AEO - American Eagle Outfitters Inc. (AEO) Long-Term Strategy and Q4 2023 Earnings Presentation (Transcript)
2024-03-07 15:35:27 ET
American Eagle Outfitters, Inc. (AEO)
Long-Term Strategy and Q4 2023 Earnings Presentation
March 7, 2024 11:00 AM ET
Company Participants
Judy Meehan - SVP of Corporate Communications and IR
Jay Schottenstein - Executive Chairman & Chief Executive Officer
Jen Foyle - President, Executive Creative Director for AE & Aerie
Mike Mathias - Chief Financial Officer
Conference Call Participants
Matt Boss - JPMorgan
Jay Sole - UBS
Janet Kloppenburg - JJK Research
Kelly Crago - Citi
Adrienne Yih - Barclays
Dana Telsey - Telsey Advisory
Dan Stroller - BMO Capital Markets
Jonna Kim - TD Cowen
Chris Nardone - Bank of America
Corey Tarlowe - Jefferies
Alex Straton - Morgan Stanley
Marni Shapiro - The Retail Tracker
Presentation
Judy Meehan
Good morning, everyone. Today, we are hosting an extended Earnings Call to discuss our Fourth Quarter and Fiscal 2023 Financial Results as well as our New Powering Profitable Growth Strategy and Three Year Financial Targets.
The call will include prepared remarks from Jay Schottenstein, Executive Chairman and Chief Executive Officer; Jen Foyle, President, Executive Creative Director for AE & Aerie; and Mike Mathias, Chief Financial Officer. This will be followed by a question-and-answer session. We expect to conclude the call at approximately 1 o'clock.
Before we begin, I would like to refer you to our safe harbor statement and additional disclosures around non-GAAP results posted on screen. Reconciliations of adjusted results to the GAAP results are available in the tables attached to the earnings release, which is posted on our corporate website at ww.aeo-inc.com in the Investor Relations section. Following today's call, this is also where you will find a replay and our fourth quarter investor and powering profitable growth strategy presentations.
Now, I will turn the call over to Jay to kick it off with a quick review of key highlights of our fourth quarter and fiscal 2023 results. Jay?
Jay Schottenstein
Good morning. Thanks for joining us.
Earlier today, we unveiled our new long-term strategy and financial roadmap. Our focus is simple. Powering profitable growth. We are excited to share the details of our plan with you. But first, let me begin with a quick overview of last year.
I'll start with a huge thanks to our teams for the perseverance and commitment throughout 2023. I am especially proud of the strength we delivered in the second half of the year as we began to implement actions from our profit improvement project. Building on momentum in the third quarter, we achieved record fourth quarter revenue and adjusted operating income reached the highest in over a decade.
With strong execution, we nicely exceeded expectations even after raising guidance in early January. While Mike will provide greater details, during the fourth quarter, we took a non-GAAP charge as we look to strengthen overall profitability. Our 2023 revenue reached a record $5.3 billion and we registered $375 million of adjusted operating income.
With the exception of 2021, this was our highest adjusted operating income result since 2012. We generated strong cash flow and we ended the year in a very healthy financial position. Cash and investments more than doubled from last year reaching $454 million at year end.
We exited 2023 with clean inventory, well positioned for our go forward plans. Reflecting improved financial performance and a healthy balance sheet, in December we announced a 25% increase in our quarterly cash dividend. And in February, we authorized 30 million shares for repurchase. This underscores our confidence in the strength of the business and our commitment to returning cash to shareholders. We enter 2024 well positioned with industry leading brands, a solid balance sheet and best-in-class operations.
Our profit improvement initiatives are taking hold and we expect to deliver nice revenue and profit growth in 2024, which Mike will detail shortly. We remain steadfast in operating the business with balance, staying agile and flexible to capitalize on demand opportunities while optimizing profitability for the foreseeable future.
With that, I will pass it over to Jen for some brief merchandise and marketing highlights of the Q4....
American Eagle Outfitters, Inc. (AEO) Long-Term Strategy and Q4 2023 Earnings Presentation (Transcript)