part i - financi al...

UNITED STATESSECURITIES AND E X CHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

For the quarterly period ended October 28, 2017OR

☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

Commission File Number: 1-33338

American Eagle Outfitters, Inc.(Exact name of registrant as specified in its charter)

Delaware No. 13-2721761(State or other jurisdiction ofincorporation or organization)

(I.R.S. EmployerIdentification No.)

77 Hot Metal Street, Pittsburgh, PA 15203-2329(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (412) 432-3300Former name, former address and former fiscal year, if changed since last report:

N/A

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 of1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. YES ☒ NO ☐Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for suchshorter period that the registrant was required to submit and post such files). YES ☒ NO ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, oremerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growthcompany” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐Non-accelerated filer ☐ (Do not check if a smaller reporting company) 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 anynew or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 177,307,946 CommonShares were outstanding at December 4, 2017.

AMERICAN EAGLE OUTFITTERS, INC.TABLE OF CONTENTS

PageNumber

PART I - FINANCIAL INFORMATION Item 1. Financial Statements 3 Consolidated Balance Sheets: October 28, 2017, January 28, 2017 and October 29, 2016 3 Consolidated Statements of Operations and Retained Earnings: 13 weeks and 39 weeks ended October 28, 2017 and

October 29, 2016

4 Consolidated Statements of Comprehensive Income: 13 weeks and 39 weeks ended October 28, 2017 and October 29,

2016

5 Consolidated Statements of Cash Flows: 39 weeks ended October 28, 2017 and October 29, 2016 6 Notes to Consolidated Financial Statements 7 Report of Independent Registered Public Accounting Firm 19Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20Item 3. Quantitative and Qualitative Disclosures about Market Risk 29Item 4. Controls and Procedures 30

PART II - OTHER INFORMATION Item 1. Legal Proceedings N/AItem 1A. Risk Factors 31Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31Item 3. Defaults Upon Senior Securities N/AItem 4. Mine Safety Disclosures N/AItem 5. Other Information 31Item 6. Exhibits 32

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PART I - FINANCI AL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.AMERICAN EAGLE OUTFITTERS, INC.CONSOLIDATED BALANCE SHEETS

October 28, January 28, October 29, (Inthousands,exceptpershareamounts) 2017 2017 2016 (Unaudited) (Unaudited) Assets Current assets:

Cash and cash equivalents $ 257,527 $ 378,613 $ 291,667 Merchandise inventory 534,019 358,446 492,602 Accounts receivable, net 77,113 86,634 74,812 Prepaid expenses and other 61,553 77,536 77,768

Total current assets 930,212 901,229 936,849 Property and equipment, at cost, net of accumulated depreciation 726,168 707,797 708,488 Intangible assets, at cost, net of accumulated amortization 46,979 49,373 49,993 Goodwill 14,972 14,887 17,315 Non-current deferred income taxes 29,025 49,250 49,627 Other assets 54,424 60,124 60,268 Total assets $ 1,801,780 $ 1,782,660 $ 1,822,540 Liabilities and Stockholders’ Equity Current liabilities:

Accounts payable $ 330,716 $ 246,204 $ 314,111 Accrued compensation and payroll taxes 43,561 54,184 56,939 Accrued rent 80,580 78,619 79,255 Accrued income and other taxes 17,262 12,220 29,373 Unredeemed gift cards and gift certificates 29,475 52,966 30,130 Current portion of deferred lease credits 12,887 12,780 12,783 Other liabilities and accrued expenses 38,359 36,810 40,288

Total current liabilities 552,840 493,783 562,879 Non-current liabilities:

Deferred lease credits 50,439 45,114 47,677 Non-current accrued income taxes 4,590 4,537 4,573 Other non-current liabilities 30,712 34,657 35,451

Total non-current liabilities 85,741 84,308 87,701 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; 177,084, 181,886 and 181,863 shares outstanding, respectively 2,496 2,496 2,496 Contributed capital 588,978 603,890 597,919 Accumulated other comprehensive loss (34,798) (36,462) (31,160)Retained earnings 1,812,821 1,775,775 1,744,227 Treasury stock, 72,482, 67,680 and 67,703 shares, respectively (1,206,298) (1,141,130) (1,141,522)

Total stockholders’ equity 1,163,199 1,204,569 1,171,960 Total liabilities and stockholders’ equity $ 1,801,780 $ 1,782,660 $ 1,822,540

Refer to Notes to Consolidated Financial Statements

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AMERICAN EAGLE OUTFITTERS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

(Unaudited) 13 Weeks Ended 39 Weeks Ended October 28, October 29, October 28, October 29, (Inthousands,exceptpershareamounts) 2017 2016 2017 2016 Total net revenue $ 960,433 $ 940,609 $ 2,566,826 $ 2,512,619 Cost of sales, including certain buying, occupancy and warehousing expenses 585,520 562,793 1,621,441 1,534,194 Gross profit 374,913 377,816 945,385 978,425 Selling, general and administrative expenses 217,146 219,912 615,842 615,503 Restructuring charges 3,695 — 18,888 — Depreciation and amortization expense 43,149 39,636 123,878 117,319 Operating income 110,923 118,268 186,777 245,603 Other (expense) income, net (13,243) 603 (19,574) 2,403 Income before income taxes 97,680 118,871 167,203 248,006 Provision for income taxes 33,947 43,111 56,997 90,179 Net income $ 63,733 $ 75,760 $ 110,206 $ 157,827 Net income per basic share $ 0.36 $ 0.42 $ 0.62 $ 0.87 Net income per diluted share $ 0.36 $ 0.41 $ 0.61 $ 0.86 Cash dividends per common share $ 0.125 $ 0.125 $ 0.375 $ 0.375 Weighted average common shares outstanding - basic 177,288 181,819 178,272 181,196 Weighted average common shares outstanding - diluted 179,132 184,615 180,260 183,651 Retained earnings, beginning $ 1,772,233 $ 1,693,371 $ 1,775,775 $ 1,659,267 Net income 63,733 75,760 110,206 157,827 Cash dividends and dividend equivalents (22,733) (23,349) (68,119) (69,754)Reissuance of treasury stock (412) (1,555) (5,041) (3,113)Retained earnings, ending $ 1,812,821 $ 1,744,227 $ 1,812,821 $ 1,744,227


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AMERICAN EAGLE OUTFITTERS, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited) 13 Weeks Ended 39 Weeks Ended October 28, October 29, October 28, October 29, (Inthousands) 2017 2016 2017 2016 Net income $ 63,733 $ 75,760 $ 110,206 $ 157,827 Other comprehensive income:

Foreign currency translation (expense) income (4,677) (1,805) 1,504 (1,287)Other comprehensive (expense) income: (4,677) (1,805) 1,504 (1,287)Comprehensive income $ 59,056 $ 73,955 $ 111,710 $ 156,540


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AMERICAN EAGLE OUTFITTERS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 39 Weeks Ended October 28, October 29, (Inthousands) 2017 2016 Operating activities: Net income $ 110,206 $ 157,827 Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization 125,370 118,173 Share-based compensation 12,056 23,024 Deferred income taxes 19,846 14,647 Foreign currency transaction gain (5,002) (806)

Changes in assets and liabilities: Merchandise inventory (173,020) (186,594)Accounts receivable 9,515 4,070 Prepaid expenses and other 16,220 (499)Other assets 2,872 (5,893)Accounts payable 80,844 117,967 Unredeemed gift cards and gift certificates (23,581) (18,265)Deferred lease credits 5,287 (2,577)Accrued compensation and payroll taxes (9,499) (22,002)Accrued income and other taxes 5,519 7,038 Accrued liabilities 11,467 (3,256)

Total adjustments 77,894 45,027 Net cash provided by operating activities 188,100 202,854 Investing activities:

Capital expenditures for property and equipment (134,920) (107,616)Acquisition of intangible assets (645) (1,215)

Net cash used for investing activities (135,565) (108,831)Financing activities:

Payments on capital leases (8,705) (5,604)Repurchase of common stock as part of publicly announced programs (87,682) — Repurchase of common stock from employees (12,300) (6,898)Net proceeds from stock options exercised 225 16,177 Excess tax benefit from share-based payments — 758 Cash dividends paid (66,385) (67,945)

Net cash used for financing activities (174,847) (63,512)Effect of exchange rates changes on cash 1,226 1,089 Net change in cash and cash equivalents (121,086) 31,600 Cash and cash equivalents - beginning of period 378,613 260,067 Cash and cash equivalents - end of period $ 257,527 $ 291,667 Supplemental disclosure of cash flow information: Cash paid during the period for income taxes $ 36,822 $ 77,562 Cash paid during the period for interest $ 818 $ 881


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AMERICAN EAGLE OUTFITTERS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) 1. Interim Financial StatementsThe accompanying Consolidated Financial Statements of American Eagle Outfitters, Inc. (the “Company”) at October 28, 2017 and October 29, 2016and for the 13 and 39 week periods ended October 28, 2017 and October 29, 2016 have been prepared in accordance with generally acceptedaccounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Certainnotes and other information have been condensed or omitted from the interim Consolidated Financial Statements presented in this Quarterly Reporton Form 10-Q. Therefore, these Consolidated Financial Statements should be read in conjunction with the Company’s Fiscal 2016 Annual Report. Inthe opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and those described in the footnotes thatfollow) considered necessary for a fair presentation have been included. The existence of subsequent events has been evaluated through the filingdate of this Quarterly Report on Form 10-Q.

As used in this report, all references to “we,” “our” and the “Company” refer to American Eagle Outfitters, Inc. and its wholly owned subsidiaries.“American Eagle Outfitters,” “American Eagle,” “AEO” and the “AE Brand” refer to our American Eagle Outfitters stores. “Aerie” refers to our Aerie ®by American Eagle ® stores. “AEO Direct” refers to our e-commerce operations, www.ae.com and www.aerie.com . “Tailgate” refers to our Tailgatebrand of vintage, sports- inspired apparel. “Todd Snyder” refers to our Todd Snyder New York premium menswear brand.

Our business is affected by the pattern of seasonality common to most retail apparel businesses. Historically, a large portion of total net revenueand operating income occurs in the third and fourth fiscal quarters, reflecting the increased demand during the back-to-school and year-end holidayselling seasons, respectively. The results for the current and prior periods are not necessarily indicative of future financial results. 2. Summary of Significant Accounting PoliciesPrinciples of ConsolidationThe Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions andbalances have been eliminated in consolidation. At October 28, 2017, the Company operated in one reportable segment.

Fiscal YearThe Company’s financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, “Fiscal 2017” refers to the 53week period ending February 3, 2018. “Fiscal 2016” refers to the 52 week period ended January 28, 2017.

EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of our contingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, ourmanagement reviews the Company’s estimates based on currently available information. Changes in facts and circumstances may result in revisedestimates.

