American Eagle Outfitters Inc (AEO)

Return on total capital

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	444,864	222,717	241,038	192,203	247,047
Long-term debt	US$ in thousands	—	—	—	—	8,911
Total stockholders’ equity	US$ in thousands	1,766,860	1,736,760	1,736,760	1,599,160	1,599,160
Return on total capital		25.18%	12.82%	13.88%	12.02%	15.36%

January 31, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $444,864K ÷ ($—K + $1,766,860K)
= 25.18%

American Eagle Outfitters Inc's return on total capital has fluctuated over the years based on the data provided. In January 2023, the return on total capital was 15.36%, indicating that the company generated $0.1536 in profit for every dollar of total capital employed. This ratio decreased to 12.02% by January 2023, suggesting a decline in the company's profitability relative to its total capital.

However, the return on total capital improved to 13.88% in January 2024 and then slightly decreased to 12.82% in February 2024. This indicates some variability in the company's ability to generate profit from its total capital during this period.

The most notable change occurred in January 2025, where the return on total capital significantly increased to 25.18%. This considerable improvement suggests that American Eagle Outfitters Inc was able to enhance its profitability in relation to the total capital deployed, indicating potentially more efficient capital utilization or increased profitability.

Overall, the trending data for return on total capital shows some variability, with fluctuations in profitability relative to the total capital employed by American Eagle Outfitters Inc. The company may need to closely monitor and manage its capital allocation strategies to ensure consistent and sustainable profitability in the future.