American Eagle Outfitters Reports Record First Quarter EPS from Contin

American Eagle Outfitters Reports Record First Quarter EPS from Continuing Operations of $0.35 versus $0.18 Last Year; Comparable Store Sales Increase 27.1%; Provides Second Quarter EPS Guidance

    Business Editors

    WARRENDALE, Pa.--(BUSINESS WIRE)--May 12, 2005--American Eagle Outfitters, Inc. (NASDAQ:AEOS) today announced its consolidated financial results for the first quarter ended April 30, 2005.

--	Total sales increased 36.7% to $454.0 million from $332.2 million for the quarter ended May 1, 2004.
--	Comparable store sales increased 27.1% when compared to the corresponding period last year.
--	Gross profit as a percent to sales increased to 48.9% from 44.7% last year due to the leveraging of rent expense and an improvement in merchandise margins.
--	Operating income for the quarter increased to $87.5 million, or 19.3% as a percent to sales, from $43.1 million, or 13.0% as a percent to sales last year.
--	Net income for the quarter increased to $55.3 million, or $0.35 per share on a diluted basis, from net income of $25.3 million, or $0.17 per share on a diluted basis last year (which included a $0.01 loss from discontinued operations).

    Management also provided second quarter earnings guidance of $0.32 to $0.33 per share. This compares to earnings of $0.22 per share from continuing operations in the second quarter of last year.

    At 9:00 a.m. Eastern Time, on May 12, 2005, the Company's management team will host a conference call to review the financial results. To listen to the call, dial 877-601-0864 at least ten minutes prior to the start of the call. The conference call will also be simultaneously broadcast over the Internet at www.ae.com. A replay will be available beginning May 12th at 12:00 p.m. Eastern Time through May 26th. To listen to the replay, dial 1-800-642-1687 and reference confirmation code #5555612. An audio replay of the conference call will also be available at www.ae.com.

    American Eagle Outfitters (NASDAQ:AEOS) is a leading lifestyle retailer that designs, markets and sells its own brand of relaxed, casual clothing for 15 to 25 year olds, providing high-quality merchandise at affordable prices. AE's collection includes modern basics like jeans, cargo pants and graphic T's as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 775 AE stores in 49 states, the District of Columbia and Puerto Rico, and 70 AE stores in Canada. AE also operates via its Web business, www.ae.com, which offers additional sizes and styles of favorite AE merchandise.

    "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which represent our expectations or beliefs concerning future events, specifically regarding second quarter earnings. All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors beyond the Company's control. Such factors include, but are not limited to the risk that our second quarter sales, markdowns and/or earnings expectations may not be achieved, and those other risks described in the Company's filings with the Securities and Exchange Commission. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if future changes make it clear that projected results expressed or implied will not be realized.

AMERICAN EAGLE OUTFITTERS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)

April 30, January 29, May 1, 2005 2005 2004 ----------- ----------- ----------- (Unaudited) (Unaudited) (Restated) ASSETS Cash, cash equivalents and short-term investments $ 561,297 $ 589,607 $ 326,268 Merchandise inventory 153,749 137,991 146,786 Other current assets 132,152 100,042 83,114 ----------- ----------- ----------- Total current assets 847,198 827,640 556,168 ----------- ----------- ----------- Property and equipment, net 349,493 353,213 339,198 Goodwill, net 10,136 10,136 10,136 Long-term investments 119,897 84,416 24,258 Other assets, net 29,899 18,254 27,568 ----------- ----------- ----------- Total Assets $ 1,356,623 $ 1,293,659 $ 957,328 ----------- ----------- ----------- ----------- ----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 65,638 $ 76,344 $ 68,777 Accrued compensation and payroll taxes 30,105 36,008 22,546 Accrued rent 44,835 45,089 40,173 Accrued income and other taxes 25,636 33,926 18,152 Unredeemed stored value cards and gift certificates 22,287 32,724 18,181 Current portion of note payable - - 4,832 Current portion of deferred lease credits 10,457 9,798 9,966 Other current liabilities 14,618 19,376 13,091 ----------- ----------- ----------- Total current liabilities 213,576 253,265 195,718 ----------- ----------- ----------- Note payable - - 12,660 Deferred lease credits 57,162 57,758 55,299 Other non-current liabilities 26,990 19,150 18,493 ----------- ----------- ----------- Total non-current liabilities 84,152 76,908 86,452 ----------- ----------- ----------- Total stockholders' equity 1,058,895 963,486 675,158 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 1,356,623 $ 1,293,659 $ 957,328 ----------- ----------- ----------- ----------- ----------- -----------

