American Eagle Outfitters, Inc. (NYSE:AEO) Q2 2019 Earnings Conference Call Transcript

Sep 04, 2019 • 09:00 am ET

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American Eagle Outfitters, Inc. (NYSE:AEO) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings and welcome to the American Eagle Outfitters' Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to your host, Ms. Judy Meehan. Thank you. You may begin.

Executive
Judy Meehan

Good morning, 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 Madore, 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 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 aeoinc.com [Phonetic] in the Investor Relations section. Here you can also find the second quarter investor presentation.

And now I'd like to turn the call over to Jay.

Executive
Jay L. Schottenstein

Thanks, Judy, and good morning everyone. The second quarter marked our 18th consecutive quarter of positive comps, which show remarkable consistency in a difficult environment. While we did face some challenges in the quarter that impacted our AE Brand, the issues were largely concentrated in certain warm weather apparel categories which were affected by unseasonable weather. With the start of August, business has picked up and we're pleased with positive trends quarter-to-date. Based on these positive trends and strength in fall category, I'm optimistic about our prospects for the second half of the year.

Despite some of the challenges in the second quarter, we had a number of wins and accomplishment, specifically. American Eagle Jeans continue to post record sales, marking sixth consecutive years of all time highs in each and every quarter. This period we recorded strong double-digit growth across genders, capturing market share and further strengthening our number one market position.

Aerie maintain incredible momentum, achieving a 16% comp increase, its 19th consecutive quarter of double-digit sales increases. Aerie's consistent industry leading growth continues to demonstrate the power of this emerging brand and the significant opportunity ahead of us. Clearly we offer our customers industry leading product innovations that best fits quality and value, wrapped in emotional brand experiences.

Our digital business was also a highlight producing growth in the double-digits. Across channel and brands, we saw positive traffic, and stores outpaced the mall, a clear indication of strong brand equity. We ended the quarter with over $300 million in cash and no debt after returning $83 million to shareholders through dividends and share repurchases. We continue to make key investments across our