Net income increased 13% to $81.3 million, compared to $72.1 million last year. As a percent to sales, net income was 11.6% compared to 12.0% last year. Earnings per diluted share increased 19% to $0.37, compared to $0.31 last year.
Inventory:
Total merchandise inventories at the end of the second quarter were $321 million, an increase of $54 million compared to last year. AE brand inventory (excluding e-commerce) increased 7% on a per square foot basis from a year ago.
Capital Expenditures:
For the second quarter of 2007, capital expenditures were approximately $55 million. For fiscal year 2007, management continues to expect capital expenditures to be in the range of $240 to $260 million, which includes new and renovated stores, investments in information technology, the company's new Pittsburgh headquarters and the completion of the expanded Kansas distribution center.
Stock Repurchase:
During the quarter, the company completed the repurchase of 3.7 million shares of common stock for approximately $99.5 million. Year-to-date, the company has repurchased 6.5 million shares for approximately $184.7 million. After the second quarter activity, the company had 23.5 million shares remaining under various authorizations.
Real Estate:
In the second quarter, American Eagle opened six new AE stores and remodeled 26 locations. Additionally, the company opened two new free-standing aerie stores and one new MARTIN + OSA store. For 2007 the company is on-track to increase square footage by approximately 10%. This includes approximately 32 new and 53 remodeled American Eagle stores, 14 MARTIN + OSA stores and approximately 37 free-standing aerie stores.
Third Quarter Guidance:
The Company is pleased with month-to-date August sales performance. At this time, management is establishing third quarter earnings guidance of $0.47 to $0.48 per share, compared to $0.44 per share last year.
Conference Call Information:
At 9:00 a.m. Eastern Time on August 21, 2007, the company's management team will host a conference call to review the financial results.
American Eagle Outfitters Inc
marketing@alchempro.com
