UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
March 8, 2005 
 Date of Report (Date of earliest event reported)
AMERICAN EAGLE OUTFITTERS, INC. 
 (Exact name of registrant as specified in its charter)
Delaware 
 (State or other jurisdiction of incorporation)

0-23760	 	13-2721761	
(Commission File Number)	 	(IRS Employer Identification No.)	
 	 	 	
150 Thorn Hill Drive	 	15086-7528	
Warrendale, Pennsylvania	 	(Zip Code)	
(Address of principal executive offices)	 	 	
(724) 776-4857 
 (Registrant's telephone number, including area code)
Not Applicable
 (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

 

 
Item 2.02. Result s of Operations and Financial Condition.
The information in this Form 8-K, including the accompanying exhibit, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
On March 10, 2005, American Eagle Outfitters (the "Company") issued a press release announcing a restatement of its consolidated financial statements and a change in its unaudited results of operations for the fourth quarter and year ended January 29, 2005, which were previously announced on March 2, 2005. A copy of the press release is attached hereto as Exhibit 99.1.

Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
As a result of the February 7, 2005 letter from the Office of the Chief Accountant of the Securities and Exchange Commission to the American Institute of Certified Public Accountants which clarified existing generally accepted accounting principles applicable to leases, and after discussions with its Audit Committee and independent registered public accounting firm, Ernst & Young LLP, the Company has re-evaluated its lease accounting practices. Like many other retail companies, the Company will correct the way it accounts for leases, specifically the accounting for construction allowances and rent holidays.
Management and the Audit Committee of the Board of Directors of the Company concluded on March 8, 2005 that the Company's previously reported financial results will be restated to correct its accounting for leases. Accordingly, such previously filed financial statements and the related independent auditors' reports should no longer be relied upon. Management and the Audit Committee discussed these matters with Ernst & Young LLP.
The Company believes that the earnings impact of these changes is not material to any given period.  The primary impact of these changes on the Company's January 29, 2005 balance sheet is an increase to property and equipment and accounts receivable of approximately $67 million, as well as a corresponding increase to a deferred lease credit.  The primary impact of these changes on the Company's January 31, 2004 balance sheet is an increase to property and equipment and accounts receivable of approximately $64 million, as well as a corresponding increase to a deferred lease credit.
Historically, the Company has recognized straight line rent expense for leases beginning on the store opening date.  This had the effect of excluding the build-out period of its stores from the calculation of the period over which it expenses rent and recognizes construction allowances.  The Company is now changing this practice to include the build-out period in our calculations of rent expense and construction allowance amortization.
Additionally, the Company is changing its classification of construction allowances on its consolidated financial statements to record them as deferred liabilities, which will be amortized as a reduction to rent expense.  Furthermore, construction allowances will be presented within operating activities on its consolidated statements of cash flows.  Historically, construction allowances have been classified on the Company's consolidated balance sheets as a reduction of property and equipment and the related amortization has been classified as a reduction to depreciation and amortization expense (over the lesser of the useful life or the life of the lease) on the consolidated statements of operations.  The Company's consolidated statements of cash flows have historically reflected construction allowances as a reduction of capital expenditures within investing activities.
The Company will file its restated financial statements within its fiscal year 2004 Form 10-K filing as well as its fiscal year 2005 Form 10-Q filings. 

Item 8.01. Other Events
 
On March 9, 2005, the Company issued a press release announcing that its Board of Directors raised its cash dividend to an annual rate of $0.20 per share, from $0.12 per share.  Additionally, the Board of Directors declared a quarterly cash dividend of $0.05 per share. The dividend is payable on April 8, 2005 to stockholders of record at the close of business on March 25, 2005. A copy of the press release is attached hereto as Exhibit 99.2.
 
Item 9.01. Financial Statements and Exhibits

(c) Exhibits		
 	 	
Exhibit No.	Description	
 99.1	Press release dated March 10, 2005 announcing a restatement of the Company's consolidated financial statements and a change to its unaudited fourth quarter and fiscal 2004 financial results	
99.2	Press release dated March 9, 2005 announcing the declaration of a dividend	

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

	 	AMERICAN EAGLE OUTFITTERS, INC.	 	