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Recent Accounting PronouncementsIn May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue fromContracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model that expands disclosurerequirements and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects theconsideration it expects to receive in exchange for those goods or services. Originally, ASU 2014-09 was effective for annual reporting periodsbeginning after December 15, 2016. In July 2015, the FASB voted to approve amendments deferring the effective date by one year to be effectivefor annual reporting periods beginning after December 15, 2017. Accordingly, the Company will adopt ASU 2014-09 on February 4, 2018 using themodified retrospective method. The adoption of ASU 2014-09 will not have a material impact on the Company’s Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016–02”) which replaces the existing guidance in Accounting StandardCertification (“ASC”) 840, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and alease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, withclassification affecting the pattern of expense recognition in the income statement. The guidance is effective for fiscal years beginning afterDecember 15, 2018, including interim periods within those fiscal years and requires retrospective application. The Company will adopt in Fiscal 2019and is currently evaluating the impact of ASU 2016-02 to its Consolidated Financial Statements, but expects that it will result in a significant increaseto its long-term assets and liabilities on the Consolidated Balance Sheets.

In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) (“ASU 2016-09”). ASU 2016-09 makesseveral modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financialstatement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certaincomponents of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. TheCompany adopted ASU 2016-09 prospectively on January 29, 2017 and it did not have a material impact to the Consolidated Financial Statementsfor the 13 or 39 weeks ended October 28, 2017.

Foreign Currency TranslationIn accordance with “ASC” 830, ForeignCurrencyMatters, assets and liabilities denominated in foreign currencies were translated into United Statesdollars (“USD”) (the reporting currency) at the exchange rates prevailing at the balance sheet date. Revenues and expenses denominated in foreigncurrencies were translated into USD at the monthly average exchange rates for the period. Gains or losses resulting from foreign currencytransactions are included in the results of operations, whereas, related translation adjustments are reported as an element of other comprehensiveincome in accordance with ASC 220, ComprehensiveIncome.

Revenue RecognitionRevenue is recorded for store sales upon the purchase of merchandise by customers. The Company’s e-commerce operation records revenue uponthe estimated customer receipt date of the merchandise. Shipping and handling revenues are included in total net revenue. Sales tax collected fromcustomers 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 toits sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based onprojected merchandise returns determined through the use of 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 isredeemed for merchandise. Additionally, the Company recognizes revenue on unredeemed gift cards based on an estimate of the amounts that willnot be redeemed (“gift card breakage”), determined through historical redemption trends. Gift card breakage revenue is recognized in proportion toactual gift card redemptions as a component of total net revenue. For further information on the Company’s gift card program, refer to the Gift Cardscaption below.

The Company recognizes royalty revenue generated from its license or franchise agreements based on a percentage of merchandise sales by thelicensee/franchisee. This revenue is recorded as a component of total net revenue when earned.

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Cost of Sales, Including Certain Buying, Occupancy and Warehousing ExpensesCost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage andcertain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs.

Design costs are related to the Company's Design Center operations and include compensation, travel and entertainment, supplies and samples forour design teams, as well as rent and depreciation for our Design Center. These costs are included in cost of sales as the respective inventory issold.

Buying, occupancy and warehousing costs consist of compensation, employee benefit expenses and travel and entertainment for our buyers andcertain 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 andinspection costs; and shipping and handling costs related to our e-commerce operation. Gross profit is the difference between total net revenue andcost of sales.

Selling, General and Administrative ExpensesSelling, general and administrative expenses consist of compensation and employee benefit expenses, including salaries, incentives and relatedbenefits 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 andadministrative expenses do not include compensation, employee benefit expenses and travel for our design, sourcing and importing teams, ourbuyers and our distribution centers as these amounts are recorded in cost of sales. Additionally, selling, general and administrative expenses do notinclude rent and utilities related to our stores, operating costs of our distribution centers, and shipping and handling costs related to our e-commerceoperations.

Other (Expense) Income, NetOther (expense) income, net consists primarily of allowances for uncollectible receivables, foreign currency transaction gain/loss, interestincome/expense and realized investment gains/losses.

As of October 28, 2017, allowances for uncollectible receivables were $20.4 million. There were no allowances for uncollectible receivables as ofOctober 29, 2016.

Cash and Cash Equivalents and InvestmentsThe Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

As of October 28, 2017 and October 29, 2016, the Company held no investments.

Refer to Note 3 to the Consolidated Financial Statements for information regarding cash and cash equivalents and investments.

Merchandise InventoryMerchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design andsourcing costs and related expenses. The Company records merchandise receipts when both title and risk of loss for the merchandise havetransferred 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 wheninventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance offashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have amaterial adverse impact on earnings, depending on the extent and amount of inventory affected. The Company also estimates a shrinkage reservefor the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can beaffected by changes in merchandise mix and changes in actual shrinkage trends.

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Income TaxesThe Company calculates income taxes in accordance with ASC 740, IncomeTaxes(“ASC 740”), which requires the use of the asset and liabilitymethod. Under this method, deferred tax assets and liabilities are recognized based on the difference between the Consolidated Financial Statementcarrying amounts of existing assets and liabilities and their respective tax bases as computed pursuant to ASC 740. Deferred tax assets andliabilities are measured using the tax rates, based on certain judgments regarding enacted tax laws and published guidance, in effect in the yearswhen those temporary differences are expected to reverse. A valuation allowance is established against the deferred tax assets when it is morelikely 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, taxlaws 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 fileor 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 avaluation allowance require management to make estimates and assumptions. The Company believes that its estimates and assumptions arereasonable, although actual results may have a positive or negative material impact on the balances of deferred tax assets and liabilities, valuationallowances or net income.

Refer to Note 10 to the Consolidated Financial Statements for additional information regarding income taxes.

Property and EquipmentProperty and equipment is recorded on the basis of cost, including costs to prepare the asset for use, with depreciation computed utilizing thestraight-line method over the assets’ estimated useful lives. The useful lives of our major classes of assets are as follows: Buildings 25 yearsLeasehold improvements Lesser of 10 years or the term of the leaseFixtures and equipmentInformation technology

5 years3-5 years

As of October 28, 2017, the weighted average remaining useful life of our assets is approximately 8.3 years. In accordance with ASC 360, Property,Plant,andEquipment(“ASC 360”), the Company evaluates long-lived assets for impairment at the individualstore level, which is the lowest level at which individual cash flows can be identified, for stores that have been open for a period of time sufficient toreach maturity. Impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets areimpaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. When events such asthese occur, the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded. No long-lived asset impairmentcharges were recorded during the 13 or 39 weeks ended October 28, 2017 or October 29, 2016.

Refer to Note 6 to the Consolidated Financial Statements for additional information regarding property and equipment.

GoodwillThe Company’s goodwill is primarily related to the acquisition of its importing operations, Canada business, Tailgate and Todd Snyder brands, andHong Kong and China businesses. In accordance with ASC 350, Intangibles–GoodwillandOther(“ASC 350”), the Company evaluates goodwill forpossible impairment on at least an annual basis and last performed an annual impairment test as of January 28, 2017. During the fourth quarter ofFiscal 2016, the goodwill was fully impaired for the Hong Kong and China businesses. All other goodwill for the Company was not impaired as aresult of the annual impairment test.

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Intangible AssetsIntangible assets are recorded on the basis of cost with amortization computed utilizing the straight-line method over the assets’ estimated usefullives. The Company’s intangible assets, which consists primarily of trademark assets, are generally amortized over 15 to 25 years.

The Company evaluates intangible assets for impairment in accordance with ASC 350 when events or circumstances indicate that the carrying valueof 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 are less than the carrying amounts of the assets, then the assets are impaired and areadjusted to their estimated fair value. No intangible asset impairment charges were recorded during the 13 or 39 weeks ended October 28, 2017 orOctober 29, 2016.

Refer to Note 7 to the Consolidated Financial Statements for additional information regarding intangible assets.

Gift CardsThe value of a gift card is recorded as a current liability upon issuance, and revenue is recognized when the gift card is redeemed formerchandise. The Company estimates gift card breakage and recognizes revenue in proportion to actual gift card redemptions as a component oftotal net revenue. The Company determines an estimated gift card breakage rate by continuously evaluating historical redemption data and the timewhen there is a remote likelihood that a gift card will be redeemed. The Company recorded $1.6 million and $1.5 million of revenue related to giftcard breakage during the 13 weeks ended October 28, 2017 and October 29, 2016, respectively. During the 39 weeks ended October 28, 2017 andOctober 29, 2016, the Company recorded $6.1 million and $5.3 million, respectively, of revenue related to gift card breakage.

Deferred Lease CreditsDeferred lease credits represent the unamortized portion of construction allowances received from landlords related to the Company’s retail stores.Construction allowances are generally comprised of cash amounts received by the Company from its landlords as part of the negotiated lease terms.The Company records a receivable and a deferred lease credit liability at the lease commencement date (date of initial possession of the store). Thedeferred lease credit is amortized on a straight-line basis as a reduction of rent expense over the term of the original lease (including the pre-openingbuild-out period). The receivable is reduced as amounts are received from the landlord.

Co-branded Credit CardThe Company offers a co-branded credit card (the “AEO Visa Card”) and a private label credit card (the “AEO Credit Card”) under the AEO andAerie brands. These credit cards are issued by a third-party bank (the “Bank”) in accordance with a credit card agreement (“the Agreement”). TheCompany has no liability to the Bank for bad debt expense, provided that purchases are made in accordance with the Bank’s procedures. Wereceive funding from the Bank based on the Agreement and card activity, which includes payments for new account activations and usage of thecredit cards. We recognize revenue for this funding when the amounts are fixed or determinable and collectability is reasonably assured. Thisrevenue is recorded in other revenue, which is a component of total net revenue in our Consolidated Statements of Operations and RetainedEarnings.

Once a customer is approved to receive the AEO Visa Card or the AEO Credit Card and the card is activated, the customer is eligible to participatein the customer loyalty program offered by the Company. For further information on the Company’s loyalty program, refer to the Customer LoyaltyProgram caption below.

Customer Loyalty ProgramThe Company recently launched a new, highly digitized loyalty program called AEO Connected TM (the “Program”). This Program integrates thecurrent credit card rewards program and the AEREWARDS Ò loyalty program into one combined customer offering. Under the Program, customersaccumulate points based on purchase activity and earn rewards by reaching certain point thresholds and when reached rewards aredistributed. Customers will earn discounts in the form of savings certificates, which are accounted for in accordance with ASC 605-25. Rewardsearned are valid through the stated expiration date, which is approximately 45 days from the issuance date of the reward. Additional rewards arealso given for key items such as jeans and bras. Rewards not redeemed during the 45 days redemption period are forfeited.

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Points earned under the Program on purchases at AEO and Aerie are accounted for by analogy to ASC 605-25, Revenue Recognition, MultipleElemen t Arrangements (“ASC 605-25”). The Company believes that points earned under the Program represent deliverables in a multiple elementarrangement rather than a rebate or refund of cash. Accordingly, the portion of the sales revenue attributed to the awar d points is deferred andrecognized when the award is redeemed or when the points expire. Additionally, reward points earned on non-AEO or Aerie purchases areaccounted for in accordance with ASC 605-25. As the points are earned, a current liability is r ecorded for the estimated cost of the award, and theimpact of adjustments is recorded in cost of sales.

