0000950170-23-007604

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 28, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-33338

AMERICAN EAGLE OUTFITTERS, INC.

(Exact name of registrant as specified in its charter)

Delaware 13-2721761

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

77 Hot Metal Street, Pittsburgh, PA 15203-2329

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (412) 432-3300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, $0.01 par value AEO New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Sections 15(d) of the Act. YES ☐ NO ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at the past 90

days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth

company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange

Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial

reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the

correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s

executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of July 30, 2022 was $2,067,276,031.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 195,556,065 Common Shares were

outstanding at March 8, 2023.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated into Part III herein.

 
AMERICAN EAGLE OUTFITTERS, INC.
TABLE OF CONTENTS
 
 
Page
Number
PART I  
Item 1. Business 4
Item 1A. Risk Factors 13
Item 1B. Unresolved Staff Comments 26
Item 2. Properties 26
Item 3. Legal Proceedings 27
Item 4. Mine Safety Disclosures 27
   
PART II  
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28
Item 6. Reserved 30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 41
Item 8. Financial Statements and Supplementary Data 42
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 74
Item 9A. Controls and Procedures 74
Item 9B. Other Information 76
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 76
   
PART III  
Item 10. Directors, Executive Officers and Corporate Governance 77
Item 11. Executive Compensation 77
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 77
Item 13. Certain Relationships and Related Transactions, and Director Independence 77
Item 14. Principal Accounting Fees and Services 77
   
PART IV  
Item 15. Exhibits, Financial Statement Schedules 78
Item 16. Form 10-K Summary 81
   
 
2

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K ("Annual Report") contains “forward‑looking statements” within the meaning of Section 27A of the Securities

Act of 1933, as amended (the Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act”) that are

based on the views and beliefs of management, as well as assumptions and estimates made by management. Actual results could differ

materially from such forward‑looking statements as a result of various risk factors, including those that may not be in the control of management.

All statements other than statements of historical facts contained in this Annual Report are forward-looking statements. Words such as “estimate,”

“project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “potential,” and similar expressions may identify forward-looking statements. Our

forward-looking statements include, but are not limited to, statements about:

• the planned opening of approximately 5 to 15 American Eagle stores and approximately 20 to 30 Aerie locations, including approximately

15 OFFLINE™ stores, which will be a mix of stand-alone and Aerie side-by-sides, during Fiscal 2023;

• the anticipated selection of approximately 15 to 30 American Eagle and Aerie stores in the United States and Canada for remodeling

during Fiscal 2023;

• the potential closure of approximately 20 to 40 American Eagle stores at the expiration of their lease term, primarily in North America,

during Fiscal 2023;

• the success of our core American Eagle and Aerie brands through our omni-channel and licensed outlets within North America and

internationally;

• our plans for Quiet Platforms;

• our acquisitions' ability to achieve expected results;

• the success of our business priorities and strategies;

• the continued validity of our trademarks;

• our performance during the back-to-school and holiday selling seasons;

• the reduction of operating expenses and capital expenditures;

• the accuracy of the estimates and assumptions we make pursuant to our critical accounting policies and estimates;

• the payment of a dividend in future periods;

• our ability to fund our current and long-term cash requirements through current cash holdings and available liquidity, including under our

revolving credit facility;

• the possibility that product costs are adversely affected by foreign trade issues (including import tariffs and other trade restrictions with

China and other countries), currency exchange rate fluctuations, increasing prices for raw materials, supply chain issues, political instability

or other reasons;

• the possibility of changes in global economic and financial conditions, and resulting impacts on consumer confidence and consumer

spending, as well as other changes in consumer discretionary spending habits;

• the effect of inflation on our business;

• the possibility that we may be required to take additional impairment or other restructuring charges;

• the ongoing impact of the COVID-19 pandemic on global economic conditions; and

• the ability of our distribution centers and stores to maintain adequate staffing to meet increased customer demand.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ

materially from those in the forward-looking statements. Potential risk factors include the risk factors discussed under the heading “Risk Factors”

under Part I, Item 1A of this Annual Report. Any forward-looking statement speaks only as of the date on which such statement is made, and we

do not intend to correct or update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as

required by law.

PART I

Item 1. Business.

Company Overview

American Eagle Outfitters, Inc. (the “Company,” "AEO," “we,”, "us," and “our”) is a leading global specialty retailer. We operate and license over

1,400 retail stores worldwide and are online at www.ae.com and www.aerie.com in the United States and internationally. Our brands are

connected under the core tenet of REAL, which is inclusive, optimistic, and empowering and celebrates self-expression. Our purpose is to show

the world that there's REAL power in the optimism of youth.

We offer a broad assortment of high-quality, on-trend apparel, accessories, and personal care products at affordable prices for men and women

under the American Eagle brand, and intimates, apparel, active wear, and swim collections under the Aerie brand. We sell directly to consumers

through our retail channel, which includes our stores and concession-based shop-within-shops. We operate stores in the United States, Canada,

Mexico, Hong Kong, and Japan. We also have license agreements with third parties to operate American Eagle and Aerie stores and online

marketplace businesses throughout Asia, Europe, India, Latin America, and the Middle East.

We also operate Todd Snyder New York (“Todd Snyder”), a premium menswear brand, and Unsubscribed, which focuses on consciously made,

slow fashion.

In Fiscal 2021, we acquired AirTerra, Inc. ("AirTerra") and Quiet Logistics, Inc. ("Quiet Logistics"), creating a new supply chain platform ("Quiet

Platforms”). Quiet Logistics is a logistics company that operates a network of in-market fulfillment centers, locating products closer to need,

creating inventory efficiencies, cost benefits and affordable same-day and next-day delivery options for customers and stores. AirTerra is a

logistics service and platform that solves e-commerce fulfillment and shipping challenges in a unique and innovative way for retailers and brands

of all sizes. Both acquisitions represent an important step in building our supply chain platform, as part of our ongoing supply chain

transformation strategy of leveraging scale and innovation to help us manage costs and improve service.

Operating Segments

The Company has identified two operating segments (American Eagle brand and Aerie brand) that also represent our reportable segments and

reflect the Chief Operating Decision Maker’s (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our

Todd Snyder and Unsubscribed brands and Quiet Platforms have been identified as separate operating segments; however, as they do not meet

the quantitative thresholds for separate disclosure they have been included in the Corporate and Other category. See Note 16. “Segment

Reporting,” of the Notes to the Consolidated Financial Statements included herein for additional information.

Fiscal Year

Our fiscal year is a 52- or 53-week year that ends on the Saturday nearest to January 31. As used herein, "Fiscal 2023" refers to the 53-week

period that will end on February 3, 2024. “Fiscal 2022” refers to the 52-week period ended January 28, 2023, “Fiscal 2021” refers to the 52-week

period ended January 29, 2022, and “Fiscal 2020” refers to the 52-week period ended January 30, 2021.

Brands

American Eagle

American Eagle is a leading American jeans and apparel brand, the go-to destination for casual style, embraced by generations of youth since

1977. We are rooted in authenticity, powered by positivity and inspired by our community. Our collections are designed to inspire self-expression

and empower our customers to celebrate their own uniqueness. We have broadened our leadership by producing innovative, sustainable fabrics.

As of January 28, 2023, we operated 865 AE stores. We offer American Eagle products online at www.ae.com.

Aerie and OFFLINE™ by Aerie

Built on a platform of power, positivity and no photo retouching - inspiring people to love their real selves. Aerie is a fast-growing lifestyle brand

offering intimates, apparel, activewear, and swim collections. With the #AerieREAL™ movement, we celebrate our community by advocating for

body positivity and the empowerment of all women. As part of our Real Good promise, we create swimsuits, bras, and underwear with materials

made from recycled polyester, recycled nylon fabric or sustainably sourced cotton.

OFFLINE™ by Aerie offers a complete collection of activewear and accessories made for real movement and real comfort. Built on the success

of Aerie's leggings and sports bras, OFFLINE™'s unique take on an active lifestyle celebrates real life - when some days you feel like you can

take on the world and other days you need that extra push to get off the couch. Our Real Good promise extends to the OFFLINE™ collections

with some of our best-selling fleece, leggings and tees made with the planet in mind.

As of January 28, 2023, we operated 295 Aerie brand stand-alone stores, inclusive of 34 OFFLINE™ stand-alone stores and 28 OFFLINE™

side-by-side stores connected to an Aerie brand location. We also operated 186 Aerie side-by-side stores connected to an AE brand location, four

locations with an AE brand location, Aerie brand location and OFFLINE™ connected as one store, and two OFFLINE™ side-by-side stores

connected to an AE brand location. In addition, Aerie brand merchandise is sold online at www.aerie.com and certain items are sold in AE brand

stores.

Todd Snyder New York

A premium menswear brand informed by heritage, yet updated for today, with an emphasis on versatility and comfort. Todd Snyder offers

signature essentials, statement pieces, custom suiting and iconic accessories reflective of quintessential American style. From bespoke tailoring

to innovative capsule collections - good style can be attainable and playful.

As of January 28, 2023, we operated 10 Todd Snyder stores. We offer Todd Snyder products online at www.ToddSnyder.com.

Unsubscribed

A truly unique brand offering consciously-made, slow fashion with timeless clothing and accessories, Unsubscribed offers one-of-a-kind vintage

pieces that represent socially conscious and ethically produced practices. Each store is a unique experience that respects and highlights the

heritage of the space and the surrounding community. We are making wise choices through plant-first practices, emphasizing local makers,

natural fibers, and a desire to produce pieces that stand the test of time in both style and quality.

As of January 28, 2023, we operated five Unsubscribed stores. We offer Unsubscribed products online at www.unsubscribed.com.

Key Business Priorities & Strategy

We are focused on our “Real Power. Real Growth.” value creation. AEO has the following strategic priorities:

o Fueling Aerie to $2 billion in revenue; and

o Driving sustained profitable growth for American Eagle.

The Company will leverage customer-focused capabilities and continue to strengthen its return on investment ("ROI") discipline, while building on

the power of AEO’s people, culture and purpose.

Real Estate

We ended Fiscal 2022 with 1,175 Company-owned stores and 269 licensed store locations. Our AE brand stores average approximately 6,400

gross square feet and our Aerie brand stand-alone stores, inclusive of OFFLINE™ stand-alone stores, average approximately 5,800 gross

square feet. The gross square footage of our Company-owned stores increased by 5.6% to 7.3 million during Fiscal 2022.

COVID-19

Impacts related to the ongoing COVID-19 pandemic have had a significant impact on the retail industry, our Company, our customers, and our

associates.

The impacts of the COVID-19 pandemic on our business are discussed in further detail throughout this Business section, Part I, Item 1A Risk

Factors, and Part II Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report.

Company-Owned Stores

Our Company-owned retail stores are located in shopping malls, lifestyle centers, and street locations in the United States, Canada, Mexico,

Hong Kong and Japan.

Refer to Note 17. “Impairment, Restructuring and COVID-19 Related Charges,” to the Consolidated Financial Statements included in this Annual

Report for additional information regarding impairment charges related to our Company-owned stores.

The following table provides the number of our Company-owned stores in operation as of January 28, 2023 and January 29, 2022.

January 28, January 29,

2023

2022

AE Brand:

United States 715 741

Canada 75 78

Mexico 56 48

Hong Kong 16 13

Japan

—

Total AE Brand 865 880

Aerie Brand:

United States 248 206

Canada 29 22

Mexico 16 14

Hong Kong

Total Aerie Brand 295 244

Todd Snyder 10 5

Unsubscribed

Total Consolidated

1,175

1,133

(1) Includes 186 Aerie side-by-side stores connected to an AE brand location, four locations with AE brand, Aerie brand and OFFLINE™

connected as one store, and two OFFLINE™ side-by-side stores connected to an AE brand location.

(2) Includes 34 OFFLINE™ stand-alone stores and 28 OFFLINE™ side-by-side stores connected to an Aerie brand location.

The following table provides the changes in the number of our Company-owned stores for the past five fiscal years:

Fiscal Year Beginning of Year Opened Closed End of Year

2022 1,133 87 (45 ) 1,175

2021 1,078 103 (48 ) 1,133

2020 1,095 40 (57 ) 1,078

2019 1,055 66 (26 ) 1,095

2018 1,047 29 (21 ) 1,055

Licensed Operations

Our international licensing partners acquire the right to sell, promote, market, and/or distribute various categories of our products in a given

geographic area and to source products from us. International licensees' rights include the right to own and operate retail stores and may include

rights to sell in wholesale markets and shop-in-shop concessions and operate online marketplace businesses. As of January 28, 2023, our

international licensing partners operated in 269 licensed retail

(1)

(2)

stores and concessions, as well as wholesale markets, online brand sites, and online marketplaces in approximately 30 countries.

We plan to continue to increase the number of locations under license agreements or similar arrangements as part of our disciplined approach to

global expansion.

AEO Direct

We sell merchandise through our digital channels, www.ae.com, www.aerie.com, www.toddsnyder.com, www.unsubscribed.com, and our AEO

apps, both domestically and internationally in approximately 80 countries. We also sell merchandise on various international online marketplaces.

The digital channels reinforce each particular brand platform and are designed to complement the in-store experience.

Over the past several years, we have invested in building our technologies and digital capabilities. We focused our investments in three key

areas: making significant advances in mobile technology, investing in digital marketing and improving the digital customer experience.

Omni-Channel

In addition to our investments in technology, we have invested in building omni-channel capabilities to better serve customers and gain

operational efficiencies. These upgraded technologies provide a single view of inventory across channels, connecting physical stores directly to

our digital store and providing our customers with a more convenient and improved shopping experience. Our United States and Canadian

distribution centers and our Quiet Logistics regional distribution centers are fully omni-channel and service both stores and digital businesses. We

offer the ability for customers to return products seamlessly via any channel regardless of where the products were originally purchased. We also

offer a variety of channels to fulfill customer orders. These include “ship to home,” which can be fulfilled either through our distribution center or

our store sites (buy online, ship from stores) when purchased online or through our app; “store pick-up,” which consists of online orders being

fulfilled either in store or curbside, and “store-to-door” where customers order within our store, and the goods are shipped directly to their home.

Customer Loyalty Program

Real Rewards by American Eagle and Aerie™ (the “Program”) is a highly digitized loyalty program that launched in June 2020. The Program

features a variety of benefits for loyalty members and credit card members.

Real Rewards by American Eagle and Aerie™ highlights include:

• Faster earn rates, which equal more rewards;

• Exclusive access to member promotions, discounts, and experiences;

• Free shipping perks; and

• Special cardmember discounts and tier benefits.

Under the Program, members accumulate points based on purchase activity and earn rewards by reaching certain point thresholds. Members

earn dollar rewards in the form of discount savings certificates. Rewards earned are valid through the stated expiration date, which is 60 days

from the issuance date of the reward. Rewards not redeemed during the 60-day redemption period are forfeited.

Merchandise Suppliers

We design our merchandise, which is manufactured by third-party factories. During Fiscal 2022, we purchased substantially all of our

merchandise from non North American suppliers. We sourced merchandise through approximately 330 vendors located throughout the world,

primarily in Asia, and did not source more than 10% of our merchandise from any single factory or supplier. Although we purchase a significant

portion of our merchandise through a single international buying agent, we do not maintain any exclusive commitments to purchase from any one

vendor.

We maintain quality control departments at our distribution centers to inspect incoming merchandise shipments for overall quality of

manufacturing. Inspections are also made by our employees and agents at manufacturing facilities to identify quality issues prior to shipment of

merchandise.

We uphold an extensive factory inspection program to monitor compliance with our Supplier Code of Conduct. New garment factories must pass

an initial inspection in order to do business with us and we continue to review their performance against our guidelines regarding working

conditions, employment practices, and compliance with local laws through internal audits by our compliance team and the use of third-party

monitors. We strive to partner with suppliers who respect local laws and share our dedication to utilize best practices in human rights, labor rights,

environmental practices, and workplace safety. We are a certified, validated member of the Customs-Trade Partnership Against Terrorism

program (“CTPAT”), a designation we have held since 2004. CTPAT is a voluntary program offered by United States Customs and Border

Protection (“CBP”) in which an importer agrees to work with CBP to strengthen overall supply chain security. In 2016, we were accepted into the

Apparel, Footwear, and Textiles Center, one of CBP’s Centers of Excellence and Expertise (“CEE”). The CEEs were created to ensure uniformity,

create efficiencies, reduce redundancies, enhance industry expertise, and facilitate trade, all with a final goal of reduced costs at the border and

allowing CBP to focus on high-risk shipments.

Inventory and Distribution

Merchandise is shipped directly from our vendors, and deconsolidated through trans loaders to our Company-owned distribution centers in

Hazleton, Pennsylvania and Ottawa, Kansas, our Quiet Logistics regional distribution centers strategically located throughout the United States,

or our Canadian distribution center in Mississauga, Ontario. Additionally, some products are shipped directly to stores, which reduces transit

times and lowers operating costs. We contract with third-party distribution centers in Mexico, Hong Kong and Japan to service our Company-

owned stores and e-commerce operations in those regions.

Regulation

We and our products are subject to regulation by various federal, state, local, and foreign regulatory authorities. Substantially all of our products

are manufactured by foreign suppliers and imported by us, and we are subject to a variety of trade laws, customs regulations, and international

trade agreements. Apparel and other products sold by us are under the jurisdiction of multiple governmental agencies and regulations, including,

in the United States, the Federal Trade Commission and the Consumer Products Safety Commission. These regulations relate principally to

product labeling, marketing, licensing requirements, and consumer product safety requirements and regulatory testing. We are also subject to

regulations governing our employees both globally and in the United States, and by disclosure and reporting requirements for publicly traded

companies established under existing or new federal or state laws, including the rules and regulations of the Securities and Exchange

Commission (“SEC”) and New York Stock Exchange (“NYSE”).

Our licensing partners, buying/sourcing agents, and the vendors and factories with which we contract for the manufacture and distribution of our

products are also subject to regulation. Our agreements require our licensing partners, buying/sourcing agents, vendors, and factories to operate

in compliance with all applicable laws and regulations, and we are not aware of any violations that could reasonably be expected to have a

material adverse effect on our consolidated business or operating results.

Human Capital Management

Our people come first. As of January 28, 2023, we employed approximately 40,000 associates throughout the world, of whom approximately

32,000 were part-time or seasonal associates. We employed 32,800 associates in the United States, of whom approximately 26,400 were part-

time or seasonal associates.

Our values of People, Innovation, Passion, Integrity, and Teamwork are the backbone of our Company and are at the center of every

decision, every product and every interaction - they represent the foundation of our REAL culture. We all have a vital role to play in

creating an environment where everyone feels respected and empowered while we continue to grow as a community that promotes individuality

and difference. We celebrate the diversity of one through the inclusion of many.

To evaluate our REAL culture, we look holistically at all the beliefs, values and behaviors that reflect how our best work is done. We aim to ensure

there is alignment between what is espoused and what is practiced. Our consistently strong internal employee satisfaction scores, corporate exit

survey data, and external Glassdoor ratings demonstrate the achievement of this goal.

Our culture model is composed of Listening, Observing, Supporting, and Informing:

• Listening to our associates, customers and candidates through reviews of culture surveys, exit surveys, Glassdoor reporting,

LinkedIn responses, and hotline reporting; we also conduct open-door engagement, Company-wide town halls, and roundtables on

a periodic basis.

• Observing who we are and what our associates are doing by regularly reviewing our demographic data and retention rates.

• Supporting a positive Company culture through programs and processes for eligible associates that promote our strong values and

address leadership development opportunities, work-life integration, well-being initiatives, fair pay initiatives, family support, and

inclusion and diversity programs.

• Informing and clearly communicating our values, modeling the behaviors we expect, and providing training and feedback.

Our Board of Directors (our “Board”) plays an important role in the oversight of our talent and culture and devotes time each quarter to receiving

updates from senior management on employee engagement, turnover and retention rates, inclusion and diversity, talent development,

leadership, and succession planning initiatives.

During Fiscal 2022, we prioritized growth through developing our people, our brands, and our operations. Our growth of people focused on

supporting the health and well-being of our associates, customers and communities while also reimagining connection and collaboration and

remaining diligent in the execution of our corporate social responsibility objectives.

TALENT MANAGEMENT PROGRAMS

We utilize an integrated set of talent management tools and programs, rooted in our values, that thread through the entire talent life cycle.

Consistent talent reviews, performance evaluations, equitable pay practices and succession planning have contributed to a full-time voluntary

and mutual turnover rate, including our store associates, of approximately 28% for Fiscal 2022, which is consistent with our retail peer group and

compares to a 27% five-year Company average. Associate development is supported through numerous programs, including AEO Academy, an

online training platform that provides eligible associates with continuous learning opportunities. AEO Academy has nearly 2,900 modules, which

aggregate were completed over one million times during Fiscal 2022, with a total of 14.9 million views on the platform since it was launched in

late Fiscal 2019. Our focus on associate development led to a full-time promotion rate of approximately 26% for Fiscal 2022 as compared to a

24% five-year Company average.

INCLUSION, DIVERSITY, EQUITY & ACCESS

At AEO, we believe that our success is the result of our focus on being an inclusive, diverse, equitable and accessible Company. It is about more

than simply bringing together people who are different; it is about celebrating what makes us REAL.

We believe in embedding Inclusion, Diversity, Equity & Access (“IDEA”) into everything we do. Our mission is to achieve sustainable progress

in the pillars of hiring, community, and development through strategic, data-supported, and people-centric action. Our values are at the center of

every decision, product, and interaction. This means making sure that all people are respected and feel that being their authentic selves will not

be a barrier to personal or professional fulfillment and growth.

We are a global company with people from many different backgrounds. In the United States alone, as of January 28, 2023, approximately 44%

of our associates self-identified as people of color (“POC”). Specifically, our United States population is approximately 55% White, 25% Hispanic,

10% Black, 4% Asian, 1% American Indian or Native Hawaiian, 4% two or more races or other, and 1% not reported. Globally, 79% of our

associates self-identified as women.

These numbers reflect a year-over-year increase of 1% in the representation of POC across the organization. These gains were achieved

through increased rates of POC hiring in each of the Company’s business units (Corporate, Stores and Distribution Centers), with increases of

1% in all three business units.

We have three IDEA Pillars. Hiring, Community and Development.

Hiring. AEO believes that a diverse workforce makes us stronger as an organization. We are focused on increasing candidate diversity in our

recruiting process through implementation and execution of policies, processes, practices and strategies focused on inclusion, equity, and

accessibility.

Community. Our associates have the freedom to be themselves, uniquely helping to create a vibrant community. We believe that AEO is a place

where our people are excited to come to work, believe in the work that they do, feel valued, and are appreciated for their contributions. At AEO

we also know we not only have the power to touch lives within our Company but also can make a lasting impact in the communities in which we

operate. We know that living our values of People, Innovation, Passion, Integrity and Teamwork will allow us to enrich our internal and external

communities and sustain our inclusive culture.

Development. We believe in the power of equipping our leaders and our associates with the necessary resources to create and maintain an

inclusive workplace, while aiming to advance the careers of associates from historically marginalized groups.

During Fiscal 2022, in addition to increasing the representation of POC throughout the organization, we believe that we made significant progress

on our IDEA initiatives at AEO, including:

• The announcement of our second class of 15 recipients of the Steven Davis Scholarship for Social Justice (renamed in honor of the

late Steven Davis, a Director of the AEO Board who passed away in 2022). The scholarship program is supported by an investment

of $5 million, providing annual full scholarships to 15 associates who are actively driving anti-racism, equality and social justice

initiatives;

• Continuing our commitment to using both qualitative and quantitative data to inform our strategies and priorities, we released an

expanded IDEA survey capturing our entire — population and leveraged information gathered through mandatory inclusive

workplace training programs developed by our training partner Emtrain. These efforts provide us with important data-points to

measure future progress.

• Launching the Structured Hiring process which revamps candidate evaluation for corporate positions to provide a more thoughtful

and standardized approach to hiring, leading to a more equitable, accessible and inclusive process.

• Investing in relationships with both Historically Black Colleges and Universities and underrepresented group student organizations

at Predominantly White Institutions resulting in increased diversity within our Internship and Teammate programs.

• Becoming an original signatory to the Open to All Charter to Mitigate Racial Bias, meant to address the different experiences of

BIPOC customers in retail establishments and the role bias or the perception of bias has on their shopping experiences and

choices.

• Expanding Close Knit, our internal co-mentoring program and PREP, our mentoring and retail enrichment program aimed at

educating college students from historically marginalized groups about opportunities in retail, generally, and AEO specifically.

• The introduction of a LGBTQAI+ associate guide and Transition support resources for transgender associates, developed by

members of The Real Pride Network (AEO’s LGBTQAI+ employee resource group), IDEA Department and AEO Human Resources.

TOTAL REWARDS

Our compensation programs are designed to attract and retain highly skilled, performance-oriented associates who live our brands and embody

the spirit of authenticity and innovation we cultivate. We focus on delivering simple, straightforward compensation programs that our associates

can easily understand. Ensuring that our teams are rewarded for delivering results is a key priority.

We strive to make compensation decisions that are fair and equitable, consistently evaluating compensation through both an internal and

external lens. We focus on internal pay equity and conduct regular benchmarking to ensure competitiveness to the external market.

Our compensation programs are composed of three key elements:

• Competitive base pay rates, which are aligned to specific roles and skills, local market rates, and relevant experience;

• Incentive bonuses for full-time associates, which are structured to deliver financial rewards for the delivery of monthly, quarterly, or

annual results; and

• Annual stock awards for over 450 leaders and key individual contributors throughout areas of the business, including the senior

management team, which provide a commonality of interest between our leaders and shareholders.

We recognize that benefits are highly personal, and we offer a broad suite of inclusive plans and programs to our workforce, understanding that

their needs and priorities vary. Starting on their hire, re-hire, or promotion date, our full-time associates have access to a variety of medical,

dental and vision plan offerings. In the United States, our largest market, we also offer the following benefits to our workforce:

• All associates are eligible for the following benefits: comprehensive health and holistic well-being programs, supporting the physical,

emotional, social and financial needs of our associates. Benefit programs include: robust well-being programs and incentives

promoting an active and healthy lifestyle; mental health and meditation benefits; innovative student loan debt benefits; financial well-

being tools and guidance; a gym/online fitness discount program; discounts on AEO merchandise; and a voluntary benefit and

discount platform, offering competitive rates for auto insurance, home/renters insurance, legal services, identity theft services, pet

insurance and more. Upon eligibility, associates can participate in AEO’s Employee Stock Purchase Plan and 401(k) plans.

• Associates that are eligible for AEO’s medical insurance programs: Full-time associates, or part-time associates with an average of

30 hours or more (per ACA’s required initial or standard measurement period), are eligible to enroll in medical insurance on their hire

or rehire date. Associate’s dependents are also eligible to enroll in AEO’s medical insurance programs including dependent

child(ren), and same or opposite-sex spouses or domestic partners. Enhanced benefits offered with medical insurance include:

primary care, behavioral and specialist visits via telehealth to ensure consistent access to convenient, high-quality, low-cost care; a

wide selection of behavioral health programs to support mental health; generous fertility management benefits, adoption and

surrogacy reimbursement for our associates who are focused on expanding their families; digital management programs for chronic

conditions, smoking cessation and digital physical therapy; prescription drug savings programs; access to care navigators and

claims advocacy; gender affirmation support programs; free to low-cost primary and specialist visits at four onsite health care

centers; and

• For all full-time associates: Up to 10 free, confidential in-person or telephonic sessions per issue through the Employee Assistance

Program; paid time off; life insurance, short-term and long-term disability insurance; access to health coaches and lifestyle programs

to assist with managing chronic conditions, nutrition, smoking cessation and weight loss; flexible spending accounts; benefits to

support parents of children with disabilities; neurodiversity inclusion training and resources; mobile apps for fertility, menopause,

maternity, and parenting; support for nursing mothers on business travel; paid parental and caregiver leave; and additional caregiver

programs.

We recognize the importance of supporting AEO’s new parents and caregivers. During Fiscal 2022, AEO made significant enhancements to

parental and caregiver benefits. Full-time associates, after only 30 days of employment, are eligible for up to eight weeks of paid parental leave

upon becoming a new parent. In addition, AEO automatically enrolls full-time associates into employer-paid short-term disability benefits upon

being hired, rehired or promoted into a full-time status. Full-time associates that qualify for benefits under the Family and Medical Leave Act are

also provided with four weeks of paid caregiver leave, to take care of a child, spouse, domestic partner or parent dealing with a serious medical

condition.

As securing child care and backup care in the United States remains challenging, we made the decision to continue child care benefits that offer

support to those working at home, on a waiting list for child care, or those needing backup care. These programs were also expanded to offer

tutoring for grades K-12 and expanded resources to caregivers.

HEALTH AND SAFETY

The health and safety of our workforce and customers are critical to our culture and business. We continue to put our people first in our health

and safety programs for our associates, customers, and partners. AEO's Health and Safety Management Program focuses on accident

prevention, training, and response. Safety is a team effort; all levels of management have responsibilities and are held accountable to the

standards set by the Company.

Our efforts are focused on reporting leading indicators, which allow us to be proactive in predicting and preventing accidents from occurring. We

identify leading indicators by conducting observations of our associates working and correcting unsafe behaviors, through coaching, before an

injury can occur. Our efforts are benchmarked and audited annually. The results of the audits are shared with the executive management team,

and appropriate corrective measures are taken to correct any identified deficiencies.

Creating a safe and secure environment allows our associates, customers, and partners to perform efficiently and confidently. We deploy state-

of-the-art technology in screening personnel, vehicles, and the surrounding grounds. Some technology applications use artificial intelligence (AI)

and advanced analytics to enhance awareness and provide early detection of security anomalies that deserve appropriate attention. Our layered

approach to security, coupled with technology, training, and vigilance, ensures AEO, Inc. maintains an environment that is the safest place to

work and shop.

Throughout Fiscal 2022, we have maintained the comprehensive global store playbook to protect our associates and guests from the new

variants of COVID-19 as we evolved to a less restrictive set of protocols to stay in step with the CDC guideline. With the need for sanitizers and

disposable masks being reduced in our stores, distribution centers, and offices, we found other organizations that could benefit and made

donations of 15 million disposable masks to our communities.

Competition

The global retail apparel industry is highly competitive both in stores and online. We compete with various local, national, and global apparel

retailers, as well as the casual apparel and footwear departments of department stores and discount retailers, primarily on the basis of quality,

fashion, service, selection, and price.

Trademarks and Service Marks

We have registered AMERICAN EAGLE OUTFITTERS®, AMERICAN EAGLE®, AE®, AEO®, LIVE YOUR LIFE®, AERIE®, OFFLINE BY

AERIE® and various eagle designs with the United States Patent and Trademark Office. We also have registered or have applied to register

substantially all of these trademarks with the registries of the foreign countries in which our stores, e-commerce sites, and/or manufacturers are

located and/or where our product is shipped.

We have registered AMERICAN EAGLE OUTFITTERS®, AMERICAN EAGLE®, AEO®, LIVE YOUR LIFE®, AERIE®, and various eagle designs

with the Canadian Intellectual Property Office. In addition, we have acquired rights in AE™ for clothing products and registered AE® in

connection with certain non-clothing products.

In the United States and in other countries around the world, we also have registered, or have applied to register, a number of other marks used

in our business, including TODD SNYDER®, TAILGATE®, UNSUBSCRIBED®, AE77®, AIRTERRA™, QUIET LOGISTICS®, and our pocket

stitch designs.

Our registered trademarks are renewable indefinitely, and their registrations are properly maintained in accordance with the laws of the country in

which they are registered. We intend to use, renew, and enforce our trademarks in accordance with our business plans.

Seasonality

Historically, our operations have been seasonal, with a large portion of total net revenue and operating income occurring in the third and fourth

fiscal quarters, reflecting increased demand during the back-to-school and year-end holiday selling seasons, respectively. Our quarterly results of

operations also may fluctuate based upon such factors as the timing of certain holiday seasons, the number and timing of new store openings,

the acceptability of seasonal merchandise offerings, the timing and level of markdowns, store closings and remodels, competitive factors,

weather and general economic and political conditions.

Information About our Executive Officers

Marisa A. Baldwin, age 52, has served as our Chief Human Resources Officer since September 2021. Prior to joining us, Ms. Baldwin served as

Chief Human Resources Officer at Ascena Retail Group/ANN Inc. from November 2019 to May 2021; as Senior Vice President, Human

Resources & Corporate Communications (ANN INC.) from 2015 to 2019; and as Vice President, Human Resources, ANN INC. from 2011 to

2015. Prior thereto, Ms. Baldwin served in human resources leadership roles focused on the growth and expansion of Starbucks Corporation and

building a culture of inclusion at Diageo North America Inc.