Current Ratio 3.97 3.27 2.84

AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars and shares in thousands, except per share amounts) (Unaudited)

Three Months Ended ----------------------- April 30, May 1, 2005 2004 ----------- ----------- (Restated)

Net sales $ 454,019 $ 332,230 Cost of sales, including certain buying, occupancy and warehousing expenses 231,859 183,511 ----------- ----------- Gross profit 222,160 148,719 Selling, general and administrative expenses 116,536 89,850 Depreciation and amortization 18,102 15,738 ----------- ----------- Operating income 87,522 43,131 Other income, net 2,975 940 ----------- ----------- Income before income taxes 90,497 44,071 Provision for income taxes 35,313 17,070 ----------- ----------- Income from continuing operations, net of tax 55,184 27,001 Income (loss) from discontinued operations, net of tax 89 (1,727) ----------- ----------- Net income $ 55,273 $ 25,274 ----------- ----------- ----------- -----------

Basic per common share amounts: Income from continuing operations $ 0.36 $ 0.19 Loss from discontinued operations 0.00 (0.01) ----------- ----------- Net income per basic common share $ 0.36 $ 0.18 ----------- ----------- ----------- -----------

Diluted per common share amounts: Income from continuing operations $ 0.35 $ 0.18 Loss from discontinued operations 0.00 (0.01) ----------- ----------- Net income per diluted common share $ 0.35 $ 0.17 ----------- ----------- ----------- -----------

Weighted average common shares outstanding - basic 151,582 143,012 Weighted average common shares outstanding - diluted 156,109 146,494

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Total gross square footage at end of period: 4,549,729 4,285,182

Store count at end of period: 845 809

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AMERICAN EAGLE OUTFITTERS, INC. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Quarterly Financial information was presented in Note 15 of our 2004 Annual Report on Form 10-K. The aforementioned information was updated from that previously reported to reflect Bluenotes as discontinued operations and to reflect the restatement resulting from our change in lease accounting practices. The Quarterly Consolidated Statements of Operations (unaudited) presented below reflect a more detailed presentation of the Fiscal 2004 quarterly information and are being presented for informational purposes only.

Quarters Ended ----------------------------------- January 29, October 30, July 31, 2005 2004 2004 ----------- ----------- ----------- (Dollars and shares in thousands, (Restated) (Restated) except per share amounts)

Net sales $ 674,024 $ 479,585 $ 395,402 Cost of sales, including certain buying, occupancy and warehousing expenses 341,647 245,727 232,548 ----------- ----------- ----------- Gross profit 332,377 233,858 162,854 Selling, general and administrative expenses 142,386 119,642 94,951 Depreciation and amortization 18,304 17,345 16,886 ----------- ----------- ----------- Operating income 171,687 96,871 51,017 Other income (expense), net 3,343 (645) 491 ----------- ----------- ----------- Income before income taxes 175,030 96,226 51,508 Provision for income taxes 68,086 37,521 19,926 ----------- ----------- ----------- Income from continuing operations, net of tax 106,944 58,705 31,582 Loss from discontinued operations, net of income tax benefit (6,027) (807) (2,328) ----------- ----------- ----------- Net income $ 100,917 $ 57,898 $ 29,254 ----------- ----------- ----------- ----------- ----------- -----------

Basic per common share amounts: Income from continuing operations $ 0.73 $ 0.40 $ 0.22 Loss from discontinued operations (0.04) - (0.02) ----------- ----------- ----------- Net income per basic common share $ 0.69 $ 0.40 $ 0.20 ----------- ----------- ----------- ----------- ----------- -----------

Diluted per common share amounts: Income from continuing operations $ 0.70 $ 0.39 $ 0.22 Loss from discontinued operations (0.04) (0.01) (0.02) ----------- ----------- ----------- Net income per diluted common share $ 0.66 $ 0.38 $ 0.20 ----------- ----------- ----------- ----------- ----------- -----------

Weighted average common shares outstanding - basic 147,094 146,004 144,502 Weighted average common shares outstanding - diluted 153,402 151,570 148,328

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CONTACT: American Eagle Outfitters, Inc. Laura Weil or Judy Meehan, 724-776-4857

KEYWORD: PENNSYLVANIA INTERNATIONAL CANADA INDUSTRY KEYWORD: APPAREL/TEXTILES CONSUMER/HOUSEHOLD RETAIL ADVERTISING/MARKETING CONFERENCE CALLS EARNINGS SOURCE: American Eagle Outfitters, Inc.

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