Segment InformationIn accordance with ASC 280, Segment Reporting (“ASC 280”), the Company has identified two operating segments (American Eagle OutfittersBrand and Aerie by American Eagle Outfitters Brand) that reflect the basis used internally to review performance and allocate resources. Alloperating segments have been aggregated and are presented as one reportable segment, as permitted by ASC 280. 3. Cash and Cash EquivalentsThe following table summarizes the fair market values for the Company’s cash and marketable securities, which are recorded on the ConsolidatedBalance Sheets:

(Inthousands) October 28,

2017 January 28,

2017 October 29,

2016 Cash and cash equivalents:

Cash $ 185,546 $ 265,332 $ 209,581 Interest bearing deposits 71,981 83,281 82,086 Commercial paper — 30,000 —

Total cash and cash equivalents $ 257,527 $ 378,613 $ 291,667

There were no sales or purchases of investments for the 13 and 39 weeks ended October 28, 2017 and October 29, 2016. 4. Fair Value MeasurementsASC 820, FairValueMeasurementDisclosures(“ASC 820”), defines fair value, establishes a framework for measuring fair value in accordance withGAAP and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of anasset or transfer of a liability in an orderly transaction between market participants at the measurement date.

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Financial InstrumentsValuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservableinputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiersinclude:

• 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 orliabilities.

In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents) measuredat fair value on a recurring basis at October 28, 2017 and October 29, 2016:

Fair Value Measurements at October 28, 2017

(Inthousands) Carrying Amount

Quoted MarketPrices in ActiveMarkets forIdenticalAssets(Level 1)

Significant OtherObservable Inputs

(Level 2)

SignificantUnobservable

Inputs(Level 3)

Cash and cash equivalents: Cash $ 185,546 $ 185,546 — — Interest bearing deposits 71,981 71,981 — —

Total cash and cash equivalents $ 257,527 $ 257,527 — —





(Level 2)


Inputs(Level 3)


Total cash and cash equivalents $ 291,667 $ 291,667 $ — $ —

In the event the Company holds Level 3 investments, a discounted cash flow model is used to value those investments. There were no Level 3investments at October 28, 2017 or October 29, 2016.

Non-Financial AssetsThe Company’s non-financial assets, which include goodwill, intangible assets and property and equipment, are not required to be measured at fairvalue on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required, and the Company is required toevaluate the non-financial instrument for impairment, a resulting asset impairment would require that the non-financial asset be recorded at theestimated fair value. During the 13 and 39 weeks ended for October 28, 2017, the Company did not impair any non-financial assets.

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5. Earnings per ShareThe following is a reconciliation between basic and diluted weighted average shares outstanding:

13 Weeks Ended 39 Weeks Ended October 28, October 29, October 28, October 29, (Inthousands) 2017 2016 2017 2016 Weighted average common shares outstanding:

Basic number of common shares outstanding 177,288 181,819 178,272 181,196 Dilutive effect of stock options and non-vested restricted stock 1,844 2,796 1,988 2,455

Diluted number of common shares outstanding 179,132 184,615 180,260 183,651

Equity awards to purchase approximately 2.5 million shares of common stock during both the 13 and 39 weeks ended October 28, 2017 andapproximately 1.4 million shares of common stock during both the 13 and 39 weeks ended October 29, 2016 were outstanding, but were notincluded in the computation of weighted average diluted common share amounts as the effect of doing so would be anti-dilutive.

Additionally, approximately 0.1 million and 0.9 million shares of restricted stock units for the 13 and 39 weeks ended October 28, 2017, respectively,were outstanding, but not included in the computation of weighted average diluted common share amounts as the effect of doing so would be anti-dilutive.

Refer to Note 9 to the Consolidated Financial Statements for additional information regarding share-based compensation. 6. Property and EquipmentProperty and equipment consists of the following:

October 28, January 28, October 29, (Inthousands) 2017 2017 2016 Property and equipment, at cost $ 1,994,071 $ 1,884,297 $ 1,858,863 Less: Accumulated depreciation and impairment (1,267,903) (1,176,500) (1,150,375)Property and equipment, net $ 726,168 $ 707,797 $ 708,488

7. Intangible AssetsIntangible assets consist of the following:

October 28, January 28, October 29, (Inthousands) 2017 2017 2016 Trademarks, at cost $ 69,623 $ 68,978 $ 68,611 Less: Accumulated amortization (22,644) (19,605) (18,618)Intangible assets, net $ 46,979 $ 49,373 $ 49,993

8. Other Credit ArrangementsIn Fiscal 2014, the Company entered into a Credit Agreement (“Credit Agreement”) for five-year, syndicated, asset-based revolving credit facilities(the “Credit Facilities”). The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400 million, subject tocustomary borrowing base limitations. The Credit Facilities provide increased financial flexibility and take advantage of a favorable creditenvironment.

All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement aresecured by a first-priority security interest in certain working capital assets of the borrowers and guarantors, consisting primarily of cash, receivables,inventory and certain other assets and have been further secured by first-priority mortgages on certain real property.

As of October 28, 2017, the Company was in compliance with the terms of the Credit Agreement and had $8.1 million outstanding in stand-by lettersof credit. No loans were outstanding under the Credit Agreement as of October 28, 2017.

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Additionally, the Company has a borrowing agreement with one financial institution under which it may borrow an aggregate of $5.0 million USD forthe purposes of trade letter of credit issuances. The availability of any future borrowings under the trade le tter of credit facilities is subject toacceptance by the financial institution. As of October 28, 2017, the Company had no outstanding trade letters of credit . 9. Share-Based CompensationThe Company accounts for share-based compensation under the provisions of ASC 718, Compensation-StockCompensation(“ASC 718”), whichrequires companies to measure and recognize compensation expense for all share-based payments at fair value. The Company adopted ASU 2016-09 prospectively at the beginning of Fiscal 2017 and now records excess tax benefits and deficiencies as a discrete adjustment to income taxexpense when stock awards vest or are exercised, rather than in contributed capital where they have been historically recorded. ASU 2016-09 alsorequires cash flows related to excess tax benefits from share-based compensation to be presented in operating activities, rather than separately as afinancing activity, in the Consolidated Statement of Cash Flows.

Total share-based compensation expense included in the Consolidated Statements of Operations for the 13 weeks and 39 weeks ended October 28,2017 was $2.3 million ($1.5 million, net of tax) and $12.1 million ($7.9 million, net of tax), respectively, and for the 13 weeks and 39 weeks endedOctober 29, 2016 was $6.3 million ($4.0 million, net of tax) and $23.0 million ($14.6 million, net of tax), respectively.

Stock Option GrantsThe Company grants both time-based and performance-based stock options. A summary of the Company’s stock option activity for the 39 weeksended October 28, 2017 follows:

Weighted-Average

Weighted-AverageRemainingContractual Aggregate

Options Exercise Price Term Intrinsic Value (Inthousands) (Inyears) (Inthousands) Outstanding - January 28, 2017 2,314 $ 15.33 Granted 1,055 $ 14.59 Exercised (1) (29) $ 11.51 Cancelled (852) $ 14.82 Outstanding - October 28, 2017 2,488 $ 15.24 5.3 $ 0.3 Vested and expected to vest - October 28, 2017 2,341 $ 15.25 5.3 $ 0.3 Exercisable - October 28, 2017 (2) 5 $ 13.70 1.3 $ 0.3

(1) Options exercised during the 39 weeks ended October 28, 2017 had an exercise price of $11.51. (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 at October 28, 2017.

Cash received from the exercise of stock options was $0.2 million for the 39 weeks ended October 28, 2017 and $16.2 million for the 39 weeksended October 29, 2016. The actual tax benefit realized from stock option exercises totaled $0.7 million for the 39 weeks October 28, 2017 and$(0.2) million for the 39 weeks ended October 29, 2016.

As of October 28, 2017, there was $5.2 million of unrecognized compensation expense for stock option awards that is expected to be recognizedover a weighted average period of 2.0 years.

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The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-averageassumptions:

39 Weeks Ended October 28, Black-Scholes Option Valuation Assumptions 2017 Risk-free interest rate (1) 2.1%Dividend yield 3.1%Volatility factor (2) 38.5%Weighted-average expected term (3) 4.5 years

(1) Based on the U.S. 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 a combination of historical volatility of the Company’s common stock and implied volatility.(3) Represents the period of time options are expected to be outstanding. The weighted average expected option terms were determined based

on historical experience.

Restricted Stock GrantsTime-based restricted stock awards are comprised of time-based restricted stock units. These awards vest over three years. Time-based restrictedstock units receive dividend equivalents in the form of additional time-based restricted stock units, which are subject to the same restrictions andforfeiture provisions as the original award.

Performance-based restricted stock awards include performance-based restricted stock units. These awards cliff vest at the end of a three yearperiod based upon the Company’s achievement of pre-established goals throughout the term of the award. Performance-based restricted stockunits receive dividend equivalents in the form of additional performance-based restricted stock units, which are subject to the same restrictions andforfeiture provisions as the original award.

The grant date fair value of all restricted stock awards is based on the closing market price of the Company’s common stock on the date of grant.

A summary of the Company’s restricted stock activity is presented in the following tables:

Time-Based Restricted

Stock Units Performance-Based Restricted

Stock Units 39 Weeks Ended 39 Weeks Ended October 28, 2017 October 28, 2017

(Sharesinthousands) Shares

Weighted-AverageGrant DateFair Value Shares

Weighted-AverageGrant DateFair Value

Nonvested - January 28, 2017 2,001 $ 15.39 2,825 $ 15.07 Granted 1,489 $ 11.62 703 $ 14.97 Vested (986) $ 14.91 (957) $ 14.14 Cancelled (194) $ 14.13 (295) $ 16.13 Nonvested - October 28, 2017 2,310 $ 13.27 2,276 $ 15.17

As of October 28, 2017, there was $21.3 million of unrecognized compensation expense related to non-vested, time-based restricted stock unitawards that is expected to be recognized over a weighted-average period of 1.9 years. Based on current probable performance, there is $4.1 millionof unrecognized compensation expense related to performance-based restricted stock unit awards which will be recognized as achievement ofperformance goals is probable over a one to three year period.

As of October 28, 2017, the Company had 9.3 million shares available for all equity grants. 10. Income TaxesThe provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discretequarterly events. The effective income tax rate for the 13 weeks ended October 28, 2017 was 34.8% compared to 36.3% for the 13 weeks endedOctober 29, 2016. The effective income tax rate for the 39 weeks

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ended October 28, 2017 was 34.1% compared to 36.4% for the 39 weeks ended October 29, 2016. The decrease in the effective income tax rate forthe 13 weeks ended October 28, 2017 was primarily due to the overall mix of earnings in jurisdictions with different tax rates. The decrease in theeffective income tax rate for the 39 weeks ended October 28, 2017 was primarily due to the overall mix of earnings in jurisdic tions with different taxrates and changes in unrecognized tax benefits.

The Company records accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognizes incometax liabilities related to unrecognized tax benefits in accordance with ASC 740 and adjusts these liabilities when its judgment changes as the result ofthe evaluation of new information not previously available. Unrecognized tax benefits did not change significantly during the 13 weeks endedOctober 28, 2017. Over the next twelve months, the Company believes that it is reasonably possible that unrecognized tax benefits may decreaseby approximately $3.9 million due to settlements, expiration of statute of limitations or other changes in unrecognized tax benefits. 11. Legal ProceedingsThe 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 reasonablyestimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Companyrecords the accrual at the low end of the range, in accordance with ASC 450. As the Company believes that it has provided adequate reserves, itanticipates that the ultimate outcome of any matter currently pending against the Company will not materially affect the consolidated financialposition, results of operations or consolidated cash flows of the Company. However, our assessment of any litigation or other legal claims couldpotentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact which are not inaccord with management’s evaluation of the possible liability or outcome of such litigation or claims. 12. Restructuring Related Charges

In the 13 and 39 weeks ended October 28, 2017, the Company recorded pre-tax restructuring related charges of $3.7 million and $29.9 million,respectively. These amounts consist of costs related to the planned exit of a joint business venture; charges for home office restructuring; and thepreviously announced initiative to explore the closure or conversion of Company owned and operated stores in Hong Kong, China, and the UnitedKingdom to licensed partnerships. The closure of the United Kingdom was completed in the 39 weeks ended October 28, 2017. The Companyexpects to incur additional charges for corporate and international restructuring charges in Fiscal 2017. The magnitude is dependent on a number offactors, including negotiating third-party agreements, adherence to notification requirements and local laws.