Jennifer M. Foyle, age 56, has served as our President, Executive Creative Officer – AE and Aerie since June 2021 and as Chief Creative

Officer, AEO Inc. and Global Brand President – Aerie from September 2020 to June 2021. Prior thereto she served as our Global Brand President

- Aerie since 2015. Ms. Foyle served as Executive Vice President, Chief Merchandising Officer - Aerie from February 2014 to January 2015 and

Senior Vice President, Chief Merchandising Officer – Aerie from August 2010 to February 2014. Prior to joining us, Ms. Foyle was President of

Calypso St. Barth from 2009 to 2010. In addition, she was the Chief Merchandising Officer at J. Crew Group, Inc., from 2003 to 2009. Early in her

career, Ms. Foyle was the Women’s Divisional Merchandise Manager for Gap Inc. from 1999 to 2003 and held various roles at Bloomingdales

from 1988 to 1999.

Michael A. Mathias, age 48, has served as our Executive Vice President and Chief Financial Officer since April 2020. Prior thereto, he served

as Senior Vice President, Financial Planning & Analysis from October 2017 to April 2020, and in various key financial and operational roles since

joining us in 1998 through 2014. From 2016 to 2017, Mr. Mathias served as Vice President, Financial Planning and Strategy at General Nutrition

Centers, Inc. From 2014 to 2016, he served as President and Managing Partner of SY Ventures.

Michael R. Rempell, age 49, has served as our Executive Vice President and Chief Operations Officer since June 2012. His current

responsibilities include oversight of our Commercial, Technology, end-to-end Supply Chain, Production and Sourcing, Corporate Strategy, and

Todd Snyder Business. Prior thereto, he served as our Executive Vice President and Chief Operating Officer, New York Design Center, from April

2009 to June 2012, as Senior Vice President and Chief Supply Chain Officer from May 2006 to April 2009, and in various other positions since

joining us in February 2000.

Jay L. Schottenstein, age 68, has served as our Executive Chairman, Chief Executive Officer since December 2015. Prior thereto, Mr.

Schottenstein served as our Executive Chairman, Interim Chief Executive Officer from January 2014 to December 2015. He has also served as

the Chairman of the Company and its predecessors since March 1992. He served as our Chief Executive Officer from March 1992 until

December 2002 and prior to that time, he served as a Vice President and Director of our predecessors since 1980. He has also served as

Chairman of the Board and Chief Executive Officer of Schottenstein Stores Corporation (“SSC”) since March 1992 and as President since 2001.

Prior thereto, Mr. Schottenstein served as Vice Chairman of SSC from 1986 to 1992. He has been a Director of SSC since 1982. Mr.

Schottenstein also has served since March 2005 as Executive Chairman of the Board of Designer Brands Inc. (f/k/a DSW Inc.) (NYSE: DBI) and

formerly served as that company’s Chief Executive Officer from March 2005 to April 2009. He has also served as a member of the Board of

Directors for Albertsons Companies, Inc. (NYSE: ACI) since 2006 to 2022. He has also served as an officer and director of various other entities

owned or controlled by members of his family since 1976.

Available Information

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, as well as

other information that we file with or furnish to the SEC, are available under the Investor Relations section of our website at www.aeo-inc.com.

These reports are available as soon as reasonably practicable, free of charge, after such material is electronically filed with or furnished to the

SEC. Alternatively, you may access these reports at the SEC’s website at www.sec.gov.

Our corporate governance materials, including our corporate governance guidelines: the charters of our audit, compensation, and nominating and

corporate governance committees; and our code of ethics may also be found under the Investor Relations section of our website at www.aeo-

inc.com. A copy of the corporate governance materials is also available upon written request.

Additionally, our investor presentations are available under the Investor Relations section of our website at www.aeo-inc.com. These materials

are available no later than the time they are presented at investor conferences. We have included our website addresses throughout this report

as inactive textual references only. The information on our website or any other websites is not incorporated by reference in this Annual Report

and should not be considered part of this Annual Report.

Item 1A. Risk Factors

Macroeconomic and Industry Risks

Global economic conditions and the effect of economic pressures and other business factors on discretionary consumer

spending and changes in consumer preferences have had and could continue to have a material adverse effect on our

business, results of operations and financial condition.

The uncertain state of the global economy continues to impact businesses around the world, including ours. Inflation and other macroeconomic

pressures in the United States and the global economy such as rising interest rates, energy prices

and recession fears are creating a complex and challenging retail environment for us and our customers, and consumers may further reduce

discretionary spending.

If global economic and financial market conditions deteriorate, the following factors could have a material adverse effect on our business,

operating results and financial condition:

• The success of our operations is highly dependent on consumer spending, which can be negatively impacted by economic

conditions as well as factors affecting disposable consumer income such as income taxes, payroll taxes, employment, consumer

debt, interest rates, increases in energy costs and consumer confidence. During Fiscal 2022 interest rates and energy costs

increased, and consumer confidence reached an all time low. Additionally, there are fears of a potential recession during Fiscal

2023. Any of these factors could lead to a decrease in consumer spending. Declines in consumer spending have and, in the future,

may result in decreased demand for our products, increased inventories, lower revenues, higher discounts, pricing pressure and

lower gross margins.

• We may be negatively impacted by changes in consumer preferences and discretionary spending habits such as consumer

behavior reallocating to non-retail discretionary consumer spending.

• We may be unable to access financing in the credit and capital markets at reasonable rates.

• We conduct transactions in various currencies, which creates exposure to fluctuations in foreign currency exchange rates relative to

the United States dollar, in particular the Mexican peso and Canadian dollar. Continued volatility in the markets and exchange rates

for foreign currencies could have a significant impact on our reported operating results and financial condition.

• Continued volatility in the availability and prices for commodities and raw materials we use in our products and in our supply chain

(such as cotton) and related inflationary pressures could have a material adverse effect on our costs, gross margins and profitability.

• If our suppliers or other participants in our supply chain experience difficulty obtaining financing needed for their operations in the

capital and credit markets, it may result in delays or non-delivery of our products.

In uncertain economic environments, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any,

such circumstances could have on our business, results of operations, cash flows and financial position.

Our inability to anticipate and respond to changing consumer preferences and fashion trends and fluctuations in

consumer demand in a timely manner could adversely impact our business and results of operations.

The specialty retail apparel business fluctuates according to changes in the economy and consumer preferences and trends, which are dictated

by fashion trends and season and may shift quickly. These fluctuations can materially impact our sales and gross margins and are exacerbated

by the fact that merchandise is typically ordered well in advance of a selling season. While we work to identify trends and consumer preferences

on an ongoing basis and offer inventory and shopping experiences that meet such trends and preferences, we may not do so effectively and/or

on a timely basis. As a result, we are vulnerable to changes in consumer demand, pricing shifts and the timing and selection of merchandise

purchases.

Our future success depends, in part, upon our ability to identify and respond to fashion trends and changing consumer preferences in a timely

manner. Lead times for many of our design and purchasing decisions may make it more difficult for us to respond rapidly to new or changing

apparel trends or consumer acceptance of our products. Our failure to enter into agreements for the manufacture and purchase of merchandise

in a timely manner could, among other things, lead to a shortage of inventory and lower sales. Changes in fashion trends, if unsuccessfully

identified, forecasted or responded to markdowns or write-offs, could negatively impact our ability to achieve or maintain profitability and have a

material adverse effect on our business, particularly unanticipated changes such as those that resulted from the COVID-19 pandemic, could also

negatively impact our brand image with our customers and result in diminished brand loyalty.

Seasonality may cause sales to fluctuate and negatively impact our results of operations.

Historically, our operations have been seasonal, with a large portion of total net revenue and operating income occurring in the third and fourth

fiscal quarters, reflecting increased demand during the back-to-school and year-end holiday selling seasons, respectively. Because of this

seasonality, factors negatively affecting us during the third and fourth fiscal quarters of any year, including adverse weather or unfavorable

economic conditions, could have a material adverse effect on our financial condition and results of operations for the entire year. As a result, we

may not be able to accurately predict our

quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period. Our quarterly results of operations

also may fluctuate based upon such factors as the timing of certain holiday seasons, the number and timing of new store openings, the

acceptability of seasonal merchandise offerings, the timing and level of markdowns, store closings and remodels, competitive factors, weather,

and general economic and political conditions.

This seasonality, along with other factors that are beyond our control, including public health events, social or political unrest, general economic

conditions, changes in consumer preferences, weather conditions, including the effects of climate change, the availability of import quotas,

transportation disruptions and foreign currency exchange rate fluctuations, could adversely affect our business and cause our results of

operations to fluctuate.

We operate in a highly competitive industry, and we face significant pricing pressures from existing and new competitors.

The sale of apparel, accessories, intimates, and personal care products is a highly competitive business with numerous participants, including

individual and chain specialty apparel retailers, local, regional, national, and international department stores; discount stores and online

businesses. Changing consumer preferences has resulted and may continue to result in new competition for our products. The substantial sales

growth in the digital channel within the last several years has increased competition due to new entrants in the market and has resulted in pricing

pressures from new entrants and established competitors. Some of these competitors have robust digital consumer experiences and highly

efficient delivery systems. Furthermore, the decrease in mall traffic is putting a greater reliance on the digital channel and thus increasing the

competitive threat.

We face a variety of competitive challenges, including:

• Anticipating and quickly responding to changing consumer demands or preferences better than our competitors;

• Maintaining favorable brand recognition and effective marketing of our products to consumers in several demographic markets;

• Sourcing merchandise efficiently;

• Developing innovative, high-quality merchandise in styles that appeal to our customers and in ways that favorably distinguish us

from our competitors;

• Countering the aggressive pricing and promotional activities of many of our competitors; and

• Anticipating and quickly responding to changing consumer shopping preferences and practices, including the increasing shift to

digital brand engagement, social media communication, and online shopping.

In light of the competitive challenges we face, we may not be able to compete successfully in the future, which may result in lower market share.

Additionally, increases in the number of our competitors could reduce our sales, which in turn could have a material adverse effect on our results

of operations and financial condition.

Our results could be adversely affected by events beyond our control, such as natural disasters, public health crises,

political crises, negative global climate patterns, or other catastrophic events.

Our operations, those of our licensees, our suppliers, or our customers, could be negatively impacted by various events beyond our control,

including, without limitation, natural disasters, such as hurricanes, tornadoes, floods, earthquakes, extreme cold events and other adverse

weather conditions; public health crises, such as pandemics and epidemics (including, without limitation, the ongoing COVID-19 pandemic);

political crises, such as terrorist attacks, war, labor unrest, and other political instability (including, without limitation, the ongoing conflict between

Russia and Ukraine); negative global climate patterns, especially in water-stressed regions; or other catastrophic events, such as fires or other

disasters occurring at our distribution centers or our vendors' manufacturing facilities, whether occurring in the United States or internationally. In

particular, these types of events could impact our supply chain from or to the impacted region and could impact our ability or the ability of our

licensees or other third parties to operate our stores or websites, or could impact our business as a whole if the impacted region includes our

corporate offices. In addition, these types of events could negatively impact consumer spending in the impacted regions or, depending upon the

severity, globally. Disasters occurring at our vendors’ manufacturing facilities could impact our reputation and consumers’ perception of our

brands. To the extent that any of these events occur, our operations and financial results could be adversely affected. In addition, the impacts of

climate change could result in changes in regulations or consumer preferences, which could in turn affect our business, operating results, and

financial condition.

Impairment to goodwill, intangible assets, and other long-lived assets could adversely impact our profitability.

Significant negative industry or general economic trends, changes in customer demand for our product, disruptions to our business, and

unexpected significant changes or planned changes in our operating results or use of long-lived assets may result in impairments to goodwill,

intangible assets, and other long-lived assets.

The ongoing COVID-19 pandemic has had, and may in the future have, an adverse effect on our business and results of

operations.

The COVID-19 pandemic has negatively impacted the global economy, disrupted consumer spending and global supply chains, created

significant volatility and disruption of financial markets, and has had an adverse impact on our business and financial performance. The COVID-

19 pandemic also has impacted and may in the future interrupt and further increase costs for our supply chain and could require additional

changes to our operations.

Transportation shortages, labor shortages and port congestion globally have in the past delayed and could in the future delay inventory orders

and, in turn, deliveries to our customers and availability in our company-operated stores and e-commerce sites. These supply chain and logistics

disruptions have impacted our inventory levels and net revenues in prior periods and could impact our financial results in future periods.

The COVID-19 pandemic also directly threatens the health of our associates and consumers. The operation of all of our stores is critically

dependent on our associates who staff these locations. In the event that an associate tests positive for COVID-19, we have had to, and may in

the future have to, temporarily close one or more stores, offices or distribution centers for cleaning and/or quarantine one or more associates, or

due to the unavailability of impacted associates, which could negatively impact our financial results.

The extent of the impact of the COVID-19 pandemic on our business will depend on future developments, which remain highly uncertain and

difficult to predict, including the duration, severity and sustained geographic spread of the pandemic; additional waves of increased infections; the

virulence and spread of different strains of the virus; and the extent to which associated prevention, containment, remediation and treatment

efforts, including global vaccination programs and vaccine acceptance, are successful.

Strategic Risks

Our inability to grow our digital channels and leverage omni-channel capabilities could adversely impact our business.

We have made and expect to continue to make significant investments in building our technologies and digital capabilities in three key areas:

mobile technology, digital marketing, and the digital customer experience. We have made significant capital investments in these areas but there

is no assurance that we will realize expected returns on those investments or be successful in growing our digital channels.

As omni-channel retailing continues to evolve, our customers are increasingly more likely to shop across multiple channels that work in tandem to

meet their needs. In addition, our competitors are also investing in omni-channel initiatives, some of which may be more successful than our

initiatives. Our inability to respond to changes in consumer behavior and our competitive environment, or to successfully maintain and expand our

omni-channel business may have an adverse impact on our results of operations. See “— Operational Risks — Our failure to manage growth in

our omni-channel operations and the resulting impact on our distribution and fulfillment networks may have an adverse effect on our results of

operations.”

Failure to define, launch and communicate a brand-relevant customer experience could have a negative impact on our

growth and profitability.

We strive to build strong emotional connections with our customers and to enrich the customer experience. If our marketing and customer

experience programs, including our loyalty program, are unsuccessful, or if our competitors are more effective with their programs than we are,

our growth and profitability may be negatively affected.

Our efforts to execute on our key business priorities could have a negative impact on our growth and profitability.

Our success depends on our ability to execute on our key priorities. Achieving these key business priorities depends on us executing our

strategies successfully, and the initiatives that we implement in connection with these goals may not resonate with our customers, or be

successful in achieving their intended goals. It may take longer than anticipated to generate the expected benefits of our initiatives, and there can

be no guarantee that pursuing these key priorities will result in improved operating results or achievement of a given priority. Misalignment and

competing initiatives could result in inefficiencies, erroneously prioritized efforts, and resource dilution. Failure to implement our key business

priorities successfully could have a negative impact on our growth and profitability.

Our current international operations and efforts to further expand internationally expose us to risks inherent in operating

in other countries.

We are actively pursuing additional international expansion initiatives, which include Company-owned stores and stores operated by third parties

through licensing arrangements in select international markets. The effect of international expansion arrangements on our business and results of

operations is uncertain and will depend upon various factors, including the demand for our products in new markets internationally. Furthermore,

although we provide store operation training, literature and support, to the extent that a licensee does not operate its stores in a manner

consistent with our requirements regarding our brand and customer experience standards, our business results and the value of our brand could

be negatively impacted.

As we pursue our international expansion initiatives, we are subject to certain laws, including the Foreign Corrupt Practices Act, as well as the

laws of the foreign countries in which we operate, which may impose new or changing regulatory restrictions and requirements, including in the

areas of data privacy, sustainability and responses to climate change. Violations of these laws could subject us to sanctions or other penalties

that could have an adverse effect on our reputation, operating results and financial condition.

A failure to implement our expansion initiatives properly, or the adverse impact of political or economic risks in our current or new international

markets, could have a material adverse effect on our results of operations and financial condition. In certain international markets we have

limited prior experience operating our Company-owned stores, and in all international markets we face established local and international

competitors. In many of these locations, the real estate, labor and employment, transportation and logistics and other operating requirements

differ dramatically from those in the locations where we have more experience. Consumer demand and behavior, as well as tastes and

purchasing trends, may differ substantially, and, as a result, sales of our products may not be successful, or the margins on those sales may not

be in line with those we currently anticipate. Our potential inability to anticipate and address differences that we encounter as we expand

internationally may divert financial, operational, and managerial resources from our existing operations, which could adversely impact our

financial condition and results of operations. In addition, we are increasingly exposed to foreign currency exchange rate risk with respect to our

revenue, profits, assets, and liabilities denominated in currencies other than the United States dollar. The instruments we may use to hedge

certain foreign currency risks in the future may not succeed in offsetting all of the negative impact of foreign currency rate movements on our

business and results of operations.

Operational Risks

Our failure to protect our reputation could have a material adverse effect on our brands.

Our business depends on the value and reputation of our brands and our ability to anticipate, identify, and respond to consumer demands and

preferences, and to fashion trends. In addition, the increasing use of social media platforms allows for rapid communication and any negative

publicity related to the aforementioned concerns may reduce demand for our merchandise. Public perception about our products or our stores,

whether justified or not, could impair our reputation, involve us in litigation, damage our brands and may adversely impact our business, results of

operations, and financial condition.

The appeal of our brands may also depend on the success of our environmental, social and governance ("ESG") initiatives, which require

company-wide coordination and alignment. We are working to manage risks and costs to us, our licensees and our supply chain that are exposed

to the effects of climate change as well as diminishing fossil fuel and water resources. These risks include any increased public focus, including

by governmental and non-governmental organizations, on climate change and other environmental sustainability matters, including packaging

and waste, animal welfare, and land use. We may receive increased pressure to expand our disclosures in these areas, make commitments, set

targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risks.

The metrics we disclose in our ESG report, such as emissions and water usage, whether they be based on the standards

we set for ourselves or those set by others, may influence our reputation and the value of our brand. Our failure to achieve progress on our

metrics on a timely basis, or at all, could adversely affect our business, financial performance, and growth. By electing to publicly set and share

these metrics and expand upon our disclosures, we may also face increased scrutiny related to ESG activities. As a result, we could experience

damage to our reputation and the value of our brands if we fail to act responsibly in the areas in which we report. Any such harm to our reputation

or any failure or perceived failure by us to adequately address ESG-related activities, including setting of metrics or enhancing disclosures, could

adversely affect our business, financial performance, and growth.

Our failure to manage growth in our omni-channel operations and the resulting impact on our distribution and fulfillment

networks may have an adverse effect on our results of operations.

Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors, and to do comparison

shopping, as well as to engage with us and our competitors through digital services and experiences that are offered on mobile platforms. In

Fiscal 2022, digital sales represented 36% of our total revenue. In order to grow and remain competitive, we will need to continue to adapt to

future changes in technology to address the changing demands of consumers. Any failure on our part to provide attractive, effective, reliable,

secure, user-friendly digital commerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet

the changing expectations of online shoppers or any failure to provide attractive digital experiences to our customers could place us at a

competitive disadvantage, result in the loss of digital commerce and other sales, harm our reputation with consumers, have a material adverse

impact on the growth of our digital commerce business globally and have a material adverse impact on our business and results of operations.

Our omni-channel operations are subject to numerous risks that could have a material adverse effect on our results. Risks include, but are not

limited to, the difficulty in recreating the in-store experience; our ability to anticipate and implement innovations in technology and logistics in

order to appeal to existing and potential consumers who increasingly rely on multiple channels to meet their shopping needs; and the failure of

and risks related to the systems that operate our web infrastructure, websites and the related support systems, including computer viruses, theft

of consumer information, privacy concerns, telecommunication failures and electronic break-ins and similar disruptions.

Our failure to maintain efficient and uninterrupted fulfillment operations could also have a material adverse effect on our results. The satisfaction

of consumers who shop online depends on their timely receipt of merchandise. If we encounter difficulties with our distribution facilities, or if the

facilities were to shut down for any reason, including as a result of fire, natural disaster or work stoppage, we could face shortages of inventory,

incur significantly higher costs and longer lead times associated with distributing our products to consumers, and cause consumer dissatisfaction.

Any of these issues could have a material adverse effect on our operations, financial condition and cash flows.

Our inability to implement and sustain adequate information technology systems could adversely impact our profitability

and the loss of disruption of information technology systems could have a material adverse effect on our business.

Our information technology systems are an integral part of our strategies in efficiently operating our business, in managing operations and

protecting against security risks related to our electronic processing and transmitting of confidential consumer and associate data. The

requirements to keep our information technology systems operating at peak performance may be higher than anticipated and could strain our

capital resources, management of any system upgrades, implementation of new systems and the related change management processes

required with new systems and our ability to prevent any future information security breaches. We regularly evaluate our information technology

systems and are currently implementing modifications and/or upgrades to the information technology systems that support our business.

Modifications include replacing legacy systems with successor systems, making changes to legacy systems, or acquiring new systems with new

functionality. We are aware of the inherent risks associated with operating, replacing, and modifying these systems, including inaccurate system

information and system disruptions. There is a risk that information technology system disruptions and inaccurate system information, if not

anticipated and/or promptly and appropriately mitigated, could have a material adverse effect on our results of operations. Additionally, there can

be no guarantee that, if any information technology system failure, cyberattack, or security breach occurs, it will be timely detected or sufficiently

remediated.

Any significant disruption of our data center could have a material adverse effect on those operations dependent on those systems, specifically

our store and e-commerce operations, our distribution and fulfillment centers and our merchandising team. While we maintain business

interruption and property insurance, in the event of a data center shutdown, our insurance may not be sufficient to cover the impact to the

business.

Furthermore, if our information technology systems are damaged, breached or cease to properly function for any reason, including the poor

performance of, failure of, or cyber-attack on third-party service providers, catastrophic events, power outages, cybersecurity breaches, network

outages, failed upgrades or similar events, and if our disaster recovery and business continuity plans do not effectively resolve such issues, we

may suffer interruptions in our ability to manage or conduct business, as well as reputational harm, and we may be subject to governmental

investigations and litigation, any of which may adversely impact our business, results of operations, and financial condition.

We face risks related to our electronic processing of sensitive and confidential personal and business data. If such data

are lost or disclosed in an unauthorized manner, or if we or our third-party vendors are subject to cyberattacks, data

breaches, other security incidents, or disruption of information technology systems or software, such events could

expose us to liability, damage our reputation, and have a material adverse effect on our business.

Given the nature of our business, we, together with third parties acting on our behalf, receive, collect, process, use, and retain sensitive and

confidential consumer and associate data, in addition to proprietary business information. Our business relies on information technology networks

and systems to market and sell our products, process financial and personal information, manage a variety of business processes and comply

with regulatory, legal and tax requirements. We also depend on a variety of information systems to effectively process consumer orders and other

data and for digital marketing activities and for electronic communications among our associates, consumers, prospective consumers, and

vendors. Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to

consumer data. Additionally, we maintain other confidential, proprietary, or otherwise sensitive information relating to our business and from third

parties.

The information technology networks and systems owned, operated, controlled or used by us or our vendors may be vulnerable to damage,

disruptions or shutdowns, software or hardware vulnerabilities, data breaches, security incidents, supply-side attacks, failures during the process

of upgrading or replacing software, databases or components, power outages, natural disasters, hardware failures, attacks by computer hackers,

telecommunication failures, user errors, user malfeasance, computer viruses, unauthorized access, phishing or social engineering attacks,

ransomware attacks, denial-of-service attacks and other real or perceived cyber-attacks or catastrophic events, all of which may not be prevented

by our efforts to secure our information technology systems. Any of these incidents could lead to interruptions or shutdowns of our platform,

disruptions in our ability to process consumer orders or to track, record or analyze the sale of our products, loss or corruption of data or

unauthorized access to or acquisition of personal information or other sensitive information, such as our intellectual property.

We utilize security tools and controls and also rely on our third-party vendors to use sufficient security measures, including encryption and

authentication technology, in an effort to protect personal and other sensitive information. However, advances in information technology

capabilities, increasingly sophisticated tools and methods used by hackers and cyber terrorists, new discoveries in the field of cryptography or

other developments may result in our failure or inability, or the failure or inability of our vendors, to adequately protect personal or other sensitive

information and there can be no assurance that we or our vendors will not suffer a cyberattack, that hackers or other unauthorized parties will not

gain access to or exfiltrate personal information or other sensitive data, or that any such data compromise or unauthorized access will be

discovered in a timely fashion.

We rely on associates, contractors and other third parties who may attempt to circumvent our security measures in order to obtain such

information and may purposefully or inadvertently cause a breach involving such information. Actual or anticipated attacks may cause us to incur

increasing costs, including costs to deploy additional personnel and protection technologies, train associates, pay higher insurance premiums,

and engage third-party specialists for additional services. An information security breach involving confidential and personal data could damage

our reputation and our customers' willingness to purchase from us. In addition, we may incur material liabilities and remediation costs as a result

of an information security breach, including potential liability for stolen consumer or associate data, repairing system damage or providing credit

monitoring or other benefits to consumers or associates affected by the breach. In the event we experience an information security breach, our

insurance may not be sufficient to cover the impact to the business. Although we have developed mitigating security controls to reduce our cyber

risk and protect our data from loss or disclosure due to a security breach, including processes designed to reduce the impact of a security breach

at a third-party vendor, such measures cannot provide absolute security.

We and our third-party vendors regularly experience cyber-attacks aimed at disrupting services. Our third-party vendors have been and may be

the victim of cyber related attacks that could lead to operational disruptions that could have an adverse effect on our ability to fulfill consumer

orders. Security incidents such as ransomware attacks are becoming increasingly prevalent and severe, as well as increasingly difficult to detect.

We, and our third-party vendors, have been

subject to cyber, phishing and social engineering attacks and other security incidents in the past and may continue to be subject to such attacks

in the future. Security breaches can also occur as a result of non-technical issues, including intentional or inadvertent actions by our associates,

our third-party vendors or their personnel or other parties. If we or our third-party service providers experience security breaches that result in

marketplace performance problems, availability problems, or the loss, corruption of, unauthorized access to, or disclosure of personal data or

confidential information, people may become unwilling to provide us the information necessary to make purchases on our sites, and our

reputation and market position could be harmed. Existing consumers may also decrease their purchases or close their accounts altogether. We

could also face potential claims, investigations, regulatory proceedings, liability and litigation, and bear other substantial costs in connection with

remediating and otherwise responding to any data security breach, all of which may not be adequately covered by insurance, and which may

result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms, or at all. Insurers may also

deny us coverage as to any future claim. Any of these results could harm our growth prospects, financial condition, business, and reputation.

Telework may negatively impact our operations or increase our risk exposures.

Most of our corporate office associates are working remotely. If our associates are unable to work because of ineffective remote work

arrangements or technology failures or limitations, our operations would be adversely impacted. Further, remote work arrangements may

increase the risk of security incidents, data breaches or cyberattacks, which could have a material adverse effect on our business and results of

operations, due to, among other things, the loss of proprietary data, interruptions or delays in the operation of our business, damage to our

reputation and any government-imposed penalty.

Our international merchandise sourcing strategy subjects us to risks that could adversely impact our business and results

of operations.

We design our merchandise, which is manufactured by third-party suppliers worldwide. Because we have a global supply chain, any event that

causes the disruption of imports, including the insolvency of a significant supplier, global health crisis, or a major labor dispute including any such

actions involving ports, trans loaders, consolidators, or shippers, could have an adverse effect on our operations. Given the volatility and risk in

the current markets, our reliance on external vendors leaves us subject to certain risks should one or more of these external vendors become

insolvent. The financial failure of a key vendor could disrupt our operations and have an adverse effect on our cash flows, results of operations

and financial condition.

Trade matters may disrupt our supply chain. Trade restrictions, including increased tariffs or quotas, embargoes, safeguards, and customs

restrictions against apparel items, as well as United States or foreign labor strikes, work stoppages, or boycotts, could increase the cost or

reduce the supply of apparel available to us and adversely affect our business, financial condition, and results of operations.

We have a Supplier Code of Conduct that provides guidelines for our vendors regarding working conditions, employment practices, and

compliance with local laws. A copy of the Supplier Code of Conduct is posted on our website, www.aeo-inc.com, and is included in our vendor

manual in English and multiple other languages. There can be no assurance that all violations can be eliminated in our supply chain. Publicity

regarding violation of our Supplier Code of Conduct or other social responsibility standards by any of our vendor factories could adversely affect

our reputation, sales, and financial performance.

There is a risk of terrorist activity on a global basis. Such activity might take the form of a physical act that impedes the flow of imported goods or

the insertion of a harmful or injurious agent into an imported shipment. We cannot predict the likelihood of any such activities or the extent of their

adverse impact on our operations.

We are also exposed to risks caused by new or ongoing armed conflicts. For example, the recent conflict between Russia and Ukraine has

caused and continues to cause disruption, instability and volatility in global markets. The conflict has caused and may continue to cause adverse

global economic conditions resulting from escalating geopolitical tensions and inflationary pressures, among other factors.

Our product costs may be adversely affected by foreign trade issues, including import tariffs and other trade restrictions

with China, increasing prices for raw materials, political instability, or other reasons, which could impact our profitability.

A significant portion of the products that we purchase is manufactured abroad. Foreign imports subject us to risks relating to changes in import

duties, quotas, the introduction of United States taxes on imported goods or the extension of United

States income taxes on our foreign suppliers' sales of imported goods through the adoption of destination-based income tax jurisdiction, loss of

"most favored nation" status with the United States, shipment delays and shipping port constraints, labor strikes, work stoppages or other

disruptions, freight cost increases and economic uncertainties. Furthermore, we could face significantly higher United States income and similar

taxes with respect to sales of products purchased from foreign suppliers if the United States were to adopt a system of taxation, such as a border

adjustment tax, under which the cost of imported products was not deductible in determining such products' tax base. If such a tax system were

adopted, we could also face higher prices for products manufactured or produced abroad that we purchase from our domestic suppliers if they

were subject to such a tax.

In addition, the United States government periodically considers other restrictions on the importation of products obtained by our vendors and us.

General trade tensions between the United States and China have been high, with multiple rounds of United States tariffs on Chinese goods

implemented in 2018 and 2019. Furthermore, China or other countries have and may institute future retaliatory trade measures in response to

existing or future tariffs imposed by the United States that could have a negative impact on our business. If any of these events continue as

described, we may need to seek alternative suppliers or vendors, raise prices, or make changes to our operations, any of which could have a

material adverse effect on our sales and profitability, results of operations and financial condition. If any of these or other factors were to cause a

disruption of trade from the countries in which our vendors' suppliers or our products' manufacturers are located, our inventory levels may be

reduced or the cost of our products may increase.

Our suppliers may be impacted by economic conditions and cycles and changing laws and regulatory requirements that

could impact their ability to do business with us or cause us to terminate our relationship with them and require us to find

replacements, which we may have difficulty doing.

Our suppliers are subject to the fluctuations in general economic cycles, and global economic conditions may impact their ability to operate their

businesses. They may also be impacted by the increasing costs or availability of raw materials due to inflationary pressures or rising labor and

distribution costs, among other reasons, potentially resulting in demands for less attractive contract terms or an inability for them to meet our

requirements or conduct their own businesses. The performance and financial condition of a supplier may cause us to alter our business terms or

to cease doing business with a particular supplier, or change our sourcing practices generally, which could in turn adversely affect our business

and financial condition.

In addition, we require our suppliers to comply with applicable laws, including labor, safety, anti-corruption, human rights, and environmental laws,

and to otherwise meet our Vendor Code of Conduct and other industry standards. Our ability to find qualified suppliers who uphold our standards

and provide access to products in a timely and efficient manner in the volume we may demand, can present a significant challenge, especially

with respect to suppliers located and goods sourced outside the United States Further, United States foreign trade policies, tariffs, and other

impositions on imported goods, trade sanctions imposed on certain countries and entities, the limitation on the importation of goods containing

certain materials from other countries and other factors relating to foreign trade are beyond our control.

Our inability to achieve planned store performance, gain market share in the face of declining shopping center traffic or

attract customers to our stores could adversely impact our profitability and our results of operations.

The results achieved by our stores may not be indicative of long-term performance or the potential performance of stores in other locations. Part

of our future growth is dependent on our ability to operate stores in desirable locations with capital investment and lease costs providing the

opportunity to earn a reasonable return. We cannot be sure as to when or whether such desirable locations will become available at reasonable

costs. The failure of our stores to achieve acceptable results could result in store asset impairment charges, which could adversely affect our

results of operations and financial condition.

Additionally, our real estate strategy may not be successful, and store locations may fail to produce desired results, which could impact our

competitive position and profitability. Customer shopping patterns have been evolving from brick-and-mortar locations to, increasingly, digital

channels. We have Company-owned stores in shopping centers that have experienced declining traffic trends while our digital channels continue

to grow. Our ability to grow revenue and acquire new customers is contingent on our ability to drive traffic to both store locations and digital

channels so that we are accessible to our customers when and where they want to shop.

We seek to locate our brick-and-mortar stores in prominent locations within successful shopping malls or street locations. Our stores benefit from

the ability of the malls’ “anchor” tenants, which generally are large department stores and other area attractions, to generate consumer traffic

near our stores. We cannot control the increasing impact of digital channels on

shopping center traffic, the loss of an anchor or other significant tenant in a shopping mall in which we have a store, the development of new

shopping malls in the United States or around the world, the availability or cost of appropriate locations, competition with other retailers for

prominent locations, or the success of individual shopping malls. All of these factors may impact our ability to meet our sales targets and could

have a material adverse effect on our financial results. In addition, some malls and shopping centers that were in prominent locations when we

opened our stores may cease to be viewed as prominent. If this trend away from brick-and-mortar retail continues or if the popularity of mall

shopping continues to decline generally among our customers, our sales may decline, which would impact our results of operations and financial

condition.

