American Eagle Outfitters Inc (AEO)

Short-term

Turnover ratios

American Eagle Outfitters Inc's inventory turnover ratio fluctuated over the reviewed period, ranging from a high of 7.92 in January 2022 to a low of 4.96 in October 2023. Overall, the company's inventory turnover ratio has shown a downward trend, indicating that it takes longer for the company to sell through its inventory over time.

The receivables turnover ratio was erratic and inconsistent, with values being reported only sporadically. For the periods where data is available, the company exhibited varying levels of efficiency in collecting its receivables, with turnover ratios ranging from 17.91 to 24.04. The lack of consistent data makes it challenging to draw any definitive conclusions about American Eagle Outfitters Inc's receivables turnover performance.

Similarly, the payables turnover ratio was also reported inconsistently. The company's payables turnover ratio ranged from 12.72 to 22.51 during the reviewed periods, suggesting that the company managed its payables at differing levels of efficiency over time. Without a complete set of data points, it is challenging to determine the overall trend in the company's payment cycle efficiency.

Regarding the working capital turnover ratio, American Eagle Outfitters Inc displayed variations in its efficiency in utilizing working capital. The ratio ranged from 7.83 to 16.70, indicating fluctuations in how effectively the company was able to generate revenue in relation to its working capital. The company showed improved efficiency in utilizing working capital towards the latter part of the reviewed period.

In assessing the activity ratios collectively, it is evident that American Eagle Outfitters Inc experienced varying levels of performance in managing its inventory, receivables, payables, and working capital turnover. The company should aim for consistency and improvement in these ratios to enhance its operational efficiency and overall financial health.

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Average number of days

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

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand measures how many days on average the company holds its inventory before it is sold.
- The trend shows fluctuations in the days of inventory on hand, ranging from a low of 46.08 days as of January 31, 2022, to a high of 73.59 days as of October 28, 2023.
- Generally, a lower DOH indicates more efficient inventory management, while a higher DOH may suggest slower inventory turnover.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding reflects the average number of days it takes for the company to collect payment after making a sale.
- The data shows irregularities, with some periods not reported (denoted as "\u2014 days").
- A lower DSO is preferable as it indicates faster collection of receivables and better cash flow management.

3. Number of Days of Payables:
- The number of days of payables measures the average number of days it takes for the company to pay its suppliers.
- Similar to DSO, there are missing data points as well.
- A higher number of days of payables may suggest that the company is taking longer to pay its suppliers, potentially indicating a leverage on trade credit.

Overall, analyzing these activity ratios provides insights into how efficiently American Eagle Outfitters Inc is managing its inventory, collecting payments from customers, and paying its suppliers. It is important for the company to maintain a balance in these ratios to ensure effective working capital management.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. For American Eagle Outfitters Inc, we can see fluctuations in the Fixed Asset Turnover ratio over the years. The ratio was not available for some periods, but generally, there is an increasing trend in the ratio. It was relatively low in April 2022 and July 2022 at 2.69 and 2.53 respectively, but showed significant improvement in January 2023 and April 2023, reaching 6.70 and 7.05 respectively. This implies that American Eagle Outfitters Inc was able to generate more sales revenue per dollar of fixed assets during these periods.

On the other hand, the Total Asset Turnover ratio indicates how effectively the company is utilizing all its assets to generate sales. American Eagle Outfitters Inc's Total Asset Turnover ratio also shows some variations over time. The ratio was relatively stable in the range of 1.2 to 1.6 for most periods, with some fluctuations. It reached a peak of 1.68 in February 2024, indicating a higher level of sales generated per dollar of total assets during that period.

Overall, the increasing trend in the Fixed Asset Turnover ratio and the generally stable Total Asset Turnover ratio suggest that American Eagle Outfitters Inc is efficiently utilizing its assets to generate sales over the years. However, further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of the company's long-term activity performance.