13 Weeks Ended 39 Weeks Ended October 28, October 28, (Inthousands) 2017 2017

Severance and related employee costs $ 2,431 $ 9,592 Lease termination and store closure costs 1,264 9,296 Total cash restructuring charges (1) 3,695 18,888 Joint business venture charges (2) — 9,311 Inventory charges (3) — 1,669 Total restructuring related charges $ 3,695 $ 29,868

(1) Cash charges of $3.7 million and $18.9 million for the 13 and 39 weeks respectively, for lease termination, store closures & severance were

recorded within Restructuring Charges on the Consolidated Statements of Operations(2) $9.3 million ($5.1 million cash and $4.2 million non-cash) of charges related to the planned exit of a joint business venture were recorded

within Other (Expense) Income, Net on the Consolidated Statements of Operations(3) Non-cash inventory charges of $1.7 million related to restructuring activities for our United Kingdom and Asia markets recorded as a reduction

in Gross Profit on the Consolidated Statements of Operations.

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A rollforward of the liabilities recognized in the Consolidated Balance Sheet is as follows. The accrued liability as of January 28, 2017 relates toprevious restructuring activities disclosed in the Company’s Fiscal 2016 Form 10-K, which remained unpaid at the beginning of Fiscal 2017.

(Inthousands) Accrued liability as of January 28, 2017 $ 1,175 Add: Costs incurred, excluding non-cash charges 24,015 Less: Cash payments and adjustments (15,391) Accrued liability as of October 28, 2017 $ 9,799

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Review by Independent Registered Public Accounting FirmErnst & Young LLP, our independent registered public accounting firm, has performed a limited review of the unaudited Consolidated FinancialStatements for the thirteen and thirty-nine week periods ended October 28, 2017 and October 29, 2016, as indicated in their report on the limitedreview included below. Since they did not perform an audit, they express no opinion on the unaudited Consolidated Financial Statements referred toabove.

Review Report of Independent Registered Public Accounting FirmThe Board of Directors and Stockholders ofAmerican Eagle Outfitters, Inc. We have reviewed the consolidated balance sheets of American Eagle Outfitters, Inc. (the Company) as of October 28, 2017 and October 29, 2016,and the related consolidated statements of operations and retained earnings and comprehensive income for the thirteen and thirty-nine week periodsended October 28, 2017 and October 29, 2016 and the consolidated statements of cash flows for the thirty-nine week periods ended October 28,2017 and October 29, 2016. These financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interimfinancial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accountingmatters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting OversightBoard (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we donot express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred toabove for them to be in conformity with U.S. generally accepted accounting principles. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidatedbalance sheet of American Eagle Outfitters, Inc. as of January 28, 2017, and the related consolidated statements of operations, comprehensiveincome, stockholders’ equity, and cash flows for the year then ended (not presented herein), and we expressed an unqualified audit opinion on thoseconsolidated financial statements in our report dated March 10, 2017. In our opinion, the accompanying consolidated balance sheet of AmericanEagle Outfitters, Inc. as of January 28, 2017, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it hasbeen derived. /s/ Ernst & Young LLP Pittsburgh, PennsylvaniaDecember 7, 2017

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ITEM 2. MANAGEMENT’S DISCUSSION A ND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS.The following discussion and analysis of financial condition and results of operations should be read in conjunction with our Fiscal 2016Management’s Discussion and Analysis of Financial Condition and Results of Operations which can be found in our Fiscal 2016 Annual Report onForm 10-K.

In addition, the following discussion and analysis of financial condition and results of operations are based upon our Consolidated FinancialStatements and should be read in conjunction with these statements and notes thereto.

This report contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended, which represent our expectations or beliefs concerning future events, includingthe following:

• the planned opening of approximately 15 to 20 AEO stores, including 10 to 15 Aerie side-by-side formats, and 15 Aerie stand-alone stores,and remodel of 15 to 20 existing AE stores to Aerie side-by-side format in North America during Fiscal 2017;

• the success of our efforts to expand internationally, engage in future franchise/license agreements, and/or growth through acquisitions or jointventures;

• the selection of approximately 50 American Eagle Outfitters stores in the United States and Canada for remodeling and refurbishing duringFiscal 2017;

• the potential closure of approximately 20 to 23 American Eagle Outfitters and 4 to 7 Aerie stores primarily in North America during Fiscal2017;

• the success of our core American Eagle Outfitters and Aerie brands within North America and internationally;

• the success of our business priorities and strategies;

• the expected payment of a dividend in future periods;

• the possibility that our credit facilities may not be available for future borrowings;

• the possibility that rising prices of raw materials, labor, energy and other inputs to our manufacturing process, if unmitigated, will have asignificant impact to our profitability; and

• the possibility that we may be required to take additional store impairment charges related to underperforming stores.

We caution that these forward-looking statements, and those described elsewhere in this report, involve material risks and uncertainties and aresubject to change based on factors beyond our control as discussed within Item 1A of this Quarterly Report on Form 10-Q and Item 1A of our Fiscal2016 Annual Report on Form 10-K. Accordingly, our future performance and financial results may differ materially from those expressed or implied inany such forward-looking statements.

Key Performance IndicatorsOur management evaluates the following items, which are considered key performance indicators, in assessing our performance:

Comparablesales- Comparable sales provide a measure of sales growth for stores and channels open at least one year over the comparable prioryear 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 isincluded in comparable sales in the thirteenth month of operation. However, stores that have a gross square footage change of 25% or greater dueto a remodel are removed from the comparable sales base, but are included in total sales. These stores are returned to the comparable sales basein the thirteenth month following the remodel. Sales from American Eagle Outfitters, Aerie and Tailgate stores, as well as sales from AEO Direct andother digital channels, are included in total comparable sales. Sales from licensed stores are not included in comparable sales. Individual AmericanEagle Outfitters and Aerie brand comparable sales disclosures represent sales from stores and AEO Direct.

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AEO Direct sales are inclu ded in the individual American Eagle Outfitters and Aerie brand comparable sales metric for the following reasons:

• Our approach to customer engagement is “omni-channel”, which provides a seamless customer experience through both traditional and non-traditional channels, including four wall store locations, web, mobile/tablet devices, social networks, email, in-store displays and kiosks.Additionally, we fulfill online orders at stores through our buy online, ship from store capability, maximizing store inventory exposure to digitaltraffic. We also offer reserve online, pickup in store service to our customers and give them the ability to look up store inventory from all digitalchannels; and

• Shopping behavior has continued to evolve across multiple channels that work in tandem to meet customer needs. Management believes thatpresenting a brand level performance metric that includes all channels (i.e., stores and AEO Direct) is the most appropriate, given customerbehavior.

Our management considers comparable sales to be an important indicator of our current performance. Comparable sales results are important toachieve leveraging of our costs, including store payroll, store supplies, rent, etc. Comparable sales also have a direct impact on our total netrevenue, cash and working capital.

Grossprofit — Gross profit measures whether we are optimizing profitability of our sales. Gross profit is the difference between total net revenueand cost of sales. Cost of sales consists of: merchandise costs, including design, sourcing, importing and inbound freight costs, as well asmarkdowns, shrinkage and certain promotional costs (collectively “merchandise costs”) and buying, occupancy and warehousing costs. Design costsconsist of: compensation, rent, depreciation, travel, supplies and samples.

Buying, occupancy and warehousing costs consist of: compensation, employee benefit expenses and travel for our buyers and certain seniormerchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from ourdistribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; andshipping and handling costs related to our e-commerce operation. The inability to obtain acceptable levels of sales, initial markups or any significantincrease in our use of markdowns could have an adverse effect on our 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 arecomparable sales, gross profit, our ability to control selling, general and administrative expenses, and our level of capital expenditures. Managementalso uses earnings before interest and taxes as an indicator of operating results.

Returnoninvestedcapital— Our management uses return on invested capital as a key measure to assess our efficiency at allocating capital toprofitable investments. This measure is critical in determining which strategic alternatives to pursue.

Omni-channel sales performance — Our management utilizes the following quality of sales metrics in evaluating our omni-channel salesperformance: Comparable sales, average unit retail price (“AUR”), units per transaction (“UPT”), average transaction value, transactions, customertraffic and conversion rates.

Inventory turnover — Our management evaluates inventory turnover as a measure of how productively inventory is bought and sold. Inventoryturnover is important as it can signal slow moving inventory. This can be critical in determining the need to take markdowns on merchandise.

Cash flow and liquidity — Our management evaluates free cash flow in determining the sufficiency of our cash position. Free cash flow hashistorically been sufficient to cover our uses of cash. Our management believes that free cash flow will be sufficient to fund anticipated capitalexpenditures, dividends and working capital requirements.

Results of OperationsOverviewOur third quarter produced record sales and the eleventh consecutive quarter of positive comparable sales growth. Comparable sales were positivein both the AE and Aerie brands. Our results validated our investments in product leadership, innovation, quality and strong brand equity. Margin

demonstrated sequential improvement year ‐over-year as erosion narrowed significantly. SG&A expense declined compared to last year, resulting in

strong expense leverage. We ended the quarter in solid financial condition, with $257.5 million in cash and no outstanding debt .

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Total net revenue increased 2% to $960.4 million and consolidated comparable sales, including AEO Direct, increased 3%, following a 2% increaselast year. By brand, American Eagle Outfitte rs comparable sales increased 1% while Aerie increased 19%.

Gross profit decreased 1% to $374.9 million compared to $377.8 million last year and decreased 120 basis points to 39.0% as a rate to total netrevenue. The decline in margin rate is the result of increased promotional activity and shipping costs associated with a strong digital business.

Selling, general and administrative expense decreased 1% to $217.1 million compared to $219.9 million last year and leveraged 80 basis points to22.6% as a rate to total net revenue. SG&A expense decreased as a result of lower incentives and expense discipline, partially offset by higherwages.

Net income for the quarter was $63.7 million, or $0.36 per diluted share, compared to $75.8 million, or $0.41 per diluted share, last year. On anadjusted basis, net income per diluted share this year was $0.37 per share, which excludes $0.01 per share of restructuring related charges.Additionally, this year we incurred a discrete charge of $13.9 million, or $0.05 per diluted share, in other expense associated with a reserve against areceivable.

During Fiscal 2017, we returned $155.8 million to shareholders through share repurchases of $87.7 million, and cash dividends of $68.1 million. Wehad $257.5 million in cash and cash equivalents as of October 28, 2017 compared to $291.7 million last year. Merchandise inventory at the end ofthe third quarter was $534.0 million, compared to $492.6 million last year, an 8% increase.

Our business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are notnecessarily indicative of future financial results.