Failure to properly manage and allocate our inventory could have an adverse effect on our business, sales, margins,

financial condition, and results of operations

In order to better serve our customers and maximize sales, we must properly execute our inventory management strategies by appropriately

allocating merchandise among our stores, timely and efficiently distributing inventory to such locations, maintaining an appropriate mix and level

of inventory in such locations, and effectively managing pricing and markdowns, and there is no assurance we will be able to do so. In addition,

as we continue to take actions to right-size our inventory, there could be disruptions in inventory flow and placement. Failure to effectively

execute our inventory management strategies could adversely affect our business, financial condition and results of operations.

We base our purchases of inventory, in part, on our sales forecasts. If our sales forecasts do not match customer demand, we may experience

higher inventory levels and need to markdown excess or slow-moving inventory, leading to decreased profit margins, or we may have insufficient

inventory to meet customer demand, leading to lost sales, either of which could adversely affect our financial performance.

We have significant lease obligations and are subject to risks associated with leasing substantial amounts of space,

including future increases in occupancy costs and the need to generate significant cash flow to meet our lease

obligations.

Operating lease obligations, which consist primarily of future minimum lease commitments related to store operating leases, represent a

significant contractual commitment. All of our stores are leased and generally have initial terms of 5-10 years. In the future, we may not be able to

negotiate favorable lease terms for the most desired store locations. Our inability to do so may cause our occupancy costs to be higher in future

years or may force us to close stores in desirable locations.

Certain leases have early termination options, which can be exercised under certain specific conditions. In addition to future minimum lease

payments, some of our store leases provide for additional rental payments based on a percentage of net sales, or “percentage rent,” if sales at

the respective stores exceed specified levels, as well as the payment of tenant occupancy costs, including maintenance costs, common area

charges, real estate taxes and certain other expenses. Many of our lease agreements have defined escalating rent provisions over the initial term

and any extensions.

We depend on cash flow from operations to pay our lease expenses. If our business does not generate sufficient cash flow from operating

activities to fund these expenses, due to continued decreases in mall traffic, the highly competitive and promotional retail environment, or other

factors, we may not be able to service our lease expenses, or may need to incur additional indebtedness, which could materially harm our

business. Furthermore, the significant cash flow required to satisfy our obligations under the leases increases our vulnerability to adverse

changes in general economic, industry, and competitive conditions, and could limit our ability to fund working capital, incur indebtedness, and

make capital expenditures or other investments in our business.

Our inability to successfully integrate Quiet Logistics’ business and operations may adversely affect the combined

company’s future results.

We believe the acquisition of Quiet Logistics will result in certain anticipated benefits, including inventory efficiencies, affordable same-day and

next-day delivery options, and other cost-effective in-market fulfillment services for the Company by utilizing state-of-the-art technology and

robotics. The combined company may fail to realize these anticipated benefits for a variety of reasons, including the following:

• failure to successfully manage relationships with employees, distributors and suppliers;

• revenue attrition in excess of anticipated levels;

• potential incompatibility of technologies and systems;

• failure to leverage the increased scale of the combined company quickly and effectively;

• potential difficulties integrating and harmonizing financial reporting systems;

• the loss of key employees; and

• failure to effectively coordinate sales and marketing efforts to efficiently utilize the acquired capabilities.

The ongoing integration of Quiet Logistics may experience additional and unforeseen expenses or delays. If the combined company is not able to

successfully leverage Quiet Logistics’ business and operations, these anticipated benefits may not be realized fully or at all or may take longer to

realize than expected. Additionally, if these benefits do not meet the expectations of investors or securities analysts, the market price of our

common stock may decline.

The integration of Quiet Logistics may result in significant accounting charges that adversely affect the results of the

combined company.

The financial results of the combined company may be adversely affected by cash expenses and non-cash accounting charges incurred in

connection with the combination. In addition to the anticipated cash charges, non-cash costs associated with the amortization of intangible assets

are expected. The failure of Quiet Logistics to achieve acceptable financial results could result in impairment charges, which could materially

affect our consolidated results of operations and financial condition.

We rely on key personnel, the loss of whom could have a material adverse effect on our business.

Our success depends to a significant extent upon our ability to attract and retain qualified key personnel, including senior management, and, in

particular, Jay Schottenstein, our Executive Chairman and CEO as well as Jennifer Foyle, our Chief Creative Officer. Collective or individual

changes in our senior management and other key personnel could have an adverse effect on our ability to determine and execute our strategies,

which could adversely affect our business and results of operations. There is a high level of competition for senior management and other key

personnel, and we cannot be assured we will be able to attract, retain, and develop a sufficient number of qualified senior managers and other

key personnel.

We must also attract, develop, and retain a sufficient number of qualified field and distribution center personnel. Competition for talent is intense

and the turnover rate in the retail industry is generally high, and we cannot be sure that we will be able to attract and retain a sufficient number of

qualified personnel in future periods. Our ability to meet our labor needs while controlling costs is subject to external factors such as

unemployment levels, prevailing wage rates, minimum wage legislation, and overtime regulations. If we are unable to retain, attract, and motivate

talented employees with the appropriate skill sets, or if changes to our organizational structure, operating results, or business model adversely

affect morale or retention, we may not achieve our objectives and our results of operations could be adversely impacted. In addition, the loss of

one or more of our key personnel or the inability to effectively identify a suitable successor to a key role could have a material adverse effect on

our business.

Increases in labor costs, including wages, could adversely impact our operational results, financial condition and results

of operations

Our store and distribution center operations are subject to laws governing such matters as minimum wages, working conditions and overtime pay.

As minimum wage rates increase or related laws and regulations change, we may need to increase not only the wage rates of our minimum

wage employees, but also the wages paid to our other hourly or salaried employees. Any increase in the cost of our labor could have an adverse

effect on our financial condition and results of operations. In addition, we operate in a competitive labor market, in which wage actions by other

retailers and companies may require us to increase salary and wage rates, bonuses and other incentives in order to attract and retain talented

employees across all of our retail store, distribution and fulfillment center, and home office operations. Labor shortages and increased employee

turnover could also increase our labor costs. This in turn could lead us to increase prices, which could adversely impact our sales. We are also

subject to risks related to other store and distribution center expenses and operational costs. Conversely, if competitive pressures or other factors

prevent us from offsetting increased labor costs by increases in prices, our profitability may decline.

We cannot provide assurance that we will pay dividends, or if paid, that dividend payments will be consistent with

historical levels.

We have generally paid quarterly dividends, which are funded through cash flow from operations and available cash on hand. The declaration of

dividends is subject to the discretion of our Board and is limited by applicable state law concepts of available funds for distribution, as well as

contractual restrictions. As a result, the amount, if any, of the dividends to be paid in the future will depend upon a number of factors, including

our available cash on hand, anticipated cash needs, overall financial condition, any future contractual restrictions, future prospects for earnings

and cash flows, as well as other factors considered relevant by our Board. In addition, our Board may also suspend the payment of dividends at

any time if it deems such action to be in the best interests of the Company and its stockholders. For example, our Board suspended our quarterly

dividend during the second quarter of Fiscal 2022 to support financial flexibility while we navigated the changing macroeconomic environment.

There can be no assurance that the Company will pay dividends in the future on a regular basis or otherwise. In the event our financial condition

or other factors necessitate, our board may choose to delay or suspend the payment of our dividends again in the future.

Legal, Tax, and Regulatory Risks

We are subject to stringent and changing privacy laws, regulations, and standards as well as policies, contracts, and

other obligations related to data privacy and security. Our failure to comply with privacy laws and regulations, as well as

other legal obligations, could have a material adverse effect on our business.

State, federal, and foreign governments are increasingly enacting laws and regulations governing the collection, use, retention, sharing, transfer,

and security of personally identifiable information and data. A variety of federal, state, local, and foreign laws and regulations, orders, rules,

codes, regulatory guidance and certain industry standards regarding privacy, data protection, consumer protection, information security and the

processing of personal information and other data apply to our business. For example, the California Consumer Privacy Act of 2018 ("CCPA"),

which took effect on January 1, 2020, imposes certain restrictions and disclosure obligations on businesses that collect personal information

about California residents and provides for a private right of action, as well as penalties for non-compliance. The CCPA provides for civil penalties

for violations and creates a private right of action for certain data breaches that is expected to increase data breach litigation. It remains unclear

how various provisions of the CCPA will be interpreted and enforced. The California Privacy Rights Act ("CPRA"), which took effect on January 1,

2023 (with a look-back for certain requirements to January 2022), amends and expands the CCPA and places additional restrictions on the

"sharing" of personal information for purposes of cross-context behavioral advertising. We are and may be subject to additional privacy

regulations in the future, including the Virginia Consumer Data Protection Act, which took effect on January 1, 2023, and the Colorado Privacy

Act, which will take effect on July 1, 2023, both of which regulate the processing of "personal data" regarding their respective residents and grant

residents certain rights with respect to their personal data. State laws are changing rapidly, and new legislation proposed or enacted in a number

of other states imposes, or has the potential to impose, additional obligations on companies that process confidential, sensitive and personal

information, and will continue to shape the data privacy environment nationally. The United States federal government is also significantly

focused on privacy matters.

We are subject to other consumer protection laws, including California's Consumer Legal Remedies Act and unfair competition and false

advertising laws, the Fair and Accurate Credit Transactions Act and the Telephone Consumer Protection Act, Canada's Anti-Spam Law, the

CCPA, the CPRA and other recently enacted consumer data protection laws. Additionally, the regulatory environment is increasingly demanding

with frequent new and changing requirements concerning cybersecurity, information security and privacy, which may be inconsistent from one

jurisdiction to another. Any failure by us or any of our business partners to comply with applicable laws, rules, and regulations may result in

investigations or actions against us by governmental entities, private claims and litigation, fines, penalties or other liabilities. Such events may

increase our expenses, expose us to liabilities and impair our reputation, which could have a material adverse effect on our business.

While we aim to comply with applicable data protection laws and obligations in all material respects, there is no assurance that we will not be

subject to claims that we have violated such laws and obligations, will be able to successfully defend against such claims, or will not be subject to

significant fines and penalties in the event of non-compliance. Additionally, to the extent that multiple state-level laws are introduced with

inconsistent or conflicting standards and there is no federal law to preempt such laws, compliance with such laws could be difficult and costly to

achieve, or impossible to achieve, and we could be subject to fines and penalties in the event of non-compliance.

The Company’s amended and restated bylaws (“Bylaws”) provide, to the fullest extent permitted by law, that the Court of

Chancery of the State of Delaware will be the exclusive forum for certain legal actions between the Company and its

stockholders, which could increase costs to bring a claim, discourage claims or limit the ability of the Company’s

stockholders to bring a claim in a judicial forum viewed by the stockholders as more favorable for disputes with the

Company or the Company’s directors, officers or other employees.

Our Bylaws provide, to the fullest extent permitted by law, that unless the Company consents in writing to the selection of an alternative forum,

the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of the Company; (ii) action asserting a claim for or

based on a breach of a fiduciary duty owed by any current or former director or officer or other employee or agent of the Company to the

Company or the Company’s stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty; (iii) action

asserting a claim against the Company or any current or former director or officer or other employee or agent of the Company arising pursuant to

any provision of the Delaware General Corporation Law (“DGCL”), or the Company’s Amended and Restated Certificate of Incorporation or

Bylaws; (iv) action asserting a claim related to or involving the Company or any current or former director or officer or other employee or agent of

the Company that is governed by the internal affairs doctrine of the State of Delaware or (v) action asserting an “internal corporate claim,” as that

term is defined in Section 115 of the DGCL shall, in each case, be the Delaware Court of Chancery located within the State of Delaware (or, if the

Delaware Court of Chancery located within the State of Delaware lacks jurisdiction over any such action or proceeding, the sole and exclusive

forum for such action or proceeding shall be another state or federal court located within the State of Delaware). Additionally, our Bylaws provide

that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America

shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. The choice

of forum provisions may increase costs to bring a claim, discourage claims or limit a stockholder’s ability to bring a claim in a judicial forum that it

finds favorable for disputes with the Company or the Company’s directors, officers or other employees, which may discourage such lawsuits

against the Company or the Company’s directors, officers and other employees. Alternatively, if a court were to find the choice-of- forum

provisions contained in the Company’s Bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs

associated with resolving such action in other jurisdictions. The exclusive forum provisions in the Company’s Bylaws will not preclude or contract

the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws including the Exchange Act or the

Securities Act, as amended, or the respective rules and regulations promulgated thereunder.

We may be unable to protect our trademarks and other intellectual property rights.

We believe that our trademarks and service marks, as described in Part I, Item 1, Business, are important to our success and our competitive

position due to their name recognition with our customers. We devote substantial resources to establishing and protecting our trademarks and

service marks. We are not aware of any material claims of infringement or material challenges to our right to use any of our trademarks.

Nevertheless, the actions we have taken, including to establish and protect our trademarks and service marks, may not be adequate to prevent

others from imitating our products or to prevent others from seeking to block sales of our products. Other parties may also claim that some of our

products infringe on their trademarks, copyrights or other intellectual property rights. In addition, the laws of certain foreign countries may not

protect our proprietary rights to the same extent as do the laws of the United States Litigation regarding our trademarks and other intellectual

property rights could adversely affect our business, financial condition, and results of operations.

Changes in the regulatory or administrative landscape could adversely affect our financial condition and results of

operations.

We are subject to numerous domestic and foreign laws and regulations affecting our business, including those related to labor, employment,

worker health and safety, competition, privacy, consumer protection, import/export, anti-corruption, including the Foreign Corrupt Practices Act,

and climate change. Additional legal and regulatory requirements have increased the complexity of the regulatory environment and the cost of

compliance. Laws and regulations at the local, state, federal, and international levels frequently change, and the ultimate cost of compliance

cannot be precisely estimated. In addition, we cannot predict the impact that may result from changes in the regulatory or administrative

landscape. If these laws change without our knowledge, or are violated by importers, designers, manufacturers, distributors or employees, we

could experience delays in shipments or receipt of goods or be subject to fines or other penalties, any of which could adversely affect our

business. Also, changes in laws and regulations could make operating our business more expensive

or require us to change the way we do business. Our employees, contractors, vendors and suppliers could take actions that violate our policies

and procedures which could have a material adverse effect on our reputation, our financial condition and the market price of our common stock.

Fluctuations in our tax obligations and effective tax rate could adversely affect us.

We are subject to income taxes in many United States and certain foreign jurisdictions. We record tax expense based on our estimates of future

payments, which include reserves for uncertain tax positions in multiple tax jurisdictions. At any time, multiple tax years are subject to audit by

various taxing authorities. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues.

In addition, the tax laws and regulations in the countries where we operate may change or there may be changes in interpretation and

enforcement of existing tax laws. As a result, we expect that throughout the year there could be ongoing variability in our quarterly tax rates as

events occur and exposures are evaluated. Our effective tax rate in a given financial statement period may be materially impacted by changes in

the mix and level of earnings by jurisdiction or by changes to existing accounting rules or regulations.

The unfavorable outcome of pending or future litigation could have an adverse impact on our business, financial

condition, and results of operations.

From time to time, we are party to several legal proceedings arising out of various aspects of our business. The outcome of these proceedings

may not be favorable, and one or more unfavorable outcomes could have an adverse impact on our business, financial condition, and results of

operations.

General Risk Factors

Additionally, other factors could adversely affect our financial performance, including factors such as our ability to successfully acquire and

integrate other businesses; any interruption of our key infrastructure systems, including exceeding capacity in our distribution centers; any

disaster or casualty resulting in the interruption of service from our distribution centers or in a large number of our stores; any interruption of our

business related to an outbreak of a pandemic disease in a country where we source or market our merchandise; extreme weather conditions or

changes in climate conditions or weather patterns; and the effects of changes in interest rates.

The impact of any of the previously discussed factors, some of which are beyond our control, and others which we are not aware of or which we

do not currently consider material, may cause our actual results to differ materially from our expectations expressed elsewhere in this Form 10-K

and other forward-looking statements we may make from time to time.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

We own two buildings in urban Pittsburgh, Pennsylvania that house our corporate headquarters, totaling 336,000 square feet.

We own distribution facilities in Ottawa, Kansas and Hazleton, Pennsylvania consisting of approximately 1.2 million and 1.0 million square feet,

respectively.

We lease approximately 200,000 square feet of office space in New York, New York for our designers and sourcing and production teams. The

lease for this space expires in 2026.

We lease a building in Mississauga, Ontario with approximately 294,000 square feet, which houses our Canadian distribution center. The lease

expires in 2028.

Each of the above identified properties is shared by certain of our reportable and operating segments, including American Eagle, Aerie, Todd

Snyder and Unsubscribed brands.

We lease distribution facilities in seven cities throughout the United States totaling 2.7 million square feet, with varying terms expiring through

2030. These facilities are used by our Quiet Platforms operating segment.

As for our stores, all are leased and generally have initial terms of 5-10 years. Certain leases also include early termination options, which can be

exercised under specific conditions. Most of these leases provide for base rent and require the

payment of a percentage of sales as additional contingent rent when sales reach specified levels. Under our store leases, we are typically

responsible for tenant occupancy costs, including maintenance and common area charges, real estate taxes and certain other expenses. We

have generally been successful in negotiating renewals as leases near expiration.

Item 3. Legal Proceedings.

We are involved, from time to time, in actions associated with or incidental to our business, including, among other things, matters involving

consumer privacy, trademark and other intellectual property, licensing, importation of products, taxation, and employee relations. We believe at

present that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on our consolidated

financial position or results of operations. However, our assessment of any litigation or other legal claims could potentially change in light of the

discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are not in accord with management's

evaluation of the possible liability or outcome of such litigation or claims. Consistent with Item 103 of Regulation S-K, we have elected to disclose

those environmental proceedings with a governmental entity as a party where the Company reasonably believes that such proceeding would

result in monetary sanctions, exclusive of interest and costs, of $1.0 million or more.

Refer to Note 2. “Summary of Significant Accounting Policies – Legal Proceedings and Claims” of the Notes to the Consolidated Financial

Statements included herein for additional information.

Item 4. Mine Safety Disclosures.

Not Applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

Market Information and Holders

Our common stock is traded on the NYSE under the symbol “AEO.” As of March 8, 2023, there were 448 stockholders of record. However, when

including associates who own shares through our employee stock purchase plan, and others holding shares in broker accounts under street

name, we estimate the stockholder base at approximately 105,000.

Dividends

A dividend of $0.18 per share was paid in the first and second quarters of Fiscal 2022 resulting in a dividend yield of 2.5%. During the third

quarter of Fiscal 2022, the Company announced that, given ongoing external uncertainties and in order to increase financial flexibility, it was

temporarily suspending its quarterly cash dividends.

A quarterly cash dividend of $0.1375 per share dividend was paid in the first quarter of Fiscal 2021 and a $0.18 per share dividend was paid in

the second, third, and fourth quarters of Fiscal 2021 resulting in a dividend yield of 2.3% for Fiscal 2021.

Subsequent to the fourth quarter of Fiscal 2022, our Board declared a $0.10 per share dividend, payable on April 21, 2023 to stockholders of

record at the close of business on April 6, 2023.

The Company maintains the right to defer the record and payment dates of any declared dividends, depending upon, among other factors,

business performance, and the macroeconomic environment. The payment of future dividends is at the discretion of our Board and is based on

future earnings, cash flow, financial condition, capital requirements, changes in United States taxation, and other relevant factors.

Performance Graph

The following performance graph and related information shall not be deemed “soliciting material” or to be filed with the SEC, nor shall such

information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent that we specifically

incorporate it by reference into such filing.

The following graph compares the changes in the cumulative total return to holders of our common stock with that of the S&P Midcap 400 and

our peer group as described below. The comparison of the cumulative total returns for each investment assumes that $100 was invested in our

common stock and the respective index on February 3, 2018 and includes reinvestment of all dividends. The plotted points are based on the

closing price on the last trading day of the fiscal year indicated.

2/3/2018 2/2/2019 2/1/2020 1/30/2021 1/29/2022 1/28/2023

American Eagle Outfitters, Inc. 100.00 122.30 87.00 138.08 139.59 100.12

S&P MidCap 400 Index 100.00 97.60 108.22 128.21 143.05 147.76

Peer Group 100.00 97.17 97.19 114.63 128.37 123.36

We compared our cumulative total return to a custom peer group that aligns with our compensation peer group, as disclosed in our Proxy

Statement for the 2022 Annual Meeting of Stockholders. As of the end of Fiscal 2022, this group consisted of the following companies:

Abercrombie & Fitch Co.; Bath and Body Works, Inc.; Burberry Group PLC; Capri Holdings Limited; Chico’s FAS, Inc.; Express, Inc., Fossil

Group, Inc.; The Gap, Inc.; Guess?, Inc.; Hanesbrands Inc.; Kontoor Brands; Levi Strauss & Co.; lululemon athletica, inc.; PVH CORP.; Ralph

Lauren Corporation; Tapestry, Inc.; Under Armour Inc.; Urban Outfitters, Inc; and Victoria's Secret & Co.

Our peer group was updated for Fiscal 2022 to include Victoria's Secret & Co., which separated from L Brands, Inc. in 2021. After the separation,

L Brands, Inc. was renamed Bath & Body Works, Inc., which is also included in the peer group for 2022.

Issuer Purchases of Equity Securities

The following table provides information regarding our repurchases of common stock during the 13 weeks ended January 28, 2023.

Total Number of Maximum Number of

Total Average Shares Purchased as Shares That May

Number of Price Paid Part of Publicly Yet Be Purchased

Period Shares Purchased

Per Share

Announced Programs

Under the Program

(1) (2) (1) (3) (3)

October 30, 2022 through

November 26, 2022

— $ — — 12,977,130

November 27, 2022 through

December 31, 2022

547 $ 14.21 — 12,977,130

January 1, 2023 through

January 28, 2023

—

$ —

—

12,977,130

Total

547

$ 14.21

—

12,977,130

(1) There were no shares repurchased as part of our publicly announced share repurchase program during the 13 weeks ended January 28,

2023 and there were 547 shares repurchased for the payment of taxes in connection with the vesting of share-based payments.

(2) Average price paid per share excludes any broker commissions paid.

(3) During Fiscal 2019, our Board authorized the public repurchase of 30.0 million shares under a new share repurchase program, which

expires on February 3, 2024.

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader

understand the Company, our operations and our present business environment. MD&A is provided as a supplement to — and should be read in

conjunction with — our consolidated financial statements and the accompanying Notes thereto contained in Part II, Item 8 – Financial Statements

and Supplementary Data " — of this report.

This MD&A generally discusses Fiscal 2022 and Fiscal 2021 and provides year-to-year comparisons between Fiscal 2022 and Fiscal 2021.

Discussions of Fiscal 2020 and year-to-year comparisons between Fiscal 2021 and Fiscal 2020 that are not included in this Annual Report can

be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II. Item 7 of our annual report on

Form 10-K for the fiscal year ended January 29, 2022.

Introduction

This MD&A is organized as follows:

Executive Overview General description of the Company’s business and certain segment information.

Key Performance Indicators Overview of key performance indicators reviewed by management to gauge the Company’s

results.

Current Trends and Outlook Discussion of trends and uncertainties facing the Company, including those related to

inflation, recent acquisitions and the Company's long-term plans for growth. In addition, this

section also provides a summary of the Company’s performance over Fiscal 2022 and

Fiscal 2021.

Results of Operations Provides an analysis of certain components of the Company’s Consolidated Statements of

Operations for Fiscal 2022 as compared to Fiscal 2021.

Non-GAAP Information Discussion of certain financial measures that have been determined to not be in

accordance with accounting principles generally accepted in the United States (“GAAP”).

This section includes certain reconciliations from GAAP to non-GAAP financial measures

and additional details on these financial non-GAAP measures, including information as to

why the Company believes the non-GAAP financial measures provided within MD&A are

useful to investors.

Liquidity and Capital Resources Discussion of the Company’s financial condition and changes in financial condition and

liquidity for Fiscal 2022 and Fiscal 2021.

Critical Accounting Policies and Estimates Discusses where information may be found about accounting policies and estimates

considered to be important to the Company’s consolidated results of operations and

financial condition, which typically require significant judgment and estimation on the part of

the Company’s management in their application.

Recent accounting pronouncements the Company has adopted or is currently evaluating prior to adoption, including the dates of adoption or

expected dates of adoption, as applicable, and anticipated effects on the Company’s audited Consolidated Financial Statements, are included in

Note 2. “Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included herein.

Executive Overview

We are a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices

under our American Eagle® and Aerie® brands.

We have two reportable segments, American Eagle and Aerie. Our Chief Operating Decision Maker (defined as our CEO) analyzes segment

results and allocates resources between segments based on adjusted operating income (loss), which is a non-GAAP financial measure. See

"Non-GAAP Information" within Part II. Item 7- Management's Discussion and Analysis of Financial Condition and Results of Operations and Note

16. “Segment Reporting,” of the Notes to the Consolidated Financial Statements included herein for additional information.

Key Performance Indicators

Our management evaluates the following items, which are considered key performance indicators, in assessing our performance:

Comparable Sales — Comparable sales and comparable sales changes provide a measure of sales growth for stores and channels open at least

one year over the comparable prior year period. In fiscal years following those with 53 weeks, the prior year period is shifted by one week to

compare similar calendar weeks. A store is included in comparable sales in the 13th month of operation. However, stores that have a gross

square footage change of 25% or greater due to a remodel are removed from the comparable sales base, but are included in total sales. These

stores are returned to the comparable sales base in the 13th month following the remodel. Sales from American Eagle, Aerie, Todd Snyder, and

Unsubscribed stores, as well as sales from AEO Direct and other digital channels, are included in total comparable sales. Sales from licensed

stores are not included in comparable sales. Individual American Eagle and Aerie brand comparable sales disclosures include sales from stores

and AEO Direct.

Omni-Channel Sales Performance — Our management utilizes the following quality of sales metrics in evaluating our omni-channel sales

performance: comparable sales, average unit retail price, total transactions, units per transaction, and consolidated comparable traffic. We

include these metrics in our discussion within this MD&A when we believe that they enhance the understanding of the matter being discussed.

Investors may find them useful as such. Each of these metrics is defined as follows (except comparable sales, which is defined separately

above):

• Average unit retail price represents the selling price of our goods. It is the cumulative net sales divided by the net units sold for a period of

time.

• Total transactions represents the count of customer transactions over a period of time (inclusive of Company-owned stores and AEO

Direct, unless specified otherwise).

• Units per transaction represents the number of units sold divided by total transactions over a period of time (inclusive of Company-owned

stores and AEO Direct, unless specified otherwise).

• Consolidated comparable traffic represents visits to our Company-owned stores, limited to those stores that qualify to be included in

comparable sales as defined above, including AEO Direct, over a period of time.

Gross Profit — Gross profit measures whether we are optimizing the profitability of our sales. Gross profit is the difference between total net

revenue and cost of sales. Cost of sales consists of merchandise costs, including design, sourcing, importing, and inbound freight costs, as well

as markdowns, shrinkage and certain promotional costs, Quiet Platforms costs to service our customers and buying, occupancy and

warehousing costs and services. Design costs consist of compensation, rent, depreciation, travel, supplies, and samples.

Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel for our buyers and

certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office

space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving

and inspection costs; and shipping and handling costs related to our e-commerce operations.

The inability to obtain acceptable levels of sales, initial markups or any significant increase in our use of markdowns could have an adverse effect

on our consolidated gross profit and results of operations.

Operating Income — Our management views operating income as a key indicator of our performance. The key drivers of operating income are

net revenue, gross profit, our ability to control SG&A expenses, and our level of capital expenditures.

Cash Flow and Liquidity — Our management evaluates cash flow from operations and investing and financing activities in determining the

sufficiency of our cash position and capital allocation strategies. Cash flow has historically been sufficient to cover our uses of cash. Our

management believes that cash flow and liquidity will be sufficient to fund anticipated capital expenditures and working capital requirements for

the next 12 months and beyond.

Current Trends and Outlook

Inflation

During Fiscal 2022, our quarterly results were negatively impacted by macro-economic challenges and global inflationary pressures impacting

consumer spending behavior, which constrained revenue and increased margin pressure to clear through excess inventory. Given ongoing

external uncertainties, we have taken additional actions to improve financial performance, including more extensive expense and capital

expenditure reductions. For further information about the risks

associated with global economic conditions and the effect of economic pressures on our business, see “Risk Factors” in Part I, Item 1A of this

Annual Report.

Quiet Platforms

In Fiscal 2021, the Company completed the acquisition of AirTerra and Quiet Logistics. With these acquisitions, the Company expects to be able

to execute on operational efficiencies to create a supply chain platform, which we refer to as Quiet Platforms, with significant long-term growth

potential.

Omni-Channel and Digital Capabilities

We sell merchandise through our digital channels, www.ae.com, www.aerie.com, www.toddsnyder.com, www.unsubscribed.com, and our AEO

apps, both domestically and internationally in approximately 80 countries. We also sell merchandise on various international online marketplaces.

The digital channels reinforce each particular brand and are designed to complement the in-store experience.

Over the past several years, we have invested in building our technologies and digital capabilities. We focused our investments in three key

areas: making significant advances in mobile technology, investing in digital marketing and improving the digital customer experience.

COVID-19

Past and future impacts of the COVID-19 pandemic may disrupt the operations of our partners, suppliers, and vendors, which could lead to or

exacerbate existing supply chain disruptions, shipping delays, freight cost increases, and labor shortages. We are monitoring ongoing

developments, and we will take further actions that we believe are in the best interests of our associates and customers, as needed. For further

information about the risks associated with the COVID-19 pandemic, see “Risk Factors” in Part I, Item 1A of this Annual Report.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements are prepared in accordance GAAP, which require us to make estimates and assumptions that may affect

the reported consolidated financial condition and results of operations should actual results differ from these estimates and assumptions. We

base our estimates and assumptions on the best available information and believe them to be reasonable for the circumstances. We believe that

of our significant accounting policies, the following involve a higher degree of judgment and complexity. Refer to Note 2 to the Consolidated

Financial Statements for a complete discussion of our significant accounting policies. Management has reviewed these critical accounting

policies and estimates with the Audit Committee of our Board.

Revenue Recognition. In accordance with Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, we

record revenue for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue upon

the estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected

from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company’s Consolidated Balance

Sheets.

Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company

records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects

an estimate of sales returns based on projected merchandise returns determined using historical average return percentages.

Revenue is not recorded on the issuance of gift cards. A current liability is recorded upon issuance, and revenue is recognized when the gift card

is redeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts

that will not be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in

proportion to actual gift card redemptions as a component of total net revenue.

The Company recognizes royalty revenue generated from its license or franchise agreements based upon a percentage of merchandise sales by

the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned.

Revenue associated with Quiet Platforms is recognized as the services are performed.

Merchandise Inventory. Merchandise inventory is valued at the lower of average cost or net realizable value, utilizing the retail method. Average

cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the

merchandise has transferred to the Company.

We review our inventory in order to identify slow-moving merchandise and generally use markdowns to clear merchandise. Additionally, we

estimate a markdown reserve for future planned markdowns related to current inventory. If inventory exceeds customer demand for reasons of

style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, or competition, or if it is determined

that the inventory in stock will not sell at its currently ticketed price, additional markdowns may be necessary. These markdowns may have a

material adverse impact on earnings, depending on the extent and amount of inventory affected.

We estimate an inventory shrinkage reserve for anticipated losses for the period between the last physical count and the balance sheet date. The

estimate for the shrinkage reserve is calculated based on historical percentages and can be affected by changes in merchandise mix and

changes in actual shrinkage trends. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates

or assumptions we use to calculate our inventory shrinkage reserve. However, if actual physical inventory losses differ significantly from our

estimate, our consolidated operating results could be adversely affected.

Impairment of long-lived assets. In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), we evaluate the value of leasehold

improvements, store fixtures, and operating lease right-of-use ("ROU") assets associated with retail stores. We evaluate long-lived assets for

impairment at the individual retail store level, which is the lowest level at which individual cash flows can be identified. Impairment losses are

recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the projected

undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts. When events such as these occur, the

impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income

(loss) in the Consolidated Statements of Operations.

Our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair

values. The significant assumption used in our fair value analysis is forecasted revenue. We do not believe there is a reasonable likelihood that

there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results

are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected.

Impairment of goodwill and intangible assets. Definite-lived intangible assets are initially recorded at fair value, with amortization computed

utilizing the straight-line method over the assets’ estimated useful lives. The Company’s definite-lived intangible assets, which consist primarily of

trademark assets, are generally amortized over 10 to 15 years. The Company evaluates definite-lived intangible assets for impairment in

accordance with ASC 360 when events or circumstances indicate that the carrying value of the asset may not be recoverable. Such an evaluation

includes the estimation of undiscounted future cash flows to be generated by those assets. If the sum of the estimated future undiscounted cash

flows is less than the carrying amounts of the assets, then the assets are impaired and are adjusted to their estimated fair value. No definite-lived

intangible asset impairment charges were recorded for all periods presented.

