AMERICAN EAGLE OUTFITTERS, INC. The following discussion and analysis of financial condition and results of operations should be read in conjunction with our Fiscal 2019 Management's Discussion and Analysis of Financial Condition and Results of Operations which can be found in our Fiscal 2019 Form 10-K.
In addition, the following discussion and analysis of financial condition and results of operations are based upon our Consolidated Financial Statements and should be read in conjunction with these statements and notes thereto.
Key Performance Indicators
Our management evaluates the following items, which are considered key performance indicators, in assessing our performance:
Comparable sales - Comparable sales and comparable sales changes provide a measure of sales growth for stores and channels open at least one year over the comparable prior year period. In light of store closures related to COVID-19, we have not disclosed comparable sales this quarter as the periods are not comparable. In fiscal years following those with 53 weeks, including Fiscal 2018, the prior year period is shifted by one week to compare similar calendar weeks. A store is included in comparable sales in its thirteenth month of operation. When stores have a gross footage increase of 25% or greater due to a remodel, they are removed from the comparable sales base, but are included in total sales. These stores are returned to the comparable sales base in the thirteenth month following the remodel. Sales from company-owned stores, as well as e-commerce sales (AEO Direct), are included in total comparable sales. Sales from licensed stores are not included in comparable sales. Individual American Eagle and Aerie brand comparable sales disclosures represent sales from stores and AEO Direct. AEO Direct sales are included in the individual American Eagle and Aerie brand comparable sales metrics for the following reasons:
• Our approach to customer engagement is "omni-channel" which provides a
seamless customer experience through both traditional and non-traditional
channels, including four wall store locations, web, mobile/tablet devices and
apps, social networks, email, in-store displays and kiosks. Additionally, we
fulfill online orders at stores through our buy online, ship from store
capability, maximizing store inventory exposure to digital traffic and accept
digital returns in stores; and
• Shopping behavior has continued to evolve across multiple channels that work
in tandem to meet customer needs. Management believes that presenting a brand
level performance metric that includes all channels (i.e., stores and AEO
Direct) is the most appropriate, given customer behavior.
Our management considers comparable sales to be an important indicator of our current performance, and investors may find it useful as such. Comparable sales results are important to achieve leveraging of our costs, including store payroll, store supplies, rent, etc. Comparable sales also have a direct impact on our total net revenue, cash and working capital. Omi-channel sales performance - Our management utilizes the following quality of sales metrics in evaluating our omni-channel sales performance: comparable sales, average unit retail price, total transactions, units per transaction, and consolidated comparable traffic. We include these metrics in our discussion within Item 7 of this report when we believe they enhance the understanding of the matter being discussed. Investors may find them useful as such. Each of these metrics is defined as follows (except comparable sales, which is defined separately above):
• Average unit retail price represents the average selling price of one unit of
our goods. It is the cumulative net sales divided by the net units sold for a
period of time.
• Total transactions represents the count of customer transactions over a
period of time (inclusive of company-owned stores and AEO Direct, unless
specified otherwise).
• Units per transaction represent the number of units sold divided by total
transactions over a period of time (inclusive of company-owned stores and AEO
Direct, unless specified otherwise).
• Consolidated comparable traffic represents visits to our company-owned
stores, limited to those stores that qualify to be included in comparable
sales as defined above, including AEO Direct, over a period of time
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-------------------------------------------------------------------------------- Gross profit - Gross profit measures whether we are optimizing profitability of our sales. Gross profit is the difference between total net revenue and cost of sales. Cost of sales consists of merchandise costs, including design, sourcing, importing and inbound freight costs, as well as markdowns, shrinkage, and certain promotional costs (collectively, "merchandise costs") and buying, occupancy and warehousing costs. Design costs consist of compensation, rent, depreciation, travel, supplies and samples. Buying, occupancy and warehousing costs consist of: compensation, employee benefit expenses and travel for our buyers and certain senior merchandising executives; rent and utilities related to our stores, corporate headquarters, distribution centers and other office space; freight from our distribution centers to the stores; compensation and supplies for our distribution centers, including purchasing, receiving and inspection costs; and shipping and handling costs related to our e-commerce operation.