Dated: March 14, 2005	 	By:	/s/ Dale E. Clifton	 	
 	 	Name:	Dale E. Clifton	 	
 	 	 	Vice President, Controller and
    Chief Accounting Officer	 	

 
EXHIBIT INDEX

Exhibit
Number
	Description
	
99.1 *	Press release dated March 10, 2005 announcing a restatement of the Company's consolidated financial statements and a change to its unaudited fourth quarter and fiscal 2004 financial results	
99.2	Press release dated March 9, 2005 announcing the declaration of a dividend	

 * Such press release is being "furnished" (not filed) pursuant to Item 2.02 of the Current Report on Form 8-K.

 

EXHIBIT 99.1

NEWS RELEASE
AMERICAN EAGLE
OUTFITTERS
Announces Restatement Due to Lease Accounting
Warrendale, PA, March 10, 2005 - American Eagle Outfitters, Inc. (NASDAQ: AEOS) today announced a restatement of prior period financial statements due to changes in its accounting practices related to leasing transactions.
As disclosed in its March 2, 2005 preliminary earnings release, the Company, like many other retailers, determined that its method of accounting for rent holidays and tenant allowances was not in accordance with the views expressed by the Securities and Exchange Commission regarding generally accepted accounting principles. As the Company previously stated, it believes that the earnings impact of these changes is not material to any given period. The primary impact of these changes on the Company's January 29, 2005 balance sheet is an increase to property and equipment and accounts receivable of approximately $67 million, as well as a corresponding increase to a deferred lease credit. The primary impact of these changes on the Company's January 31, 2004 balance sheet is an increase to property and equipment and accounts receivable of approximately $64 million, as well as a corresponding increase to a deferred lease credit.
Historically, the Company has recognized straight line rent expense for leases beginning on the store opening date. This had the effect of excluding the build-out period of its stores from the calculation of the period over which it expenses rent and recognizes construction allowances. The Company is now changing this practice to include the build-out period in our calculations of rent expense and construction allowance amortization.
Additionally, the Company is changing its classification of construction allowances on its consolidated financial statements to record them as deferred liabilities, which will be amortized as a reduction to rent expense. Furthermore, construction allowances will be presented within operating activities on its consolidated statements of cash flows. Historically, construction allowances have been classified on the Company's consolidated balance sheets as a reduction of property and equipment and the related amortization has been classified as a reduction to depreciation and amortization expense (over the lesser of the useful life or the life of the lease) on the consolidated statements of operations. The Company's consolidated statements of cash flows have historically reflected construction allowances as a reduction of capital expenditures within investing activities.
The Company, along with its independent auditors, has completed its review of the respective accounting policies. As a result, Management determined that a restatement of its consolidated balance sheets, statements of stockholders' equity, statements of operations and statements of cash flows is deemed necessary and that those previously issued financial statements should no longer be relied upon. The Company will file a Form 8-K reporting these restatements under Item 4.02 and will file its restated financial statements within its fiscal year 2004 Form 10-K filing as well as its fiscal year 2005 Form 10-Q filings. Additionally, the Company updated its consolidated financial results for the fourth quarter and year-to-date periods ended January 29, 2005 and January 31, 2004 as presented below to reflect these changes.

* * * *

American Eagle Outfitters (NASDAQ: AEOS) is a leading lifestyle retailer that designs, markets, and sells its own brand of relaxed, casual clothing for 15 to 25 year olds, providing high-quality merchandise at affordable prices. AE's collection includes modern basics like jeans, cargo pants, and graphic Ts as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 778 AE stores in 49 states, the District of Columbia and Puerto Rico, and 69 AE stores in Canada. AE also operates via its Web business, www.ae.com , which offers additional sizes and styles of favorite AE merchandise.

AMERICAN EAGLE OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)	
	
			January 29,
2005		January 31,
2004	
			(Unaudited) (1)		(1)	
ASSETS					
	Cash, cash equivalents and short-term investments	$	589,607	$	337,812	
	Merchandise inventory		137,991		120,586	
	Other current assets		100,042		72,302	
	   Total current assets		827,640		530,700	
	Property and equipment, net		353,213		340,955	
	Goodwill, net		10,136		10,136	
	Other assets, net		103,913		50,623	
	     Total Assets	$	1,294,902	$	932,414	
						