This results of operations section contains non-GAAP financial measures (“non-GAAP” or “adjusted”), comprised of earnings per share informationexcluding non-GAAP items. This financial measure is not based on any standardized methodology prescribed by U.S. generally accepted accountingprinciples (“GAAP”) and is not necessarily comparable to similar measures presented by other companies. We believe that this non-GAAPinformation is useful as an additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAPfinancial statements. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating ourbusiness and operations. The table below reconciles the GAAP financial measure to the non-GAAP financial measure discussed above.

13 Weeks Ended October 28, 2017 Net income per diluted share - GAAP Basis $ 0.36

Add: Restructuring related charges (1) 0.01 Net income per diluted share - Adjusted or Non-GAAP Basis $ 0.37

(1) $3.7 million pre-tax restructuring related charges, consisting of:

• Corporate severance related charges ($2.4 million) and corporate lease buyouts of ($1.3 million)

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The following table shows the percentage relationship to total net revenue of the listed line items included in our Consolidated Statements ofOperations.

13 Weeks Ended 39 Weeks Ended October 28, October 29, October 28, October 29, 2017 2016 2017 2016 Total net revenue 100.0 % 100.0 % 100.0 % 100.0 %Cost of sales, including certain buying, occupancy and warehousing expenses 61.0 59.8 63.2 61.1 Gross profit 39.0 40.2 36.8 38.9 Selling, general and administrative expenses 22.6 23.4 24.0 24.5 Restructuring charges 0.4 — 0.8 — Depreciation and amortization expense 4.5 4.2 4.8 4.6 Operating income 11.5 12.6 7.2 9.8 Other (expense) income, net (1.4) — (0.8) 0.1 Income before income taxes 10.1 12.6 6.4 9.9 Provision for income taxes 3.5 4.6 2.2 3.6 Net Income 6.6 % 8.0 % 4.2 % 6.3 %

The following table shows our consolidated store data:

13 Weeks Ended 39 Weeks Ended October 28, October 29, October 28, October 29, 2017 2016 2017 2016 Number of stores: Beginning of period 1,057 1,044 1,050 1,047 Opened 5 11 26 19 Closed (4) (3) (18) (14)End of period 1,058 1,052 1,058 1,052 Total gross square feet at end of period (in '000) 6,641 6,638 6,641 6,638 International licensed/franchise stores at end of period (1) 205 163 205 163

(1) International licensed/franchise stores are not included in the consolidated store data or the total gross square feet calculation.

Our operations are conducted in one reportable segment, consisting of 943 American Eagle Outfitters retail stores which include 114 Aerie side-by-side locations, 110 Aerie stand-alone locations and AEO Direct. Additionally, there were 4 Tailgate and 1 Todd Snyder stand-alone locations.

Comparison of the 13 weeks ended October 28, 2017 to the 13 weeks ended October 29, 2016Total net revenueTotal net revenue increased 2%, or $19.8 million, to $960.4 million compared to $940.6 million last year. The increase resulted from a consolidatedcomparable sales increase of 3% for the period following a 2% increase last year.

By brand, including the respective AEO Direct sales, American Eagle Outfitters brand comparable sales increased 1%, or $10.7 million, and Aeriebrand comparable sales increased 19%, or $13.5 million. Total comparable sales for AE women’s increased 1% and men’s increased 2%.

For the third quarter, consolidated comp traffic increased in the low-double digits while transactions increased in the mid-single digits. Averagetransaction value decreased slightly, driven by a decrease in units per transaction in the low-single digits, partially offset by an AUR increase in thelow-single digits.

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Gross ProfitGross profit decreased 1% or $2.9 million to $374.9 million compared to $377.8 million last year and decreased 120 basis points to 39.0%. 50 basispoints of the decline in the gross margin rate is the result of increased promotions to drive sales and conversion. Additionally, buying, occupany, andwarehousing costs deleveraged 70 basis points as a result of higher delivery costs related to increased AEO Direct penetration.

There was $2.0 million and $3.1 million of share-based payment expense included in gross profit for the periods ended October 28, 2017 andOctober 29, 2016, respectively, comprised of both time and performance-based awards.

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 asdesign 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, generaland administrative expenses. Refer to Note 2 to the Consolidated Financial Statements for a description of our accounting policy regarding cost ofsales, including certain buying, occupancy and warehousing expenses.

Selling, General and Administrative ExpensesSelling, general and administrative (“SG&A”) expenses decreased 1% or $2.8 million to $217.1 million from $219.9 million last year. As a rate to totalnet revenue, SG&A expenses leveraged 80 basis points to 22.6%, compared to 23.4% last year. SG&A expense decreased as a result of lowerincentives and expense discipline, partially offset by higher wages.

There was $0.3 million and $3.2 million of share-based payment expense included in SG&A expenses for the periods ended October 28, 2017 andOctober 29, 2016, respectively, comprised of both time and performance-based awards.

Restructuring ChargesRestructuring charges were $3.7 million, or 0.4% as a rate to total net revenue, for the 13 weeks ended October 28, 2017. These charges are theresult of corporate severance related charges of $2.4 million and $1.3 million of corporate lease buyout charges.

Depreciation and Amortization ExpenseDepreciation and amortization expense increased 9% or $3.5 million to $43.1 million, compared to $39.6 million last year. As a rate to total netrevenue, depreciation and amortization expense was 4.5% this year as compared to 4.2% last year. The increase was driven by omni-channel,stores and IT technology investments.

Other (Expense) Income, NetOther expense increased to $(13.2) million this year, compared to other income of $0.6 million last year. Included in other expense this year was a$13.9 million discrete charge, associated with a reserve against a receivable.

Provision for Income TaxesThe provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for quarterlyevents. The effective income tax rate for the 13 weeks ended October 28, 2017 was 34.8% compared to 36.3% for the 13 weeks ended October 29,2016. The decrease in the effective income tax rate for the 13 weeks ended October 28, 2017 was primarily due to the overall mix of earnings injurisdictions with different tax rates.

Net IncomeNet income decreased 16%, or $12.0 million, to $63.7 million, or 6.6% as a percent to total net revenue, from $75.8 million, or 8.0% as a percent tototal net revenue last year. Net income per share decreased to $0.36 per diluted share from $0.41 per diluted share last year. Net income perdiluted share of $0.36 this year includes $0.01 per share of restructuring related charges and $0.05 per share of a discrete charge associated with areserve against a receivable. The change in net income is attributable to the factors noted above.

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Comparison of the 39 weeks ended October 28, 2017 to the 39 weeks ended October 29, 2016Total net revenueTotal net revenue increased 2%, or $54.2 million, to $2.567 billion compared to $2.513 billion last year. The increase resulted from a consolidatedcomparable sales increase of 2% for the period, following a 4% increase last year.

By brand, including the respective AEO Direct sales, American Eagle Outfitters brand comparable sales remained approximately flat, or $3.3 million,and Aerie brand comparable sales increased 23%, or $48.0 million. Total comparable sales for AE women’s increased 1% and men’s decreased2%.

For the year to date period, consolidated comp traffic increased in the high-single digits and transactions increased in the mid-single digits. Averagetransaction value decreased in the low-single digits, driven by a low-single digits decrease in units per transaction, partially offset by an AURincrease in the low-single digits.

Gross ProfitGross profit decreased 3% or $33.0 million to $945.4 million compared to $978.4 million last year, and the gross profit rate decreased 210 basispoints to 36.8% compared to 38.9% last year. Gross profit this year includes $1.7 million, or 10 basis points, of inventory charges related torestructuring activities in our United Kingdom and Asia markets. 150 basis points of decline in the gross profit rate is the result of increasedpromotions to drive sales and conversion. Additionally, buying, occupany, and warehousing costs deleveraged 50 basis points primarily as a resultof higher delivery costs related to increased AEO Direct penetration.

There was $7.2 million and $12.1 million of share-based payment expense included in gross profit for the periods ended October 28, 2017 andOctober 29, 2016, respectively, comprised of both time and performance-based awards.

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 asdesign 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, generaland administrative expenses. Refer to Note 2 to the Consolidated Financial Statements for a description of our accounting policy regarding cost ofsales, including certain buying, occupancy and warehousing expenses.

Selling, General and Administrative ExpensesSG&A expenses of $615.8 were relatively flat as compared to $615.5 million last year. SG&A expense remained flat as a result of higheradvertising investments and store salaries, offset by lower incentive compensation. As a rate to total net revenue, SG&A expenses leveraged 50basis points to 24.0%, compared to 24.5% last year.

There was $4.8 million and $10.9 million of share-based payment expense included in SG&A expenses for the periods ended October 28, 2017 andOctober 29, 2016, respectively, comprised of both time and performance-based awards.

Restructuring ChargesRestructuring charges were $18.9 million, or 0.8% as a rate to total net revenue, for the 39 weeks ended October 28, 2017. These charges are theresult of home office restructuring and the previously announced initiative to explore the closure or conversion of Company owned and operatedstores in Hong Kong, China, and the United Kingdom to licensed partnerships. The closure of the United Kingdom was completed in the 39 weeksended October 28, 2017. We expect to incur additional charges for corporate and international restructuring charges in Fiscal 2017.

Recorded separately from Restructuring Charges on the Consolidated Statements of Operations is $1.7 million, or 0.1% as a rate to total revenue, ofinventory charges related to restructuring activities recorded as a reduction in Gross Profit in our United Kingdom and Asia markets. Additionally,$9.3 million, or 0.4% as a rate to total revenue, for costs related to the planned exit of a joint business venture are recorded within Other (Expense)Income, Net.

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Depreciation and Amortization ExpenseDepreciation and amortization expense increased 6% or $6.6 million to $123.9 million, compared to $117.3 million last year. As a rate to total netrevenue, depreciation and amortization expense was 4.8% this year as compared to 4.6% last year. The increase was driven by omni-channel,stores and IT technology investments.

Other (Expense) Income, NetOther expense was $(19.6) million this year, compared to $2.4 million of other income last year. Included in other expense this year is $9.3 million ofcosts related to the planned exit of a joint business venture, along with a $16.0 million discrete charge in the 39 weeks ended October 28, 2017associated with a reserve against a receivable, partially offset by foreign currency fluctuations.

Provision for Income TaxesThe provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for quarterlyevents. The effective income tax rate for the 39 weeks ended October 28, 2017 was 34.1% compared to 36.4% for the 39 weeks ended October 29,2016. The decrease in the effective income tax rate this year is primarily due to the overall mix of earnings in jurisdictions with different tax rates andchanges in unrecognized tax benefits.

Net IncomeNet income decreased 30% or $47.6 million to $110.2 million, or 4.2% as a percent to total net revenue, from $157.8 million, or 6.3% as a percent tototal net revenue last year. Net income per diluted share decreased to $0.61 per diluted share from $0.86 per diluted share last year. Net incomeper diluted share of $0.61 this year includes $0.11 per diluted share of restructuring related charges and $0.05 per share of a discrete chargeassociated with to a reserve against a receivable. The change in net income is attributable to the factors noted above.