The inability to obtain acceptable levels of sales, initial markups or any significant increase in our use of markdowns could have an adverse effect on our gross profit and results of operations.
Operating income - Our management views operating income as a key indicator of our performance. The key drivers of operating income are comparable sales, gross profit, our ability to control selling, general and administrative expenses, and our level of capital expenditures. Cash flow and liquidity - Our management evaluates cash flow from operations, investing and financing in determining the sufficiency of our cash position and capital allocation strategies. Cash flow has historically been sufficient to cover our uses of cash. Our management believes that cash flow and our current liquidity will be sufficient to fund anticipated capital expenditures, dividends and working capital requirements.
Results of Operations
Overview
Our business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are not necessarily indicative of future financial results.
Prior to the impact of the COVID-19 pandemic, our comparable period sales performance fromFebruary 2, 2020 through earlyMarch 2020 was consistent with our comparable period sales performance for the fourth quarter of Fiscal 2019. Commencing in early March, we experienced a significant reduction in customer traffic and demand resulting from the continued spread of COVID-19 and government actions to combat it. In response, we closed our stores to the public after the close of business onMarch 17, 2020 , however we continued to operate our digital business. Accordingly, our results for the first quarter of Fiscal 2020 were significantly impacted. Since the first day that stores were closed to the public, our digital sales growth has accelerated, significantly exceeding our expectations. In order to support online demand and utilize in-store inventory, we continued to leverage our store network for buy-online/ship-from-store capabilities, where possible. Despite our strength in digital sales, we have historically generated the majority of our revenue through stores and there can be no assurance that the current performance in our digital sales growth will continue. As a result, our results for the first quarter of Fiscal 2020 were significantly negatively impacted and are not comparable to prior year. SinceMay 2, 2020 , we have started to open stores and call back employees where state and local governments have lifted stay-at-home orders. We are taking the following precautions as we open the stores which include sanitation stations and masks for all customers to provide a safe and secure environment. Plexiglas health guard partitions have also been installed at the registers along with the implementation of enhanced cleaning routines and protocols. We are taking precautionary measures and appropriately adjusting our operational needs due to the impact of COVID-19, including taking a series of actions to preserve financial strength as follows:
• a suspension of our share repurchase program and deferred payment of the
first quarter Fiscal 2020 cash dividend;
• temporary furloughs of store, field and corporate associates beginning April
5, 2020, largely reflecting the continued uncertainty around the duration of
store closures;
• reductions to operating expenses, which include delayed merit increases for
associates, a hiring freeze and other cost saving initiatives;
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• cuts to inventory receipts to align with lower demand due to store closures;
and
• planned reductions to capital expenditures across stores, information
technology and other projects to a range of
Fiscal 2020.
In addition, we have had productive discussions with our vendors to reduce purchases and extend payment terms, as well as with our landlords regarding the extension of payment terms and rent concessions.
As ofMay 2, 2020 , we had approximately$886 million in cash and cash equivalents and short-term investments which includes the proceeds from our convertible notes issuance and Credit Facility borrowings, each discussed in greater detail below. We expect to be able to fund our medium-term future cash requirements through current cash holdings. Taking into account the measures described above, we believe that our on-hand liquidity would enable us to continue operations beyond Fiscal 2020, if necessary, even if the majority of our retail locations remained closed during the duration of that period. While our digital business, including buy-online/ship-from-store capabilities, continues to operate, and subsequent toMay 2, 2020 we have begun to reopen retail stores, we are unable to accurately predict the impact that the COVID-19 pandemic will have on our consolidated operations and financial results going forward due to:
• the currently unknown duration of the COVID-19 pandemic;
• the impact of governmental regulations that have been, and may in the future
be, imposed in response to the pandemic, including regulations which could
adversely affect our business or cause us to cease our digital business if we
are required to close our distribution and fulfillment centers or are
otherwise unable acquire or deliver merchandise, or to close our recently
reopened retail stores;
• potential changes in consumer behavior and shopping patterns, including
traffic through stores once they reopen;
• the deterioration in the economic conditions in
potentially could have an impact on discretionary consumer spending;
• the ability of our distribution centers to maintain adequate staffing to meet
increased customer demand;
• the impact on our landlords and our resulting ability of us to keep our
stores open; and
• the impact of COVID-19 on our and our vendors' supply chain, including
impacts on adequate inventory levels and supply chain costs, and on our
third-party delivery service providers.