In accordance with ASC 350, Intangibles – Goodwill and Other, the Company evaluates goodwill for possible impairment at least annually as of

the last day of the fiscal year and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair

value of a reporting unit may be below its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge is

recorded in the period of the evaluation based on that difference.

Share-Based Payments. We account for share-based payments in accordance with ASC 718, Compensation – Stock Compensation ("ASC

718"). To determine the fair value of our awards, we use the Black-Scholes option-pricing model for stock option awards and a Monte-Carlo

simulation for performance-based restricted stock awards, which requires management to apply judgment and make assumptions to determine

the fair value of our awards. These assumptions include estimating the length of time employees will retain their vested stock options before

exercising them (the “expected term”) and the estimated volatility of the price of our common stock over the expected term.

We calculate a weighted-average expected term based on historical experience. Expected stock price volatility is based on historical volatility of

our common stock. Changes in these assumptions can materially affect the estimate of the fair value of our share-based payments and the

related amount recognized in our Consolidated Financial Statements.

Income Taxes. We calculate income taxes in accordance with ASC 740, Income Taxes ("ASC 740"), which requires the use of the asset and

liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial

Statements carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax

assets and liabilities are measured using the tax

rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the years when those temporary differences

are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or

all of the deferred taxes may not be realized. Changes in our level and composition of earnings, tax laws or the deferred tax valuation allowance,

as well as the results of tax audits, may materially impact the effective income tax rate.

We evaluate our income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing, measuring,

presenting, and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision whether to

file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is more likely than

not that the position is sustainable based on its technical merits.

The calculation of the deferred tax assets and liabilities, and the decision to recognize a tax benefit from an uncertain position and to establish a

valuation allowance require management to make estimates and assumptions. We believe that our assumptions and estimates are reasonable,

although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuation

allowances or net income (loss).

Results of Operations

Overview

Fiscal 2022 demand was soft, reflecting the impact of inflationary pressure and a related shift in consumer spending patterns. In this

environment, margin pressure was more amplified as we worked to clear through excess spring and summer goods. Given ongoing uncertainties

in the macroeconomic environment, we have taken additional steps to position the business for improved financial performance. This includes

further resetting inventory plans for the back half of the year, expanding the scope of expense and capital expenditure reductions. Total net

revenue was relatively flat to last year at $4.990 billion this year, compared to $5.011 billion last year. Total comparable sales decreased 7%. By

brand, American Eagle comparable sales decreased 9% and comparable sales for Aerie decreased 3%. Gross profit decreased 12% to $1.745

billion and declined by 470 basis points to 35.0% as a percentage of revenue.

Net income was $0.64 per diluted share this year, compared to $2.03 per diluted share last year. On an adjusted basis, net income per diluted

share this year was $0.97, compared to last year at $2.19. Adjusted net income per diluted share this year excluded $0.24 of debt-related

charges and $0.09 of impairment and restructuring charges. Adjusted net income per diluted share last year excluded $0.07 of amortization of the

non-cash discount on our convertible notes, $0.04 of asset impairment charges, and $0.04 of reorganization charges related to our European

Union ("EU") license operations. Adjusted net income per diluted share is a non-GAAP financial measure. Please see “Non-GAAP Information”

below.

The following table shows, for the periods indicated, the percentage relationship to total net revenue of the listed items included in our

Consolidated Statements of Operations.

For the Fiscal Years Ended

January 28, January 29, January 30,

2023

2022

2021

Total net revenue 100.0 % 100.0 % 100.0 %

Cost of sales, including certain buying, occupancy

and warehousing expenses

65.0

60.3

69.5

Gross profit 35.0 39.7 30.5

Selling, general and administrative expenses 25.4 24.4 26.0

Impairment, restructuring and COVID-19 – related charges 0.4 0.2 7.4

Depreciation and amortization expense

4.2

3.3

4.3

Operating income (loss) 5.0 11.8 (7.2 )

Debt-related charges 1.3 — —

Interest expense, net 0.3 0.7 0.7

Other income, net (0.2 )

(0.1 )

Income (loss) before income taxes 3.6 11.2 (7.8 )

Provision (benefit) for income taxes

1.1

2.8

(2.2 )

Net income (loss)

2.5

8.4

(5.6 )

Non-GAAP Information

This Results of Operations section contains operating income, net income and net income per diluted share presented on a non-GAAP basis,

which are non-GAAP financial measures (“non-GAAP” or “adjusted”). These financial measures are not based on any standardized methodology

prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided

as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe

that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance, when reviewed in

conjunction with our GAAP consolidated financial statements and provides a higher degree of transparency. These amounts are not determined

in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. The table below reconciles

the GAAP financial measure to the non-GAAP financial measure discussed above.

For the Fiscal Year Ended

January 28, 2023

Operating Income Net Income

Earnings per Diluted

GAAP Basis $ 247,047 $ 125,136 $ 0.64

Add: Impairment and restructuring charges 22,209 18,221 0.09

Add: Debt-related charges

—

49,679

0.24

Non-GAAP Basis $ 269,256 $ 193,036 $ 0.97

(1) $22.2 million of pre-tax impairment and restructuring charges including $20.6 million of asset impairment charges and $1.6 million of

restructuring charges including corporate and field severance.

(2) $64.7 million of pre-tax debt related charges related primarily to induced conversion expense on the exchanges of our 2025 Notes, along

with certain other costs related to actions taken to strengthen our capital structure.

For the Fiscal Year Ended

January 29, 2022

Operating Income Net Income

Earnings per Diluted

GAAP Basis $ 591,065 $ 419,629 $ 2.03

Add: Asset impairment charges 11,944 8,944 0.04

Add: EU license operations reorganization — 8,917 0.04

Add: Convertible debt

—

13,867

0.07

Non-GAAP Basis $ 603,009 $ 451,357 $ 2.19

(1) $11.9 million of pre-tax asset impairment charges.

(2) $11.9 million of pre-tax reorganization charges related to our EU license operations.

(3) Amortization of the non-cash discount on the 2025 Notes included in interest expense, net on the Consolidated Statements of Operations

prior to the adoption of ASU 2020-06.

Comparison of Fiscal 2022 to Fiscal 2021

Total Net Revenue

Total net revenue for Fiscal 2022 was relatively flat to last year at $4.990 billion this year compared to $5.011 billion for Fiscal 2021. For Fiscal

2022, total comparable sales decreased 7% compared to a 30% increase for Fiscal 2021.

American Eagle

Total net revenue for Fiscal 2022 for the American Eagle brand was $3.263 billion compared to $3.556 billion for Fiscal 2021. For Fiscal 2022,

American Eagle brand comparable sales were down 9% compared to a 35% increase for Fiscal 2021.

Aerie

Total net revenue for Fiscal 2022 for the Aerie brand was $1.507 billion compared to $1.376 billion for Fiscal 2021. For Fiscal 2022, Aerie brand

comparable sales decreased 3% compared to a 27% increase in Fiscal 2021.

(1)

(2)

(1)

(2)

(3)

Gross Profit

Gross profit decreased 12% to $1.745 billion for Fiscal 2022 from $1.992 billion for Fiscal 2021. As a percentage of total net revenue, gross

margin decreased to 35.0%, compared to 39.7% last year. The decrease in gross margin as a percent of total net revenue reflected higher

markdowns, largely reflecting initiatives to clear excess inventory. Delivery, warehousing costs and rent from new store openings also increased,

offset by lower incentive compensation accruals.

There was $16.8 million of share-based payment expense, consisting of both time- and performance-based awards, included in gross profit this

year. This is compared to $16.0 million of share-based payment expense included in gross profit last year.

Our gross profit may not be comparable to that of other retailers, as some retailers include all costs related to their distribution network, as well as

design costs, in cost of sales, and others may exclude a portion of these costs from cost of sales, including them in a line item such as selling,

general, and administrative expenses. Refer to Note 2 to the Consolidated Financial Statements for a description of our accounting policy

regarding cost of sales, including certain buying, occupancy and warehousing expenses.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased 4% to $1.269 billion for Fiscal 2022, compared to $1.222 billion for Fiscal 2021. As a

percentage of total net revenue, selling, general, and administrative expenses increased 100 basis points to 25.4%, compared to 24.4% for Fiscal

2021. The increase in expenses was primarily related to increased store wages and corporate compensation, professional services and

advertising, partially offset by lower incentive compensation accruals.

There was $22.2 million of share-based payment expense, consisting of time and performance-based awards, included in selling, general, and

administrative expenses for both Fiscal 2022 and Fiscal 2021.

Impairment, Restructuring and COVID-19 Related Charges

In Fiscal 2022, the Company recorded $22.2 million of impairment and restructuring charges including asset impairment charges of $20.6 million,

primarily related to retail store property and equipment, and operating lease ROU assets as well as $1.6 million of restructuring severance.

In Fiscal 2021, the Company recorded asset impairment charges of $11.9 million, primarily related to retail store property and equipment, and

operating lease ROU assets.

There were no COVID-19 - Related charges recorded in either period.

Depreciation and Amortization Expense

Depreciation and amortization expense increased 24% to $206.9 million for Fiscal 2022 from $166.8 million for Fiscal 2021, driven by increased

capital spending in Fiscal 2022. As a percentage of total net revenue, depreciation and amortization expense was 4.2% compared to 3.3% in

Fiscal 2021.

Debt Related Charges

In Fiscal 2022, debt related charges of $64.7 million consists primarily of $60.4 million of induced conversion expense related to the exchanges of

our 2025 Notes, along with certain other costs related to actions we took to strengthen our capital structure.

Interest Expense, Net

Interest expense, net decreased $20.3 million to $14.3 million for Fiscal 2022, compared to $34.6 million for Fiscal 2021. The decrease in

expense was primarily attributable to the adoption of ASU 2020-06 on January 30, 2022 which reduced non-cash interest expense related to

amortization of the non-cash discount on our 2025 Notes and the Note Exchanges, which reduced the aggregate principal amount of the 2025

Notes by $403.2 million, partially offset by $5.9 million of interest expense from borrowings under our Credit Facility in Fiscal 2022.

Other Income, Net

Other income was $10.5 million for Fiscal 2022, compared to $2.5 million for Fiscal 2021. The increase was attributable to an $11.9 million

reorganization charge related to our EU license operations last year, partially offset by other changes in non-operating income/expense.

Income Taxes

The effective income tax rate was 29.9% for Fiscal 2022 compared to an effective income tax rate of 24.9% for Fiscal 2021. The effective income

tax rate this year is primarily impacted by nondeductible executive compensation and the Note Exchanges, as a portion of the induced

conversion expense was not deductible. Our effective income tax rate is also dependent upon the overall mix of earnings in jurisdictions with

different tax rates.

Refer to Note 2, "Summary of Significant Accounting Policies," and Note 15, "Income Taxes," to the Consolidated Financial Statements included

herein for additional information regarding our accounting for income taxes.

Net Income (Loss)

Net income decreased $294.5 million to $125.1 million for Fiscal 2022 from $419.6 million for Fiscal 2021. The change in net income was

attributable to the factors described above. As a percentage of total net revenue, net income was 2.5% and 8.4% for Fiscal 2022 and Fiscal 2021,

respectively.

Net income (loss) per diluted share for Fiscal 2022 was $0.64, which included $64.7 million ($0.24 per diluted share) of debt-related charges and

$22.2 million ($0.09 per diluted share) of pre-tax impairment and restructuring charges.

Net income (loss) per diluted share for Fiscal 2021 was $2.03, which included $18.5 million ($0.07 per diluted share) of pre-tax amortization of

the non-cash discount on the 2025 Notes, $11.9 million ($0.04 per diluted share) of pre-tax asset impairment charges, and $11.9 million ($0.04

per diluted share) of reorganization charges related to our EU license operations.

Liquidity and Capital Resources

Our uses of cash have historically been for working capital, the construction of new stores and remodeling of existing stores, information

technology and e-commerce upgrades and investments, distribution center improvements and expansion, and the return of value to shareholders

through the repurchase of common stock and the payment of dividends. Additionally, our uses of cash have included the development of the

Aerie brand, investments in technology and omni-channel capabilities, and our international expansion efforts.

Historically, our uses of cash have been funded with cash flow from operations and existing cash on hand. We also maintain an asset-based

revolving credit facility that allows us to borrow up to $700 million, which will expire in June 2027. In April 2020, the Company issued $415 million

aggregate principal amount of convertible senior notes due 2025 (the “2025 Notes”). As of January 28, 2023, approximately $8.8 million

aggregate principal amount of the 2025 Notes remain outstanding.

As of January 28, 2023, we had approximately $170.2 million in cash and cash equivalents. We expect to be able to fund our future cash

requirements through current cash holdings and available liquidity.

The following sets forth certain measures of our liquidity:

January 28, January 29,

2023

2022

Working Capital (in thousands) $ 331,293 $ 554,053

Current Ratio 1.43 1.66

Working capital as of January 28, 2023 decreased $222.8 million compared to January 29, 2022. The decrease came from lower cash and cash

equivalents of $264.6 million and lower accounts receivable, net of $44.3 million. This was partially offset by an $89.9 million decrease in accrued

compensation and payroll taxes.

Cash Flows Provided by Operating Activities

Net cash provided by operating activities totaled $406.3 million during Fiscal 2022, compared to net cash provided by operating activities of

$303.7 million during Fiscal 2021. For both periods, our major source of cash from operations was merchandise sales and our primary outflow of

cash from operations was for the payment of operational costs.

Cash Flows Used for Investing Activities

Investing activities for Fiscal 2022 primarily consisted of $260.4 million in capital expenditures for property and equipment. Investing activities for

Fiscal 2021 primarily included $358.1 million for the acquisition of businesses related to Quiet Platforms (net of $3.9 million cash acquired), as

well as $233.8 million in capital expenditures for property and equipment. For further information on capital expenditures, refer to Capital

Expenditures for Property and Equipment below.

Cash Flows Used for Financing Activities

During Fiscal 2022, cash used for financing activities consisted of $200.0 million used to repurchase the Company's common stock under an

accelerated share repurchase agreement, $136.4 million used for the principal paid in connection with the exchange of our 2025 Notes, $64.8

million used for cash dividends paid at a quarterly rate of $0.18 per share during the first and second quarters and $9.8 million used for the

repurchase of common stock from employees for the payment of taxes in connection with vesting of share-based payments.

During Fiscal 2021, cash used for financing activities consisted primarily of $113.9 million for cash dividends paid at quarterly rates of $0.1375 for

the 13 weeks ended May 2, 2021 and $0.18 for the 13 weeks ended July 31, 2021, October 30, 2021, and January 29, 2022 and $24.0 million for

the repurchase of common stock from employees for the payment of taxes in connection with vesting of share-based payments, partially offset by

$13.1 million of net proceeds from stock option exercises.

Cash returned to shareholders through dividends and share repurchases was $264.8 million and $113.9 million in Fiscal 2022 and Fiscal 2021,

respectively.

Capital Expenditures for Property and Equipment

Fiscal 2022 capital expenditures were $260.4 million, compared to $233.8 million in Fiscal 2021. Fiscal 2022 expenditures included $148.5

million related to investments in our stores, including 87 new AEO stores (25 American Eagle stores, 56 combined Aerie stand-alone stores and

OFFLINE™ stand-alone stores, five Todd Snyder stores, and one Unsubscribed store), and fixtures and visual investments. Additionally, we

continued to support our infrastructure growth by investing in information technology initiatives ($70.0 million), Quiet Platforms ($26.0 million), our

supply chain infrastructure ($13.4 million), and other home office projects ($2.4 million).

For Fiscal 2023, we expect capital expenditures to be in the range of $150 million to $200 million related to the continued support of our

expansion efforts, stores, information technology upgrades to support growth and investments in e-commerce, as well as to support and enhance

our supply chain and Quiet Platforms. We expect to be able to fund our capital expenditures through current cash holdings and cash generated

from operations.

Revolving Credit Facility

In June 2022, we entered into an amended and restated credit agreement (the "Credit Agreement"). The Credit Agreement provides senior

secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations (the "Credit

Facility). The Credit Facility expires on June 24, 2027. Before amendment and restatement, the Company's previous credit agreement provided

senior secured asset-based revolving credit for loans and letters of credit up to $400 million and was scheduled to expire on January 30, 2024.

All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are

secured by certain assets of the Company and certain subsidiaries.

In June 2022, the Company borrowed on the Credit Facility and fully repaid the borrowings by December 2022. As of January 28, 2023, we were

in compliance with the terms of the Credit Agreement and had $7.9 million outstanding in stand-by letters of credit.

Share Repurchases

During Fiscal 2019, our Board authorized the repurchase of 30.0 million shares under a share repurchase program.

On June 3, 2022, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with JPMorgan Chase Bank

(“JPM”) to repurchase an aggregate of $200.0 million of the Company’s common stock.

Pursuant to the terms of the ASR Agreement, on June 3, 2022, the Company paid to JPM $200.0 million in cash and received an initial delivery of

13.4 million shares of its common stock on June 3, 2022. At final settlement, on July 28, 2022, an additional 3.7 million shares were received.

The cumulative repurchase under the ASR Agreement was 17.0 million shares repurchased at an average price per share of $11.75.

As of January 28, 2023, our total remaining share repurchase authorization was approximately 13.0 million shares.

During Fiscal 2022 and Fiscal 2021, we repurchased approximately 0.6 million and 0.8 million shares, respectively, from certain employees at

market prices totaling $9.8 million and $24.0 million, respectively. These shares were repurchased for the payment of taxes in connection with the

vesting of share-based payments, as permitted under our equity incentive plans.

The aforementioned share repurchases have been recorded as treasury stock.

Dividends

Dividends are disclosed in Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity

Securities.

Recent Accounting Pronouncements

Recent accounting pronouncements are disclosed in Note 2 of the Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We have market risk exposure related to interest rates and foreign currency exchange rates. Market risk is measured as the potential negative

impact on earnings, cash flows, or fair values resulting from a hypothetical change in interest rates or foreign currency exchange rates over the

next year.

We have estimated our market risk exposure using sensitivity analysis. To test the sensitivity of our market risk exposure, we have estimated the

changes in fair value of market risk sensitive instruments assuming a hypothetical 10% adverse change in market prices or rates. The results of

the sensitivity analyses are summarized below.

Interest Rate Risk

Our earnings from our investments are not materially affected by changes in market interest rates. This is determined by considering the impact

of a hypothetical 10% change in yield rates on our cash and investment balances and assumes no change in our investment structure.

Foreign Exchange Rate Risk

We are exposed to the impact of foreign exchange rate risk primarily through our Canadian and Mexican operations where the functional

currency is the Canadian dollar and Mexican peso, respectively. The impact of all other foreign currencies is currently immaterial to our

consolidated financial results. We do not utilize hedging instruments to mitigate foreign currency exchange risks. A hypothetical 10% movement

in the Canadian dollar and Mexican peso exchange rate could result in a $23.3 million foreign currency translation fluctuation, which would be

recorded in accumulated other comprehensive income in the Consolidated Balance Sheets. An unrealized gain of $8.2 million is included in

accumulated other comprehensive loss as of January 28, 2023. This is primarily related to the fluctuations of the U.S. dollar to Mexican peso and

US dollar to Canadian dollar exchange rates.

This sensitivity analysis has inherent limitations. The analysis disregards the possibility that rates of multiple foreign currencies will not always

move in the same direction relative to the value of the U.S. dollar over time.

Item 8. Financial Statements and Supplementary Data.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 43

Consolidated Balance Sheets 45

Consolidated Statements of Operations 46

Consolidated Statements of Comprehensive Income 47

Consolidated Statements of Stockholders’ Equity 48

Consolidated Statements of Cash Flows 49

Notes to Consolidated Financial Statements 50

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of American Eagle Outfitters, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of American Eagle Outfitters, Inc. (the Company) as of January 28, 2023 and

January 29, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each

of the three years in the period ended January 28, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 28,

2023 and January 29, 2022, and the results of its operations and its cash flows for each of the three years in the period ended January 28, 2023,

in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the

Company’s internal control over financial reporting as of January 28, 2023, based on criteria established in Internal Control-Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 13, 2023

expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s

financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with

respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and

performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and

disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for

our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not

alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Retail Store Long-Lived Asset Impairment

Description of the Matter As more fully described in Notes 2 and 17 to the consolidated financial statements, the Company

evaluates if there are indicators of impairment for long-lived assets in accordance with ASC 360, Property,

Plant, and Equipment. The Company’s first step is to determine whether indicators of impairment exist in

its long-lived assets (store fixtures, leasehold improvements, and operating lease right-of-use assets) at

the individual retail store level, which is the lowest level at which individual cash flows can be identified. If

indicators of impairment are identified for any retail stores, the Company evaluates if the projected

undiscounted cash flows to be generated by those store assets are less than their carrying amounts.

When this is the case, the Company compares the estimated fair value of the respective retail store assets

to its carrying value. If fair value is less than carrying value, an impairment loss is recorded for the

difference. The significant assumption used in the Company’s estimated fair value of certain retail stores is

forecasted revenue. For the year ended January 28, 2023, the Company recorded retail store impairment

charges of $17.1 million. Of the total, $13.1 million related to the impairment

of operating lease right-of-use assets and $4.0 million related to the impairment of store property and

equipment (store fixtures and leasehold improvements).

Auditing the Company’s retail store impairment analyses was complex and subjective, as it involved

evaluating the significant assumption related to forecasted revenue which is used to estimate the fair value

of those retail stores to calculate any impairment charge.

How We Addressed the Matter in

Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls

over the Company’s processes over the identification of indicators of impairment, the assessment of the

projected undiscounted cash flows to be generated by retail stores with indicators of impairment, the

determination of the fair value of the retail stores and the measurement of any resulting impairment. These

controls include, among others, management’s review of the assumptions utilized to determine fair value

estimates, and management’s testing of the completeness and accuracy of the underlying data utilized to

estimate the fair value of the retail stores.

Our testing of the Company’s retail store impairment analyses included, among other procedures,

inspecting the Company’s analysis of historical results to determine if contrary evidence existed as to the

completeness of the population of potentially impaired retail stores. Additionally, we evaluated the

assumptions used by management in the analyses, including the significant assumption discussed above

used to estimate fair value. For example, we compared the significant assumption used by management

to historical results, current industry and economic trends, and other relevant factors. We performed

sensitivity analyses of the significant assumption to evaluate the changes in the fair value of the individual

retail stores that would result from changes in the underlying assumption. We involved our valuation

specialists to assist in our evaluation of the fair value estimate specific to evaluating market participant

data.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1993.

Pittsburgh, Pennsylvania

March 13, 2023

AMERICAN EAGLE OUTFITTERS, INC.

Consolidated Balance Sheets

January 28, January 29,

(In thousands, except per share amounts) 2023

2022

Assets

Current assets:

Cash and cash equivalents $ 170,209 $ 434,770

Merchandise inventory 585,083 553,458

Accounts receivable, net 242,386 286,683

Prepaid expenses and other

102,563 122,013

Total current assets

1,100,241 1,396,924

Operating lease right-of-use assets 1,086,999 1,193,021

Property and equipment, at cost, net of accumulated depreciation 781,514 728,272

Goodwill 264,945 271,416

Intangible assets, net 94,536 102,701

Non-current deferred income taxes 36,483 44,167

Other assets

56,238 50,142

Total assets

$ 3,420,956 $ 3,786,643

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable $ 234,340 $ 231,782

Current portion of operating lease liabilities 337,258 311,005

Unredeemed gift cards and gift certificates 67,618 71,365

Accrued compensation and payroll taxes 51,912 141,817

Accrued income and other taxes 10,919 16,274

Other current liabilities and accrued expenses

66,901 70,628

Total current liabilities

768,948 842,871

Non-current liabilities:

Non-current operating lease liabilities 1,021,200 1,154,481

Long-term debt, net 8,911 341,002

Other non-current liabilities

22,734 24,617

Total non-current liabilities

1,052,845 1,520,100

Commitments and contingencies — —

Stockholders’ equity:

Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and

outstanding — —

Common stock, $0.01 par value; 600,000 shares authorized; 249,566 shares

issued; 195,064 and 168,699 shares outstanding, respectively 2,496

2,496

Contributed capital 341,775 636,355

Accumulated other comprehensive loss, net of tax (32,630 ) (40,845 )

Retained earnings 2,137,126 2,203,772

Treasury stock, 54,502 and 80,867 shares, respectively, at cost

(849,604 ) (1,378,106 )

Total stockholders' equity

1,599,163 1,423,672

Total liabilities and stockholders’ equity

$ 3,420,956 $ 3,786,643

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

Consolidated Statements of Operations

For the Years Ended

January 28, January 29, January 30,

(In thousands, except per share amounts) 2023

2022

2021

Total net revenue $ 4,989,833 $ 5,010,785 $ 3,759,113

Cost of sales, including certain buying, occupancy and warehousing

expenses

3,244,585

3,018,995

2,610,966

Gross profit 1,745,248 1,991,790 1,148,147

Selling, general and administrative expenses 1,269,095 1,222,000 977,264

Impairment, restructuring and COVID-19 – related charges 22,209 11,944 279,826

Depreciation and amortization expense

206,897 166,781 162,402

Operating income (loss) 247,047 591,065 (271,345 )

Debt-related charges 64,721 — —

Interest expense, net 14,297 34,632 24,610

Other income, net

(10,465 ) (2,489 ) (3,682 )

Income (loss) before income taxes 178,494 558,922 (292,273 )

Provision (benefit) for income taxes

53,358 139,293 (82,999 )

Net income (loss)

$ 125,136 $ 419,629 $ (209,274 )

Basic net income (loss) per common share

$ 0.69 $ 2.50 $ (1.26 )

Diluted net income (loss) per common share

$ 0.64 $ 2.03 $ (1.26 )

Weighted average common shares outstanding - basic 181,778 168,156 166,455

Weighted average common shares outstanding - diluted 205,226 206,529 166,455

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended

January 28, January 29, January 30,

(In thousands) 2023

2022

2021

Net income (loss) $ 125,136 $ 419,629 $ (209,274 )

Other comprehensive gain (loss):

Foreign currency translation gain (loss)

8,215

(97 )

(7,580 )

Other comprehensive gain (loss)

8,215

(97 )

(7,580 )

Comprehensive income (loss)

$ 133,351

$ 419,532

$ (216,854 )

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

Consolidated Statements of Stockholders' Equity

(In thousands, except per share amounts)

Outstanding

Common

Stock

Contributed

Capital

Retained

Earnings

Treasury

Stock

Accumulated

Other

Comprehensive

(Loss)

Stockholders'

Equity

Balance at February 1, 2020

166,993

$ 2,496

$ 577,856

$ 2,108,292

$ (1,407,623 )

$ (33,168 )

$ 1,247,853

Stock awards — — 32,298 — — — 32,298

Repurchase of common stock as part of

publicly announced programs (1,720 ) — — — (20,000 ) — (20,000 )

Repurchase of common stock from

employees (449 ) — — — (5,413 ) — (5,413 )

Convertible Notes - Equity portion, net of

tax — — 68,330 — — — 68,330

Reissuance of treasury stock 1,511 — (15,522 ) (7,551 ) 25,622 — 2,549

Net loss — — — (209,274 ) — — (209,274 )

Other comprehensive loss — — — — — (7,580 ) (7,580 )

Cash dividends and dividend equivalents

($0.1375 per share)

—

756

(22,854 )

—

(22,098 )

Balance at January 30, 2021

166,335

$ 2,496

$ 663,718

$ 1,868,613

$ (1,407,414 )

$ (40,748 )

$ 1,086,665

Stock awards — — 37,887 — — — 37,887

Repurchase of common stock from

employees (781 ) — — — (24,018 ) — (24,018 )

Reissuance of treasury stock 2,798 — (59,384 ) 26,490 47,427 — 14,533

Equity portion of partial extinguishment of

Convertible Senior Notes, net of tax 347 — (9,876 ) 6,995 5,899 — 3,018

Net income — — — 419,629 — — 419,629

Other comprehensive loss — — — — — (97 ) (97 )

Cash dividends and dividend equivalents

($0.6775 per share)

—

4,010

(117,955 )

—

(113,945 )

Balance at January 29, 2022

168,699

$ 2,496

$ 636,355

$ 2,203,772

$ (1,378,106 )

$ (40,845 )

$ 1,423,672

Stock awards — — 38,148 — — — 38,148

Repurchase of common stock from

employees (584 ) — — — (9,780 ) — (9,780 )

Reissuance of treasury stock 1,643 — (24,642 ) (1,624 ) 27,865 — 1,599

Adoption of Accounting Standards Update

2020-06, net of tax — — (67,686 ) 18,830 — — (48,856 )

Accelerated share repurchase (17,023 ) — — — (200,000 ) — (200,000 )

Exchange of Convertible Senior Notes 42,329 — (244,198 ) (142,737 ) 710,417 — 323,482

Net income — — — 125,136 — — 125,136

Other comprehensive income — — — — — 8,215 8,215

Cash dividends and dividend equivalents

($0.3600 per share) — — 1,484 (66,251 ) — — (64,767 )

Contributions from non-controlling interests

—

2,314

—

2,314

Balance at January 28, 2023

195,064

$ 2,496

$ 341,775

$ 2,137,126

$ (849,604 )

$ (32,630 )

$ 1,599,163

(1) 600,000 authorized, 249,566 issued and 195,064 outstanding, $0.01 par value common stock at January 28, 2023; 600,000 authorized,

249,566 issued and 168,699 outstanding, $0.01 par value common stock at January 29, 2022; 600,000 authorized, 249,566 issued and

166,335 outstanding, $0.01 par value common stock at January 30, 2021; 600,000 authorized, 249,566 issued and 166,993 outstanding,

$0.01 par value common stock at February 1, 2020. The Company has 5,000 authorized, with none issued or outstanding, $0.01 par value

preferred stock for all periods presented.

(2) 54,502 shares, 80,867 shares, and 83,231 shares at January 28, 2023, January 29, 2022, and January 30, 2021, respectively. During

Fiscal 2022, Fiscal 2021, and Fiscal 2020, 1,643 shares, 2,798 shares, and 1,511 shares, respectively, were reissued from treasury stock

for the issuance of share-based payments.

Refer to Notes to Consolidated Financial Statements

(1) (2)

AMERICAN EAGLE OUTFITTERS, INC.

Consolidated Statements of Cash Flows

For the Years Ended

January 28, January 29, January 30,

(In thousands) 2023 2022 2021

Operating activities:

Net income (loss) $ 125,136 $ 419,629 $ (209,274 )

Adjustments to reconcile net income (loss) to net cash provided by

operating activities:

Depreciation and amortization 212,499 171,151 165,580

Share-based compensation 38,986 38,153 32,778

Deferred income taxes 31,049 (12,850 ) (34,890 )

Loss on impairment of assets 20,633 11,944 249,163

Loss on exchange of convertible senior notes 60,341 — —

Changes in assets and liabilities:

Merchandise inventory (38,364 ) (147,140 ) 42,156

Operating lease assets 345,798 296,652 226,376

Operating lease liabilities (361,142 ) (352,547 ) (238,810 )

Other assets 70,131 (134,152 ) (107,317 )

Accounts payable 2,019 (36,192 ) (30,909 )

Accrued compensation and payroll taxes (90,114 ) (1,412 ) 95,116

Accrued and other liabilities

(10,676 )

50,435

12,529

Net cash provided by operating activities

406,296

303,671

202,498

Investing activities:

Acquisitions of businesses, net of cash acquired — (358,151 ) —

Capital expenditures for property and equipment (260,378 ) (233,847 ) (127,975 )

Purchase of available-for-sale investments — (75,000 ) (14,956 )

Sale of available-for-sale investments — 75,000 69,956

Other investing activities

(997 )

(2,603 )

(970 )

Net cash used for investing activities

(261,375 )

(594,601 )

(73,945 )

Financing activities:

Accelerated share repurchase (200,000 ) — —

Principal paid in connection with exchange of convertible senior notes due

2025 (136,419 ) — —

Cash dividends paid (64,767 ) (113,945 ) (22,854 )

Repurchase of common stock from employees (9,780 ) (24,018 ) (5,413 )

Other financing activities 984 (299 ) (1,199 )

Net proceeds from stock options exercised 2,089 13,065 3,265

Repurchase of common stock as part of publicly announced programs — — (20,000 )

Proceeds from revolving line of credit and convertible senior notes, net

—

406,108

Net cash (used for) provided by financing activities

(407,893 )

(125,197 )

359,907

Effect of exchange rates on cash

(1,589 )

420

Net change in cash and cash equivalents (264,561 ) (415,707 ) 488,547

Cash and cash equivalents - beginning of period

$ 434,770

$ 850,477

$ 361,930

Cash and cash equivalents - end of period

170,209

434,770

850,477

Refer to Notes to Consolidated Financial Statements

AMERICAN EAGLE OUTFITTERS, INC.

