American Eagle & Buckle Inc Financial Analysis 2013

Abdou Diop Carlos Encarnacion Maceo Lofton Leudy Lugo Sooyeon Park

Agenda

BuckleInc.FinancialInformation

AmericaEagleFinancialInformation

CompanyOverview:BuckleInc.

CompanyOverview:AmericanEagleOut7itters

CompareAnalysis

AmericanEagleOut7ittersOverview

•  1977theCirstAmericanEaglewasestablishinTwelveOaksMallinNovi,Michigan

•  Morethan1,000storesineveryUSstate(includingPuertoRico,

Canada,MiddleEast,andonline)

•  Providinghigh-qualitymerchandise,on-trendingclothes,accessories,

andpersonalcareproductsataffordableprices

•  Thecompanyonlinebusiness,AEODirect,shipstocountriesworldwide

•  In2006AmericanEagleranked#1injeanssales(age15-25yearsold)andnamed#1brandofcollegestudents

Agenda

BuckleInc.FinancialInformation

AmericaEagleFinancialInformation

CompanyOverview:BuckleInc.

CompanyOverview:AmericanEagleOutCitters

CompareAnalysis

CurrentAssets $1,141,800,000CurrentAssetsCashandcashequivalents

Short-terminvestments

MerchandiseInventory

Assetsheldforsale

AccountsReceivable

PrepaidexpensesandOther

Deferredincometaxes

$1,141,800,000509,119,000

121,873,000

332,452,000

-

46,321,000

73,805,000

58,230,000

Ratio(CurrentAssets:TotalAssets) 0.6502

FinancialInformation–CurrentAssets

CurrentLiabilities $1,141,800,000CurrentLiabilitiesAccountsPayable

Accruedcompensationandpayrolltaxes

Accruedrent

Accruedincomeandothertaxes

Unredeemedgiftcardsandgift

certi7icates

Currentportionofdeferredleasecredits

Otherliabilitiesandaccruedexpenses

$435,902,000176,874,000

65,533,000

77,873,000

29,155,000

46,458,000

13,381,000

26,628,000

Ratio(CurrentLiabilities:TotalLiabilities) 0.815

FinancialInformation-CurrentLiabilities

CurrentAssets CurrentLiabilities

Merchandiseinventory

Accountsreceivable

Prepaidexpensesandother

Otherassets

Accountspayable

Accruedcompensationandpayroll

taxes

Accruedincomeandothertaxes

Unredeemedgiftcardsandgift

certi7icates,

Deferredleasecredits

Accruedliabilities

FinancialInformation-CurrentLiabilities

Retained Earnings ($218,406)

NetIncome $232,108,000

FinancialInformation

Dividend ($414,301)

AmericanEagleCompanyAuditorandReportFinancialStatement

•  Ernest&YoungLLP

•  ErnstandYoungLLP’sbelievesAmericanEagleOutCitters,Inc.

maintainedeffectiveinternalcontroloverCinancialreportsand

Cinancialstatements.

Agenda

BuckleInc.FinancialInformation

AmericaEagleFinancialInformation

CompanyOverview:BuckleInc.

CompanyOverview:AmericanEagleOutCitters

CompareAnalysis

•  1948-FirstBucklestoreopensinKearny,Nebraska

•  Leadingstoreofmediumtoimprovedpricedcasualattire,footwear,

andaccessoriesforfashion(towardtoyoungmale&female)

•  Functionsover450storesin43states,underthenameBuckle&the

Buckle

•  ThecompanyhighlightsmodiCieddevotiontoitscustomersand

providesindividualcustomerserviceslikefreechanges,layaways,

andfrequentshopperprograms.

Agenda

BuckleInc.FinancialInformation

AmericaEagleFinancialInformation

CompanyOverview:BuckleInc.

CompanyOverview:AmericanEagleOutCitters

CompareAnalysis

CurrentAssets $276,873,000

CurrentAssets: $276,873,000

CashandCashequivalentShort-terminvestments(NotesA,B,andC)ReceivableInventoryPrepaidexpensesandotherAssets(NoteF)

$117,608,00026,414,0003,470,000103,853,00025,528,000

Ratio:(CurrentAsset/TotalAsset)

0.57926373

FinancialInformation-CurrentAssets

BuckleInc.referstoitsIncomeStatementastheConsolidatedStatementsofincome.