This results of operations section contains non-GAAP financial measures
("non-GAAP" or "adjusted"), comprised of earnings per share information
excluding non-GAAP items. This financial measure is not based on any
standardized methodology prescribed by U.S. generally accepted accounting
principles ("GAAP") and is not necessarily comparable to similar measures
presented by other companies. We believe that this non-GAAP information is
useful as an additional means for investors to evaluate our operating
performance, when reviewed in conjunction with our GAAP financial statements.
These amounts are not determined in accordance with GAAP and, therefore, should
not be used exclusively in evaluating our business and operations. The table
below reconciles the GAAP financial measure to the non-GAAP financial measure
discussed above.
13 Weeks Ended
May 2 , May 4,
2020 2019
Net (loss) income per diluted share - GAAP Basis
0.69 -
Add: Restructuring charges(2) 0.01 0.01
Net (loss) income per diluted share - Adjusted or Non-
GAAP Basis$ (0.84 ) $ 0.24
(1) 13 weeks ended
the total,
assets of 272 stores. We recorded
certain corporate and store property and equipment. We also recorded
million of impairment of certain cost and equity method investments.
(2) 13 weeks ended
13 weeks ended
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The following table shows the percentage relationship to total net revenue of
the listed line items included in our Consolidated Statements of Operations.
13 Weeks Ended
May 2, May 4,
2020 2019
Total net revenue 100.0 % 100.0 %Cost of sales, including certain buying, occupancy
and warehousing expenses 94.9 63.3 Gross profit 5.1 36.7 Selling, general and administrative expenses 34.1 26 Impairment and restructuring charges 28.2 0.2 Depreciation and amortization expense 7.7 5.1 Operating (loss) income (64.9 ) 5.4 Other (expense) income, net (0.6 ) 0.5 (Loss) Income before income taxes (65.5 ) 5.9 (Benefit) provision for income taxes (18.9 ) 1.3 Net (loss) Income (46.6 ) % 4.6 %
The following table shows our consolidated store data:
13 Weeks Ended
May 2, May 4,
2020 2019
Number of stores:
Beginning of period 1,095 1,055
Opened 3 11
Closed (5 ) (5 )
End of period 1,093 1,061Total gross square feet at end of period (in '000) 6,822 6,662 International licensed/franchise stores at end of
period (1) 215 235
(1) International licensed/franchise stores are not included in the consolidated
store data or the total gross square feet calculation.
Our operations are conducted in one reportable segment, consisting of 938 American Eagle retail stores which include 175 Aerie side-by-side locations, 148 Aerie stand-alone locations and AEO Direct. Additionally, there were 5 Tailgate and 2 Todd Snyder stand-alone locations.
Comparison of the 13 weeks ended
Total Net Revenue
Total net revenue decreased 38%, or$334.6 million , to$551.7 million compared to$886.3 million last year. The COVID-19 pandemic and the associated closures of our retail stores sinceMarch 17, 2020 negatively affected our financial results for the first quarter endedMay 2, 2020 .
By brand, including the respective AEO Direct sales, American Eagle brand revenue decreased 45% compared to a 5% increase last year. Aerie brand revenue decreased 2%, compared to a 28% increase last year.
