Investor Presentaiton
Historical Operating Income Reconciliation
(In thousands)
Operating income (loss) - As reported
% of Revenue
Long-lived asset impairment charges (1)
Incremental COVID-19 related expenses (2)
Severance and related employee costs
Joint business venture exit charges
Japan market transition costs
China restructuring (3)
Other commercial related charges
Operating income - Adjusted
% of Revenue
Fiscal 2022
Fiscal 2023
2020 (4)
2021 (4)
Q1
Q2 (5)
Q3
Q4 (5)
2022 (5)
Q1 (6)
$ (271,345) $ 591,065
-7.2%
11.8%
$
41.902 $
4.0%
14.014
1.2%
$
117,548
9.5%
$
73,582
4.9%
$ 247,047 $
22,831
5.0%
2.1%
20,633
20,633
10,759
2018
$ 337,129
8.4%
2019
$ 233,345
5.4%
66,252
249,163
26,930
11,944
1,568
6,691
3.733
4,194
1,814
1,543
1,576
1,576
5,592
4,924
$ 338,698
8.4%
$ 313,839 $
7.3%
8,481
0.2%
$ 603,009
12.0%
$
41,902 $
4.0%
14,014
1.2%
$
117,548 $
9.5%
95,791
6.4%
$ 269,256 $
5.4%
44,106
4.1%
(1)
(2)
(3)
In fiscal 2022, the Company recorded impairment charges of $20.6 million primarily related to store property and equipment and operating lease ROU assets. In fiscal 2021, the Company recorded impairment charges of $11.9 million primarily related
to store property and equipment and operating lease ROU assets. In fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million
relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and
equipment, as well as $18.0 million of certain cost and equity method investments. In fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the assets of 20 retail stores. Of the total, $39.5 million related to the impairment of
leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in fiscal 2019.
Incremental COVID-19 related expenses consisted of personal protective equipment and supplies for our associates and customers.
Pre-tax corporate restructuring charges of $1.5 million, primarily consisted of severance and closure costs for our company-owned and operated stores in China recorded in the first quarter of fiscal 2019.
(4) GAAP results for fiscal 2020 and 2021 included the amortization of the non-cash discount on the 2025 Notes, which was recorded below Operating income (loss) prior to the adoption of ASU 2020-06.
(5)
(6)
GAAP results for Q2 2022 of $60.1 million, Q4 2022 of $4.7 million, and YTD 2022 included $64.7 million of pre-tax debt related charges related primarily to the induced conversion expense relating to the Note Exchange, along with certain other costs
related to actions taken to strengthen our capital structure, which was recorded below Operating income (loss).
GAAP results for Q1 2023 included impairment, restructuring and other charges related to Quiet Platforms as the Company repositions the business for improved profitability.
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