LIABILITIES AND STOCKHOLDERS' EQUITY					
	Accounts payable	$	76,344	$	71,330	
	Accrued compensation and payroll taxes		36,008		14,409	
	Accrued rent		45,089		40,668	
	Accrued income and other taxes		33,926		28,669	
	Unredeemed stored value cards and gift certificates		32,724		25,785	
	Current portion of note payable		-		4,832	
 	Current portion of deferred lease credits	 	9,798	 	10,261	
	Other current liabilities		19,376		13,025	
	   Total current liabilities		253,265		208,979	
	Note payable		-		13,874	
 	Deferred lease credits	 	57,758	 	53,936	
	Other non-current liabilities		20,393		18,248	
	   Total non-current liabilities		78,151		86,058	
	   Total stockholders' equity		963,486		637,377	
	     Total Liabilities and Stockholders' Equity	$	1,294,902	$	932,414	
						
	Current Ratio		3.27		2.54	
 
(1) Amounts as of January 29, 2005 and January 31, 2004 have been updated from those disclosed in the Company's preliminary earnings release dated March 2, 2005 to reflect the impact of certain lease accounting adjustments.

AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)	
		Three Months Ended		Twelve Months Ended	
		January 29,
2005		January 31,
2004		January 29,
2005		January 31,
2004	
		(Unaudited) (1)		(1)		(Unaudited) (1)		(1)	
									
Net sales	$	674,024	$	490,580	$	1,881,241	$	1,435,436	
Cost of sales, including certain buying, occupancy and warehousing expenses		341,647		299,800		1,003,433		885,939	
Gross profit		332,377		190,780		877,808		549,497	
Selling, general and administrative expenses		142,386		105,782		446,829		356,261	
Depreciation and amortization		18,304		15,704		68,273		59,965	
Operating income		171,687		69,294		362,706		133,271	
Other income, net		3,343		469		4,129		2,016	
Income before income taxes		175,030		69,763		366,835		135,287	
Provision for income taxes		68,086		26,953		142,603		52,179	
Income from continuing operations, net of tax		106,944		42,810		224,232		83,108	
Loss from discontinued operations, net of income tax benefit		(6,027)		(7,816)		(10,889)		(23,486)	
Net income	$	100,917	$	34,994	$	213,343	$	59,622	
									
Basic per share amounts (post-split):									
Income from continuing operations	$	0.73	$	0.30	$	1.55	$	0.59	
Loss from discontinued operations		(0.04)		(0.05)		(0.08)		(0.17)	
Net income per basic share	$	0.69	$	0.25	$	1.47	$	0.42	
									
Diluted per share amounts (post-split):									
Income from continuing operations	$	0.70	$	0.29	$	1.49	$	0.57	
Loss from discontinued operations		(0.04)		(0.05)		(0.07)		(0.16)	
Net income per diluted share	$	0.66	$	0.24	$	1.42	$	0.41	
									
Weighted average common shares outstanding - basic (post-split)		147,094		142,358		145,150		142,226	
Weighted average common shares outstanding - diluted (post-split)		153,402		144,502		150,244		144,414	
									
Total gross square footage at end of period:						4,540,095		4,239,497	
									
Store count at end of period:						846		805	
									
(1) Amounts for the three and twelve months ended January 29, 2005 and January 31, 2004 have been updated from those disclosed in the Company's preliminary earnings release dated March 2, 2005 to reflect the impact of certain lease accounting adjustments.	

Company Contacts:
Laura Weil
Judy Meehan
724-776-4857									

 
EXHIBIT 99.2
 
NEWS RELEASE
AMERICAN EAGLE
OUTFITTERS
Raises Cash Dividend 67% to an Annual Rate of $0.20 Per Share
Warrendale, PA, March 9, 2005 -- American Eagle Outfitters, Inc. (NASDAQ: AEOS) today announced that its Board of Directors voted to raise its cash dividend payment by 67% to an annual rate of $0.20 per share, from $0.12 per share. A quarterly cash dividend of $0.05 per share was declared and is payable on April 8, 2005, to stockholders of record at the close of business on March 25, 2005.
American Eagle Outfitters (NASDAQ: AEOS) is a leading lifestyle retailer that designs, markets, and sells its own brand of relaxed, casual clothing for 15 to 25 year olds, providing high-quality merchandise at affordable prices. AE's collection includes modern basics like jeans, cargo pants, and graphic Ts as well as a stylish assortment of cool accessories, outerwear and footwear. American Eagle Outfitters currently operates 777 AE stores in 49 states, the District of Columbia and Puerto Rico, and 69 AE stores in Canada. AE also operates via its Web business, www.ae.com, which offers additional sizes and styles of favorite AE merchandise.
 
Company Contacts :    

Laura Weil
Judy Meehan
724-776-4857