Gross Profit
Gross profit decreased 91% or$296.6 million , to$28.3 million compared to$324.9 million last year. Our gross margin percentage declined to 5.1% of revenue from 36.7% of revenue last year. This reflected the decline in revenue from retail store closures; higher markdowns and promotions to clear through spring and summer merchandise, inventory provisions, and the impact of fixed buying, occupancy and warehousing costs as a result of the revenue decline due to the impact of COVID-19 on our business. 27 -------------------------------------------------------------------------------- There was$2.6 million and$2.5 million of share-based payment expense included in gross profit for the periods endedMay 2, 2020 andMay 4, 2019 , respectively, comprised of both time and performance-based awards. Our gross profit may not be comparable to that of other retailers, as some retailers include all costs related to their distribution network, as well as design costs in cost of sales and others may exclude a portion of these costs from cost of sales, including them in a line item such as selling, general and administrative expenses. Refer to Note 2 to the Consolidated Financial Statements for a description of our accounting policy regarding cost of sales, including certain buying, occupancy and warehousing expenses.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses decreased 18% or $42.5
million to $188.2 million from $230.7 million last year. As a percentage of
total net revenue, SG&A expenses increased 810 basis points to 34.1%, compared
to 26.0% last year, primarily due to lower store salaries from furloughs that
took effect in early April related to the retail store closures resulting from
COVID-19.
There was
Impairment and Restructuring Charges
Impairment and restructuring charges were$155.6 million , or 28.2% as a percentage of total net revenue, for the 13 weeks endedMay 2, 2020 . These charges consisted of$153.6 million of impairment charges and$2.0 million of severance costs. For further information regarding impairment and restructuring charges, refer to Note 12 to the Consolidated Financial Statements. Restructuring charges were$1.5 million , or 0.2% as a percentage of total net revenue for the 13 weeks endedMay 4, 2019 . These charges were primarily the result of severance and closure costs for our company-owned and operated stores inChina . Our evaluation of store impairment considers the use of prospective financial information, as well as certain real estate assumptions. Given the current volatility in the retail real estate market we acknowledge that certain real estate assumptions could change in future periods. Further based on the uncertainty from the COVID-19 pandemic, we are unable to accurately predict the ultimate impact that COVID-19 will have on our operations going forward, including, among other things, the length of time that such disruptions continue and the impact of governmental regulations that may be imposed in response to the COVID-19 pandemic. Accordingly, we may be required to record further impairment and restructuring charges in future periods.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased 5% or$2.1 million , to$42.7 million for the 13 weeks endedMay 2, 2020 , compared to$44.8 million for the 13 weeks endedMay 4, 2019 . As a percentage of total net revenue, depreciation and amortization expense was 7.7% for the 13 weeks endedMay 2, 2020 compared to 5.1% for the 13 weeks endedMay 4, 2019 .
Other (Expense) Income, Net
Other (expense) was$3.1 million for the 13 weeks endedMay 2, 2020 . Other income was$4.2 million for the 13 weeks endedMay 4, 2019 . The decrease was primarily attributable to increased interest expense related to our long-term debt. 28
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Provision for Income Taxes
The provision for income taxes is based on the current estimate of the annual effective income tax rate and is adjusted as necessary for discrete quarterly events. The effective income tax rate for the 13 weeks endedMay 2, 2020 was 28.8% compared to 21.7% for the 13 weeks endedMay 4, 2019 . The increase in the effective income tax rate this year is primarily a result of the provisions of the CARES Act which permit the carry back of current year losses to a tax year where theU.S. federal corporate income tax rate was 35%, offset by an incremental rate increase on the revaluation of deferred tax assets and liabilities for current year activity and an increase to the valuation allowances recorded in the current year. We recorded our income tax expense, deferred tax assets and related liabilities based on management's best estimates.
Net Income (Loss)
Net income decreased$297.9 million , to a net loss of$257.2 million for the 13 weeks endedMay 2, 2020 , or (46.6%) as a percentage of total net revenue, as compared to net income of$40.8 million , or 4.6% as a percentage of total net revenue for the 13 weeks endedMay 4, 2019 . Net income per share decreased to a net loss of$1.54 per diluted share for the 13 weeks endedMay 2, 2020 , which included$0.70 of impairment and restructuring charges, compared to net income of$0.23 per diluted share, including$0.01 of restructuring charges, for the 13 weeks endedMay 4, 2019 . The change in net income was attributable to the factors noted above.
