American Eagle Outfitters, Inc.

Greetings. Welcome to American Eagle Outfitters' fourth quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Judy Meehan, Vice President of Investor Relations. Thank you. You may begin.

Good afternoon, everyone. Joining me today for our prepared remarks are Jay Schottenstein, Chief Executive Officer, Chad Kessler, AE Global Brand President, Jen Foyle, Aerie Global Brand President, and Bob Mador, Chief Financial Officer. Before we begin today's call, I need to remind you that we will make certain forward-looking statements. These statements are based upon information that represents the company's current expectations or beliefs. The results actually realized may differ materially based on risk factors included in our SEC filings. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by law. Also, please note that during this call and in the accompanying press release, certain financial metrics are presented in both a GAAP and non-GAAP adjusted basis. Reconciliations of adjusted results to the GAAP results are available in the tables attached to the earnings release. which is posted on our corporate website at www.aeo-inc.com in the investor relations section. Here you can also find the fourth quarter investor presentation. And now I'd like to turn the call over to Jay.

Thanks, Judy. Good afternoon, and thank you for joining us. I'll start today by providing an overview of 2019, and I'll turn it to the team for additional details on the quarter and the year. First, I'm pleased to report another year of record sales, which increased to $4.3 billion. 2019 marked our fifth straight year of positive comparable sales. Our ability to capture market share across American Eagle and Erie underscores the strength of our leading brands, as well as the team's ability to execute in a disrupted environment. Across brands and channels, customer engagement was strong. We gained new customers and traffic to our stores, was positive and outperformed all averages. We also saw our digital business continue to grow at a robust pace, fueled by our app and mobile channels. Aerie delivered exceptional growth and continues to be one of the fastest growing specialty retail concepts. After five years of double-digit sales gains, Aerie had another remarkable year with consistent momentum each quarter, We have successfully expanded Aerie's reach, gaining customers across both digital and stores. The Aerie team has done an extraordinary job delivering, expanding merchandise collection. Top-line strength also fueled a meaningful profit improvement. Without a doubt, Aerie is one of the most exciting emerging brands. Today, more than ever, we see significant market opportunity and will continue to fuel Aerie's momentum. American Eagle posted ongoing growth in its signature jeans and bottoms categories, where we continue to gain meaningful market share and achieve record revenue. We are the clear leader in the jeans market by offering constant innovation, new styles, fits, and amazing values to our customers. We will continue to fuel our power in this important category. As we noted last quarter, AETOPs have been challenging, which resulted in increased promotional activity. The team has been focused on improvement in this area, and we are seeing some positive early indications. In summary, 2019 had a number of wins, yet the bottom line results were unsatisfactory. We are capable of better performance. Our 2020 priorities revolve around product improvement, inventory optimization, dominance in AE genes, and continuing to accelerate area growth. We're also working to transform our supply chain to drive operational efficiencies and better serve our customers. You'll hear more on these efforts throughout 2020. At AEO, we take our responsibility as a corporate citizen very seriously. I therefore want to highlight our efforts on ESG. We have been an industry leader in our sustainability efforts. Last year, we unveiled environmental goals, which included carbon neutrality in our owned and operated facilities by 2030, and a 60% reduction in carbon emissions by 2040. Building a better world is consistent with our strong values and corporate culture. We stay true to our purpose to show the world there's real power in the optimism of youth. We foster empowerment, inclusivity, and hard work to drive success for all of our stakeholders. Lastly, Bob will discuss the recent coronavirus outbreaks in more detail. However, I want to emphasize that our priority is the safety of our associates, partners, and customers. Our team is monitoring the situation closely and will respond to any developments. I'm extremely proud of the company and the progress we continue to make. Although we hit some bumps in the road, AEO is an outstanding world-class organization with two of the best brands in specialty retail. We are financially healthy with a strong free cash flow enabling us to make key investments in our business while staying committed to shareholder returns. In 2020, we will focus on our strategic growth pillars. We grow our brands through signature op categories, offer an exceptional customer experience across channels, improve financial returns, and accelerate the market expansion for Aerie. I'm optimistic about our future. We are ready to seize on numerous opportunities. Thanks to the entire AEO team for their hard work and dedication. And I'll now turn the call over to Chad.