International OperationsWe have agreements with multiple third party operators to expand our brands internationally. Through these agreements, a series of franchised,licensed or other brand-dedicated American Eagle Outfitters stores have opened and will continue to open in areas including Eastern Europe, theMiddle East, Central and South America, Northern Africa and parts of Asia. These agreements do not involve a significant capital investment oroperational involvement from us. We continue to increase the number of countries in which we enter into these types of arrangements as part of ourstrategy to expand internationally. In the 13 weeks ended October 28, 2017 we signed a multi-year license agreement for the India territory, with theAditya Birla Group, a leading Indian conglomerate, with the first stores expecting to open in Spring 2018. As of October 28, 2017, we had 205 storesoperated by our third party operators in 24 countries. International third party operated stores are not included in the consolidated store data or thetotal gross square feet calculation.

As of October 28, 2017, we had 103 company-operated stores in Canada, 32 in Mexico, 6 in Hong Kong, 6 in China and 6 in Puerto Rico. Duringthe 39 weeks ended October 28, 2017, we completed the closure of all stores in the United Kingdom. We continue to evaluate further opportunitiesto expand internationally, which may include additional company-operated stores as well as stores operated by third party operators under license,franchise and/or joint venture agreements.

Fair Value MeasurementsASC 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair valuemeasurements. 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 orderlytransaction between market participants at the measurement date.

Financial InstrumentsValuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservableinputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiersinclude:

• 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 orliabilities.

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As of October 28, 2017, we held certain assets that are required to be measured at fair value on a recurring basis. These include cash and cashequivalents.

In accordance with ASC 820, the following table represents the fair value hierarchy of our financial assets (cash equivalents and investments)measured at fair value on a recurring basis as of October 28, 2017:





(Level 2)


Inputs(Level 3)


Total cash and cash equivalents $ 257,527 $ 257,527 — —

Liquidity and Capital ResourcesOur uses of cash are generally for working capital, the construction of new stores and remodeling of existing stores, information technologyupgrades, distribution center improvements and expansion and the return of value to shareholders through the repurchase of common stock and thepayment of dividends. Historically, these uses of cash have been funded with cash flow from operations and existing cash on hand. Also, we hold afive-year asset-based revolving credit facility that allows us to borrow up to $400 million, which will expire in December of 2019. Additionally, ouruses of cash include the development of the Aerie brand, investments in technology and omni-channel capabilities, and our international expansionefforts. We expect to be able to fund our future cash requirements through current cash holdings as well as cash generated from operations.

Our growth strategy includes fortifying our brands and further e-commerce and store expansion or acquisitions. We periodically consider andevaluate these options to support future growth. In the event we do pursue such options, we could require additional equity or debt financing. Therecan be no assurance that we would be successful in closing any potential transaction, or that any endeavor we undertake would increase ourprofitability.

The following sets forth certain measures of our liquidity:

October 28, January 28, October 29, 2017 2017 2016 Working Capital (in thousands) $ 377,372 $ 407,446 $ 373,970 Current Ratio 1.68 1.83 1.66

Working capital decreased $30.1 million compared to January 28, 2017 and increased $3.4 million compared to last year. The $30.1 milliondecrease in our working capital and corresponding decrease in the current ratio as of October 28, 2017, is driven by the following: $121.1 milliondecrease in cash driven by cash flow from operations of $188.1 million, offset by share repurchases of $87.7 million, capital expenditures of $134.9million and dividends of $66.4 million. Additionally, we had a net increase in non-cash working capital balances of $91.0, primarily the result of higherinventory levels as compared to Fiscal 2016 year end.

Cash Flows from Operating ActivitiesNet cash provided by operating activities totaled $188.1 million and $202.9 million for the 39 weeks ended October 28, 2017 and October 29, 2016,respectively. For both periods, our major source of cash from operations was merchandise sales and our primary outflow of cash for operations wasfor the payment of operational costs.

Cash Flows from Investing ActivitiesInvesting activities for the 39 weeks ended October 28, 2017 primarily consisted of $134.9 million of capital expenditures for property and equipment.Investing activities for the 39 weeks ended October 29, 2016 primarily included $107.6 million of capital expenditures for property and equipment.

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Cash Flows from Financing ActivitiesCash used for financing activities for the 39 weeks ended October 28, 2017 consisted primarily of $87.7 million of purchases of common stock underpublically announced programs, $66.4 million for cash dividends paid at a quarterly rate of $0.125 per share, $12.3 million for the repurchase ofcommon stock from employees for the payment of taxes in connection with the vesting of share-based payments and $8.7 million for the paymentson capital leases.

Cash used for financing activities for the 39 weeks ended October 29, 2016 consisted primarily of $67.9 million for cash dividends paid at a quarterlyrate of $0.125 per share, $6.9 million for the repurchase of common stock from employees for the payment of taxes in connection with the vesting ofshare-based payments and $5.6 million for the payments on capital leases, partially offset by $16.2 million of net proceeds from stock optionexercises. There were no purchases of common stock from publically announced programs last year.

Credit FacilitiesIn Fiscal 2014, we entered into a Credit Agreement (“Credit Agreement”) for five-year, syndicated, asset-based revolving credit facilities (the “CreditFacilities”). The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to $400.0 million, subject to customaryborrowing base limitations. The Credit Facilities provide increased financial flexibility and take advantage of a favorable credit environment.

All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement aresecured by a first-priority security interest in certain working capital assets of the borrowers and guarantors, consisting primarily of cash, receivables,inventory and certain other assets and have been further secured by first-priority mortgages on certain real property.

As of October 28, 2017, we were in compliance with the terms of the Credit Agreement and had $8.1 million outstanding in stand-by letters of credit.No loans were outstanding under the Credit Agreement on October 28, 2017.

Additionally, we have a borrowing agreement with one financial institution under which we may borrow an aggregate of $5.0 million for the purposesof trade letter of credit issuances. The availability of any future borrowings under the trade letter of credit facilities is subject to acceptance by therespective financial institutions. As of October 28, 2017, we had no outstanding trade letters of credit.

Capital Expenditures for Property and EquipmentCapital expenditures for the 39 weeks ended October 28, 2017 were $134.9 million and included $76.8 million related to investments in ourstores. In the 13 weeks ended October 28, 2017, we opened 1 new Aerie location. Also, we opened 4 new AE stores; 1 in Mexico, 1 in Canada andthe remaining 2 in the U.S. to better position select markets. Additionally, we continued to support our infrastructure growth by investing ininformation technology initiatives ($25.0 million), e-commerce ($22.9 million), the improvement of our distribution centers ($8.8 million), and otherhome office projects ($1.4 million).

For Fiscal 2017, we expect capital expenditures to be in the range of $160 million to $170 million in support of our expansion efforts, storesinvestments including selective remodels of high performing, long-term locations, information technology upgrades to support growth andinvestments in e-commerce.

Stock RepurchasesDuring the 39 weeks ended October 28, 2017, as part of our publicly announced share repurchase program, we repurchased 6.0 million shares for$87.7 million, at a weighted average price of $14.59 per share.

During Fiscal 2016, our Board authorized the repurchase of 25.0 million shares under a new share repurchase program which expires on January30, 2021. As of October 28, 2017, 19.0 million shares remain outstanding under the current authorization.

During the 39 weeks ended October 28, 2017 and October 29, 2016, we repurchased approximately 0.8 million and 0.4 million shares, respectively,from certain employees at market prices totaling $12.3 million and $6.9 million, respectively. These shares were repurchased for the payment oftaxes, in connection with the vesting of share-based payments, as permitted under our equity incentive plans. The aforementioned sharesrepurchased have been recorded as treasury stock.

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DividendsDuring the 13 weeks ended October 28, 2017, our Board declared a quarterly cash dividend of $0.125 per share, which was paid on October 20,2017. The payment of future dividends is at the discretion of our Board and is based on future earnings, cash flow, financial condition, capitalrequirements, changes in U.S. taxation and other relevant factors. It is anticipated that any future dividends paid will be declared on a quarterlybasis.

Critical Accounting PoliciesOur critical accounting policies are described in Item 7, Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations,and in the notes to our Consolidated Financial Statements for the year ended January 28, 2017 contained in our Fiscal 2016 Annual Report on Form10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed inthe notes to our Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of our critical accounting policies mayrequire our management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Our managementuses historical experience and all available information to make these estimates and judgments, and different amounts could be reported usingdifferent assumptions and estimates. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.There were no material changes in our exposure to market risk from January 28, 2017. Our market risk profile as of January 28, 2017 is disclosed inItem 7A, QuantitativeandQualitativeDisclosuresAboutMarketRisk, of our Fiscal 2016 Annual Report on Form 10-K.

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ITEM 4. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in ourreports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within thetime periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicatedto our management including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regardingrequired 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.

In connection with the preparation of this Quarterly Report on Form 10-Q, as of October 28, 2017, an evaluation was performed under thesupervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, of theeffectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Basedupon that evaluation, our Principal Executive Officer and our Principal Financial Officer have concluded that our disclosure controls and procedureswere effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting that occurred during the 13 weeks ended October 28, 2017 that havematerially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHE R INF ORMATION

ITEM 1A. RISK FACTORS.Risk factors that affect our business and financial results are discussed within Item 1A of our Fiscal 2016 Annual Report on Form 10-K. There havebeen no material changes to the disclosures relating to this item from those set forth in our Fiscal 2016 Annual Report on Form 10-K. ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.Issuer Purchases of Equity SecuritiesThe following table provides information regarding our repurchases of our common stock during the 13 weeks ended October 28, 2017.

Total Total Number of Maximum Number of Number of Average Shares Purchased as Shares that May Shares Price Paid Part of Publicly Yet Be Purchased Period Purchased Per Share Announced Programs Under the Program (1) (2) (1) (1) (3) Month #1 (July 30, 2017 through August 26, 2017) — — — 19,000,000 Month #2 (August 27, 2017 through September 30, 2017) 7,140 $ 12.27 — 19,000,000 Month #3 (October 1, 2017 through October 28, 2017) 12,916 $ 13.78 — 19,000,000 Total 20,056 $ 13.24 — 19,000,000

(1) During the 13 weeks ended October 28, 2017 there were no shares repurchased as part of our publicly announced share repurchase program

and there were 20,056 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 2016, our Board of Directors authorized 25.0 million shares under a new share repurchase program which expires on January

30, 2021. ITEM 5. OTHER INFORMATION

On December 7, 2017, the Company entered into an indemnification agreement (the “Indemnification Agreement”) with James H. Keefer, Jr., theCompany’s Vice President – Controller and Chief Accounting Officer . The Indemnification Agreement is in the same form as the indemnificationagreement that we have entered into with our other directors and executive officers and previously has been filed with the SEC. The terms of the Indemnification Agreement, subject to certain exceptions, generally provide that the Company will indemnify the indemnitee to thefullest extent permitted by law in connection with any claims, suits or proceedings arising as a result of his or her service as a director or officer of theCompany or any subsidiary of the Company, including against third-party claims and proceedings brought by or in right of the Company. Noindemnification will be paid pursuant to the Indemnification Agreement (i) on account of any proceedings brought by the indemnitee, including anyproceedings against the Company (except as otherwise provided in the Indemnification Agreement), (ii) if a court finally determines that theindemnification is prohibited under applicable law, (iii) on account of any proceeding arising against the indemnitee for the disgorgement of profitsfrom the purchase or sale of securities of the Company pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or (iv)relating to the clawback or recoupment of any bonus or other incentive-based or equity-based compensation previously received by indemnitee orpayment of any profits realized by indemnitee from the sale of securities of the Company. Additionally, the Indemnification Agreement provides thatthe indemnitee is entitled to the advancement of certain expenses, subject to certain exceptions and repayment conditions, incurred in connectionwith such claims, suits or proceedings. Any indemnification agreement to be entered into between the Company and a newly-appointed director or executive officer following the datehereof will be substantially similar to the form of the Indemnification Agreement described herein.