International Operations
We have agreements with multiple third party operators to expand our brands internationally. Through these agreements, a series of franchised, licensed or other brand-dedicated American Eagle stores have opened and will continue to open in areas includingEurope , theMiddle East , Central andSouth America ,Northern Africa and parts ofAsia . These agreements do not involve a significant capital investment or operational involvement from us. We continue to increase the number of countries in which we enter into these types of arrangements as part of our strategy to expand internationally. As ofMay 2, 2020 , we had 215 stores operated by our third party operators in 25 countries. International third party operated stores are not included in the consolidated store data or the total gross square feet calculation.
As of
Fair Value Measurements
ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.
Financial Instruments
Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
• Level 1 - Quoted prices in active markets.
• Level 2 - Inputs other than Level 1 that are observable, either directly or
indirectly.
• Level 3 - Unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or
liabilities.
As ofMay 2, 2020 , we held certain assets that are required to be measured at fair value on a recurring basis. These include cash and cash equivalents and short-term investments. 29
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In accordance with ASC 820, the following table represents the fair value
hierarchy of our financial assets (cash equivalents and investments) measured at
fair value on a recurring basis as of
Fair
Value Measurements at
Quoted Market
Prices in Active
Markets for Significant
Identical Significant Other Unobservable
Assets Observable Inputs Inputs
(In thousands) Carrying Amount (Level 1) (Level 2) (Level 3)
Cash and cash
equivalents:
Cash $ 149,205 $ 149,205 - -
Money market
securities 350,054 350,054
Interest bearing
deposits 296,509 296,509 - -
Certificates of Deposit 60,000 60,000 - -
Total cash and cash
equivalents $ 855,769 $ 855,769 - -
Short-term investments
Certificates of Deposit 15,000 15,000 - -
Commercial Paper 14,956 14,956
Total short-term
investments 29,956 29,956
Total $ 885,725 $ 885,725 - -
Long-Term Debt
As of
The fair value of the Company's convertible notes is not required to be measured at fair value on a recurring basis. Upon issuance, the fair value of these convertible notes was measured using a secondary market quoted price, which considers market related conditions, and is therefore within Level 2 of the fair value hierarchy.
Liquidity and Capital Resources
Our uses of cash have historically been for working capital, the construction of new stores and remodeling of existing stores, information technology and e-commerce upgrades and investments, distribution center improvements and expansion and the return of value to shareholders through the repurchase of common stock. Additionally, our uses of cash include the development of the Aerie brand, investments in technology and omni-channel capabilities, and our international expansion efforts. The rapid expansion of the COVID-19 global pandemic, the related economic impact, and the closure of our retail stores, resulted in a decline in net sales and earnings for the 13 week period endedMay 2, 2020 , which had a corresponding impact on our liquidity and uses of cash. Historically, our uses of cash have been funded with cash flow from operations and existing cash on hand. We also maintain an asset-based revolving credit facility that allows us to borrow up to$400 million , which will expire inJanuary 2024 . InMarch 2020 we provided notice to the lender to borrow$330 million under the Credit Facility. We elected to draw down available funds to ensure that we maintain financial flexibility in light of the spread of COVID-19. Furthermore, inApril 2020 , we issued$415 million aggregate principal amount of convertible senior notes due in 2025. As discussed in the overview, we are focused on preserving our liquidity and managing our cash flows through certain actions to enhance our ability to meet short-term liquidity needs. We have taken a series of actions to reinforce our liquidity and financial flexibility, including:
• a suspension of our share repurchase program and deferred payment of the
first quarter Fiscal 2020 cash dividend;
• temporary furloughs of store, field, and corporate associates that began on
duration of store closures;
30
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• reductions to operating expenses, which include delayed merit increases for
associates, a hiring freeze, and other cost-saving initiatives;
• cuts to inventory receipts to align with lower demand due to store closures;
and
• planned reductions to capital expenditures across stores, information
technology and other projects to a range of
Fiscal 2020.