Notes to Consolidated Financial Statements

For the Year Ended January 28, 2023

1. Business Operations

American Eagle Outfitters, Inc. (the “Company,” “we” and “our”), a Delaware corporation, operates under the American Eagle

(“AE”) and Aerie

brands. We also operate Todd Snyder New York, a premium menswear brand, and Unsubscribed, which focuses on consciously-made slow

fashion.

Founded in 1977, the Company is a leading multi-brand specialty retailer that operates more than 1,100 retail stores in the United States and

internationally, online through our digital channels at www.ae.com and www.aerie.com, www.toddsnyder.com, www.unsubscribed.com and more

than 200 international store locations managed by third-party operators. Through its portfolio of brands, the Company offers high quality, on-trend

clothing, accessories, and personal care products at affordable prices. The Company’s online business, AEO Direct, ships to approximately 80

countries worldwide.

AEO Direct reinforces each particular brand platform and is designed to complement the in-store experience. We offer the ability for customers to

return products seamlessly via any channel regardless of where products were originally purchased. We also offer a variety of channels to fulfill

customer orders. These include “ship to home,” - which can be fulfilled either through our distribution centers or our store sites (buy online, ship

from stores) when purchased online or through our app; “store pick-up,” - which consists of online orders being fulfilled either in store or curbside,

and we offer “store-to-door” capability where customers order within our store, and the goods are shipped directly to their home.

In Fiscal 2021, we acquired AirTerra, Inc. ("AirTerra") and Quiet Logistics, Inc. ("Quiet Logistics"), creating a new supply chain platform ("Quiet

Platforms”). Quiet Logistics is a leading logistics company that operates a network of in-market fulfillment centers, locating products closer to

need, creating inventory efficiencies, cost benefits and affordable same-day and next-day delivery options for customers and stores. AirTerra is a

logistics service and platform that solves e-commerce fulfillment and shipping challenges in a unique and innovative way for retailers and brands

of all sizes. Both acquisitions represent an important step in building our supply chain platform, as part of our ongoing supply chain

transformation strategy of leveraging scale and innovation to help us mange costs and improve service.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and consolidated entities where

the Company's ownership percentage is less than 100%. Non-controlling interests are included as a component of contributed capital within the

Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity and was not material for any period presented. All

intercompany transactions and balances have been eliminated in consolidation. At January 28, 2023, the Company operated in two reportable

segments, American Eagle and Aerie.

Fiscal Year

Our fiscal year is a 52- or 53-week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2023” refers to the 53-week

period that will end on February 3, 2024. “Fiscal 2022” refers to the 52-week period ended January 28, 2023. “Fiscal 2021” refers to the 52-week

period ended January 29, 2022. “Fiscal 2020” refers to the 52-week period ended January 30, 2021.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”)

requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on

currently available information. Changes in facts and circumstances may result in revised estimates.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and

Other Options (“ASU 2020-06”), which simplifies the accounting for convertible debt instruments. The new guidance eliminates two of the three

models in Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options that require separating embedded

conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted

earnings per share (“EPS”) calculation. The guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted ASU

2020-06 effective January 30, 2022 under the modified retrospective method.

Refer to Note 6 and Note 10 to the Consolidated Financial Statements for additional information regarding EPS and long-term debt, respectively.

Foreign Currency Translation

In accordance with ASC 830, Foreign Currency Matters, the Company translates assets and liabilities denominated in foreign currencies into U.S.

dollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. The Company translates revenues and

expenses denominated in foreign currencies into USD at the monthly average exchange rates for the period. Gains or losses resulting from

foreign currency transactions are included in the consolidated results of operations, whereas related translation adjustments are reported as an

element of other comprehensive income (loss) in accordance with ASC 220, Comprehensive Income. Refer to Note 12 to the Consolidated

Financial Statements for information regarding accumulated other comprehensive income (loss).

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents.

Refer to Note 4 to the Consolidated Financial Statements for information regarding cash and cash equivalents.

Accounts Receivable

The Company maintains an allowance for doubtful accounts for estimated losses from the failure of certain of our customers to make required

payments for products or services delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of

the financial condition of customers, review of historical and expected future receivables, reserve trends and other pertinent information. If the

financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances

may be required. Historically, the Company’s reserves have approximated actual experience.

Merchandise Inventory

Merchandise inventory is valued at the lower of average cost or net realizable value, utilizing the retail method. Average cost includes

merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the merchandise has

transferred to the Company.

The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally,

the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory. Markdowns may occur when

inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of

fashion items, or competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have

a material adverse impact on earnings, depending on the extent and amount of inventory affected.

The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the

shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and changes in actual shrinkage trends.

Property and Equipment

Property and equipment are recorded on the basis of cost with depreciation computed utilizing the straight-line method over the assets’ estimated

useful lives. The useful lives of our major classes of assets are as follows:

Buildings 25 years

Leasehold improvements Lesser of 10 years or the term of the lease

Fixtures and equipment Five years

Information technology Three to five years

As of January 28, 2023, the weighted average remaining useful life of our assets was approximately six years.

In accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”), the Company’s management evaluates the value of leasehold

improvements, store fixtures, and operating lease right-of-use ("ROU") assets associated with retail stores. The Company evaluates long-lived

assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. Impairment losses are

recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the projected

undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts. When events such as these occur, the

impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income

(loss) within impairment, restructuring and COVID-19 - related charges in the Consolidated Statements of Operations.

Our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair

values. The significant assumption used in our fair value analysis is forecasted revenue. We do not believe there is a reasonable likelihood that

there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results

are not consistent with our estimates and assumptions, our consolidated operating results could be adversely affected.

When the Company closes, remodels, or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to

the store is recorded as a write-off of assets within depreciation and amortization expense.

Refer to Note 8 to the Consolidated Financial Statements for additional information regarding property and equipment, and refer to Note 17 to the

Consolidated Financial Statements for additional information regarding impairment charges for Fiscal 2022, Fiscal 2021 and Fiscal 2020.

Goodwill and Intangible Assets

The Company’s goodwill is primarily related to the acquisitions of Quiet Logistics and AirTerra, in Fiscal 2021, as well as its importing operations

and Canadian business, and represents the excess of cost over fair value of net assets of businesses acquired. In accordance with ASC 350,

Intangibles – Goodwill and Other, the Company evaluates goodwill for possible impairment at least annually as of the last day of the fiscal year

and upon occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of a reporting unit may

be below its carrying value. If the carrying value of the reporting unit exceeds the fair value, an impairment charge is recorded in the period of the

evaluation based on that difference. The Company last performed an annual goodwill impairment test as of January 28, 2023. There was no

goodwill impairment charge recorded during Fiscal 2022, Fiscal 2021, or Fiscal 2020.

Definite-lived intangible assets are initially recorded at fair value, with amortization computed utilizing the straight-line method over the assets’

estimated useful lives. The Company’s definite-lived intangible assets, which consist primarily of trademark assets, are generally amortized over

10 to 15 years.

The Company evaluates definite-lived intangible assets for impairment in accordance with ASC 360 when events or circumstances indicate that

the carrying value of the asset may not be recoverable. Such an evaluation includes the estimation of undiscounted future cash flows to be

generated by those assets. If the sum of the estimated future undiscounted cash flows is less than the carrying amounts of the assets, then the

assets are impaired and are adjusted to their estimated fair value. No definite-lived intangible asset impairment charges were recorded for all

periods presented.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding goodwill and intangible assets.

Construction Allowances

As part of certain lease agreements for retail stores, the Company receives construction allowances from lessors, which are generally composed

of cash amounts. The Company records a receivable and an adjustment to the operating lease ROU asset at the lease commencement date

(date of initial possession of the store). The deferred lease credit is amortized as part of the single lease cost over the term of the original lease

(including the pre-opening build-out period). The receivable is reduced as amounts are received from the lessor.

Self-Insurance Liability

The Company uses a combination of insurance and self-insurance mechanisms for certain losses related to employee medical benefits and

worker’s compensation. Costs for self-insurance claims filed and claims incurred but not reported are accrued based on known claims and

historical experience. Management believes that it has adequately reserved for its self-insurance liability, which is capped by stop-loss contracts

with insurance companies. However, any significant variation of future claims from historical trends could cause actual results to differ from the

accrued liability.

Leases

The Company leases all store premises, the Canadian distribution center in Mississauga, Ontario, regional distribution facilities, some of its office

space and certain information technology and office equipment. These leases are generally classified as operating leases.

Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include

lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including

maintenance costs, common area charges, real estate taxes and certain other expenses. When measuring operating lease ROU assets and

operating lease liabilities, the Company only includes cash flows related to options to extend or terminate leases once those options are

executed.

Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of

operating lease ROU assets and operating lease liabilities.

When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the

Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.

For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU

asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.

Refer to Note 11 to the Consolidated Financial Statements for additional information.

Co-Branded and Private Label Credit Cards

The Company offers a co-branded credit card and a private-label credit card under the AE and Aerie brands. These credit cards are issued by a

third-party bank (the “Bank”) in accordance with a credit card agreement (the “Agreement”). The Company has no liability to the Bank for bad

debt expense, provided that purchases are made in accordance with the Bank’s procedures. We receive funding from the Bank based on the

Agreement and card activity, which includes payments for new account activations and usage of the credit cards. We recognize revenue for this

funding as we fulfill our performance obligations under the Agreement. This revenue is recorded in other revenue, which is a component of total

net revenue in our Consolidated Statements of Operations.

Customer Loyalty Program

The Company offers a highly digitized loyalty program called Real Rewards by American Eagle and Aerie™ (the “Program”). The Program

features both shared and unique benefits for loyalty members and credit card holders. Under the Program, members accumulate points based on

purchase activity and earn rewards by reaching certain point thresholds. Members earn rewards in the form of discount savings certificates.

Rewards earned are valid through the stated expiration date, which is 60 days from the issuance date of the reward. Rewards not redeemed

during the 60-day redemption period are forfeited.

Points earned under the Program on purchases at AE and Aerie are accounted for in accordance with ASC 606, Revenue from Contracts with

Customers (“ASC 606”). The portion of the sales revenue attributed to the reward points is deferred and recognized when the reward is

redeemed or when the points expire, using the relative stand-alone selling price method. Additionally, reward points earned using the co-branded

credit card on non-AE or Aerie purchases are accounted for in accordance with ASC 606. As the points are earned, a current liability is recorded

for the estimated cost of the reward, and the impact of adjustments is recorded in revenue.

The Company defers a portion of the sales revenue attributed to the loyalty points and recognizes revenue when the points are redeemed or

expire, consistent with the requirements of ASC 606.

Sales Return Reserve

Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company

records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects

an estimate of sales returns based on projected merchandise returns determined using historical average return percentages.

For the Years Ended

January 28, January 29, January 30,

(In thousands) 2023

2022

2021

Beginning balance $ 9,168 $ 8,377 $ 5,825

Returns (150,987 ) (149,988 ) (107,700 )

Provisions

152,188 150,779 110,252

Ending balance

$ 10,369 $ 9,168 $ 8,377

The presentation on a gross basis consists of a separate right of return asset and liability. These amounts are recorded within (i) prepaid

expenses and other and (ii) other current liabilities and accrued expenses, respectively, on the Consolidated Balance Sheets.

Long-Term Debt

In April 2020, the Company issued $415 million aggregate principal amount of convertible senior notes due 2025 (the "2025 Notes"). Prior to the

adoption of ASU 2020-06 in Fiscal 2022, the 2025 Notes were accounted for under the cash conversion model, which is one of the models

eliminated by ASU 2020-06. The adoption of ASU 2020-06 resulted in the 2025 Notes being accounted for as a single balance in long-term debt,

rather than being accounted for as separate debt and equity components.

In June 2022, the Company entered into an amended and restated credit agreement (the “Credit Agreement”). The Credit Agreement provides

senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations (the

"Credit Facility"). The Credit Facility expires on June 24, 2027.

Refer to Note 10 to the Consolidated Financial Statements for additional information regarding Long-Term Debt.

Income Taxes

The Company calculates income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the use of the liability method.

Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statements

carrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets and

liabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance in effect in the years

when those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is more

likely than not that some portion or all of the deferred taxes may not be realized. Changes in the Company’s level and composition of earnings,

tax laws or the deferred tax valuation allowance, as well as the results of tax audits may materially impact the Company’s effective income tax

rate.

The Company evaluates its income tax positions in accordance with ASC 740, which prescribes a comprehensive model for recognizing,

measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return, including a decision

whether to file or not to file in a particular jurisdiction. Under ASC 740, a tax benefit from an uncertain position may be recognized only if it is

“more likely than not” that the position is sustainable based on its technical merits.

The calculation of deferred tax assets and liabilities, as well as the decision to recognize a tax benefit from an uncertain position and to establish

a valuation allowance requires management to make estimates and assumptions. The Company believes that its estimates and assumptions are

reasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities,

valuation allowances or net income (loss).

Refer to Note 15 to the Consolidated Financial Statements for additional information.

Accelerated Share Repurchase Agreement

On June 3, 2022, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with JPMorgan Chase Bank

(“JPM”). Pursuant to the terms of the ASR Agreement, on June 3, 2022 the Company paid $200.0 million in cash and received an initial delivery

of 13.4 million shares of its common stock on June 3, 2022. At final settlement, on July 28, 2022, an additional 3.7 million shares were received.

The cumulative repurchase under the ASR Agreement was 17.0 million shares repurchased at an average price per share of $11.75. The

aforementioned shares have been recorded as treasury stock.

Revenue Recognition

The Company recognizes revenue pursuant to ASC 606. Revenue is recorded for store sales upon the purchase of merchandise by customers.

The Company’s e-commerce operation records revenue upon the customer receipt date of the merchandise. Shipping and handling revenues are

included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other

taxes on the Company’s Consolidated Balance Sheets.

Revenue is recorded net of estimated and actual sales returns and promotional price reductions. The Company records the impact of

adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales

returns based on projected merchandise returns determined using historical average return percentages. The presentation on a gross basis of

the sales return reserve consists of a separate right of return asset and liability. These amounts are recorded within (i) prepaid expenses and

other and (ii) other current liabilities and accrued expenses, respectively, on the Consolidated Balance Sheets.

Revenue is not recorded on the issuance of gift cards. A current liability is recorded upon issuance, and revenue is recognized when the gift card

is redeemed for merchandise. Additionally, the Company recognizes revenue on gift card breakage, determined through historical redemption

trends. Revenue on unredeemed gift cards, based on an estimate of the amounts that will not be redeemed ("gift card breakage"), is recognized

in proportion to actual gift card redemptions as a component of total net revenue. The Company determines an estimated gift card breakage rate

by continuously evaluating historical redemption data and the time when there is a remote likelihood that a gift card will be redeemed. The

Company recorded approximately $10.3 million, $10.3 million, and $8.8 million during Fiscal 2022, Fiscal 2021, and Fiscal 2020, respectively, of

revenue related to gift card breakage.

The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by

the licensee/franchisee. This revenue is recorded as a component of total net revenue when earned and collection is probable.

The Company defers a portion of the sales revenue attributed to loyalty points and recognizes revenue when the points are redeemed or expire,

consistent with the requirements of ASC 606. Refer to Customer Loyalty Program above for additional information.

Revenue associated with Quiet Platforms is recognized as the services are performed.

Cost of Sales, Including Certain Buying, Occupancy, and Warehousing Expenses

Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage

and certain promotional costs (collectively, “merchandise costs”), Quiet Platforms, costs to service its customers and buying, occupancy and

warehousing costs and services.

Design costs are related to the Company's Design Center operations and include compensation, travel and entertainment, supplies and samples

for our design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory

is sold.

Buying, occupancy and warehousing costs and services consist of compensation, employee benefit expenses and travel and entertainment for

our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and

other office space; freight from our distribution centers to the stores;

compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs

related to our e-commerce operation. Gross profit is the difference between total net revenue and cost of sales.

Selling, General, and Administrative Expenses

Selling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and related

benefits associated with our stores and corporate headquarters. Selling, general and administrative expenses also include advertising costs,

supplies for our stores and home office, communication costs, travel and entertainment, leasing costs and services purchased.

Selling, general and administrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and

importing teams, our buyers and our distribution centers as these amounts are recorded in cost of sales. Additionally, selling, general and

administrative expenses do not include rent and utilities related to our stores, operating costs of our distribution centers, and shipping and

handling costs related to our e-commerce operations, all of which are included in cost of sales.

Advertising Costs

Certain advertising costs, including direct mail, in-store photographs, and other promotional costs are expensed when the marketing campaign

commences. As of January 28, 2023 and January 29, 2022, the Company had prepaid advertising expense of $6.1 million for both periods. All

other advertising costs are expensed as incurred. The Company recognized $175.2 million, $173.6 million, and $150.0 million in advertising

expense during Fiscal 2022, Fiscal 2021, and Fiscal 2020, respectively.

Store Pre-Opening Costs

Store pre-opening costs consist primarily of rent, advertising, supplies, and payroll expenses. These costs are expensed as incurred.

Debt-Related Charges

Debt-related charges consists primarily of a $60.4 million induced conversion expense on the exchanges of the 2025 Notes, along with certain

other costs related to actions we took to strengthen our capital structure during Fiscal 2022. Refer to Note 10 to the Consolidated Financial

Statements for additional information regarding the 2025 Notes.

Interest Expense, Net

Interest expense, net primarily consists of interest expense related to the Company’s 2025 Notes and borrowings under our Credit Facility,

partially offset by interest income from cash and cash equivalents.

Other Income, Net

Other income, net consists primarily of allowances for uncollectible receivables, foreign currency fluctuations and changes in other non-operating

items. Non-controlling interest was not material for any period presented and is included within other income, net.

Legal Proceedings and Claims

The Company is subject to certain legal proceedings and claims arising out of the conduct of its business. In accordance with ASC 450,

Contingencies (“ASC 450”), the Company records a reserve for estimated losses when the loss is probable and the amount can be reasonably

estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company

records the accrual at the low end of the range, in accordance with ASC 450. As the Company believes that it has provided adequate reserves, it

anticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financial

position, results of operations or cash flows of the Company. However, our assessment of any litigation or other legal claims could potentially

change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact that are not in accord with

management’s evaluation of the possible liability or outcome of such litigation or claims.

Supplemental Disclosures of Cash Flow Information

The table below shows supplemental cash flow information for cash amounts (received) paid during the respective periods:

For the Years Ended

January 28, January 29, January 30,

(In thousands) 2023

2022

2021

Cash (received) paid during the periods for:

Income taxes $ (22,109 ) $ 182,656 $ 4,191

Interest $ 15,435 $ 8,729 $ 10,316

Segment Information

The Company has identified two operating segments (American Eagle and Aerie brand) that also represent our reportable segments and reflect

the Chief Operating Decision Maker's (defined as our CEO) internal view of analyzing results and allocating resources. Additionally, our Todd

Snyder and Unsubscribed brands and Quiet Platforms have been identified as separate operating segments; however, as they do not meet the

quantitative thresholds for separate disclosures they have been included in the Corporate and Other category. For additional information,

regarding the Company’s segment and geographic information, refer to Note 16 to the Consolidated Financial Statements.

3. Acquisitions

On December 29, 2021, the Company completed the acquisition of Quiet Logistics, Inc. and certain other strategic investments pursuant to a

Stock Purchase Agreement, dated as of November 1, 2021. Quiet Logistics is a leading logistics company that operates a network of in-market

fulfillment centers, locating products closer to need, creating inventory efficiencies, cost benefits and affordable same-day and next-day delivery

options to customers and stores.

At the closing of the transaction, the Company acquired from the sellers all of the issued and outstanding shares of capital stock of Quiet

Logistics and certain equity interests in two related strategic investments.

The aggregate purchase price paid at the closing, after giving effect to estimated adjustments in respect of working capital and other customary

matters, was approximately $360.6 million in cash.

In accordance with ASC 805, Business Combinations ("ASC 805"), the total purchase price was allocated to the net tangible and intangible

assets acquired and liabilities assumed based on their estimated fair values at the date of the acquisition. Such estimated fair values require

management to make estimates and judgments, especially with respect to intangible assets. Goodwill was calculated as the excess of the

consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that

could not be individually identified and separately recognized.

The following table summarizes the final fair values of the Quiet Logistics assets acquired and liabilities assumed at the acquisition date:

Current assets:

Cash and cash equivalents $ 3,857

Accounts Receivable 23,207

Prepaid expenses 3,210

Total current assets $ 30,274

Property and equipment $ 28,728

Intangible assets 51,500

Goodwill 248,798

Other long-term assets 118,550

Total Assets $ 477,850

Current liabilities $ 29,819

Total long-term liabilities

87,415

Total Liabilities $ 117,234

Total purchase price

$ 360,616

The purchase price allocation included $51.5 million of acquired intangible assets, of which $39.0 million was assigned to customer relationships

and $12.5 million was assigned to trade names, which were both recognized at fair value on the acquisition date. The fair value of the identifiable

intangible assets was estimated using the income approach through a discounted cash flow analysis. The cash flows were based on estimates

used to price the Quiet Logistics acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return to the

Company’s pricing model and the weighted-average cost of capital of 14.5%. Additionally, the significant assumption used to determine the fair

value of the customer relationships intangible asset was revenue growth. This significant assumption is forward-looking and could be affected by

future economic and market conditions. The customer relationships and trade name intangible assets are subject to useful lives of 10 and 15

years, respectively. Deferred tax assets were increased by $6.3 million in Fiscal 2022 related to the finalization of the net operating loss ("NOL")

benefit.

In accordance with ASC 350, the $248.8 million of goodwill that was associated with the Quiet Logistics acquisition was assigned to the reporting

units that benefited from the acquisition, namely the AE, Aerie and Quiet Platforms reporting units in the amounts of $101.6 million, $110.6 million

and $36.6 million, respectively. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Quiet

Logistics. None of the goodwill is expected to be deductible for income tax purposes.

On May 3, 2021, the Company completed the acquisition of AirTerra, Inc. AirTerra is a logistics and supply chain platform that solves e-commerce

fulfillment and shipping challenges in a unique and innovative way for retailers and brands of all sizes. The aggregate purchase price paid at

closing was $3.0 million.

Together, the Quiet Logistics and AirTerra acquisitions represent an important step in building Quiet Platforms, as part of our ongoing supply

chain transformation strategy of leveraging scale and innovation to help us manage costs and improve service.

Pro forma results from acquisitions completed during the year ended January 29, 2022 were determined not to be material.

4. Cash and Cash Equivalents

The following table summarizes the fair market value of our cash and cash equivalents, which are recorded on the Consolidated Balance Sheets:

January 28, January 29,

(In thousands) 2023 2022

Cash and cash equivalents:

Cash $ 84,960 $ 138,758

Interest-bearing deposits

85,249 296,012

Total cash and cash equivalents

$ 170,209 $ 434,770

5. Fair Value Measurements

ASC 820, Fair Value Measurement Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance

with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the

sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.

Financial Instruments

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of

unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

These tiers include:

• Level 1 — Quoted prices in active markets.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or

liabilities.

The Company’s cash equivalents are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer

to Note 4 to the Consolidated Financial Statements for additional information regarding cash equivalents.

The Company had no other financial instruments that required fair value measurement for any of the periods presented.

Fair Value Measurements at January 28, 2023

(In thousands)

Carrying Amount

Quoted Market

Prices in Active

Markets for

Identical

Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

Cash and cash equivalents

Cash $ 84,960 $ 84,960 — —

Interest-bearing deposits 85,249 85,249 —

—

Total cash and cash equivalents $ 170,209 $ 170,209 — —

Long-Term Debt

As of January 28, 2023, the Company had no outstanding borrowings under its Credit Facilities.

The Company had approximately $8.8 million aggregate principal of the 2025 Notes outstanding at January 28, 2023. The fair value of the

Company's 2025 Notes is not required to be measured at fair value on a recurring basis. Upon issuance, the fair value of the 2025 Notes was

measured using two approaches that consider market-related conditions, including market benchmark rates and a secondary market quoted

price, and is therefore within Level 2 of the fair value hierarchy.

Refer to Note 10 to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements.

Non-Financial Assets

The Company’s non-financial assets, which include intangible assets and property and equipment, are not required to be measured at fair value

on a recurring basis. However, if certain triggering events occur and the Company is required to evaluate the non-financial asset for impairment,

a resulting impairment would require that the non-financial asset be recorded at the estimated fair value.

Certain long-lived assets were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in ASC 820. During Fiscal 2022,

the Company recorded asset impairment charges of $20.6 million, primarily related to retail store property and equipment, and operating lease

ROU assets. These assets were adjusted to their fair value and the loss on impairment was recorded within impairment, restructuring and

COVID-19 related charges in the Consolidated Statements of Operations.

During Fiscal 2021, the Company recorded asset impairment charges of $11.9 million, primarily related to retail store property and equipment,

and operating lease ROU assets. The assets were adjusted to their fair value and the loss on impairment was recorded within impairment,

restructuring and COVID-19 related charges in the Consolidated Statements of Operations.

The fair value of the Company’s store assets in Fiscal 2022 and Fiscal 2021 was determined by estimating the amount and timing of net future

cash flows and discounting them using a risk-adjusted rate of interest. The Company estimates future cash flows based on its experience and

knowledge of the market in which the store is located.

The fair value of the Company's ROU assets was based upon market rent assumptions.

6. Earnings per Share

The following is a reconciliation between basic and diluted weighted average shares outstanding:

For the Years Ended

January 28, January 29, January 30,

(In thousands)

2023 2022 2021

Numerator:

Net income (loss) and numerator for basic EPS $ 125,136 $ 419,629 $ (209,274 )

Add: Interest expense, net of tax, related to the 2025 Notes

5,474

—

Numerator for diluted EPS

$ 130,610

$ 419,629

$ (209,274 )

Denominator:

Denominator for basic EPS - weighted average shares 181,778 168,156 166,455

Add: Dilutive effect of the 2025 Notes 21,507 34,003 —

Add: Dilutive effect of stock options and non-vested restricted stock

1,941

4,370

—

Denominator for diluted EPS - adjusted weighted average shares

205,226

206,529

166,455

Anti-dilutive shares 2,182 202 14,259

(1) In Fiscal 2022, the Company adopted ASU 2020-06 under the modified retrospective method, which requires the Company to utilize the "if-

converted" method of calculated diluted EPS. Accordingly, we did not restate financial information for prior periods. Refer to Note 2 to the

Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-06.

(2) In Fiscal 2020, there were 1.9 million potentially dilutive equity awards and 12.4 million potentially dilutive shares from the 2025 Notes that

were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion

would be anti-dilutive. For all other periods presented, anti-dilutive shares relate to stock options and unvested restricted stock.

Refer to Note 10 and Note 13 to the Consolidated Financial Statements for additional information regarding the 2025 Notes and share-based

compensation, respectively.

7. Accounts Receivable, net

Accounts receivable, net is comprised of the following:

January 28, January 29,

(In thousands) 2023 2022

Merchandise sell-offs and vendor receivables 66,193 $ 37,707

AE & Aerie international license receivables 59,837 71,371

Tax and other government refunds 47,201 75,137

Landlord construction allowances 25,235 24,285

Quiet Platforms' customer receivables 23,031 16,095

Gift card receivable 7,728 12,771

Credit card program receivable 3,189 39,507

Other items 9,972 9,810

Total $ 242,386 $ 286,683

(1)

(2)

8. Property and Equipment, net

Property and equipment, net consists of the following:

January 28, January 29,

(In thousands) 2023 2022

Land $ 17,910 $ 17,910

Buildings 222,857 219,194

Leasehold improvements 822,292 739,245

Fixtures and equipment 1,635,897 1,496,972

Construction in progress 8,105 7,117

Property and equipment, at cost $ 2,707,061 $ 2,480,438

Less: Accumulated depreciation (1,925,547 ) (1,752,166 )

Property and equipment, net $ 781,514 $ 728,272

Depreciation expense is as follows:

For the Years Ended

January 28, January 29, January 30,

(In thousands) 2023

2022

2021

Depreciation expense

$ 208,014

$ 161,492

$ 159,413

Additionally, during Fiscal 2022, Fiscal 2021, and Fiscal 2020, the Company recorded $4.4 million, $4.4 million and $2.2 million, respectively,

related to asset write-offs within depreciation and amortization expense.

9. Goodwill and Intangible Assets, net

Goodwill and definite-lived intangible assets, net consist of the following:

January 28, 2023 January 29, 2022

(In thousands)

American

Eagle

Aerie

Corporate and

Other

Total

American

Eagle

Aerie

Corporate and

Other

Total

Goodwill, beginning

balance $ 114,883 $ 110,600 $ 45,933 $ 271,416 $ 13,267 $ — $ — $ 13,267

Additions — — — — 101,600 110,600 45,933 258,133

Purchase

accounting

adjustment — — (6,335 ) (6,335 ) — — — —

Foreign currency

fluctuation

(136 )

—

(136 )

—

Goodwill, ending

balance $ 114,747 $ 110,600 $ 39,598 $ 264,945 $ 114,883 $ 110,600 $ 45,933 $ 271,416

(1) Beginning balances for both periods include accumulated impairment of $4.2 million.

(2) Corporate and Other includes goodwill allocated to the Quiet Platforms reporting unit, which has been identified as a separate operating

segment, but is not material to disclose as a separate reportable segment.

(In thousands)

January 28, 2023 January 29, 2022

Intangible assets, beginning balance, at cost $ 102,701 $ 57,065

Additions 985 52,580

Amortization

(9,150 )

(6,944 )

Intangible assets, net $ 94,536 $ 102,701

(1) The ending balance includes accumulated amortization of $51.7 million and $42.1 million as of January 28, 2023 and January 29, 2022,

respectively.

Amortization expense is as follows:

(In thousands)

January 28, 2023

January 29, 2022

January 30, 2021

Amortization expense

$ 9,162

$ 6,468

$ 3,752

(2) (2)

(1)

The table below summarizes the estimated future amortization expense for intangible assets existing as of January 28, 2023 for the next five

fiscal years:

Future

(In thousands)

Amortization

2023 $ 8,912

2024 $ 8,789

2025 $ 8,653

2026 $ 8,531

2027 $ 8,459

10. Long-Term Debt, Net

The Company’s long-term debt consisted of the following:

January 28, January 29,

(In thousands)

2023

2022

2025 Notes principal $ 8,791 $ 412,025

Less: unamortized discount

105

71,023

2025 Notes, net $ 8,686 $ 341,002

2025 Notes - equity portion, net of tax — 58,454

2025 Notes

In April 2020, the Company issued $415 million aggregate principal amount of 2025 Notes in a private placement to qualified institutional buyers

in reliance on Rule 144A under the Securities Act of 1933. The 2025 Notes have a stated interest rate of 3.75%, payable semi-annually. The

Company may redeem the 2025 Notes, in whole or in part, at any time beginning April 17, 2023. The Company used the net proceeds from the

issuance for general corporate purposes.

The Company does not have the right to redeem the 2025 Notes prior to April 17, 2023. On or after April 17, 2023 and prior to the fortieth

scheduled trading day immediately preceding the maturity date, the Company may redeem all or any portion of the 2025 Notes, at its option, for

cash, if the last reported sale price of AEO’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading

days (whether or not consecutive) during any 30 consecutive trading day period. Beginning January 2025, noteholders may convert their notes

for approximately 120.9 shares of common stock per $1,000 principal amount of the Notes, equivalent to a conversion price of approximately

$8.27 per share.

Subsequent to January 28, 2023, on February 10, 2023, the Company issued a notice of optional redemption for all of its outstanding 2025

Notes, notifying holders that, among other things, it has elected to exercise its right to redeem any and all of the outstanding 2025 Notes on April

17, 2023.

Note Exchanges

In June and December 2022, the Company entered into separate privately negotiated exchange agreements with certain holders of the 2025

Notes, to exchange $403.2 million in aggregate principal amount of the 2025 Notes for a combination of cash and shares of the Company's

common stock, plus payment of accrued and unpaid interest (together, the "Note Exchanges").

In June 2022, the Company exchanged $342.4 million in aggregate principal amount of the 2025 Notes. The Company paid cash of $136.1

million to redeem a principal amount of the 2025 Notes with a carrying value of $339.2 million and issued approximately 34.7 million shares of the

Company's common stock. In connection with these transactions, the Company recognized a pre-tax inducement charge of approximately $55.7

million during the 13 weeks ended July 30, 2022, which was recorded within debt-related charges on the Consolidated Statements of Operations.

In December 2022, the Company exchanged $60.8 million in aggregate principal amount of the 2025 Notes for shares of the Company's common

stock, plus payment of accrued and unpaid interest. The Company issued approximately 7.6 million shares of the Company's common stock with

a carrying value of $60.4 million. In connection with these transactions, the Company recognized a pre-tax inducement charge of approximately

$4.7 million during the 13 weeks ending January 28, 2023, which was recorded within debt-related charges on the Consolidated Statements of

Operations.

Following the Note Exchanges, approximately $8.8 million aggregate principal amount of the 2025 Notes remained outstanding at January 28,

2023.

The effective interest rate for the Notes is 4.3% and we calculated the effective yield using a market approach. The remaining amortization period

of the discount was 2.25 years as of January 28, 2023.

