American Eagle Outfitters Inc (AEO)

Interest coverage

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019	Feb 2, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	222,718	287,064	279,251	227,975	247,046	253,418	345,557	499,539	461,220	476,817	254,893	-271,343	-274,451	-266,900	-172,741	233,345	334,270	339,801	334,270	337,130
Interest expense (ttm)	US$ in thousands	-1,230	5,834	8,705	67,854	71,752	73,283	81,895	30,716	34,121	33,450	24,838	15,917	7,924	0	0	0	0	0	0	0
Interest coverage		—	49.21	32.08	3.36	3.44	3.46	4.22	16.26	13.52	14.25	10.26	-17.05	-34.64	—	—	—	—	—	—	—

February 3, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $222,718K ÷ $-1,230K
= —

The interest coverage ratio of American Eagle Outfitters Inc has shown significant fluctuations over the past several quarters. In the most recent period ending Feb 3, 2024, the company's interest coverage ratio was not available. However, in the previous quarter ending Oct 28, 2023, the ratio was 49.21, indicating a strong ability to cover interest expenses with operating income.

Looking back further, the interest coverage ratios for Jul 29, 2023, and Apr 29, 2023, were 32.08 and 3.36 respectively, showing a notable decline in coverage from the previous quarter. This suggests that the company may have faced challenges in generating sufficient earnings to cover interest costs in the second and third quarters of the fiscal year.

It is also worth noting that in the fiscal year 2022, the interest coverage ratio displayed fluctuating trends, with ratios ranging from 3.44 to 16.26. Despite the fluctuations, the company generally maintained a moderate to strong ability to meet its interest obligations during this period.

In contrast, the interest coverage ratios for the quarters ending Jan 30, 2021, and Oct 31, 2020, were negative at -17.05 and -34.64 respectively, indicating that the company's operating income was insufficient to cover its interest expenses during these periods. This raises concerns about the company's financial health and its ability to service its debt obligations.

Overall, the analysis of American Eagle Outfitters Inc's interest coverage ratios highlights the importance of monitoring the company's ability to generate earnings relative to its interest expenses to assess its financial stability and debt servicing capabilities.