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ITEM 6. E XHIBITS. * Exhibit 10.1 Separation Agreement between the registrant and Peter Horvath, dated October 5, 2017

* Exhibit 15 Acknowledgement of Independent Registered Public Accounting Firm

* Exhibit 31.1 Certification by Jay L. Schottenstein pursuant to Rule 13a-14(a) or Rule 15d-14(a)

* Exhibit 31.2 Certification by Robert L. Madore pursuant to Rule 13a-14(a) or Rule 15d-14(a)

**Exhibit 32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002

**Exhibit 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002

* Exhibit 101 Interactive Data File * Filed with this report.** Furnished with this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.

Dated: December 7, 2017 American Eagle Outfitters, Inc.

(Registrant)

By: /s/ Jay L. Schottenstein Jay L. Schottenstein Chief Executive Officer (Principal Executive Officer) By: /s/ Robert L. Madore Robert L. Madore Executive Vice President, Chief Financial Officer (Principal Financial Officer)

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Exhibit 10.1

GENERAL RELEASE AND SEPARATION AGREEMENT This General Release and Separation Agreement (“ Agreement” ) is entered into between Peter Z. Horvath, together with your heirs,administrators, executors, successors, assigns and other personal representatives (collectively referred to as “ You” ) andAMERICAN EAGLE OUTFITTERS, INC. , together with its past, present and future officers, directors, stockholders, agents,representatives, insurers, employees, attorneys, subsidiaries, affiliated corporations and assigns (collectively referred to as the “Company ”), as of the last date entered on the signature lines below. In consideration of the mutual covenants and agreements hereinafter set forth, and intending to be legally bound, the parties agree asfollows:

1. Separation From Employment a. You acknowledge separation of your employment with the Company effective (“ Separation Date ”). You

acknowledge and agree that as of the Separation Date, you will cease to be an employee of the Company andyou will no longer be eligible for, or receive any benefits of employment or due to separation therefrom,including but not limited to those set forth in your offer letter with the Company dated May 3, 2016, except forany benefits specifically described in this Agreement.

b. You shall be entitled to payment of your salary or wages earned through the Separation Date, as well as any

accrued but unused paid time off (“ PTO ”) time as of the Separation Date. The Company shall pay your salaryor wages and any PTO, less applicable withholdings and deductions.

c. You hereby agree to resign all directorships and board or committee memberships and officer positions you hold

within the Company and/or any other entity as a result of your employment with the Company. This resignationwill be effective on the Separation Date or such other date as requested by the Company.

2. Separation Payments and Benefits a. Separation Payment : Subject to your execution and non-revocation of this Agreement and compliance with

your obligations set forth in the Confidentiality, Non-Competition and Intellectual Property Agreement datedMay 4, 2016 (the “ Confidentiality Agreement ”), you will be entitled to receive a Separation Payment equal to$850,000 payable in a lump sum on January 5, 2018, less applicable deductions and withholdings. Youunderstand that the Separation Payment will not be counted as earnings for purposes of 401(k) benefit plans,regular or supplemental.

b. Health Insurance Continuation : For a period of one-year following the Separation Date (the “ COBRA

Subsidy Reimbursement Period ”), you will be

1

eligible to receive reimbursement for your COBRA premium payments, subject to, and provided you meet, theconditions stated below. You and, where applicable, your spouse and eligible dependents, shall continue to beeligible to receive health, dental and vision benefits coverage under the Company’s health, dental and visionplans in which you were participating in immediately prior to your Separation Date. In order to receive suchcontinued coverage, you shall be required to timely elect COBRA coverage under such plans following yourSeparation Date and pay the full applicable monthly premium during the COBRA Subsidy ReimbursementPeriod. Following your payment of the full COBRA premium, the Company will reimburse you for the COBRApremium during the COBRA Subsidy Reimbursement Period. Notwithstanding the immediately precedingsentence, in the event you secure employment before the end of the COBRA Subsidy Reimbursement Period andmedical, dental and/or vision coverage is available as a result of that employment, the COBRA SubsidyReimbursement Period shall end. You agree that you will notify the Company in writing immediately if youaccept employment prior to the end of the COBRA Subsidy Reimbursement Period. The COBRA continuationperiod shall run simultaneously during the COBRA Subsidy Reimbursement Period and after the end of theCOBRA Subsidy Reimbursement Period, if you are still eligible for COBRA continuation coverage and youwish to continue COBRA coverage, for the remainder of the COBRA continuation period you will be required topay 102% of the COBRA premium for such coverage.

c. Benefit Plans : Your entitlements under any benefit plans in which you participated while you were employedby the Company, including equity plans, restricted stock and/or restricted stock unit (both time-based andperformance based), stock options, deferred compensation and 401(k) plans, will be determined in accordancewith the terms of each respective plan. Nothing in this Agreement shall impair, diminish or interfere with anyrights, privileges or benefits you have with respect to the Employee Retirement Income Security Act of 1974 (“ERISA ”) plans, equity award agreements or similar governing documents. Except as described above, youhereby withdraw your participation in any and all bonus or incentive plan(s) or program(s) and understand thatyou are not now nor will in the future be entitled to any future grants or contributions under those plans,including future equity grants.

d. Unemployment Compensation : The Company will code your separation as “mutual consent” in connectionwith any application you make for unemployment compensation benefits. The Company does not, however,make any representation that you are eligible to receive unemployment compensation benefits. Your eligibilityfor such benefits will be determined solely by the state where such an application for unemployment is filed.

e. No Other Payments : You acknowledge that this Agreement does not include any form of compensation or

benefits other than specifically described herein and that the benefits you will receive under this Agreement aregreater than those benefits you would have been entitled to receive upon separation of employment

2

in the absence of this Agreement. You acknowledge that you are not eligible for any post-separation pay orbenefits other than provided in this Agreement, including but not limited to payments under any of theCompany’s severance plans or programs and bonus or incentive pay programs.

3. General Release of Claims a. You fully waive, release and forever discharge the Company and all of its officers, directors, employees, assigns,

agents, plans and plan trustees, independent contractors, stockholders, attorneys and representatives, jointly andindividually (the “ Released Parties ”), from any manner of suits, actions, or causes of action, including anyclaim for attorneys’ fees or costs, existing at the time you sign this Agreement, whether currently known orunknown to you, under any possible legal, equitable, contract, tort or statutory theory. To the greatest extentpermitted by applicable law, this General Release of Claims includes, but is not limited to, claims arising out ofor in any way related to your employment and/or separation from employment, such as, by way of example only,claims under the federal Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,Section 1981 of Title 42 of the United States Code, ERISA, the Americans With Disabilities Act, theRehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the federal Family andMedical Leave Act (FMLA), the federal Equal Pay Act, and any other federal, state or local statute, ordinance,executive order, regulation, including without limitation any amendments thereto, or any other legal theory.

b. You acknowledge and agree that included in your General Release of Claims are any and all claims that have

been, or may be asserted by you or by any other person or entity on your behalf in any class or collective actionrelating to your employment and/or the termination of your employment with the Company. Accordingly, (i)you waive any right to become, and promise not to consent to become, a member of any class in a case in whichclaims are asserted against the Released Parties that are related in any way to your employment with ortermination from the Company, and that involve events which have occurred as of the date you sign thisAgreement; and (ii) you waive any and all rights you might otherwise have to receive notice of any class orcollective action. In the event that you are included or identified as a member or potential member of a class inany proceeding, you agree to opt out of the class at the first opportunity afforded to you after learning of yourinclusion. In this regard, you agree that you will execute, without objection or delay, an “opt-out” formpresented to you in connection with such proceeding.

c. You agree that should any person or entity file or cause to be filed any civil action, suit, arbitration, or legal

proceeding (with the exception of the EEOC and similar state agency charges of discrimination as describedbelow) seeking equitable or monetary relief in connection with any aspect of your employment relationship withthe Company, you will take all necessary actions to withdraw from such action and/or have it dismissed withprejudice as it relates to you

3

personally, and you will agree not to voluntarily participate or cooperate in such matter(s) unless required bylaw. If you are unable to preclude a charge or claim on your behalf, you agree that you will not seek or acceptany personal relief, including but not limited to an award of monetary damages or reinstatement to employment,in connection with such a charge or claims. Nothing in this Agreement waives or releases your right to receive amonetary award from the U.S. Securities and Exchange Commission (“ SEC ”) or any other government-maintained whistleblower program.

d. You expressly agree that the General Release of Claims will extend and apply to all claims, injuries and

damages you may have against the Company or any Released Parties at the time you sign the Agreement,regardless of whether you are aware of or suspect such claims at the time you sign, except as stated in theparagraph below.

e. You agree that the above paragraphs shall release the Company from liability to the fullest extent permitted by

law and only to the extent permitted by law. You acknowledge that the General Release of Claims does notprohibit the following rights or claims: (i) claims that first arise after the date you sign this Agreement or whicharise out of or in connection with the interpretation or enforcement of this Agreement itself; (ii) your right to filea charge or complaint with the EEOC or similar federal or state agency, or your ability to participate in anyinvestigation or proceeding conducted by such agency; or (iii) any rights or claims, whether specified above ornot, that cannot be waived as a matter of law pursuant to federal, state or local statute. If it is determined thatany claim covered by this General Release of Claims cannot be waived as a matter of law, you expressly agreethat the General Release of Claims will nevertheless remain valid and fully enforceable as to the remainingreleased claims. As set forth above, nothing in this waives or releases your right to receive a monetary awardfrom the SEC or any other government-maintained whistleblower program.

f. You agree that you have been properly paid for all hours worked, you have not suffered any on-the-job injury for

which you have not already filed a claim, and you have been properly provided any leaves of absence because ofyour own health condition or a family member’s health condition.

g. You acknowledge that as an employee of the Company it has been your obligation to advise the Company

completely and candidly of all facts of which you are aware that constitute or might constitute violations of theCompany’s ethical standards or legal or regulatory obligations. You represent and warrant that you are not awareof any such facts or that you have previously advised the Company about any such facts. Nothing in thisAgreement prohibits you from reporting possible violations of federal or state law or regulations to anygovernmental agency or entity or self-regulatory institution, including but not limited to the EEOC, the NLRB,the Department of Justice, the SEC, Congress, and any Inspector General, or making other disclosures that areprotected under the whistleblower provisions of federal or state law or regulation. Prior

4

authorization of the Company shall not be required to make any such reports or disclosures and no employee isrequired to notify the Company that he or she has made such reports or disclosures.