Interest expense for the 2025 Notes was:

January 28, January 29,

(In thousands)

2023

2022

Accrued interest for interest payments $ 6,894 $ 15,431

Amortization of discount

915

18,520

Total interest expense $ 7,809 $ 33,951

Refer to Note 2 and Note 6 to the Consolidated Financial Statements for additional information regarding the impact of the adoption of ASU 2020-

06.

The following table discloses conversion amounts if the 2025 Notes were all converted as of the end of the period:

January 28,

(In thousands, except per share amounts)

2023

Number of shares convertible 1,063

Conversion price per share $ 8.27

Value in excess of principal if converted $ 6,448

Revolving Credit Facility

In June 2022, the Company entered into an amended and restated Credit Agreement (the "Credit Agreement"). The Credit Agreement provides

senior secured asset-based revolving credit for loans and letters of credit up to $700 million, subject to customary borrowing base limitations (the

"Credit Facility"). The Credit Facility expires on June 24, 2027. Before amendment and restatement, the Company's previous credit agreement

provided senior secured asset-based revolving credit for loans and letters of credit up to $400 million and was scheduled to expire on January 30,

2024.

All obligations under the Credit Facility are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are

secured by certain assets of the Company and certain subsidiaries.

As of January 28, 2023, the Company was in compliance with the terms of the Credit Agreement and had $7.9 million outstanding in stand-by

letters of credit. No loans were outstanding under the Credit Agreement as of both January 28, 2023 and January 29, 2022.

Borrowings under the Credit Facility accrue interest at the election of the Company at an adjusted secured overnight financing rate ("SOFR") rate

of SOFR plus 0.10% plus an applicable margin (ranging from 1.125% to 1.375%) or an alternate base rate plus an applicable margin (ranging

from 0.125% to 0.375%), with each such applicable margin being based on average borrowing availability under the Credit Facility. Interest is

payable quarterly and at the end of each applicable interest period. The weighted average interest rate for borrowings during Fiscal 2022 was

3.8%. The total interest expense related to the Credit Facility for Fiscal 2022 was $5.9 million. There was no interest related to the Credit Facility

for Fiscal 2021.

11. Leases

The Company leases all store premises, regional distribution facilities, some of its office space and certain information technology and office

equipment. These leases are generally classified as operating leases.

Store leases generally provide for a combination of base rentals and contingent rent based on store sales. Additionally, most leases include

lessor incentives such as construction allowances and rent holidays. The Company is typically responsible for tenant occupancy costs including

maintenance costs, common area charges, real estate taxes, and certain other expenses.

Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s discretion and is not reasonably

certain at lease commencement. When measuring operating lease ROU assets and operating lease liabilities after the date of adoption of ASC

842, the Company only includes cash flows related to options to extend or terminate leases when those options are executed.

Some leases have variable payments. However, because they are not based on an index or rate, they are not included in the measurement of

operating lease ROU assets and operating lease liabilities.

When determining the present value of future payments for an operating lease that does not have a readily determinable implicit rate, the

Company uses its incremental borrowing rate as of the date of initial possession of the leased asset.

For leases that qualify for the short-term lease exemption, the Company does not record an operating lease liability or operating lease ROU

asset. Short-term lease payments are recognized on a straight-line basis over the lease term of 12 months or less.

The following table summarizes expense categories and cash payments for operating leases during the period. It also includes the total non-cash

transaction activity for new operating lease ROU assets and related operating lease liabilities entered into during the period.

For the Year Ended

January 28, January 29,

(In thousands)

2023 2022

Lease costs

Operating lease costs $ 368,483 $ 328,868

Variable lease costs 121,604 121,118

Short-term leases and other lease costs

5,357 11,927

Total lease costs

$ 495,444 $ 461,913

Other information

Cash paid for operating lease liability $ (397,059 ) $ (363,468 )

New operating lease ROU assets entered into during the period $ 254,290 $ 336,546

The following table contains the average remaining lease term and discount rate, weighted by outstanding operating lease liability as of the end

of the period:

Lease term and discount rate

January 28, 2023

Weighted-average remaining lease term - operating leases 4.75 years

Weighted-average discount rate - operating leases 3.9%

The table below is a maturity analysis of the operating leases in effect as of the end of the period. Undiscounted cash flows for finance leases

and short-term leases are not material for the periods reported and are excluded from the table below:

Undiscounted

cash flows

(In thousands)

January 28, 2023

Fiscal years:

2023 $ 321,240

2024 294,514

2025 245,899

2026 203,187

2027 155,015

Thereafter

264,715

Total undiscounted cash flows $ 1,484,570

Less: discount on lease liability

(126,112 )

Total lease liability

$ 1,358,458

12. Accumulated Other Comprehensive Loss

The accumulated balances of other comprehensive loss included as part of the Consolidated Statements of Stockholders’ Equity follow:

Accumulated

Before

Tax

Other

Tax Benefit Comprehensive

(In thousands) Amount (Expense) Loss

Balance at February 1, 2020

$ (34,287 )

$ 1,119

$ (33,168 )

Foreign currency translation loss (7,053 ) — (7,053 )

Gain (loss) on long-term intra-entity foreign currency transactions

592

(1,119 )

(527 )

Balance at January 30, 2021

$ (40,748 )

$ —

$ (40,748 )

Foreign currency translation loss (1,003 ) — (1,003 )

Gain on long-term intra-entity foreign currency transactions

906

—

906

Balance at January 29, 2022

$ (40,845 )

$ —

$ (40,845 )

Foreign currency translation gain 9,749 — 9,749

Loss on long-term intra-entity foreign currency transactions

(1,534 )

—

(1,534 )

Balance at January 28, 2023

$ (32,630 )

$ —

$ (32,630 )

(1) Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in a subsidiary.

13. Share-Based Payments

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation – Stock Compensation (“ASC 718”),

which requires the Company to measure and recognize compensation expense for all share-based payments at fair value. Total share-based

compensation expense included in the Consolidated Statements of Operations for Fiscal 2022, Fiscal 2021 and Fiscal 2020 was $39.0 million

($27.3 million, net of tax), $38.2 million ($28.8 million, net of tax), and $32.8 million ($24.6 million, net of tax), respectively.

ASC 718 requires recognition of compensation cost under a non-substantive vesting period approach for awards containing provisions that

accelerate or continue vesting upon retirement. Accordingly, for awards with such provisions, the Company recognizes compensation expense

over the period from the grant date to the date that retirement eligibility is achieved, if that is expected to occur during the nominal vesting period.

Additionally, for awards granted to retirement-eligible employees, the full compensation cost of an award must be recognized immediately upon

grant.

At January 28, 2023, the Company had awards outstanding under two share-based compensation plans, which are described below.

Share-based compensation plans

2020 Stock Award and Incentive Plan (“2020 Plan”)

The 2020 Plan was approved by the stockholders on April 13, 2020. The 2020 Plan authorized 10.2 million shares for issuance, in the form of

options, stock appreciation rights (“SARS”), restricted stock, restricted stock units, bonus stock and awards, performance awards, dividend

equivalents and other stock-based awards. The 2020 Plan provides that for awards intended to qualify as “performance-based compensation”

under Code Section 162(m), (i) the maximum number of shares awarded to any individual may not exceed 3.0 million shares per year for options

and SARS and (ii) no more than 1.5 million shares may be granted with respect to each of restricted shares of stock and restricted stock units

(subject to certain adjustments and exceptions provided therein). The 2020 Plan allows the Compensation Committee of the Board to determine

which employees receive awards and the terms and conditions of the awards under the 2020 Plan. The 2020 Plan provides for grants to directors

who are not officers or employees of the Company, which are not to exceed in value of $750,000 in any single fiscal year. Through January 28,

2023, approximately 4.3 million shares of restricted stock and approximately 2.3 million shares of common stock had been granted under the

2020 Plan to employees and directors. Approximately 40% of the restricted stock awards are performance-based and are earned if the

established performance goals are met. The remaining 60% of the restricted stock awards are time-based and 96% vest ratably over three years

and 4% vest over a period of one to two years.

(1)

2017 Stock Award and Incentive Plan (“2017 Plan”)

The 2017 Plan was approved by the stockholders on May 23, 2017. The 2017 Plan authorized 11.2 million shares for issuance, in the form of

options, SARS, restricted stock, restricted stock units, bonus stock and awards, performance awards, dividend equivalents and other stock-based

awards. The 2017 Plan provides that for awards intended to qualify as “performance-based compensation” under Code Section 162(m) (i) the

maximum number of shares awarded to any individual may not exceed 3.0 million shares per year for options and SARS and (ii) no more than

1.5 million shares may be granted with respect to each of restricted shares of stock and restricted stock units (subject to certain adjustments and

exceptions provided therein). The 2017 Plan allows the Compensation Committee of the Board to determine which employees receive awards

and the terms and conditions of the awards under the 2017 Plan. The 2017 Plan provides for grants to directors who are not officers or

employees of the Company, which are not to exceed in value of $750,000 in any single fiscal year. Through January 30, 2021, approximately 7.7

million shares of restricted stock and approximately 3.5 million shares of common stock had been granted under the 2017 Plan to employees and

directors. Approximately 80% of the restricted stock awards are performance-based and are earned if the established performance goals are met.

The remaining 20% of the restricted stock awards are time-based and 98% vest ratably over three years and 2% vest over a period of one to two

years. After April 13, 2020, no new awards may be granted under the 2017 Plan and all outstanding awards at that time continued in force and

operation in accordance with their respective terms.

Stock Option Grants

The Company has granted time-based stock options under the 2017 and 2020 Plans. Time-based stock option awards vest over the requisite

service period of the award or to an employee’s eligible retirement date, if earlier.

A summary of the Company’s stock option activity under the 2017 and 2020 Plans for Fiscal 2022 follows:

For the Year Ended January 28, 2023

Weighted-

Average

Weighted-

Average

Remaining

Contractual

Aggregate

Intrinsic

Options Exercise Price Term Value

(In thousands) (In years) (In thousands)

Outstanding - January 29, 2022 3,647 $ 16.74

Granted 1,094 $ 17.24

Exercised (126 ) $ 9.16

Cancelled

(665 ) $ 17.41

Outstanding - January 28, 2023

3,950 $ 17.01 4.0

$ 6,725

Vested and expected to vest - January 28, 2023

2,789 $ 16.92 2.8

$ 2,112

Exercisable - January 28, 2023 1,096 $ 11.48 3.3 $ 4,576

(1) Options exercised during Fiscal 2022 ranged in price from $8.62 to $12.33.

(2) Options exercisable represent “in-the-money” vested options based upon the weighted average exercise price of vested options compared

to the Company’s stock price on January 28, 2023.

The weighted-average grant date fair value of stock options granted during Fiscal 2022 and Fiscal 2021 was $5.90 and $11.68, respectively. The

aggregate intrinsic value of options exercised during Fiscal 2022, Fiscal 2021, and Fiscal 2020 was $0.5 million, $12.8 million and $0.7 million,

respectively. Cash received from the exercise of stock options and the actual tax benefit realized from share-based payments was $2.1 million

and $0.3 million, respectively, for Fiscal 2022. Cash received from the exercise of stock options and the actual tax benefit realized from share-

based payments was $13.1 million and $4.5 million, respectively, for Fiscal 2021. Cash received from the exercise of stock options and the actual

tax benefit realized from share-based payments was $3.3 million and $1.2 million, respectively, for Fiscal 2020.

As of January 28, 2023, there was $6.5 million of unrecognized compensation expense related to non-vested stock option awards that is

expected to be recognized over a weighted average period of 1.8 years.

(1)

(2)

The fair value of stock options was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average

assumptions:

For the Years Ended

January 28, January 29,

Black-Scholes Option Valuation Assumptions 2023 2022

Risk-free interest rate 2.5% 0.9%

Dividend yield 3.8% 1.6%

Volatility factor 52.2% 50.7%

Weighted-average expected term 4.5 years 4.5 years

(1) Based on the United States Treasury yield curve in effect at the time of grant with a term consistent with the expected life of our stock

options.

(2) Based on the historical volatility of the Company’s common stock.

(3) Represents the period that options are expected to be outstanding. The weighted average expected option terms were determined based

on historical experience.

Restricted Stock Grants

Time-based restricted stock awards are composed of time-based restricted stock units. These awards vest over three years. Time-based

restricted stock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same

restrictions and forfeiture provisions as the original awards.

Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three-year

period based upon the Company’s achievement of pre-established goals throughout the term of the award. Performance-based restricted stock

units receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions

and forfeiture provisions as the original awards.

The grant date fair value of time-based restricted stock awards is based on the closing market price of the Company’s common stock on the date

of grant. A Monte Carlo simulation was utilized for performance-based restricted stock awards.

A summary of the activity of the Company’s restricted stock is presented in the following tables:

Time-Based Restricted Stock Units

Performance-

Based Restricted Stock Units

For the year ended For the year ended

January 28, 2023

(Shares in thousands)

Weighted-Average

Grant Date

Fair Value

Weighted-Average

Grant Date

Fair Value

Non-vested - January 29, 2022 2,702 $ 16.25 1,462 $ 20.95

Granted 1,609 16.47 549 19.16

Vested (1,229 ) 15.02 (257 ) 21.28

Cancelled/Forfeited

(333 )

15.66

(180 )

22.39

Non-vested - January 28, 2023 2,749 $ 17.00 1,574 $ 20.11

As of January 28, 2023, there was $25.9 million of unrecognized compensation expense related to non-vested time-based restricted stock unit

awards that is expected to be recognized over a weighted average period of 1.8 years. There is $6.8 million of unrecognized compensation

expense related to performance-based restricted stock unit awards that is expected to be recognized over a weighted average period of 1.5

years.

As of January 28, 2023, the Company had 4.8 million shares available for all equity grants.

(1)

(2)

(3)

14. Retirement Plan and Employee Stock Purchase Plan

The Company maintains a profit sharing and 401(k) plan (the “Retirement Plan”). Under the provisions of the Retirement Plan, full-time

employees and part-time employees are automatically enrolled to contribute 3% of their salary if they have attained 20 years of age. In addition,

full-time employees need to have completed 30 days of service and part-time employees must complete 1,000 hours of service within a 12-month

period. Individuals can decline enrollment or can contribute up to 50% of their salary to the 401(k) plan on a pretax basis, subject to Internal

Revenue Service (“IRS) limitations. After one year of service, the Company will match 100% of the first 3% of pay plus an additional 25% of the

next 3% of pay that is contributed to the plan. Employees are 100% vested in the Company match after two years. Contributions to the profit-

sharing plan, as determined by the Board, are discretionary. The Company recognized $15.1 million, $14.7 million and $13.3 million in expense

during Fiscal 2022, Fiscal 2021, and Fiscal 2020, respectively, in connection with the Retirement Plan.

The Employee Stock Purchase Plan is a non-qualified plan that covers all full-time employees and part-time employees who are at least 18 years

old and have completed 60 days of service. Contributions are determined by the employee, with the Company matching 15% of the investment

up to a maximum investment of $100 per pay period. These contributions are used to purchase shares of Company stock in the open market.

15. Income Taxes

On December 22, 2017, the United States government enacted comprehensive tax legislation in the form of the Tax Cuts and Jobs Act (“the Tax

Act”). The Tax Act significantly changed United States international tax laws for tax years beginning after December 31, 2017 and included a

provision designed to currently tax global intangible low-taxed income (“GILTI”) earned by non-United States corporate subsidiaries of large

United States shareholders. The Company has elected to treat GILTI as a period expense, and the effect of the GILTI inclusion for Fiscal 2022 is

not material.

In addition, on March 27, 2020, the United States government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to

address the COVID-19 pandemic. The CARES Act allows net operating losses (“NOL”) generated within tax years 2018 through 2020 to be

carried back up to five years, including years in which the United States federal corporate income tax rate was 35%, as opposed to the current

U.S federal corporate income tax rate of 21%. The CARES Act contains other key income and payroll tax provisions, including the immediate

write-off of qualified improvement property.

The components of income (loss) before income taxes are:

For the Years Ended

January 28, January 29, January 30,

(In thousands)

2023

2022

2021

U.S. $ 138,023 $ 520,952 $ (294,208 )

Foreign

40,471

37,970

1,935

Total

$ 178,494

$ 558,922

$ (292,273 )

The significant components of the Company’s deferred tax assets and liabilities are as follows:

January 28, January 29,

(in thousands)

2023 2022

Deferred tax assets:

Operating lease ROU assets $ 353,277 $ 380,117

Net Operating Loss 27,604 27,643

Accruals not currently deductible 11,442 11,645

Deferred compensation 9,498 8,429

Disallowed business interest expense 8,353 —

Other long-term assets 8,201 8,208

State tax credits 7,968 7,546

Inventories 7,082 5,220

Gift card liability 4,871 3,974

Capital Loss 4,210 4,213

Capitalized research and development expenses 4,120 —

Employee compensation and benefits 2,896 20,521

Foreign tax credits 2,761 2,982

General Business Credits 1,586 751

Allowance for Doubtful Accounts 911 3,201

Other

744 1,032

Gross deferred tax assets 455,524 485,482

Valuation allowance

(25,902 ) (25,628 )

Total deferred tax assets

429,622 459,854

Deferred tax liabilities:

Operating lease liabilities $ (287,061 ) $ (308,299 )

Property and equipment (100,958 ) (87,192 )

Prepaid expenses (2,988 ) (2,215 )

Goodwill (1,996 ) (2,045 )

Other (136 ) (552 )

2025 Notes

— (15,384 )

Total deferred tax liabilities

$ (393,139 ) $ (415,687 )

Total deferred tax assets, net $ 36,483 $ 44,167

The change in net deferred tax assets was primarily due to a decrease in the net deferred tax asset of Operating lease ROU assets, Operating

lease liabilities and Employee compensation and benefits, partially offset by a decrease in the deferred tax liability of the 2025 Notes.

As of January 28, 2023, the Company had deferred tax assets related to federal, state and foreign net operating loss carryovers of $15.0 million,

$5.9 million and $6.7 million, respectively, that could be utilized to reduce future years’ tax liabilities. A portion of these net operating loss

carryovers expire in future years and some have an indefinite carryforward period. Management believes it is more likely than not that a portion of

state net operating loss and the foreign net operating loss carryovers will not reduce future years’ tax liabilities in certain jurisdictions. As such,

valuation allowances of $2.7 have been recorded on the deferred tax assets related to a portion of the state net operating loss carryovers as of

both January 28, 2023 and January 29, 2022. Further, valuation allowances of $6.7 million and $6.1 million have been recorded on the deferred

tax assets related to the cumulative foreign net operating loss carryovers as of January 28, 2023 and January 29, 2022, respectively. We also

provided for valuation allowances of approximately $1.6 million related to other foreign deferred tax assets as of both January 28, 2023 and

January 29, 2022.

The Company had foreign tax credit carryovers in the amount of $2.8 million and $3.0 million as of January 28, 2023 and January 29, 2022,

respectively. The foreign tax credit carryovers begin to expire in Fiscal 2032 to the extent not utilized. Management believes it is more likely than

not that a certain category of foreign tax credit carryover will not reduce future years’ tax liabilities. As such, valuation allowances of $1.0 million

have been recorded on the deferred tax assets related to the foreign tax credit carryovers as of both January 28, 2023 and January 29, 2022.

The Company had state income tax credit carryforwards of $8.0 million (net of federal tax) and $7.5 million (net of federal tax) as of January 28,

2023 and January 29, 2022, respectively. These income tax credits can be utilized to offset future state income taxes, with the majority having a

carryforward period of 16 years. They will begin to expire in Fiscal 2024. Management believes it is more likely than not that a portion of the state

income tax credit carryovers will not reduce future years’ tax liabilities in certain jurisdictions. As such, valuation allowances of $1.5 million and

$1.8 million have been recorded on the deferred tax assets related to the cumulative state income tax credit carryovers as of January 28, 2023

and January 29, 2022, respectively.

The Company had United States federal and state capital loss carryforwards of $4.2 million as of both January 28, 2023 and January 29, 2022.

Generally, the capital loss has a carryforward period of five years. The Company has recorded a valuation allowance of $4.2 million as of both

January 28, 2023 and January 29, 2022, on the deferred tax asset attributable to these capital losses. The Company recorded deferred tax

assets of $8.2 million as of both January 28, 2023 and January 29, 2022, for other long-term assets related to the acquisition of Quiet Logistics,

Inc. and certain other strategic investments. Management believes it is more likely than not that these other long-term assets will not reduce

future years’ tax liabilities. As such, valuation allowances of $8.2 million was recorded as of both January 28, 2023 and January 29, 2022 for the

deferred tax asset attributable to these assets.

Significant components of the provision (benefit) for income taxes are as follows:

For the Years Ended

January 28,

January 29,

January 30,

(In thousands)

2023

2022

2021

Current:

Federal $ (986 ) $ 107,493 $ (59,080 )

Foreign taxes 19,701 19,671 7,443

State

3,594 24,979 3,528

Total current

22,309 152,143 (48,109 )

Deferred:

Federal $ 26,758 $ (12,637 ) $ (17,286 )

Foreign taxes (1,374 ) (1,284 ) (4,622 )

State

5,665 1,071 (12,982 )

Total deferred

31,049 (12,850 ) (34,890 )

Provision (Benefit) for income taxes

$ 53,358 $ 139,293 $ (82,999 )

As of January 28, 2023, the undistributed earnings of the Company’s foreign subsidiaries were approximately $119.6 million. The Company

intends to permanently reinvest a portion of its earnings outside of the United States for the foreseeable future. On the remaining earnings, the

Company has not recognized deferred tax expense because we expect any potential distribution to be made from previously taxed earnings, or

qualify for the 100% dividends received deduction, along with negligible foreign withholding taxes.

The following table summarizes the activity related to our unrecognized tax benefits:

For the Years Ended

January 28,

January 29,

January 30,

(In thousands)

2023

2022

2021

Unrecognized tax benefits, beginning of the year

balance $ 3,259 $ 2,563 $ 2,781

Increases in current period tax positions 681 251 602

Increases in tax positions of prior periods — 688 1

Settlements (454 ) — (450 )

Lapse of statute of limitations (277 ) (93 ) (289 )

Decreases in tax positions of prior periods

(731 )

(150 )

(82 )

Unrecognized tax benefits, end of the year balance

$ 2,478

$ 3,259

$ 2,563

As of January 28, 2023, the gross amount of unrecognized tax benefits was $2.5 million, of which $2.0 million would affect the effective income

tax rate if recognized. The gross amount of unrecognized tax benefits as of January 29, 2022 was $3.3 million, of which $2.6 million would affect

the effective income tax rate if recognized.

Unrecognized tax benefits decreased by $0.8 million during Fiscal 2022, increased by $0.7 million during Fiscal 2021, and decreased by $0.2

million during Fiscal 2020. Over the next 12 months, the Company believes it is reasonably possible that the unrecognized tax benefits could

decrease by as much as $0.4 million as a result of federal and state tax settlements, statute of limitations lapses, and other changes to the

reserves.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense. Accrued interest and penalties

related to unrecognized tax benefits included in the Consolidated Balance Sheets were $0.8 million and $0.9 million as of January 28, 2023 and

January 29, 2022, respectively. An immaterial amount of interest and penalties was recognized in the provision (benefit) for income taxes during

Fiscal 2022, Fiscal 2021, and Fiscal 2020.

The Company and its subsidiaries file income tax returns in the United States federal and various state and foreign jurisdictions. The IRS has

completed examinations through February 1, 2020. With respect to state and local jurisdictions and countries outside of the United States, with

limited exceptions, generally, the Company and its subsidiaries are no longer subject to income tax audits for tax years before Fiscal 2016 (ended

January 28, 2017). Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest, and

penalties have been provided for any adjustments that are expected to result from these years.

A reconciliation between the statutory federal income tax rate and the effective income tax rate follows:

For the Years Ended

January 28, January 29, January 30,

2023

2022

2021

Federal income tax rate 21.0 % 21.0 % 21.0 %

State income taxes, net of federal income tax effect 3.6 4.1 3.1

Foreign rate differential 0.9 0.6 0.3

International provisions of Tax Act 0.1 (0.5 ) 0.0

Rate differential on CARES Act NOL carryback 0.0 0.0 8.1

Valuation allowance changes, net 0.5 0.2 (2.6 )

Non-deductible executive compensation 2.0 1.3 (2.1 )

Change in unrecognized tax benefits (0.1 ) 0.1 (0.1 )

Share Based Payments (0.2 ) (0.8 ) 0.4

Note Exchanges 1.4 0.0 0.0

Other

0.7

(1.1 )

0.3

29.9 %

24.9 %

28.4 %

The Company recorded income tax expense of $53.4 million (an effective tax rate of 29.9%) in Fiscal 2022, income tax expense of $139.3 million

(an effective tax rate of 24.9%) in Fiscal 2021, and an income tax benefit of $83.0 million (an effective tax benefit rate of 28.4%) in Fiscal 2020.

16. Segment Reporting

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified two operating segments (American Eagle brand and

Aerie brand) that also represent our reportable segments and reflect the Chief Operating Decision Maker’s (defined as our CEO) internal view of

analyzing results and allocating resources. Additionally, our Todd Snyder brand, Unsubscribed brand, and Quiet Platforms have been identified as

separate operating segments; however, as they do not meet the quantitative thresholds for separate disclosure, they have been included in the

Corporate and Other category, as permitted by ASC 280.

Our CEO analyzes segment results and allocates resources between segments based on the adjusted operating income (loss), or the operating

income (loss) in periods where there are no adjustments, of each segment. Adjusted operating income (loss) is a non-GAAP financial measure

("non-GAAP" or "adjusted") that is defined by the Company as operating income excluding impairment, restructuring and COVID-19 related

charges. Adjusted operating income (loss) is not based on any standardized methodology prescribed by GAAP and is not necessarily

comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or

as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an

additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP consolidated financial

statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should

not be used exclusively in evaluating our business and operations. Adjusted operating income (loss) on a consolidated basis is presented in the

following table to reconcile the segment operating performance measure to operating income (loss) as presented on the Consolidated Financial

Statements.

Reportable segment information is presented in the following table:

(in thousands)

American Eagle Aerie

Corporate and

Other Total

For the year ended January 28, 2023

Total net revenue $ 3,262,893 $ 1,506,798 $ 220,142 $ 4,989,833

Operating income (Ioss) $ 528,369 $ 163,915 $ (445,237 ) $ 247,047

Impairment and restructuring charges

$ 13,037 $ 3,552 $ 5,620 $ 22,209

Adjusted operating income (loss) $ 541,406 $ 167,467 $ (439,617 ) $ 269,256

Depreciation and amortization $ 66,820 $ 53,921 $ 86,157 $ 206,897

Capital expenditures $ 85,033 $ 107,084 $ 68,261 $ 260,378

For the year ended January 29, 2022

Total net revenue $ 3,555,706 $ 1,376,269 $ 78,810 $ 5,010,785

Operating income (Ioss) $ 785,729 $ 212,287 $ (406,951 ) $ 591,065

Asset impairment

$ 10,231 $ 1,713 $ — $ 11,944

Adjusted operating income (loss) $ 795,960 $ 214,000 $ (406,951 ) $ 603,009

Depreciation and amortization $ 59,641 $ 33,834 $ 73,306 $ 166,781

Capital expenditures $ 47,106 $ 80,062 $ 106,679 $ 233,847

For the year ended January 30, 2021

Total net revenue $ 2,733,849 $ 989,989 $ 35,275 $ 3,759,113

Operating income (loss) $ 93,029 $ 60,298 $ (424,672 ) $ (271,345 )

Impairment, restructuring and COVID-19 – related charges

$ 144,486 $ 52,849 $ 82,491 $ 279,826

Adjusted operating income (loss) $ 237,515 $ 113,147 $ (342,181 ) $ 8,481

Depreciation and amortization $ 63,019 $ 26,647 $ 72,736 $ 162,402

Capital expenditures $ 36,606 $ 32,723 $ 58,646 $ 127,975

(1) Corporate and Other includes revenue and operating results of the Todd Snyder brand, Unsubscribed brand, and Quiet Platforms (net of

intersegment eliminations), which have been identified as separate operating segments, but are not material to disclose as separate

reportable segments. Corporate operating costs represent certain costs that are not directly attributable to another reportable segment.

(2) The difference between Operating income (loss) and Income (loss) before income taxes includes the following, which are not allocated to

our reportable segments:

▪ For Fiscal 2022: interest expense, net of $14.3 million and other income, net of $10.5 million

▪ For Fiscal 2021: interest expense, net of $34.6 million and other income, net of $2.5 million

▪ For Fiscal 2020: interest expense, net of $24.6 million and other income, net of $3.7 million

We do not allocate assets to the reportable segment level and therefore our CEO does not use segment asset information to make decisions.

Total net revenue for the American Eagle and Aerie reportable segments in the table above represents revenue attributable to each brand's

merchandise, which comprises approximately 96% of total net revenue.

The following tables present summarized geographical information.

For the Years Ended

January 28, January 29, January 30,

(In thousands) 2023

2022

2021

Total net revenue:

United States $ 4,268,114 $ 4,336,806 $ 3,295,028

Foreign

721,719

673,979

464,085

Total net revenue

$ 4,989,833

$ 5,010,785

$ 3,759,113

(1) Amounts represent sales from American Eagle and Aerie international retail stores, and e-commerce sales that are billed to and/or shipped

to foreign countries and international franchise royalty revenue.

(1) (2)

(1)

January 28, January 29,

(In thousands) 2023 2022

Long-lived assets, net:

United States $ 2,050,459 $ 2,137,835

Foreign

177,535

157,575

Total long-lived assets, net

$ 2,227,994

$ 2,295,410

17. Impairment, Restructuring and COVID-19 – Related Charges

The following table represents impairment, restructuring and COVID-19 – related charges. All amounts were recorded within impairment,

restructuring and COVID-19 – related charges on the Consolidated Statements of Operations, unless otherwise noted.

For the years ended

January 28, January 29, January 30,

(In thousands)

2023

2022

2021

Long-lived asset impairment charges

$ 20,633

$ 11,944

$ 249,163

Incremental COVID-19 – related expenses

—

26,930

Severance and related employee costs

1,576

— 3,733

Total impairment, restructuring, and COVID-19 – related charges

$ 22,209 $ 11,944 $ 279,826

(1) The Company recorded impairment charges of $20.6 million in Fiscal 2022, of which $13.1 million relates to operating lease store ROU

assets and $4.0 million relates to store property and equipment (store fixtures and leasehold improvements), and $3.5 million of other

assets.

(2) The Company recorded impairment charges of $11.9 million in Fiscal 2021, of which $4.1 million relates to operating lease store ROU

assets and $5.2 million relates to store property and equipment (store fixtures and leasehold improvements), and $2.6 million of other

assets.

(3) In Fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of

$203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment

(fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate

property and equipment, as well as $18.0 million of certain cost and equity method investments.

(4) Incremental COVID-19 – related expenses consisting of personal protective equipment and supplies for our associates and customers.

(1) (2) (3)

(4)

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in

our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and

forms, and that such information is accumulated and communicated to the management of American Eagle Outfitters, Inc. (the “Management”),

including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, Management recognized that any controls and procedures, no matter how

well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As of the end of the period covered by this Annual Report on Form 10-K, the Company performed an evaluation under the supervision and with

the participation of Management, including our principal executive officer and principal financial officer, of the design and effectiveness of our

disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon that evaluation, our

principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Annual Report, our disclosure

controls and procedures were effective in the timely and accurate recording, processing, summarizing, and reporting of material financial and

non-financial information within the periods specified within the SEC’s rules and forms. Our principal executive officer and principal financial

officer also concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports

that we file or submit under the Exchange Act is accumulated and communicated to our Management, including our principal executive officer

and principal financial officer, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f)

or Rule 15(d)-15(f) under the Exchange Act). Our internal control over financial reporting is designed to provide a reasonable assurance to our

Management and our Board that the reported financial information is presented fairly, that disclosures are adequate, and that the judgments

inherent in the preparation of financial statements are reasonable.

All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the overriding of

controls. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance with respect to financial

statement preparation and presentation.

Our Management assessed the effectiveness of our internal control over financial reporting as of January 28, 2023. In making this assessment,

our Management used the framework and criteria set forth in Internal Control – Integrated Framework (2013), issued by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our Management concluded that the Company’s

internal control over financial reporting was effective as of January 28, 2023.

Our independent registered public accounting firm, Ernst & Young LLP, was retained to audit the Company’s consolidated financial statements

included in this Annual Report on Form 10-K and the effectiveness of the Company’s internal control over financial reporting. Ernst & Young LLP

has issued an attestation report on our internal control over financial reporting as of January 28, 2023, which is included herein.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during our

most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial

reporting.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of American Eagle Outfitters, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited American Eagle Outfitters, Inc.’s internal control over financial reporting as of January 28, 2023, based on criteria established in

Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)

(the COSO criteria). In our opinion, American Eagle Outfitters, Inc. (the Company) maintained, in all material respects, effective internal control

over financial reporting as of January 28, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the

consolidated balance sheets of the Company as of January 28, 2023 and January 29, 2022, the related consolidated statements of operations,

comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended January 28, 2023, and the

related notes and our report dated March 13, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the

effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over

Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We

are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the

U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,

testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other

procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A

company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance

that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting

principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and

directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any

evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or

that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

March 13, 2023

Item 9B. Other Information.

