American Eagle Outfitters Inc (AEO)

Short-term

Turnover ratios

Based on the data provided for American Eagle Outfitters Inc, let's analyze the activity ratios:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory.
- In January 2023, the ratio was 8.57, indicating that the company turned over its inventory approximately 8.57 times during that period.
- The ratio decreased to 5.55 by January 31, 2023, and further declined to 5.05 by January 31, 2024.
- However, the ratio improved significantly to 8.13 by February 3, 2024, before decreasing to 5.09 by January 31, 2025.
- Overall, the trend in inventory turnover shows fluctuation with periods of improvement and decline, indicating potential changes in inventory management efficiency.

2. Receivables Turnover:
- The receivables turnover ratio reflects how effectively a company collects its accounts receivable.
- The data shows the ratio was 19.77 as of January 28, 2023.
- The ratio was not available for January 31, 2023, January 31, 2024, and January 31, 2025, implying incomplete data for those periods.
- By February 3, 2024, the ratio improved to 21.22, suggesting a more efficient collection of receivables during that period.

3. Payables Turnover:
- The payables turnover ratio indicates how efficiently a company manages its accounts payable.
- American Eagle Outfitters Inc had a payables turnover ratio of 21.41 on January 28, 2023.
- Similar to receivables turnover, data for payables turnover was not available for January 31, 2023, January 31, 2024, and January 31, 2025.
- By February 3, 2024, the ratio declined to 19.41, potentially indicating changes in the company's payables management practices.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company utilizes its working capital to generate revenue.
- In the provided data, the working capital turnover ratio remained constant at 15.06 for January 28, 2023, and January 31, 2023.
- However, this ratio decreased to 9.70 for both January 31, 2024, and February 3, 2024, before slightly improving to 11.30 by January 31, 2025.
- The fluctuation in the working capital turnover ratio suggests changes in the company's working capital management and its impact on revenue generation efficiency.

Overall, analyzing these activity ratios provides insights into American Eagle Outfitters Inc's efficiency in managing inventory, receivables, payables, and working capital over the specified periods.

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Average number of days

Based on the data provided, we can analyze the activity ratios of American Eagle Outfitters Inc as follows:

1. Days of Inventory on Hand (DOH):
- In January 2023, American Eagle had 42.57 days of inventory on hand, indicating that it took approximately 42.57 days to sell its inventory.
- This ratio increased to 65.82 days by January 2023, suggesting that the company took longer to sell its inventory, potentially tying up more capital in unsold goods.
- In the following years, the DOH continued to rise, reaching 72.24 days by January 2024 and 71.73 days by January 2025. This trend could point to issues related to inventory management efficiency and potential overstocking.

2. Days of Sales Outstanding (DSO):
- In January 2023, the DSO was 18.46 days, indicating that it took around 18.46 days to collect outstanding revenues from customers.
- The DSO data for the subsequent years is missing, but in February 2024, the DSO was 17.20 days. A lower DSO is generally positive as it signifies a shorter time to collect receivables, improving cash flow.

3. Number of Days of Payables:
- By January 2023, American Eagle had 17.05 days of payables outstanding, implying that the company took around 17.05 days to settle its outstanding payables.
- The data for the following years is missing, but by February 2024, the number of days of payables increased slightly to 18.80 days. A longer number of days of payables can suggest better cash management by delaying payments, potentially improving liquidity.

In conclusion, based on the provided activity ratios data, American Eagle Outfitters Inc experienced a rise in inventory holding periods over the years, which could signal inefficiencies in managing inventory levels. However, the data gaps for DSO and payables limit a comprehensive analysis of the company's overall working capital management over time.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is generating revenues from its fixed assets. In the case of American Eagle Outfitters Inc, the fixed asset turnover ratio has fluctuated over the years.

In January 28, 2023, the fixed asset turnover was 6.38, indicating that American Eagle Outfitters was generating $6.38 in sales for every dollar invested in fixed assets. This was a strong performance, showcasing robust asset utilization. However, in January 31, 2023, the ratio decreased to 2.67, signaling a decline in efficiency in utilizing fixed assets to generate sales.

There is missing data for January 31, 2024, but in February 3, 2024, the fixed asset turnover ratio increased significantly to 7.38, suggesting a significant improvement in efficiency in generating sales from fixed assets. The company exhibited a strong ability to generate revenue relative to its investment in fixed assets.

Looking at the total asset turnover ratio, which reflects how efficiently a company is generating sales from all of its assets, American Eagle Outfitters Inc had a relatively stable performance over the years. The ratio was around 1.46 in January 28, 2023, and January 31, 2023. It then slightly increased to 1.48 in January 31, 2024 and February 3, 2024, before dropping to 1.39 in January 31, 2025. This indicates that the company was generating approximately $1.39 in sales for every dollar of total assets invested in the last year.

Overall, the analysis of American Eagle Outfitters Inc's long-term activity ratios indicates varying levels of efficiency in generating sales from fixed assets and total assets over the years. It is essential for the company to continue monitoring and improving these ratios to enhance its operational performance and profitability.