As ofMay 2, 2020 , we had approximately$886 million in cash and cash equivalents and short-term investments, which includes the proceeds from our convertible notes and Credit Facility borrowings. We expect to be able to fund our medium-term future cash requirements through current cash holdings. Taking into account the measures described above, we believe that our on-hand liquidity would enable us to continue operations beyond Fiscal 2020, if necessary, even if the majority of our retail locations remained closed during the duration of that period.
The following sets forth certain measures of our liquidity:
May 2, February 1, May 4,
2020 2020 2019
Working Capital (in thousands)
2.35 1.39 1.46
During the 13 weeks ended May 2, 2020 , working capital increased $600.5 million
compared to February 1, 2020 and increased $595.9 million compared to the 13
weeks ended May 4, 2019 . The largest increase came from cash and short-term
investments of $468.8 due to the proceeds from our convertible notes and Credit
Facility borrowings. Compared to February 1, 2020 , the remaining $131.7 million
increase in working capital was driven by a $108.6 million decrease in accounts
payable, a $21.9 million decrease in accrued compensation, and a $24.5 million
decrease in inventory, partially offset by a $29.2 million increase in current
operating lease liabilities, a $22.8 million due to dividends payable, and a
$4.6 million increase in accrued expenses.
Cash Flows (used for) provided by Operating Activities
Net cash used for operating activities totaled($209.9) million for the 13 weeks endedMay 2, 2020 , compared to cash flows from operating activities of$7.7 million for the 13 weeks endedMay 4, 2019 . Our primary outflow was for the payment of operational costs. For the period endedMay 4, 2019 , our major source of cash from operations was merchandise sales and our primary outflow of cash for operations was for the payment of operational costs.
Cash Flows (used for) provided by Investing Activities
Net cash used for investing activities totaled$9.1 million for the 13 weeks endedMay 2, 2020 , compared to net cash provided by investing activities of$10.4 million for the 13 weeks endedMay 4, 2019 . Investing activities for the 13 weeks endedMay 2, 2020 primarily consisted of$25.0 million of short-term investment sales, offset by$33.9 million of capital expenditures for property and equipment. We anticipate our capital expenditures for the remainder of Fiscal 2020 to be lower compared to prior years as we manage spending to help mitigate the negative impact of COVID-19 on our business. Investing activities for the 13 weeks endedMay 4, 2019 primarily included$47.1 million of net short-term investment sales, partially offset by$36.6 million of capital expenditures for property and equipment.
Cash Flows provided by (used for) Financing Activities
Net cash provided by financing activities totaled$714.6 million for the 13 weeks endedMay 2, 2020 , compared to net cash used for financing activities of$46.6 million for the 13 weeks endedMay 4, 2019 . Cash provided by financing activities for the 13 weeks endedMay 2, 2020 consisted primarily of$406.1 million of net proceeds from the issuance of convertible senior notes and the$330.0 million of borrowings on our Credit Facilities, partially offset by$20.0 million used for purchases of 1.7 million shares of common stock under publicly-announced programs inearly-March 2020 , and$1.4 million for the repurchase of common stock from employees for the payment of taxes in connection with the vesting of share-based payments. We borrowed on our Credit Facilities and issued convertible notes to strengthen our cash position and provide us with additional financial flexibility during the remainder of the ongoing COVID-19 pandemic. Cash used for financing activities for the 13 weeks endedMay 4, 2019 consisted primarily of$23.6 million for cash dividends paid at a quarterly rate of$0.1375 per share,$20.0 million used for purchases of 0.9 million shares of common stock under 31
-------------------------------------------------------------------------------- publically announced programs, and$3.5 million for the repurchase of common stock from employees for the payment of taxes in connection with the vesting of share-based payments. Credit Facilities InJanuary 2019 , we entered into a Credit Agreement for five-year, syndicated, asset-based revolving Credit Facilities. The Credit Agreement provides senior secured revolving credit for loans and letters of credit up to$400 million , subject to customary borrowing base limitations. The Credit Facilities expireJanuary 30, 2024 . All obligations under the Credit Facilities are unconditionally guaranteed by certain subsidiaries. The obligations under the Credit Agreement are secured by a first-priority security interest in certain working capital assets of the borrowers and guarantors, consisting primarily of cash, receivables, inventory, and certain other assets and have been further secured by first-priority mortgages on certain real property. As ofMay 2, 2020 the Company was in compliance with the terms of the Credit Agreement and had$330.0 million in borrowings and$7.9 million outstanding in stand-by letters of credit. The current interest rate for borrowings under the Credit Facilities is the one month LIBOR, plus an adjusted spread based on leverage as reflected in the Credit Facilities.