4. Post-Employment Limitations and Obligations a. Restrictive Covenants : You acknowledge and reaffirm that the Company and you are parties to the

Confidentiality Agreement. You acknowledge and agree that all of your obligations under the ConfidentialityAgreement remain in full force and effect and shall survive the termination of your employment with theCompany and the execution of this Agreement in accordance with the terms of the Confidentiality Agreementand, provided, further that, the Separation Payment described in paragraph 2(a) is being paid in full satisfactionof any amount to be paid to you for not working for a Competitive Business as described and provided inSection 5 of the Confidentiality Agreement; provided, however, that the Company shall not deem a firm thatreceives less than 30% of their revenues from retail to be a competitive business .

b. Future Cooperation : You agree that during and after the term of this Agreement, you will make yourselfavailable, upon reasonable notice and under reasonable conditions, to assist the Company in any capacity withrespect to matters of which you were involved or had knowledge while employed by the Company. Withoutlimitation, such assistance may include providing information or documents, cooperating with investigations,negotiations, lawsuits or administrative proceedings involving the Company, preparing for and giving testimonyincluding written declarations or statements, and other similar activities. You understand that the Company willreimburse you for all reasonable, documented out-of-pocket expenses incurred as a result of your obligationsunder this paragraph, in accordance with the Company’s then applicable Expense Guidelines.

c. Negative Comments : You agree to refrain from directly or indirectly engaging in publicity, including written,

oral and electronic communication of any kind, or any other activity which reflects negatively or adversely uponthe Company, its business, its actions or its officers, directors or employees, whether or not you believe thecontent of the publicity to be true or whether or not it is, in fact, true. This paragraph does not apply to truthfultestimony compelled or protected by applicable law or legal process.

d. Return of Company Property : You also agree that you either have returned or will return to the Company

any and all Company property and information which came into your possession, or which you prepared orhelped prepare, in connection with or during your employment, including but not limited to any Companycomputer, Blackberry device, credit card, Company vehicle, keys and documents; provided, that, you maycontinue to use the Company-purchased cellphone until October 15, 2017. You will not retain any copies ofsuch property or information, and you will provide the Company will any passwords or passcodes to access suchCompany property.

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e. Expense Reconciliation : You further represent and agree by your Separation Date you will have reimbursedor reconciled to the Company’s satisfaction all charges made to the Company by you or expenses charged byyou to the Company, and that if you fail to make such reimbursement that the Company may deduct any sumsowed by you from the payment amount(s) specified in this Agreement.

f. Breach/Remedy : You agree that the restrictions in this Section 4, including those obligations set forth in the

Confidentiality Agreement which is incorporated herein, are reasonable and necessary to protect the legitimateinterests of the Company and you agree that if you breach any provision of this Section 4 or of theConfidentiality Agreement, the damage may be substantial, although difficult to quantify, and money damagesmay not afford the Company an adequate remedy. Therefore, if you breach or threaten to breach this Section 4or the Confidentiality Agreement, in whole or in part, the Company shall be entitled, in addition to other rightsand remedies provided by this Agreement, the Confidentiality Agreement or by law, to specific performance,injunctive relief, and other equitable relief to prevent or restrain such conduct. In addition, you acknowledge andunderstand that if you breach any provision of this Agreement or the Confidentiality Agreement, you will ceaseto be eligible for payments and benefits under this Agreement and the Company may, in its sole discretion,discontinue remaining payments and benefits, if any, and may require you to reimburse the value of paymentsand benefits previously received, unless prohibited by law.

5. Miscellaneous Provisions a. No Admission of Liability : You specifically understand and agree that by entering into this Agreement, the

Company and the other Released Parties do not admit any liability whatsoever to you or to any other personarising out of any claims heretofore or hereafter asserted by you and the Company, for itself and on behalf ofother Released Parties expressly denies any and all such liability.

b. Severability : Should any of the provisions of this Agreement be rendered invalid by a court or government

agency of competent jurisdiction, or should you fail to fulfill your obligations under it or the ConfidentialityAgreement, the remainder of the Agreement and the Confidentiality Agreement shall, to the fullest extentpermitted by applicable law and at the Company’s option, remain in full force and effect and/or you will beobligated to return, in full or in part, as determined by the Company, any and all consideration you received inexchange for signing the Agreement, except, if applicable, the Five Hundred Dollars ($500.00) you received inexchange for your release and waiver of rights or claims under the federal Age Discrimination in EmploymentAct.

c. Choice of Law : To the extent not governed by federal law or otherwise prohibited by state law, you agree that

this Agreement is governed by the laws of Pennsylvania, without regard to its principles on conflict of law. Tothe extent a

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federal court or agency does not have jurisdiction over any action involving the validity, interpretation orenforcement of this Agreement, or any of its terms, provisions or obligations, you agree that jurisdiction andvenue shall exist exclusively in a court or government agency located within the Commonwealth ofPennsylvania, unless specifically prohibited by applicable state law.

d. Tax Withholding : All payments made, and benefits provided, hereunder shall be net of all legally required

taxes and other withholdings. You shall be solely responsible for all taxes that result from your receipt of thepayments and benefits to be provided under this Agreement and the Company does not make any representation,warranty or guarantee of any federal, state or local tax consequence to you as part of your receipt of any paymentor benefit hereunder, including, but not limited to, under Section 409A of the Internal Revenue Code of 1986, asamended (“ Section 409A ”). Notwithstanding any provision to the contrary, all provisions of this Agreementshall be construed and interpreted to comply with Section 409A and if necessary, any provision shall be held nulland void to the extent such provision (or part thereof) fails to comply with Section 409A or regulationsthereunder. For purposes of the limitations on nonqualified deferred compensation under Section 409A, eachpayment of compensation under this Agreement shall be treated as a separate payment of compensation forpurposes of applying the Section 409A deferral election rules and the exclusion from Section 409A for certainshort-term deferral amounts. Any amounts payable under this Agreement solely on account of an involuntaryseparation from service within the meaning of Section 409A shall be excludible from the requirements ofSection 409A, either as involuntary separation pay or as short-term deferral amounts (e.g., amounts payableunder the schedule prior to March 15 of the calendar year following the calendar year of involuntary separation)to the maximum possible extent. To the extent that deferred compensation subject to the requirements of Section409A, and not excludible therefrom, becomes payable under this Agreement to a “specified employee” (withinthe meaning of Section 409A) on account of separation from service, any such payments shall be delayed by sixmonths to the extent necessary to comply with the requirements of Section 409A. Further, any reimbursementsor in-kind benefits provided under this Agreement that are subject to Section 409A shall be made or provided inaccordance with the requirements of Section 409A, including, where applicable, the requirement that (i) anyreimbursement is for expenses incurred during the period of time specified in the employment agreement, (ii) theamount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may notaffect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii)the reimbursement of an eligible expense will be made no later than the last day of the calendar year followingthe year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject toliquidation or exchange for another benefit.

e. Medicare Disclaimer : You represent that you are not a Medicare Beneficiary as of the time you enter into this

Agreement.

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f. Entire Agreement : You understand that, unless specifically mentioned otherwise in this Agreement, all prior

agreements and understandings covering the same or similar subject matter, written or oral, between you and theCompany, are replaced and superseded by this Agreement, and are no longer of any force and effect. ThisAgreement may not be changed, modified, or altered without the express written consent of you and an officer ofthe Company.

g. No Waiver : The Company’s failure to insist upon strict adherence to any term of this Agreement on any

occasion shall not be considered a waiver of, or deprive the Company of its right thereafter to insist upon strictadherence to that term or any other term of this Agreement. To be effective, any waiver must be in writing andsigned by an officer of the Company.

h. Binding Effect : This Agreement shall bind and inure to the benefit of and be enforceable by you, the

Company, and your and its respective heirs, executors, personal representatives, successors and permittedassigns.

6. Time for Signing

You acknowledge that you first received this Agreement on or before September 21, 2017 and that to receive the SeparationPayment and benefits described herein, you must sign, return and not revoke this Agreement as described below.

You have twenty-one (21) calendar days from your receipt of the Agreement to consider it and consult with an attorney of yourchoice before signing and returning it. You agree that any changes to this Agreement that may be negotiated between you or yourattorney and the Company, whether material or immaterial, will not restart the time you have to consider and sign this Agreement. You understand that you may sign and return this Agreement at any time before the expiration of the 21-day period. You furtherunderstand that you can revoke your acceptance of this Agreement, in writing, for a period of seven (7) calendar days after you signthis Agreement.

The signed Agreement and, if applicable, written revocation should be returned within the time periods described above to:

Stacy SiegalSVP/General CounselAEO, Inc.77 Hot Metal StreetPittsburgh, PA 15203

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7. Counterpart Originals This Agreement may be executed in any manner of copies, each of which shall be deemed to be a counterpart original.

YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE BEEN ADVISED THAT THE AGREEMENT IS A LEGALDOCUMENT, AND YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY CONCERNING THEAGREEMENT. YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE CAREFULLY READ AND FULLYUNDERSTAND ALL PROVISIONS OF THIS AGREEMENT, AND YOU ARE VOLUNTARILY AND KNOWINGLYSIGNING THIS AGREEMENT. ACKNOWLEDGED AND AGREED: DATED: October 5, 2017 /s/ Peter Z. Horvath Peter Z. Horvath AMERICAN EAGLE OUTFITTERS, INC. DATED: October 5, 2017 By: /s/ Stacy Siegal Name: Stacy Siegal Title: Senior Vice President – General Counsel

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Exhibit 15

Acknowledgment of Independent Registered Public Accounting Firm

The Board of Directors and StockholdersAmerican Eagle Outfitters, Inc.

We are aware of the incorporation by reference in the Registration Statement and in the related prospectus (Form S-3, Registration No. 333-68875)of American Eagle Outfitters, Inc. and in the Registration Statements (Form S-8) of American Eagle Outfitters, Inc. as follows:

• Employee Stock Purchase Plan (Registration No. 333-03278),

• Stock Fund of American Eagle Outfitters, Inc. Profit Sharing and 401(k) Plan (Registration No. 33-84796),

• 2005 Stock Award and Incentive Plan (Registration Nos. 333-126278 and 333-161661),

• 2014 Stock Award and Incentive Plan (Registration No. 333-197050), and

• 2017 Stock Award and Incentive Plan (Registration No. 333-218194)

of our report dated December 7, 2017 related to the unaudited consolidated interim financial statements of American Eagle Outfitters, Inc., that isincluded in its Form 10-Q for the quarter ended October 28, 2017. /s/ Ernst & Young LLP Pittsburgh, PennsylvaniaDated: December 7, 2017

Exhibit 31.1

CERTIFICATIONS

I, Jay L. Schottenstein, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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 tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects 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 (asdefined 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 oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal 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 aboutthe 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’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely 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 financialreporting, 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 arereasonably 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’sinternal control over financial reporting.

Dated: December 7, 2017 /s/ Jay L. Schottenstein Jay L. Schottenstein Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Robert L. Madore, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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 tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects 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 (asdefined 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 oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal 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 aboutthe 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’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely 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 financialreporting, 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 arereasonably 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’sinternal control over financial reporting.

Dated: December 7, 2017 /s/ Robert L. Madore Robert L. Madore Executive Vice President, Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of American Eagle Outfitters, Inc. (the “Company”) on Form 10-Q for the period ended October 28,2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay L. Schottenstein, Principal Executive Officer ofthe Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.

Dated: December 7, 2017 /s/ Jay L. Schottenstein Jay L. Schottenstein Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350,as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of American Eagle Outfitters, Inc. (the “Company”) on Form 10-Q for the period ended October 28,2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert L. Madore, Principal Financial Officer of theCompany, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Actof 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.

Dated: December 7, 2017 /s/ Robert L. Madore Robert L. Madore Executive Vice President, Chief Financial Officer (Principal Financial Officer)

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