Not Applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by Item 401 of Regulation S-K regarding directors is contained under the caption “Proposal One: Election of Directors”

in our Proxy Statement relating to our 2023 Annual Meeting of Stockholders (“Proxy Statement”), to be filed pursuant to Regulation 14A within

120 days after January 28, 2023 and is incorporated herein by reference. The information required by Item 401 of Regulation S-K regarding

executive officers is set forth in Part I, Item 1 of this Annual Report on Form 10-K under the caption “Information about our Executive Officers.”

The information required by Item 405 of Regulation S-K is contained under the caption “Delinquent Section 16(a) Reports” of the Proxy

Statement and is incorporated herein by reference.

The Company’s Code of Ethics is publicly available on the Investor Relations page of the Company’s Internet website at www.aeo-inc.com under

the section “Corporate Governance Overview.” The remaining information required by Item 406 of Regulation S-K is contained under the caption

“Corporate Governance” of the Proxy Statement and is incorporated herein by reference.

The applicable information required by Items 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is included under the caption “Corporate Governance:

Board Committees” of the Proxy Statement and is incorporated herein by reference.

Item 11. Executive Compensation.

The information required by Item 402 of Regulation S-K is contained under the captions “Compensation Discussion and Analysis,”

“Compensation Tables and Related Information,” “Corporate Governance: Director Compensation,” and “Corporate Governance: Board Oversight

of Risk Management” of the Proxy Statement and is incorporated herein by reference.

The applicable information required by Items 407(e)(4) and (e)(5) of Regulation S-K is contained under the caption “Compensation Committee

Report” of the Proxy Statement, which information (which shall not be deemed to be “filed”) is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 201(d) of Regulation S-K relating to securities authorized for issuance under equity compensation plans is

contained under the caption “Compensation Tables and Related Information: Equity Compensation Plan Information” in the Proxy Statement.

The information required by Item 403 of Regulation S-K is contained under the caption “Ownership of Our Shares” of the Proxy Statement and is

incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by Item 404 of Regulation S-K regarding related party transactions is contained under the caption “Corporate

Governance: Related Party Transactions” of our Proxy Statement and is incorporated herein by reference.

The information required by Item 407(a) of Regulation S-K regarding director independence is contained under the captions “Proposal One:

Election of Directors” and “Corporate Governance” of the Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

The information required by Item 9(e) of Schedule 14A is contained under the caption “Independent Registered Public Accounting Firm Fees and

Services” of the Proxy Statement and is incorporated herein by reference.

 
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) (1) The following consolidated financial statements are included in Part II Item 8, Financial Statements and Supplementary Data:
 
Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022  
   
Consolidated Statements of Operations for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2021  
   
Consolidated Statements of Comprehensive Income for the fiscal years ended January 28, 2023, January 29, 2022 and January 
30, 2021
 
   
Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 
2021
 
   
Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2021  
   
Notes to Consolidated Financial Statements  
 
(a)  (2)  Financial  statement  schedules  have  been  omitted  because  either  they  are  not  required  or  are  not  applicable  or  because  the 
information required to be set forth therein is not material.
(a) (3) Exhibits
 
Exhibit 
Number 
  
 
Description 
  2.1-
 
   
Stock Purchase Agreement, dated November 1, 2021, by and among The Original Real Co., Quiet Holdings, LLC, Quiet Global 
Holdings,  LLC,  Quiet  Logistics,  Inc.  and,  solely  for  the  purposes  of  guaranteeing  certain  obligations  of  Buyer, American  Eagle 
Outfitters, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on November 2, 2021 (SEC File No. 001-
33338))
     
  3.1 
  
 
Amended and Restated Certificate of Incorporation of American Eagle Outfitters, Inc., as amended (incorporated by reference to 
Exhibit 3.1 to the Company’s Form 10-Q filed on September 6, 2007 (SEC File No. 001-33338))
           
  3.2*
 
Amended and Restated Bylaws of American Eagle Outfitters, Inc.
     
  4.1 
  
 
Voting  and  Stockholder Agreement  among  Jay  L.  Schottenstein, Ann  S.  Deshe,  Susan  S.  Diamond,  and  other  parties  thereto, 
dated as of September 16, 2011 (incorporated by reference to Exhibit 1 to Schedule 13D filed by Jay L. Schottenstein on October 
3, 2011 (SEC File No. 005-49559))
     
  4.2   Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended 
(incorporated by reference to Exhibit 4.2 to the Company’s Form 10-K filed on March
11, 2021 (SEC File No. 001-33338))
     
  4.3   Indenture,  dated  as  of April  27,  2020,  between American  Eagle  Outfitters,  Inc.  and  U.S.  Bank  National Association,  as  trustee 
(incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on April 28, 2020 (SEC File No. 001-33338))
     
  4.4   Form of certificate representing the 3.75% Convertible Senior Notes due 2025 (included as Exhibit A to Exhibit 4.4) (incorporated 
by reference to Exhibit 4.2 to the Company’s Form 8-K filed on April 28, 2020 (SEC File No. 001-33338))
     
 4.5
   
Amendment and Restatement Agreement, dated as of June 24, 2022, between American Eagle Outfitters, Inc., American Eagle 
Outfitters Canada Corporation, the guarantors party thereto from time to time, the lenders party thereto from time to time and PNC 
Bank, National Association, as administrative agent (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on 
June 27, 2022 (SEC File No. 001-3338))
     
78

 
10.1+ 
  
Amended  and  Restated  Credit  Agreement,  dated  January  30,  2019,  among  American  Eagle  Outfitters,  Inc.  and  certain  of  its 
subsidiaries  as  borrowers,  each  lender  from  time  to  time  party  thereto,  and  PNC  Bank,  National Association  as  administrative 
agent for the lenders and certain other parties and agents (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K 
filed on February 5, 2019 (SEC Filed No. 001-33338))
     
10.2+   First  Amendment  to  the  Amended  and  Restated  Credit  Agreement,  dated  as  of  January  30,  2019,  among  American  Eagle 
Outfitters, Inc. and certain of its subsidiaries as co-borrowers or grantors, each lender from time to time party thereto, and PNC 
Bank, National Association as administrative agent for the lenders and certain other parties and agents (incorporated by reference 
to Exhibit 10.1 to the Company’s Form 8-K filed on April 23, 2020 (SEC File No. 001-33338))
           
10.3^ 
  
American  Eagle  Outfitters,  Inc.  Deferred  Compensation  Plan,  Amended  and  Restated  December  22,  2008  (incorporated  by 
reference to Exhibit 10.2 to the Company’s Form 8-K filed on December 23, 2008 (SEC File No. 001-33338))
     
10.4^   American Eagle Outfitters, Inc. Director Deferred Compensation Plan, Amended and Restated January 28, 2021(incorporated by 
reference to Exhibit 10.4 to the Company’s Form 10-K filed on March 11, 2021 (SECFile No. 001-33338))
           
10.5^ 
  
American Eagle Outfitters, Inc. Form of Director Deferred Compensation Agreement (incorporated by reference to Exhibit 10.1 to 
the Company’s Form 8-K filed on January 5, 2006 (SEC File No. 001-33338))
           
10.6^ 
  
Form of Change in Control Agreement dated April 21, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K 
filed on April 26, 2010 (SEC File No. 001-33338))
     
10.7^
  
Change in Control Agreement between American Eagle Outfitters, Inc. and Michael A. Mathias, dated April 20, 2020 (incorporated 
by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 22, 2020 (SEC File No. 001-33338))
     
10.8^ 
  
Form of RSU Confidentiality, Non-Solicitation, Non-Competition and Intellectual Property Agreement (incorporated by reference to 
Exhibit 10.25 to the Company’s Form 10-K filed on March 11, 2011 (SEC File No. 001-33338))
           
10.9^ 
  
Letter Agreement with Chad Kessler dated December 2, 2013 (incorporated by reference to Exhibit 10.23 to the Company’s Form 
10-K filed on March 13, 2014 (SEC File No. 001-33338))
           
10.10^ 
  
Letter Agreement with Jennifer Foyle dated June 25, 2010 (incorporated by reference to Exhibit 10.26 to the Company’s Form 10-
K filed on March 13, 2014 (SEC File No. 001-33338))
     
10.11^
 
Form of 2016 Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.18 to the Company’s Form 
10-K filed on March 10, 2017 (SEC File No. 001-33338))
     
10.12^
 
American  Eagle  Outfitters,  Inc.  2017  Stock  Award  and  Incentive  Plan  (as  amended  and  restated  effective  March  14,  2018) 
(incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on June 1, 2018 (SEC File No. 001-33338))
     
10.13^
 
Form  of  Notice  of  Grant  of Time-Based  Restricted  Stock  Units  and  Restricted  Stock  Units Awards Agreement (incorporated  by 
reference to Exhibit 10.2 to the Company’s Form 10-Q filed on June 1, 2018 (SEC File No. 001-33338))
     
10.14^
 
Form of Notice of Grant of Performance-Based Restricted Stock Units and Restricted Stock Units Awards Agreement (incorporated 
by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on June 1, 2018 (SEC File No. 001-33338))
     
10.15^
 
Form of Notice of Grant of Stock Option Award Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q 
filed on June 1, 2018 (SEC File No. 001-33338))
     
10.16^
 
Notice of Long Term Incentive Grant of Special Engagement and Retention Restricted Stock Units (incorporated by reference to 
Exhibit 10.1 to the Company’s Form 10-Q filed on December 12, 2018 (SEC File No. 001-33338))
     
10.17^
 
Notice  of  Grant  of  Special  Engagement  and  Retention  Restricted  Stock  Units  (incorporated  by  reference  to  Exhibit  10.2  to  the 
Company’s Form 10-Q filed on December 12, 2018 (SEC File No. 001-33338))
     
10.18^
 
Notice  of  Grant  of  Special  Engagement  and  Retention  Restricted  Stock  Units  (incorporated  by  reference  to  Exhibit  10.2  to  the 
Company’s Form 10-Q filed on December 12, 2018 (SEC File No. 001-33338))
79

 
10.19^
 
American Eagle Outfitters, Inc. 2020 Stock Award and Incentive Plan (incorporated by reference as Exhibit 99.1 to the Company’s 
Form S-8 filed on June 4, 2020 (SEC File No. 333-238942))
     
10.20^
 
  American Eagle Outfitters, Inc. Annual Cash Incentive Compensation Plan (incorporated by reference to
Exhibit 10.20 to the Company’s Form 10-K filed on March 14, 2022 (SEC File No. 001-33338))
     
10.21^   Letter Agreement with Marisa Baldwin, dated August 27, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Form 
10-Q filed on November 23, 2021 (SEC File No. 001-33338))
     
10.22^   Change in Control Agreement between American Eagle Outfitters, Inc. and Marisa Baldwin, dated August 27, 2021 (incorporated 
by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on November 23, 2021 (SEC File No. 001-33338))
     
10.23^   Form of 2021 Confidentiality, Non-Competition and Intellectual Property Agreement (incorporated by reference to Exhibit 10.3 to 
the Company’s Form 10-Q filed on November 23, 2021 (SEC File No. 001-33338))
     
10.24   Form of Exchange Agreement, dated June 3, 2022, by and between American Eagle Outfitters, Inc. and the applicable Noteholder 
(incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 3, 2022 (SEC File No. 001-3338))
     
10.25   Accelerated Share Repurchase Agreement, dated June 3, 2022, by and between American Eagle Outfitters, Inc. and JPMorgan 
Chase Bank,  National Association  (incorporated by reference to Exhibit 10.2 to  the Company’s Form 8-K filed on June 3,  2022 
(SEC File No. 001-3338))
     
10.26   Form  of  Exchange  Agreement,  dated  December  5,  2022,  by  and  between  American  Eagle  Outfitters,  Inc.  and  the  applicable 
Noteholder  (incorporated  by  reference  to  Exhibit  10.1  to  the  Company’s  Form  8-K  filed  on  December  6,  2022  (SEC  File  No. 
001.3338))
     
   21* 
  
Subsidiaries 
           
   23* 
  
Consent of Independent Registered Public Accounting Firm
           
   24* 
  
Powers of Attorney
           
31.1* 
  
Certification by Jay L. Schottenstein pursuant to Rule 13a-14(a) or Rule 15d-14(a) 
           
31.2* 
  
Certification by Michael A. Mathias pursuant to Rule 13a-14(a) or Rule 15d-14(a)
           
32.1** 
  
Certification  of  Principal  Executive  Officer  Pursuant  to  18  U.S.C.  Section  1350,  as  adopted  Pursuant  to  Section  906  of  the 
Sarbanes-Oxley Act of 2002
     
32.2** 
  
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the 
Sarbanes-Oxley Act of 2002 
           
101* 
  
The following materials from the Company’s Annual Report on Form 10-K for the year ended January 28, 2023, formatted as Inline 
eXtensible  Business  Reporting  Language  (“XBRL”):  (i)  Consolidated  Balance  Sheets  as  of  January  28,  2023  and  January  29, 
2022, (ii) Consolidated Statements of Operations for the fiscal years ended January 28, 2023, January 29, 2022, and January 30, 
2021, (iii) Consolidated Statements of Comprehensive Income for the fiscal years ended January 28, 2023, January 29, 2022, and 
January 30, 2021, (iv) Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 28, 2023, January 29, 
2022,  and  January  30,  2021,  and  (v)  Consolidated  Statements  of  Cash  Flows  for  the  fiscal  years  ended  January  28,  2023, 
January 29, 2022, and January 30, 2021 
     
104*   The cover page from the Company’s Annual Report on Form 10-K for the year ended January 28, 2023, formatted in Inline XBRL 
and contained in Exhibit 101
 
80

- Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the

SEC a copy of any omitted schedule or exhibit upon request by the SEC.

+ Portions of this exhibit have been omitted pursuant to a confidential treatment order from the SEC

^ Management contract or compensatory plan or arrangement.

* Filed herewith.

** Furnished herewith.

(b) Exhibits

The exhibits to this report have been filed herewith.

None.

Item 16. Form 10-K Summary

None

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to

be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN EAGLE OUTFITTERS, INC.

By: /s/ Jay L. Schottenstein

Jay L. Schottenstein

Chief Executive Officer

Dated March 13, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the

registrant and in the capacities indicated on March 13, 2023.

Signature Title

/s/ Jay L. Schottenstein Chief Executive Officer, Chairman of the Board of Directors and Director

(Principal Executive Officer)

Jay L. Schottenstein

/s/ Michael A. Mathias Executive Vice President, Chief Financial Officer

(Principal Financial Officer)

Michael A. Mathias

/s/ James H. Keefer Senior Vice President, Chief Accounting Officer

(Principal Accounting Officer)

James H. Keefer

* Director

Sujatha Chandrasekaran

* Director

Deborah A. Henretta

* Director

Cary D. McMillan

* Director

Janice E. Page

* Director

David M. Sable

* Director

Noel J. Spiegel

*By: /s/ Michael A. Mathias

Michael A. Mathias,

Attorney-in-Fact

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

AMERICAN EAGLE OUTFITTERS, INC.

(A Delaware corporation)

ARTICLE I

Offices

Section 1401.Registered Office. The registered office of American Eagle Outfitters, Inc., a Delaware corporation (the “Corporation”) is located at

1209 Orange Street, Wilmington, Delaware 19801. The Corporation may, by resolution of the Board of Directors of Directors of the Corporation (the “Board of

Directors”), change the location to any other place in Delaware.

Section 1402.Other Offices. The Corporation may have such other offices, within or without the State of Delaware, as the Board of Directors may

from time to time establish.

ARTICLE II

Meetings of Stockholders

Section 1401.Annual Meetings. The annual meeting of the stockholders for the election of directors and for the transaction of any other business as

may properly come before the meeting shall be held on such date as from time to time may be designated by the Board of Directors. The Board of Directors

may postpone, reschedule, or cancel any annual meeting of stockholders.

Section 1402.Special Meetings. A special meeting of the stockholders may be called at any time only by the Board of Directors pursuant to a

resolution approved by a majority of the Board of Directors, by the chair of the Board of Directors (the “Chair”) or by the chief executive officer of the

Corporation (the “Chief Executive Officer”). Special meetings of stockholders shall be held on such date as shall be determined by the Board of Directors and

stated in the Corporation’s notice of the meeting.

Section 1403.Place of Meetings. The Board of Directors may designate any place, either within or without the State of Delaware, as the place of

meeting for any annual meeting or for any special meeting of stockholders. The Board of Directors may, in its sole discretion, determine that a meeting of

stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General

Corporation Law of the State of Delaware (the “DGCL”) and Article XIV herein. In the absence of any such designation or determination, meetings of

stockholders shall be held at the Corporation’s principal executive office.

Section 1404.Notice of Meetings. Written notice stating the place, date and hour of the meeting, and the means of remote communication, if any, and,

in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given by or under the direction of the Secretary, to each

stockholder of record entitled to vote at such meeting. Except as otherwise required by statute, the written notice shall be given not less than ten nor more than

sixty days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed

to the stockholder at his address as it appears on the records of the Corporation. Without limiting the manner by which notices of meetings otherwise may be

given effectively to stockholders, any such notice may be given by electronic transmission in accordance with applicable law. Only such business shall be

conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Attendance of a

person at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends for the express purpose of

objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any previously scheduled

meeting of the stockholders may be postponed, and unless the Corporation’s Amended and Restated Certificate of Incorporation, as the same may be further

amended from time to time (the “Certificate of Incorporation”) otherwise provides, any special meeting of the stockholders may be cancelled, by resolution of

the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of stockholders.

DB1/ 134384570.7

Section 1405.Quorum. Except as otherwise required by statute, the presence at any meeting, in person or by proxy, of a majority of the shares then

issued and outstanding and entitled to vote shall be necessary and sufficient to constitute a quorum for the transaction of business. The chair of the meeting or a

majority of the shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum. The stockholders present at a duly

called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to

leave less than a quorum.

Section 1406.List of Stockholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before

every meeting of stockholders, a complete list of the stockholders of record entitled to vote at the meeting, provided, however, if the record date for determining

the stockholders entitled to vote is less than ten days before the meeting date, the list shall reflect the stockholders entitled to vote as of the 10th day before the

meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.

To the extent required by statute, such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary

business hours, for a period of at least ten days ending on the date prior to the meeting date,: (i) on a reasonably accessible electronic network, provided that the

information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Corporation’s principal

place of business.

Section 1407.Adjourned Meetings. When a meeting is adjourned to another time or place, including an adjournment taken to address a technical

failure to convene or continue a meeting using remote communication, notice need not be given of the adjourned meeting if the time and place, if any, thereof,

and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned

meeting are announced at the meeting at which the adjournment is taken, displayed during the time scheduled for the meeting on the electronic network used for

the virtual meeting, or set forth in the notice of such meeting given in accordance with Article II, Section 4 of these Bylaws. At the adjourned meeting the

Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the

adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote

at the meeting.

Section 1408.Proxies.

A. Each stockholder of record entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by written

proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The authorization of a person

to act as proxy may be documented, signed, and delivered in accordance with Section 116 of the DGCL provided that such authorization shall set forth, or be

delivered with, information enabling the Corporation to determine the identity of the stockholder granting such authorization. A proxy shall be irrevocable if it

states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke

any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or a new proxy

bearing a later date.

B. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall

be reserved for the exclusive use by the Board of Directors.

Section 1409.Voting Rights. Except as otherwise provided by statute or by the Certificate of Incorporation, and subject to the provisions of Article VI

of these Bylaws, each stockholder of record shall at every meeting of the stockholders be entitled to one vote for each share of the capital stock having voting

power held by such stockholder.

Section 1410.Notice of Stockholder Business.

A. Annual Meetings of Stockholders.

(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the

stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board of

Directors or (c) by any stockholder of the Corporation who

DB1/ 134384570.7

(i) was a stockholder of record at the time of giving of notice provided for in this Bylaw and at the time of the annual meeting, (ii) is entitled to vote at the

meeting and (iii) complies with the notice procedures set forth in this Bylaw.

(2) For business other than nominations to be properly brought before an annual meeting by a stockholder, the

stockholder must have given timely notice thereof in writing to the Secretary pursuant to this Section 10(A) and such other business must otherwise be a proper

matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not

earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s

annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or after such anniversary date, notice by the

stockholder to be timely must be so delivered by close of business on the 10th day following the day on which public announcement of the date of such meeting

is first made by the Corporation. In no event shall the public announcement of an adjournment, recess, continuation, rescheduling, or postponement of an annual

meeting, or the announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

(2) To be in proper form, a stockholder’s notice to the Secretary must set forth the following information:

a. as to each such matter such stockholder proposes to bring before the annual meeting:

i. a brief description of the business intended to be brought before

the annual meeting and the proposed text of any proposal relating to such business, including the complete text of any resolutions proposed for consideration at

the annual meeting and, if such business includes a proposal to amend the Certificate of Incorporation or these Bylaws, the text of the proposed amendment, the

reasons for conducting such business at the annual meeting, and any material interest in such business of any such person proposing to bring such business

before the annual meeting; and

ii. all other information relating to such business that would be

required to be disclosed in a proxy statement or other filing required to be made by such person in connection with the solicitation of proxies in support of such

proposed business; and

b. as to the stockholder of record giving notice and any Stockholder Associated Person

(as defined below), if any, on whose behalf the proposal is being made:

i. the name and address of such stockholder or any Stockholder

Associated Person (including, if applicable, the name and address that appear on the Corporation’s stock ledger);

ii. (1) the class or series and number of all shares of capital stock

of the Corporation that are, directly or indirectly, owned beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended

(the “Exchange Act”)) or of record by such stockholder or any Stockholder Associated Person (specifying the type of ownership), (2) the name of each nominee

holder of shares of all stock of the Corporation owned beneficially but not of record by such stockholder or any Stockholder Associated Person, the number of

such shares of stock of the Corporation held by each such nominee holder, and any pledge with respect to any such stock, (3) whether and to the extent to which

any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction or series of transactions has been entered into by or

on behalf of such stockholder or any Stockholder Associated Person, with respect to stock of the Corporation, and (4) whether and to the extent to which any

other transaction, agreement, arrangement, or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has

been made by or on behalf of such stockholder or any Stockholder Associated Person, the effect or intent of any of the foregoing being to mitigate loss to, or to

manage risk or benefit of stock price changes for, such stockholder or any Stockholder Associated Person, or to increase or decrease the voting power or

pecuniary or economic interest of such stockholder or any Stockholder Associated Person, with respect to stock of the Corporation;

iii. a complete and accurate description of all agreements,

arrangements or understandings (whether written or oral) between or among such stockholder or any Stockholder Associated Person

DB1/ 134384570.7

and any other person or persons or entity (naming each such person or entity) in connection with (1) the proposal of such business, including any material

interest of such stockholder or any Stockholder Associated Person, in such business, including any anticipated benefit therefrom to such stockholder or any

Stockholder Associated Person, and (2) any understanding (whether written or oral) that such stockholder or any Stockholder Associated Person may have

reached with a stockholder of the Corporation (including the name of such stockholder) with respect to how such stockholder will vote such stockholder’s

shares in the Corporation at any meeting of stockholders or take other action in support of any other business or other actions to be taken, by such stockholder or

any Stockholder Associated Person;

iv. any substantial direct or indirect interest (including any existing

or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of stockholder or any Stockholder

Associated Person in the Corporation or any affiliate thereof, other than an interest arising from the ownership of Corporation securities where such stockholder

or any Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

v. any direct or indirect interest of stockholder or any Stockholder

Associated Person in any contract or arrangement with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation

(including any employment agreement, collective bargaining agreement or consulting agreement);

vi. a representation that (i) no such stockholder or any Stockholder

Associated Person has breached any contract or other agreement, arrangement or understanding with the Corporation except as disclosed to the Corporation

pursuant hereto and (ii) that such stockholder or any Stockholder Associated Person has complied, and will comply, with all applicable requirements of state law

and the Exchange Act with respect to the matters set forth in this Section 10(A);

vii. a complete and accurate description of any pending or, to such

stockholder’s knowledge, threatened legal proceeding in which such stockholder or any Stockholder Associated Person is a party or participant involving the

Corporation, or to such stockholder’s knowledge, any current or former officer, director, affiliate or associate of the Corporation;

viii. a representation that the stockholder giving notice intends to

appear in person or by proxy at the annual meeting to bring such business before the meeting and an acknowledgment that, if such stockholder (or a qualified

representative of such stockholder) does not appear to present such business at such meeting, the Corporation need not present such business for a vote at such

meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation;

ix. a representation from such stockholder as to whether such

stockholder or any Stockholder Associated Person intends or is part of a group that intends (A) to deliver a proxy statement and/or form of proxy to a number of

holders of the Corporation’s voting shares reasonably believed by such stockholder to be sufficient to approve or adopt the business to be proposed, (B) to

engage in a solicitation (within the meaning of Exchange Act Rule 14a-1(l)) with respect to business, and if so, the name of each participant (as defined in Item

4 of Schedule 14A under the Exchange Act) in such solicitation; and

x. any other information relating to such stockholder or any

Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation

of proxies by such person with respect to the proposed business to be brought by such person before the annual meeting pursuant to Section 14 of the Exchange

Act, and the rules and regulations promulgated thereunder, and any other information relating to such stockholder or any Stockholder Associated Person that

would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) of the Exchange Act (regardless of whether such person or entity is actually

required to file a Schedule 13D).

(3) A stockholder providing notice of business proposed to be brought before an annual meeting shall further update and

supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 10(A) shall be true and

correct as of the record date for determining

DB1/ 134384570.7

the stockholders entitled to receive notice of the annual meeting and such update and supplement shall be delivered either in person or by United States certified

mail, postage prepaid, and received by the secretary at the principal executive offices of the Corporation not later than five (5) business days after the record

date for determining the stockholders entitled to receive notice of the annual meeting. The update and supplement shall clearly identify the information that has

changed since such stockholder’s prior submission, it being understood that no such update may cure any deficiencies or inaccuracies with respect to any such

prior submission or extend the time period for the delivery of notice pursuant to this Section 10(A). If a stockholder fails to provide such written update within

such period, the information as to which such written update relates may be deemed not to have been provided in accordance with this Section 10(A). In

addition, the stockholder shall promptly provide any other information reasonably requested by the Corporation. If requested by the Corporation, any

supplemental information required under this paragraph shall be provided within 10 (ten) days after it has been requested by the Corporation.

(4) No business shall be conducted at the annual meeting of stockholders except business brought before the annual

meeting in accordance with the procedures set forth in this Section 10(A); provided, however, that, once business has been properly brought before the annual

meeting in accordance with such procedures, nothing in this Section 10(A) shall be deemed to preclude discussion by any stockholder of any such business.

Except as otherwise provided by law, the Certificate of Incorporation, or these Bylaws the chair of an annual meeting shall have the power and duty to

determine whether any business was properly brought before the annual meeting in accordance with the foregoing procedures, and, if such proposed business is

deemed not to have been properly made, to declare to the meeting that the business was not properly brought before the meeting and such business shall be

disregarded and declared to be out of order, notwithstanding that proxies with respect to such vote may have been received by the Corporation. Notwithstanding

the foregoing provisions of this Section 10(A), unless otherwise required by law, if the stockholder (or a qualified representative of such stockholder) proposing

any business to be conducted at the annual meeting does not appear at the annual meeting of stockholders to propose such business, such proposed business

shall not be transacted, and no vote shall be taken with respect to such proposed business, notwithstanding that proxies with respect to such vote may have been

received by the Corporation.

(5) Notwithstanding the foregoing provisions of this Section 10(A), a stockholder shall also comply with all applicable

requirements of the Exchange Act with respect to the matters set forth in this Section 10(A). This Section 10(A) is expressly intended to apply to any business

proposed to be brought before a meeting of stockholders other than any proposal made pursuant to Rule 14a-8 under the Exchange Act. Nothing contained in

this Section 10(A) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule

14a-8 under the Exchange Act (or any successor provision of law).

B. Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought

before the meeting pursuant to the Corporation’s notice of meeting. In no event shall the public announcement of an adjournment of a special meeting

commence a new time period for the giving of a stockholder’s notice as described above.

Section 1411.Required Vote for Directors.

A. Majority Vote. Each director to be elected by stockholders shall be elected by the vote of the majority of the votes cast at any meeting for

the election of directors at which a quorum is present. For purposes of this Bylaw, a majority of votes cast shall mean that the number of shares voted “for” a

director’s election exceeds 50% of the number of votes cast with respect to that director’s election. Votes cast shall include votes “against” and exclude

“abstentions” with respect to that director’s election. Notwithstanding the foregoing, in the event of a contested election of directors, directors shall be elected

by the vote of a plurality of the votes cast at any meeting for the election of directors at which a quorum is present. For purposes of this Bylaw, a contested

election shall mean any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected, with the

determination thereof being made by the Secretary as of the close of the applicable notice of nomination period set forth in Article II, Section 12 of these

Bylaws based on whether one or more notice(s) of nomination were timely filed in accordance with said advance notice provision (provided that the

determination that an election is a “contested election” shall be determinative only as to the timeliness of a notice of nomination and not otherwise as to its

validity). If, prior to the time the Corporation mails its initial proxy statement in connection with such election of directors, one or more notices of nomination

are withdrawn such that the number of candidates for election as director no longer exceeds the number

DB1/ 134384570.7

of directors to be elected, or if a stockholder provides notice pursuant to Rule 14a-19(b) under the Exchange Act in connection with a stockholder’s notice

provided under Article II, Section 12 of these Bylaws and such stockholder subsequently either (x) notifies the Corporation that such stockholder no longer

intends to solicit proxies in support of the election of a proposed nominee to the Board of Directors in accordance with Rule 14a-19(b) under the Exchange Act

or (y) fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3) under the Exchange Act, then the nomination of such proposed nominee

shall be disregarded and no vote on the election of such proposed nominee shall occur (notwithstanding that proxies in respect of such vote may have been

received by the Corporation), and the election shall not be considered a contested election. Upon request by the Corporation, if any shareholder provides notice

pursuant to Rule 14a-19(b) under the Exchange Act in connection with a notice provided under Article II, Section 12, such shareholder shall deliver to the

Secretary, no later than five business days prior to the applicable meeting date, reasonable evidence that the requirements of Rule 14a‑19(a)(3) under the

Exchange Act have been satisfied.

B. Resignation. If a nominee for director who is an incumbent director is not elected and no successor has been elected at such meeting, the

director shall promptly tender his or her resignation to the Board of Directors in accordance with the agreement contemplated by this Bylaw. The Nominating

and Corporate Governance Committee shall make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation, or

whether other action should be taken. The Board of Directors shall act on the tendered resignation, taking into account the Nominating and Corporate

Governance Committee’s recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly

disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of the

certification of the election results. The Nominating and Corporate Governance Committee in making its recommendation, and the Board of Directors in

making its decision, may each consider any factors or other information that it considers appropriate and relevant. The director who tenders his or her

resignation shall not participate in the recommendation of the Nominating and Corporate Governance Committee or the decision of the Board of Directors with

respect to his or her resignation. If such incumbent director’s resignation is not accepted by the Board of Directors, such director shall continue to serve until the

annual meeting for election of his or her class of Director and until his or her successor is duly elected, or his or her earlier resignation or removal. If a director’s

resignation is accepted by the Board of Directors pursuant to this Bylaw, or if a nominee for director is not elected and the nominee is not an incumbent director,

then the Board of Directors, in its sole discretion, may fill any resulting vacancy or may decrease the size of the Board of Directors pursuant to the provisions of

Article III.

Section 1412.Advance Notice for Nomination of Directors.

A. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation,

except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of

Preferred Stock to elect directors. Nominations of persons for election to the Board of Directors at any annual meeting of stockholders, or at any special meeting

of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at the direction

of the Board of Directors or (ii) by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote in the election of directors on the date

of the giving of the notice provided for in this Section 12 and on the record date for the determination of stockholders is entitled to vote at such meeting and (y)

who complies with the notice procedures set forth in this Section 12.

B. In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely

notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary

at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the

close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the

event that the annual meeting is more than 30 days before or after such anniversary date (or if there has been no prior annual meeting), notice by the stockholder

to be timely must be so received by the close of business on the 10th day following the day on which public announcement of the date of the annual meeting

was first made by the Corporation; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of

business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall

the adjournment,

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recess, continuation, rescheduling, or postponement of an annual meeting or special meeting, or the public announcement thereof, commence a new time period

(or extend any time period) for the giving of a stockholder’s notice as described in this Section 12.

C. Notwithstanding anything in paragraph (b) to the contrary, in the event that the number of directors to be elected to the Board of Directors

at an annual meeting is greater than the number of directors whose terms expire on the date of the annual meeting and there is no public announcement by the

Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on the

90th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice required by this Section 12 shall also

be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual

meeting, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day

following the date on which such public announcement was first made by the Corporation.