Capital Expenditures for Property and Equipment
Capital expenditures for the 13 weeks endedMay 2, 2020 were$33.9 million , and included$14.2 million related to investments in our stores, including three new AEO stores (two American Eagle stores and one Aerie stand-alone store), one remodeled and refurbished stores, and fixtures and visual investments. Additionally, we continued to support our infrastructure growth by investing in information technology initiatives ($8.3 million ), e-commerce ($9.1 million ) and other home office projects ($2.3 million ). In order to preserve financial liquidity in response to the uncertainty created by the impact of COVID-19, the company has reduced its Fiscal 2020 capital spending plans to a range of$100 to$125 million , prioritizing strategic omni-channel, store and supply-chain investments aimed at further strengthening its competitive position. Stock Repurchases In earlyMarch 2020 , as part of our publicly-announced share repurchase program, we repurchased 1.7 million shares for$20.0 million , at a weighted average price of$11.63 per share. As previously announced, to preserve cash liquidity in response to the uncertainty created by the impact of COVID-19, the company suspended the stock repurchase program. During the 13 weeks endedMay 4, 2019 , as part of our publicly-announced share repurchase program, we repurchased 0.9 million shares for$20.0 million , at a weighted average price of$21.69 per share. As ofMay 2, 2020 3.6 million shares remained under the share repurchase program authorized by the Company's Board of Directors (our "Board") inApril 2016 that expires onJanuary 30, 2021 . During Fiscal 2019, our Board authorized the repurchase of 30.0 million shares under a new share repurchase program, which expires onFebruary 3, 2024 , bringing our total share repurchases authorization to 33.6 million shares. During the 13 weeks endedMay 2, 2020 andMay 4, 2019 , we repurchased approximately 0.1 million and 0.2 million shares, respectively, from certain employees at market prices totaling$1.4 million and$3.5 million , respectively. These shares were repurchased for the payment of taxes, in connection with the vesting of share-based payments, as permitted under our equity incentive plans. The aforementioned shares repurchased have been recorded as treasury stock. Dividends During the 13 weeks endedMay 2, 2020 , our Board declared a quarterly cash dividend of$0.1375 per share onMarch 26, 2020 , originally payable onMay 14, 2020 to stockholders of record at the close of business onApril 30, 2020 ; as part of our efforts to carefully manage the impact of COVID-19 on our liquidity, our first quarter dividend payment was delayed. It will now be paid onApril 23, 2021 , to stockholders of record at the close of business onApril 9, 2021 . The Company maintains the right to defer the record and payment dates of its dividends, depending upon, among other factors, the progression of the COVID-19 outbreak, business performance and the macroeconomic environment. The payment of future dividends is at the discretion of our Board and is based on future earnings, cash flow, financial condition, capital requirements, changes inU.S. taxation and other relevant factors. 32
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Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are described in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and in the notes to our Consolidated Financial Statements for the year endedFebruary 1, 2020 contained in our Fiscal 2019 Form 10-K. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been discussed in the notes to our Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The application of our critical accounting policies and estimates may require our management to make judgments and estimates about the amounts reflected in the Consolidated Financial Statements. Our management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.
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