2007, we instituted a process of pre-inspection for facilities being considered
for AE production and expanded our annual re-audit program to strive to include all primary existing facilities.
Security Compliance
During recent years, there has been an increasing focus within the international trade community on concerns
related to global terrorist activity. Various security issues and other terrorist threats have brought increased demands
from the Bureau of Customs and Border Protection (CBP) and other agencies within the Department of
Homeland Security that importers take responsible action to secure their supply chains. In response, we became
a certified member of the Customs Trade Partnership Against Terrorism program (C-TPAT) during 2004. CTPAT is a voluntary program offered by CBP in which an importer agrees to work with CBP to strengthen overall
supply chain security. Our internal security procedures were reviewed by CBP during February 2005 and a
validation of processes with respect to our external partners was completed in June 2005 and then re-evaluated in
June 2008. We received formal written validations of our security procedures from CBP during the first quarter of
Fiscal 2006 and the second quarter of Fiscal 2008, each indicating the highest level of benefits afforded to C-TPAT
members.
Historically, we took significant steps to expand the scope of our security procedures, including, but not
limited to: a significant increase in the number of factory audits performed; a revision of the factory audit format to
include a review of all critical security issues as defined by CBP; a review of security procedures of our other
international trading partners, including forwarders, consolidators, shippers and brokers; and a requirement that all
of our international trading partners be members of C-TPAT. In Fiscal 2007, we further increased the scope of our
inspection program to strive to include pre-inspections of all potential production facilities. In Fiscal 2009, we again
expanded the program to require all suppliers that have passed pre-inspections and reached a satisfactory level of
security compliance through annual factory re-audits to provide us with security self-assessments on at least an
annual basis. Additionally, in Fiscal 2009, we began evaluating additional oversight options for high-risk security
countries.
Trade Compliance
We act as the importer of record for substantially all of the merchandise we purchase overseas from foreign
suppliers. Accordingly, we have an affirmative obligation to comply with the rules and regulations established for
importers by the CBP regarding issues such as merchandise classification, valuation and country of origin. We have
developed and implemented a comprehensive series of trade compliance procedures to assure that we adhere to all
CBP requirements. In its most recent review and audit of our import operations and procedures, CBP found no
unacceptable risks of non-compliance.
Merchandise Inventory, Replenishment and Distribution
Merchandise is normally shipped directly from our vendors and routed to our two U.S. distribution centers, one
in Warrendale, Pennsylvania and the other in Ottawa, Kansas, or to our Canadian distribution center in Mississauga,
Ontario.
Upon receipt, merchandise is processed and prepared for shipment to the stores or forwarded to a warehouse
holding area to be used as store replenishment goods. The allocation of merchandise among stores varies based
upon a number of factors, including geographic location, customer demographics and store size. Merchandise is
shipped to our stores two to five times per week depending upon the season and store requirements.
The expansion of our Kansas distribution center in Fiscal 2007 enabled us to bring fulfillment services for
AEO Direct in-house. The second phase of this expansion was completed in Fiscal 2008 to enhance operating
efficiency and support our futur…

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