D. To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information:

(1) as to each person whom the stockholder proposes to nominate for election as a director:

a. the name, age, business address and residence address of such person;

b. the principal occupation or employment of such person;

c. (i) the class or series and number of all shares of capital stock of the Corporation, if

any, that are, directly or indirectly, owned beneficially or of record by such person (specifying the type of ownership), (ii) the name of each nominee holder of

shares of all stock of the Corporation owned beneficially but not of record by such person, the number of such shares of stock of the Corporation held by each

such nominee holder and any pledge with respect to any of such shares of stock, (iii) whether and the extent to which any derivative instrument, swap, option,

warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, with respect to stock of the Corporation,

and (iv) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or

lending of shares of stock of the Corporation) has been made by or on behalf of such person, the effect or intent of any of the foregoing being to mitigate the

loss to, or to manage the risk or benefit of stock price changes for, such person, or to increase or decrease the voting power or pecuniary or economic interest of

such person, with respect to stock of the Corporation;

(2) a written questionnaire with respect to the background and qualification of such person, completed and executed by

such person in the form required by the Corporation (which form such stockholder shall request in writing from the Secretary of the Corporation prior to

submitting notice and which the secretary shall provide within ten days after receiving such request);

(3) a written representation and agreement completed by such person in the form required by the Corporation providing

that such person (which form such stockholder shall request in writing from the Secretary of the Corporation prior to submitting notice and which the Secretary

shall provide within ten (10) days after receiving such request): (a) is not and will not become a party to any agreement, arrangement or understanding with, and

any commitment or assurance to, any person or entity as to how a person, if elected as a director, will act or vote on any issue or question that has not been

disclosed to the Corporation or that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s

fiduciary duties under applicable law; (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other

than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director or

a director nominee that has not been disclosed to the Corporation; (c) will, if elected as a director, comply with all applicable rules of any securities exchanges

upon which the Corporation’s securities are listed, the Certificate of Incorporation, these Bylaws, all applicable publicly disclosed corporate governance, ethics,

conflict of interest, confidentiality, stock ownership and trading policies and all other guidelines and policies of the Corporation generally applicable to directors

(which other guidelines and policies will be provided to such person within five (5) business days after the Secretary receives any written request therefor from

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such person), and all applicable fiduciary duties under state law; (d) intends to serve a full term as a director, if elected; (e) will provide facts, statements and

other information in all communications with the Corporation and its stockholders that are or will be true and correct and that do not and will not omit to state

any fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; and (f) will tender his or her

resignation as a director if the Board of Directors determines that such person failed to comply with the provisions of this Section 12 in all material respects,

provides such person notice of any such determination and, if such non-compliance may be cured, such person fails to cure such non-compliance within ten

business days after delivery of such notice to such person;

(4) a description of any business or personal interests that could place such person in a potential conflict of interest with

the Corporation or any of its subsidiaries;

(5) any other information relating to such person that would be required to be disclosed in a proxy statement or other

filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and

regulations promulgated thereunder (including such person’s written consent to being named in the Corporation’s proxy statement and form of proxy as a

nominee and to serve as a director if elected);

(6) a description of all direct and indirect compensation and other material monetary agreements, arrangements and

understandings during the past three years, and any other material relationships, between or among any stockholder giving the notice (including the beneficial

owner, if any, on whose behalf the nomination is being made) or Stockholder Associated Person, on the one hand, and each such proposed nominee and his or

her respective affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item

404 under Regulation S-K if such any stockholder giving the notice (including the beneficial owner, if any, on whose behalf the nomination is being made) or

Stockholder Associated Person were the “registrant” for purposes of such rule and the such proposed nominee were a director or executive officer of such

registrant; and

E. as to the stockholder giving the notice, and any Stockholder Associated Person, if any, on whose behalf the nomination is being made:

(1) the name and record address of the stockholder giving the notice and the name and address of any Stockholder

Associated Person (including, if applicable, the name and address that appear on the Corporation’s stock ledger);

(2) (a) the class or series and number of all shares of capital stock of the Corporation that are, directly or indirectly,

owned beneficially or of record by such stockholder or any Stockholder Associated Person (specifying the type of ownership), (b) the name of each nominee

holder of shares of the Corporation owned beneficially but not of record by such stockholder or any Stockholder Associated Person, the number of shares of

stock of the Corporation held by each such nominee holder and any pledge with respect to any of such stock, (c) whether and the extent to which any derivative

instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such stockholder or any

Stockholder Associated Person, with respect to stock of the Corporation and (d) whether and the extent to which any other transaction, agreement, arrangement

or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such

stockholder or any Stockholder Associated Person, the effect or intent of any of the foregoing being to mitigate the loss to, or to manage the risk or benefit of

stock price changes for, such stockholder or any Stockholder Associated Person, or to increase or decrease the voting power or pecuniary or economic interest

of such stockholder or any Stockholder Associated Person, respect to stock of the Corporation;

(3) a complete and accurate description of all agreements, arrangements, or understandings (whether written or oral)

between or among such stockholder or any Stockholder Associated Person, and any proposed nominee or any other person or persons or entity (naming each

such person or entity) pursuant to which (a) the nomination(s) are being made by such stockholder, and any material interest of such stockholder or any

Stockholder Associated Person, in such nomination, including any anticipated benefit therefrom to such stockholder or any Stockholder Associated Person, and

(b) any understanding that such stockholder or any Stockholder Associated Person

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may have reached with a stockholder of the Corporation (including the name of such stockholder) with respect to how such stockholder will vote such

stockholder’s shares in the Corporation in support of any nomination;

(4) any direct or indirect interest of such stockholder or any Stockholder Associated Person in any contract or

arrangement with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including any employment agreement or

consulting agreement);

(5) a representation that (a) no such stockholder or any Stockholder Associated Person has breached any contract or other

agreement, arrangement or understanding with the Corporation except as disclosed to the Corporation pursuant hereto and (b) that such stockholder or any

Stockholder Associated Person has complied, and will comply, with all applicable requirements of state law and Exchange Act with respect to the matters set

forth in this Section 12;

(6) a complete and accurate description of any pending or, to such stockholder’s knowledge, threatened legal proceeding

in which such stockholder or any Stockholder Associated Person is a party or participant involving the Corporation or, to such stockholder’s knowledge, any

current or former officer, director, affiliate or associate of the Corporation;

(7) a representation that the stockholder giving notice intends to appear in person or by proxy at the annual meeting of

stockholders or special meeting of stockholders to nominate the persons named in such stockholder’s notice and an acknowledgment that, if such stockholder

(or a qualified representative of such stockholder) does not appear to nominate the persons named in the stockholder’s notice at such meeting, such nomination

shall be disregarded and no vote shall be taken with respect to such nomination, notwithstanding that proxies in respect of such vote may have been received by

the Corporation;

(8) a representation from such stockholder as to whether such stockholder or any Stockholder Associated Person intends

or is part of a group that intends (a) to deliver a proxy statement and/or form of proxy to a number of holders of the Corporation’s voting shares reasonably

believed by such stockholder to be sufficient to elect the person named in the stockholder’s notice, (b) to solicit proxies in support of the election of any

nominee named in the stockholder’s notice in accordance with Rule 14a-19 under the Exchange Act, or (c) to engage in a solicitation (within the meaning of

Exchange Act Rule 14a-1(l)) with respect to the nomination, and if so, the name of each participant (as defined in Item 4 of Schedule 14A under the Exchange

Act) in such solicitation; and

(9) any other information relating to such stockholder or any Stockholder Associated Person that would be required to be

disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for the election of directors pursuant to Section

14 of the Exchange Act and the rules and regulations promulgated thereunder.

F. A stockholder providing notice of any nomination proposed to be made at an annual meeting of stockholders or a special meeting of

stockholders shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to

this Section 12 shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the annual meeting of stockholders or

special meeting of stockholders, and such update and supplement shall be delivered either in person or by United States certified mail, postage prepaid, and

received by the secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the

stockholders entitled to receive notice of such annual meeting of stockholders or special meeting of stockholders. The update and supplement shall clearly

identify the information that has changed since such stockholder’s prior submission. If a stockholder fails to provide such written update within such period, the

information as to which such written update relates may be deemed not to have been provided in accordance with this Section 12. For the avoidance of doubt,

the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not be deemed to extend or waive any

applicable deadlines under these Bylaws, cure deficiencies in any notice of nomination or permit a change in the nominee(s) or nomination(s) proposed to be

made at a meeting of the stockholders as identified in the notice of nomination. In addition, the stockholder shall promptly provide any other information

reasonably requested by the Corporation. If requested by the Corporation, any supplemental information required under this paragraph shall be provided within

ten (10) days after it has been requested by the Corporation. In addition, the Board of Directors

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may require any proposed nominee to submit to interviews with the Board of Directors or any committee thereof, and such proposed nominee shall make

himself or herself available for any such interviews within ten (10) days following any reasonable request therefor from the Board of Directors or any

committee thereof.

G. In addition to the provisions of this Section 12, a stockholder shall also comply with all of the applicable requirements of the Exchange Act

and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 12 shall be deemed to affect any rights of the

holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.

H. General.

(1) Only such persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to

serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the

procedures set forth in this Bylaw. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chair of the meeting shall have the

power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in

accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such

defective proposal or nomination shall be disregarded.

(2) For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow

Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange

Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) For purposes of these Bylaws, a “Stockholder Associated Person” of any stockholder shall mean (i) any person

controlling, directly or indirectly, or acting in concert with, such stockholder or any beneficial owner described in the immediately following clause (ii), (ii) any

beneficial owner of shares of stock of the corporation owned of record or beneficially by such stockholder and on whose behalf the proposal or nomination, as

the case may be, is being made, or (iii) any person controlling, controlled by or under common control with such person referred to in the preceding clauses (i)

and (ii).

(4) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable

requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be

deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange

Act or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws.

Section 1413.Inspectors of Elections; Opening and Closing the Polls. The Board of Directors by resolution shall appoint one or more inspectors,

which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees,

agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate

inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the chair

of the meeting shall appoint one or more inspectors to act at the meeting. The inspectors shall have the duties prescribed by law.

The chair of the meeting may fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon

which the stockholders will vote at a meeting.

ARTICLE III

Board of Directors

Section 1401.General Powers. The business of the Corporation shall be managed by the Board of Directors, except as otherwise provided by statute

or by the Certificate of Incorporation.

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Section 1402.Number. The number of the Directors of the Corporation shall be fixed as specified in the Certificate of Incorporation.

Section 1403.Election and Term of Office. Directors shall be elected at the annual meeting of stockholders as specified in the Certificate of

Incorporation. Newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from

death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even

though less than a quorum, or by a sole remaining director, all as specified in the Certificate of Incorporation.

Section 1404.First Meetings. The first meeting of each newly elected Board of Directors shall be held without notice immediately after the annual

meeting of the stockholders for the purpose of the organization of the Board of Directors, the election of officers, and the transaction of such other business as

may properly come before the meeting.

Section 1405.Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such times and at such places, within or

without the State of Delaware, as shall from time to time be determined by the Board of Directors.

Section 1406.Special Meetings. Special meetings of the Board of Directors may be called by the Chair of the Board of Directors. Such meetings shall

be held at such times and at such places, within or without the State of Delaware, as shall be determined by the officer calling the meeting. Notice of any special

meeting of directors shall be given to each director at his business or residence in writing by electronic mail, hand delivery, first-class or overnight mail or

courier service, telegram or facsimile transmission, or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered when

deposited in the United States mails so addressed, with postage thereon prepaid, at least two (2) days before such meeting. If by electronic mail, telegram,

overnight mail or courier service, such notice shall be deemed adequately delivered when the electronic mail is sent, the telegram is delivered to the telegraph

company, or the notice is delivered to the overnight mail or courier service company at least the day prior to such meeting. If by facsimile transmission, such

notice shall be deemed adequately delivered when the notice is transmitted at least twelve (12) hours before such meeting. Such notice need not state the

purposes of the meeting. Any or all directors may waive notice of any meeting, either before or after the meeting. Attendance of a director at a meeting shall

constitute a waiver of notice of such meeting, except when the director attends for the express purpose of objecting, at the beginning of the meeting, to the

transaction of any business because the meeting is not lawfully called or convened.

Section 1407.Quorum, Required Vote, and Adjournment. The presence, at any meeting, of a majority of the whole Board shall be necessary and

sufficient to constitute a quorum for the transaction of business. Except as otherwise required by statute or by the Certificate of Incorporation, the vote of a

majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of

the directors present at the time and place of any meeting may adjourn such meeting from time to time until a quorum be present.

Section 1408.Consent of Directors in Lieu of Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors, or of

any committee thereof, may be taken without a meeting if all the members of the Board of Directors or committee, as the case may be, consent thereto in

writing, or by electronic transmission and any consent may be documented, signed, and delivered in any manner permitted by Section 116 of the DGCL. After

an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board of Directors or committee in accordance

with applicable law.

Section 1409.Participation in Meetings by Telephone. A member of the Board of Directors or any committee thereof may participate in a meeting of

such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting

can hear each other, and participation in a meeting pursuant to this Section 9 shall constitute presence in person at such meeting.

Section 1410.Compensation. The Board of Directors may authorize the payment to directors of a fixed fee and expenses for attendance at meetings of

the Board of Directors or any committee thereof, and other compensation

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for service as directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 1411.Intercompany Transactions. Transactions between the Corporation and any of its affiliates will be subject to approval by a majority of

the disinterested directors of the Corporation and will be on such terms, which, in the judgment of such directors, will be no less favorable to the Corporation

than could be obtained from unaffiliated parties.

ARTICLE IV

Board Committees

The Board of Directors may designate one or more regular and special committees, consisting of directors, officers or other persons, which shall have

and may exercise such powers and functions as the Board of Directors may prescribe in the management of the business and affairs of the Corporation;

provided, however, that no committee shall have power or authority in reference to the following matters: (a) approving or adopting, or recommending to the

stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (b) adopting, amending or repealing any

Bylaw of the Corporation. Such committees shall keep regular minutes of their proceedings and report the same to the Board of Directors when required. Unless

provided otherwise in the resolutions creating the committee, the Board of Directors may from time to time suspend, alter, continue or terminate any such

committee or the powers and functions thereof. The Board of Directors may designate one or more directors as alternate members of any committee, who may

replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or

members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitutes a quorum, may unanimously

appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

ARTICLE V

Officers

Section 1401.Number, Election, Term of Office and Qualification. The number, titles and duties of the officers shall be determined by the Board of

Directors from time to time, subject to the provisions of applicable law, the Certificate of Incorporation, and these Bylaws. Each officer shall be elected in the

manner prescribed by the Board of Directors and shall hold office until such officer’s successor is elected and qualified or until such officer’s death, resignation

or removal. The election of officers shall be held annually at the first meeting of the Board of Directors held after each annual meeting of stockholders, subject

to the power of the Board of Directors to designate any office at any time and elect any person thereto. The officers shall include a Chair of the Board of

Directors and a President, and may include one or more Vice Chairs of the Board of Directors, one or more Vice Presidents, a Secretary, a Treasurer, and such

other officers as the Board of Directors may determine. The same person may hold any two or more offices, and in any such case, these Bylaws shall be

construed and understood accordingly; provided that the same person may not hold the offices of Chair of the Board of Directors and Secretary or President and

Secretary. No officer other than the Chair of the Board of Directors or Vice Chair of the Board of Directors need be a director of the Corporation.

Section 1402.Removal. Any officer or agent may he removed at any time, with or without cause, by the Board of Directors.

Section 1403.Vacancies. Any vacancy occurring in any office of the Corporation may be filled for the unexpired term in the manner prescribed by

these Bylaws for the regular election to such office.

Section 1404.Chief Executive Officer. The Board of Directors shall designate one of the officers to be the Chief Executive Officer. Subject to the

direction and under the supervision of the Board of Directors, the Chief Executive Officer shall have general charge of the business, affairs and property of the

Corporation, and control over its officers, agents and employees.

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Section 1405.The Secretary. The Secretary shall keep the minutes of the proceedings of the stockholders and of the Board of Directors in one or more

books to be kept for that purpose. The Secretary shall have custody of the seal of the Corporation, and the Secretary, and any Assistant Secretary, shall have

authority to cause such seal to be affixed to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or Assistant

Secretary. The Secretary shall, in general, perform all duties and have all powers incident to the office of Secretary and shall perform such other duties and have

such other powers as may from time to time be assigned to the Secretary by these Bylaws, by the Board of Directors or by the Chief Executive Officer.

Section 1406.Treasurer. The Treasurer shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts

and disbursements in books belonging to the Corporation. The Treasurer shall cause all moneys and other valuable effects to be deposited in the name and to the

credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall cause the funds of the Corporation to be

disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer

and the Board of Directors, whenever requested, an account of all transactions conducted by the Treasurer for the Corporation and of the financial condition of

the Corporation. The Treasurer shall, in general, perform all duties and have all powers incident to the office of Treasurer and shall perform such other duties

and have such other powers as may from time to time be assigned to the Treasurer by these Bylaws, by the Board of Directors or by the Chief Executive Officer.

ARTICLE VI

Fixing Record Date

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment

thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change,

conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be

more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed, the

record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding

the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held and the record

date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution

relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting;

provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

ARTICLE VII

Execution of Documents and Instruments

Section 1401.Execution of Documents and Instruments Generally. Any officer of the Corporation and such other persons as may be authorized by the

Chair of the Board of Directors or any Vice Chair of the Board of Directors from time to time are severally and respectively authorized to execute documents

and to take actions in the Corporation’s name in connection with transactions conducted in the ordinary course of the Corporation’s business. With respect to all

other transactions, all documents, instruments or writings of any nature shall be signed, executed, verified, acknowledged and delivered by such officer or

officers or such agent or agents of the Corporation and in such manner as the Board of Directors from time to time may determine.

Section 1402.Checks, Drafts, Etc. All notes, drafts, acceptances, checks, endorsements, and all evidence of indebtedness of the Corporation

whatsoever, shall be signed by such officer or officers or such agent or agents of the Corporation and in such manner as the Board of Directors from time to

time may determine. Endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories shall be made in such manner as the

Board of Directors from time to time may determine.

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Section 1403.Proxies and Consents. Proxies to vote and written consent with respect to shares of stock of other corporations owned by or standing in

the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the Chair, the President, any Vice Chair, any Vice

President, the Secretary or the Treasurer of the Corporation, or by any other person or persons duly authorized by the Board of Directors.

ARTICLE VIII

Capital Stock

Section 1401.Stock Certificates and Uncertificated Shares. The interest of every holder of stock in the Corporation shall be evidenced by a certificate

or certificates signed in the name of the Corporation by the Chair, President, Vice Chair or a Vice President, and by the Secretary or an Assistant Secretary of the

Corporation certifying the number of shares owned by him in the Corporation and in such form not inconsistent with the Certificate of Incorporation or

applicable law as the Board of Directors may from time to time prescribe. If such certificate is countersigned (1) by a transfer agent, whether or not a subsidiary

of the Corporation, other than the Corporation or its employee, or (2) by a registrar, whether or not a subsidiary of the Corporation, other than the Corporation

or its employee, the signatures of the officers of the Corporation may be facsimiles. In case any officer who has signed or whose facsimile signature has been

placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he

were such officer at the date of issue. The foregoing notwithstanding, the Board of Directors may provide by resolution or resolutions that some or all of any or

all classes or series of stock of the Corporation be represented by uncertificated shares. Any such resolution shall not apply to shares represented by a certificate

until such certificate is surrendered to the Corporation. Within a reasonable time after the issuance or transfer of uncertificated stock, the Corporation shall send

to the registered owner thereof a written notice containing the information required by law to be set forth or stated on certificates representing shares of such

class or series or a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and

rights of such class or series and the qualifications, limitations or restrictions of such preferences and/or rights. Except as otherwise provided by law, the rights

and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of stock of the same class

and the same series shall be identical.

Section 1402.Transfer of Stock. Shares of stock of the Corporation shall be transferred on the books of the Corporation only by the holder of record

thereof or by his attorney duly authorized in writing, upon receipt of proper transfer instructions from the registered owner of uncertificated shares or surrender

to the Corporation of the certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement,

transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer tax stamps. In that event, it

shall be the duty of the Corporation to issue a new certificate or uncertificated shares to the person entitled thereto, cancel the old certificate, and record the

transaction on the Corporation’s books.

Section 1403.Rights of Corporation with Respect to Registered Owners. Prior to the surrender to the Corporation of the certificates for shares of

stock with a proper request to record the transfer of such shares or receipt by the Corporation of proper transfer instructions from the registered owner of

uncertificated shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise

to exercise all the rights and powers of an owner.

Section 1404.Transfer Agents and Registrars. The Board of Directors may make such rules and regulations as it may deem expedient concerning the

issuance and transfer of shares of the stock of the Corporation and may appoint transfer agents or registrars, or both, and may require all certificates of stock to

bear the signature of either or both. Nothing herein shall be construed to prohibit the Corporation or any subsidiary of it from acting as its own transfer agent or

registrar at any of its offices.

Section 1405.Lost, Destroyed and Stolen Certificates. Where the owner of a certificate for shares claims that such certificate has been lost, destroyed

or wrongfully taken, the Corporation shall issue a new certificate or uncertificated shares in place of the original certificate if the owner satisfies such reasonable

requirements, including evidence of such loss, destruction, or wrongful taking, as may be imposed by the Corporation, including but without limitation, the

delivery to the Corporation of an indemnity bond satisfactory to it.

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ARTICLE IX

Indemnification

Section 1401.Advancement to Former Directors or Officers. Subject to the provisions of these Bylaws, expenses incurred by a former director or

officer in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such civil or criminal

action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such amount if it shall ultimately be

determined that the former officer or director is not entitled to be indemnified by the Corporation, such advances to be paid by the Corporation within 20 days

after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however,

that the Corporation shall advance such expenses incurred in any civil or criminal action, suit or proceeding brought by the Corporation against the former

officer or director, other than a derivative action, only if authorized by the Board of Directors.

Section 1402.Advancement to Former Employees and Agents. The Corporation may, by action of its Board of Directors, provide advancement of

expenses to such of the former employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be

appropriate and authorized by the DGCL as it may be amended from time to time.

Section 1403.Submission of Claim. To obtain advancement or indemnification under this Bylaw, a claimant shall submit to the Corporation a written

request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine

whether and to what extent the claimant is entitled to advancement or indemnification. In the event the determination of entitlement to indemnification is to be

made by Independent Counsel (as hereinafter defined) as set forth in the Certificate of Incorporation, the Independent Counsel shall be selected by the Board of

Directors. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within 10 days after such determination.

Section 1404.Unpaid Claim. If a claim for indemnification is not paid in full by the Corporation within thirty days after a written claim pursuant to

Article IX, Section 3 has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid

amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim.

Section 1405.Binding Determination. If a determination shall have been made by any means permitted by the DGCL that the claimant is entitled to

indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced by claimant for such indemnification.

Section 1406.Binding Effect on Corporation. The Corporation shall be precluded from asserting in any judicial proceeding commenced to obtain

indemnification or advancement that the procedures and presumptions of this Bylaw are not valid, binding and enforceable and shall stipulate in such

proceeding that the Corporation is bound by all the provisions of this Bylaw.

Section 1407.Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final

disposition conferred in this Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the

Certificate of Incorporation, Bylaws, agreement, vote of stockholders or Disinterested Directors or otherwise. No repeal or modification of this Bylaw shall in

any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation hereunder in respect of any occurrence or matter

arising prior to any such repeal or modification.

Section 1408.Validity. If any provision or provisions of this Bylaw shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1)

the validity, legality and enforceability of the remaining provisions of this Bylaw (including, without limitation, each portion of any Section of this Bylaw

containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be

affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Bylaw (including, without limitation, each such portion of any Section

of this Bylaw containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the

provision held invalid, illegal or unenforceable.

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Section 1409.Definitions. For purposes of this Bylaw:

A. “Disinterested Director” means a director of the Corporation who is not and was not a party to the matter in respect of which

indemnification is sought by the claimant.

B. “Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of

corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest

in representing either the Corporation or the claimant in an action to determine the claimant’s rights under this Bylaw.

Section 1410.Notice. Any notice, request or other communication required or permitted to be given to the Corporation under this Bylaw shall be in

writing and either delivered in person or sent by electronic mail, fax, telex, telegram, overnight mail or courier service, or certified or registered mail, postage

prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.

ARTICLE X

Seal

The corporate seal, subject to alteration by the Board of Directors, shall be in the form of a circle and shall bear the name of the Corporation and the

year of its incorporation and shall indicate its formation under the laws of the State of Delaware. Such seal may be used by causing it or a facsimile thereof to be

impressed or affixed or in any other manner reproduced.

ARTICLE XI

Fiscal Year

The fiscal year of the Corporation shall be as determined by the Board of Directors.

ARTICLE XII

Exclusive Forum for Adjudication of Disputes

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or

proceeding brought on behalf of the Corporation, (ii) any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former

director or officer or other employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, including a claim alleging the aiding and

abetting of such a breach of fiduciary duty, (iii) any action asserting a claim against the Corporation or any current or former director or officer or other

employee or agent of the Corporation arising pursuant to any provision of the DGCL or the Certificate of Incorporation or these Bylaws (as either may be

amended from time to time), (iv) any action asserting a claim related to or involving the Corporation or any current or former director or officer or other

employee or agent of the Corporation that is governed by the internal affairs doctrine of the State of Delaware or (v) any action asserting an “internal corporate

claim” as that term is defined in Section 115 of the DGCL shall, in each case, be the Delaware Court of Chancery located within the State of Delaware (or, if the

Delaware Court of Chancery located within the State of Delaware lacks jurisdiction over any such action or proceeding, the sole and exclusive forum for such

action or proceeding shall be another state or federal court located within the State of Delaware). Unless the Corporation consents in writing to the selection of

an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the sole and exclusive forum for

the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

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ARTICLE XIII

Amendments

The Bylaws of the Corporation may be amended or repealed, or new Bylaws not inconsistent with law or any provision of the Certificate of

Incorporation, may be made and adopted by a majority vote of the whole Board of Directors at any regular or special meeting of the Board of Directors.

ARTICLE XIV

Miscellaneous

Section 1401.Books and Records. Any records administered by or on behalf of the Corporation in the regular course of its business, including its

stock ledger, books of account, and minute books, may be maintained on any information storage device, method, or one or more electronic networks or

databases (including one or more distributed electronic networks or databases); provided that the records so kept can be converted into clearly legible paper

form within a reasonable time, and, with respect to the stock ledger, the records so kept comply with Section 224 of the DGCL. The Corporation shall so

convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

Section 1402.Meeting Attendance via Remote Communication Equipment.

A. Stockholder Meetings. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the

Board of Directors may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may, by

means of remote communication:

(1) participate in a meeting of stockholders; and

(2) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a

designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each

person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation shall

implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters

submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C)

if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be

maintained by the Corporation.

B. Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these Bylaws, members of the Board of

Directors or any committee thereof may participate in a meeting of the Board of Directors or any committee thereof by means of conference telephone or other

communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute

presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on

the ground that the meeting was not lawfully called or convened.

Amended and Restated as of December 14, 2022

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Exhibit 21

Subsidiaries

American Eagle Outfitters, Inc., a Delaware Corporation, has the following wholly owned subsidiaries:

AE Admin Services Co LLC, a Ohio Limited Liability Company

AE Corporate Services Co., a Delaware Corporation

AE Direct Co. LLC, a Delaware Limited Liability Company

AE Holdings Co., a Delaware Corporation

AE North Holdings Co, a Canadian (Nova Scotia) Unlimited Liability Company

AE Outfitters Retail Co., a Delaware Corporation

AE Retail West LLC, a Delaware Limited Liability Company

AEO Asia Trading, a People’s Republic of China Trust

AEO International Corp., a Delaware Corporation

AEO International Trading Corp., a Cayman Islands Exempted Company

AEO Israeli Services Co, a Delaware Corporation

AEO Management Co., a Delaware Corporation

AEO PR Holding, a Cayman Islands Exempted Company

AEO Realty Co LLC, a Delaware Limited Liability Company

AIRTERRA, Inc., a Delaware Corporation

American Eagle Cdn Hold Co., a Delaware Corporation

American Eagle Mexico Imports, S. de R.L. de C.V., a Mexican Limited Liability Company

American Eagle Mexico Retail, S. de R.L. de C.V., a Mexican Limited Liability

Company

American Eagle Outfitters Asia Limited, a Hong Kong Limited Liability Company

American Eagle Outfitters Canada Corporation, a Canadian (Nova Scotia) Unlimited Liability Company

American Eagle Outfitters Chile SpA, a Chile Corporation

American Eagle Outfitters (China) Commercial Enterprise Co., Ltd., a Peoples Republic of China Foreign Investment Commercial

Enterprise

American Eagle Outfitters Dutch Op Co B.V., a Netherlands Limited Liability Company

American Eagle Outfitters Hong Kong Limited, a Hong Kong Limited Liability Company

American Eagle Outfitters Japan GK, a Japan Limited Liability Company

Blue Heart Enterprises LLC, a Delaware Limited Liability Company

Blue Star Imports, Ltd., a Delaware Corporation

Blue Star Imports, L.P., a Pennsylvania Limited Partnership

BSI Imports Company, LLC, a Delaware Limited Liability Company

Linmar Realty Co II LLC, a Delaware Limited Liability Company

Retail Distribution East LLC, a Delaware Limited Liability Company

Retail Distribution West LLC, a Delaware Limited Liability Company

Retail Royalty Company, a Nevada Corporation

The Original Real Co., a Delaware Corporation

Todd Snyder, Inc., an Iowa Corporation

Quiet Logistics, Inc., a Delaware Corporation

Quiet Strategic Investments, LLC, a Delaware Limited Liability Company

Quiet Platforms, Inc., a Delaware Corporation

Quiet Platforms India Private Limited, an India Company Limited by Shares

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-8 No. 333-03278) pertaining to the Employee Stock Purchase Plan of American Eagle Outfitters,

Inc.,

(2) Registration Statements (Form S-8 Nos. 333-126278 and 333-161661) pertaining to the 2005 Stock Award and Incentive Plan of

American Eagle Outfitters, Inc.,

(3) Registration Statement (Form S-8 No. 333-197050) pertaining to the 2014 Stock Award and Incentive Plan of American Eagle

Outfitters, Inc.,

(4) Registration Statement (Form S-8 No. 333-218194) pertaining to the 2017 Stock Award and Incentive Plan of American Eagle

Outfitters, Inc., and

(5) Registration Statement (Form S-8 No. 333-238942) pertaining to the 2020 Stock Award and Incentive Plan of American Eagle

Outfitters, Inc;

of our reports dated March 13, 2023, with respect to the consolidated financial statements of American Eagle Outfitters, Inc. and the effectiveness

of internal control over financial reporting of American Eagle Outfitters, Inc. included in this Annual Report (Form 10-K) of American Eagle

Outfitters, Inc. for the year ended January 28, 2023.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

March 13, 2023

Exhibit 24

Power of Attorney

Each director and/or officer of American Eagle Outfitters, Inc. (the “Corporation”) whose signature appears below hereby appoints Beth

Henke or Michael A. Mathias as his or her attorneys or either of them individually as his or her attorney, to sign, in his or her name and behalf and

in any and all capacities stated below, and to cause to be filed with the Securities and Exchange Commission (the “Commission”), the

Corporation’s Annual Report on Form 10-K (the “Form 10-K”) for the year ended January 28, 2023, and likewise to sign and file with the

Commission any and all amendments to the Form 10-K, and the Corporation hereby appoints such persons as its attorneys-in-fact and each of

them as its attorney-in-fact with like authority to sign and file the Form 10-K and any amendments thereto granting to each such attorney-in-fact

full power of substitution and revocation, and hereby ratifying all that any such attorney-in-fact or his substitute may do by virtue hereof.

IN WITNESS WHEREOF, we have hereunto set our hands as of March 13, 2023.

Signature Title

/s/ Jay L. Schottenstein

Chief Executive Officer,

Chairman of the Board of Directors and Director

(Principal Executive Officer)

Jay L. Schottenstein

/s/ Michael A. Mathias

Chief Financial Officer

(Principal Financial Officer)

Michael A. Mathias

/s/ James H. Keefer

James H. Keefer

Senior Vice President, Chief Accounting Officer

(Principal Accounting Officer)

/s/ Sujatha Chandrasekaran

Director

Sujatha Chandrasekaran

/s/ Deborah A. Henretta Director

Deborah A. Henretta

/s/ Cary D. McMillan Director

Cary D. McMillan

/s/ Janice E. Page Director

Janice E. Page

/s/ David M. Sable Director

David M. Sable

/s/ Noel J. Spiegel Director

Noel J. Spiegel

Exhibit 31.1

CERTIFICATIONS

I, Jay L. Schottenstein, certify that:

1. I have reviewed this Annual Report on Form 10-K of American Eagle Outfitters, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to

make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period

covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as

defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)

and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by

others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed

under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions

about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such

evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s

most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably

likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial

reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent

functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which

are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s

internal control over financial reporting.

/s/ Jay L. Schottenstein

Jay L. Schottenstein

Chief Executive Officer

(Principal Executive Officer)

March 13, 2023

Exhibit 31.2

CERTIFICATIONS

I, Michael A. Mathias, certify that: