American Eagle Outfitters, Inc.

Greetings and welcome to the American Eagle Outfitters first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If you'd like to ask a question during that time, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Judy Meehan. Thank you. You may begin.

Good afternoon, everyone. Joining me today for our prepared remarks are Jay Schottenstein, Executive Chairman and Chief Executive Officer, Jen Foyle, President, Executive Creative Director for AE and ARRI, and Mike Mathias, 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 released 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. Consistent with the retail calendar and the 53rd week last year, First quarter 2024 results and today's discussion are presented for the 13 weeks ending May 4th, 2024 compared to 13 weeks ending April 29th, 2023. Comparable sales metrics are presented for the 13 weeks ending May 4th, 2024 compared to the 13 weeks ending May 6th, 2023. Also, please note that during this call and in the accompanying press release, Certain financial metrics are presented on 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 first quarter investor presentation. And now I will turn the call over to Jay.

Thanks, Judy, and good afternoon, everyone. I'm incredibly pleased with our first quarter results. We posted significant growth from last year and meaningfully exceeded our guidance. These results are a strong proof point that our strategic priorities are driving business momentum and solid profit flow through. This past March, we were excited to share our new strategy plan, Powering Profitable Growth. charge a new path forward for the company and aims to deliver steady growth as we build to an operating margin target of 10% by 2026. AEO is a proven brand builder with distinct and undeniable strength. We have exceptional brands in American Eagle and Erie with powerful customer connection and tremendous growth potential. Our best-in-class operations bring our brilliant design team's creative vision to life at the highest level every day. Our shopping experience is across stores, and digital is second to none, powered by decades of customer insights. Our new strategy magnifies the strength to go after growth opportunities, and our focus on continuous operational improvements will set the business up to deliver consistent, profitable growth in the years ahead. As a reminder, our priorities are defined by three key strategic pillars. First, amplify our brands. Second, optimize our operations. And third, execute with financial discipline. Jen and Mike will provide more detail on how we deliver against these pillars. But I want to underscore just how pleased I am with momentum out of the gate. The teams have wasted no time in attacking our priorities let me touch on a few highlights first quarter revenue 1.1 billion dollars reflected a new record for the company driven by seven percent top growth what's more notable is the strength we saw across brands and channels american eagle airing digital and stores all experienced solid growth and healthy metrics We saw meaningful increases across Aerie and Offline's core categories, particularly in apparel, where expansion beyond Aerie's foundation intimates has seen strong success. As we reviewed activewear under the Offline banner, an Aerie soft dressing presents huge long-term growth opportunities. These are large categories with significant white space, and Aerie and Offline bring a fresh take to the market that is body positive and fun. As we continue to build brand awareness and invest in our assortments, we're gaining momentum and we have strong plans in place to continue to gain share. I also want to take a quick minute to celebrate the great progress we have made on the American Eagle brand. As we shared in March, there's renewed focus on driving growth by leveraging AE's powerful platform an amazing legacy to extend our dominance in casual wear. This presents a sizable growth opportunity. And as Jen will cover, early initiatives are delivering excellent results. We're gaining momentum and growing market share in a number of our focus categories. Strength with broad base across channels, with growth of both digital and stores. Here, too, we saw recent initiatives aimed at improving KPIs deliver results. For example, more strategic and targeted customer tactics online led to a double-digit increase in digital revenue. Our first quarter financial results reflected strong early results on our priorities. We saw significant leverage across our cost base fueled by a number of initiatives action on as a part of our strategic priorities. Our strong cash position allowed us to fuel investments in the business. Additionally, we return approximately $60 million in cash to shareholders through a combination of dividends and share repurchases. Our balance sheet is healthy with $300 million in cash and no debt. With a solid start to the year, we are on pace to deliver our full-year guidance for revenue and operating income. This is an exciting time for American Eagle Outfitters. We feel very confident in our future. We have the right focus, a clear strategy, and a highly talented team that will carry us through as we unlock greater value for our shareholders. Now over to Jen.