CurrentLiabilities $128,956,000

CurrentLiabilitiesAccountsPayableAccruedemployeeCompensationAccruedStoreoperatingexpensesGiftcerti7icatesredeemableIncometaxespayable

$128,956,00034,124,00042,183,00010,121,00022,221,00020,307,000

Ratio:(CurrentLiabilities/Totalliabilities)

0.68475242

FinancialInformation-CurrentLiabilities

�    �  Receivables 596,000

�  Inventory 356,000

�  Prepaid expenses and other assets (10,281,000)

�  Accounts Payable 6,534,000

�  Accrued Employee Comp. (671,000)

�  Accrued Store Operating Exp. (1,004,000) �  Gift Certificate Redeemable 1,935,000 �  Differed rent liabilities and deferred Comp. 2.463,000

The change in retained earning from 2012 to 2013 was 23,500,000

Net Income $164,305,000

FinancialInformation

Increase from previous two years

Dividends $254,633

FinancialInformation

Largest inflow for Investing activities

Proceedsfromsales/maturitiesofinvestment

$37,294,000

LargestOutClowforInvestingactivities

Purchaseofpropertyandequipment

($30,297,000)

Largestin7lowforFinancingactivities

Excesstaxbene7itfromstockoptionexercises

$5,609,000

LargestOutClowforFinancingactivities

PaymentofDividends ($254,178,000)

BuckleInc.CompanyAuditorandReportFinancialStatement

•  Deloitte&ToucheLLP

•  Thecompanymaintainedaneffectiveinternalcontrolover

CinancialreportingofFebruary2,2013.Therewerenochangesin

thecompany’sinternalcontroloverCinancialreportingthat

occurredduringthecompany’slastCiscalquarter.

Agenda

BuckleInc.FinancialInformation

AmericaEagleFinancialInformation

CompanyOverview:BuckleInc.

CompanyOverview:AmericanEagleOutCitters

CompareAnalysis

�  TotalAssets:$1,756,053,000�  TotalLiabilities:$534,866,000�  NetIncome:$232,108,000�  GrossProCit:$1,390,322,000

�  TotalAssets:$477,974,000�  TotalLiabilities:$188,325,000�  NetIncome:$164,305,000�  GrossProCit:$499,315,000

•  AmericanEagleOutCitter’sInc.reportedhighertotalassetsat$1,756,053,000.•  AmericanEagleOutCitter’sInc.reportedhighertotalliabilitiesat$534,866,000.

VS

CompareAnalysis

VS

•  Ifacompany’scapitalstructureisdisproportionatetowardsliabilitiesandtheyhavealmostasmuchliabilitiesastheydoassetsthanthe

companymaybemoreriskytocreditors.

•  AmericanEagleOutCitters,Inc.astheirFinancialLeverageRatioat1.41isactuallylowerthanBuckle’sFinancialLeverageRatio,whichisat1.55,

indicatingthatBuckleCinancesitsassetsthroughahigherproportionof

debtthanshareholder’sequitythanAmericanEagleOutCitter’sInc.does.

•  Accordingtothisratio,BuckleisactuallyriskierthanAmericanEagle

OutCitter’sInc.fromacreditor’spointofview.

CompareAnalysis

�  TotalAssets:$1,756,053,000�  TotalLiabilities:$534,866,000�  NetIncome:$232,108,000�  GrossProCit:$1,390,322,000

�  TotalAssets:$477,974,000�  TotalLiabilities:$188,325,000�  NetIncome:$164,305,000�  GrossProCit:$499,315,000

VS

CompareAnalysis

•  AmericanEagleOutCittersInc.generateshighernetincome.

•  OneoftheprimaryfactorsthatcontributetothechangeinnetproCitisanincreaseor

decreaseofthepriceofthesoldunits.Pricechangesgreatlyaffecthowmanyunitsa

companycansell,whichinturninCluencestheoverallproCitnumbers.

•  Inventoryisanotherfactorthatcontributestochangesinacompany'snetproCit

•  (Chartresults) 

VS

CompareAnalysis

•  InvestorswantmostproCitablecompany

•  FactorstoAnalyze:

•  HowlongthecompanycanmaintainproCitabilityinthemarket

•  Comparisontorecentyears

•  GrowthTrajectory

•  OperatingProCitability-AssetTurnoverRatio

AmericanEagle 1.87

Buckle,Inc. 2.22