AMERICAN EAGLE OUTFITTERS ae.com

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1 ae.com

2 Safe Harbor Statement Any remarks that we make today about future expectations, plans and prospects for American Eagle Outfitters which are not historical facts, are forwardlooking statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause the Company s actual results to differ from those contained in the forward-looking statements, please read the section entitled Risk Factors in the Company s most recent Form 10-K and Form 10-Q, each on file with the Securities and Exchange Commission. ae.com 2

3 The AE Story Leading Lifestyle Brand Unique Competitive Edge Powerful Growth Drivers Strong, Sustainable Operating Margin ae.com 3

4 Leading Lifestyle Brand Year Olds Spring 2000 Spring 2006 Brand Total Brand Total Nike 21% Nike 21% Abercrombie & Fitch 14% American Eagle 11% Adidas/Old Navy 13% Sony 10% Tommy Hilfiger 12% Hollister/A&F 9% Sony 11% Microsoft 7% Gap 10% Aeropostale/Pepsi/Ford 6% Nintendo/Cover Girl 6% Coke/Adidas 5% American Eagle 5% Source: Teen Research Unlimited ae.com 4

5 Unique Competitive Edge Strong Quality/Value Offering Sharp Customer Focus Go-To Brand for Year Olds Strong Operating Systems Disciplined, Flexible Execution ae.com 5

6 Powerful Growth Drivers Real Estate Destination AE aerie Intimates Sub-Brand ae.com MARTIN + OSA ae.com 6

7 Growth Drivers Real Estate Rationale Strong New Store ROI Remodels Drive Productivity Results On Track for 7% Growth in Square Footage 46 New Stores in 2006 Accelerating Remodels 68 in 2006 ae.com 7

8 Strong New Store Economics First 12 Months of Operations (Average of 45 stores)* Sales $2.5 Million 4-Wall Profit $580,000 Profit Margin 23% Sales Per Foot $424 Store Size 5,900 Sq. Feet Year One ROI 100% * First 12 months of operation for 45 stores opened since the beginning of 2004 ae.com 8

9 Remodeling Drives Productivity* Sales per Foot Profit per Foot $500 $400 $450/foot +15% $520/foot $175 $150 $125 $120/foot +30% $160/foot 68 Planned in $300 $200 $100 $ $50 $100 $25 $0 Pre-Remo Post -Remo $0 Pre-Remo Post-Remo * Trailing 12 months of operations for 36 stores ae.com 9

10 Growth Drivers Destination AE Rationale Build Brand-Defining Categories Market Share Opportunity Drive Comps and Sales per Square Foot Results Leading Market Share in Jeans Strong Knit Performance Delivering Value at Each Price Point ae.com 10

11 Growth Drivers Destination AE Build Brand-Defining Destination Categories Emphasize Value & Quality Develop Tiered Assortment ae.com 11

12 Growth Drivers aerie Intimates Opportunity Rationale Significant Market Opportunity Building on Proven Success Complimentary to Margins Consistent with AE Lifestyle Results Launching in Fall 2006 Incremental Square Footage ae.com 12

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14 Growth Drivers ae.com Rationale Potential for Double-Digit Sales Growth Solid Operating Margin Reinforces AE Brand, Expands Selection Results, TTM Over 50% Sales Increase 42% Increase in Unique Site Visitors Strong Conversion Rate ae.com 14

15 Growth Drivers MARTIN + OSA Rationale Sportswear Lifestyle Brand Targeting Year Old Women and Men Market Opportunity to Design Fun and Sport Back into Sportswear Results Launching in Fall 2006 Four Leases in Premier Malls ae.com 15

16 Supporting Our Growth ae.com

17 Leadership Team Recent Promotions/Appointments to Strengthen Management in Finance Marketing Sourcing and Production Real Estate Supply Chain ae.com 17

18 Positioned for Growth Headquarters Relocation Building New Corporate Data Center Expansion of Kansas Distribution Center to Support AE s western stores, aerie, ae.com and MARTIN + OSA ae.com 18

19 Strong Operating Performance ae.com

20 Comparable Store Sales Through May Q1 10% 27% 9% May 11% 17% 11% ae.com 20

21 May YTD Sales Highlights Strength Across Men s and Women s in Key Categories Knit Tops Shorts Jeans Intimates ae.com 21

22 Positive Sales Metrics May YTD Average Unit Retail +MSD Transaction Value +HSD Units per Transaction +LSD Transactions per Store +MSD Units per Store +MSD ae.com 22

23 First Quarter 2006 Highlights Ninth Consecutive Quarter of Record Sales and Earnings Operating Margin of 18.9% 20% Increase in First Quarter EPS $925 Million of Cash Inventory +1.4% at cost per foot ae.com 23

24 Our Long Term Goal is to Achieve at Least 15% Earnings Growth with Sustainable Operating Margin Top Line Growth Merchandise Margin Performance Expense Discipline ae.com 24

25 Track Record of Sales Growth $2.5 $2.3 $2.0 $1.9 $ in billions $1.5 $1.0 $0.8 $1.1 $1.3 $1.4 $1.4 $0.5 $ Comp Growth 21% 6% 2% -4% -7% 21% 16% ae.com 25

26 Growth Drivers Sales Growth AE Real Estate Destination AE aerie ae.com Square Footage Growth AE Real Estate MARTIN + OSA ae.com 26

27 Sales Per Square Foot Growth $500 $451 $ Year Goal of $550-$600 per foot $472 $417 $412 $400 $374 $343 $ Avg Store Sq Footage 4,376 4,687 4,918 5,070 5,266 5,367 5,491 ae.com 27

28 Operating Margin 19.3% 20.0% $ in millions 18.0% 13.3% 12.6% 11.5% 9.3% $363 $461 $150 $141 $160 $159 $ ae.com 28

29 IMU Track Record + Over 550 basis points Improvement Driven by Lower Cost ae.com 29

30 Annual Markdown Rates ae.com 30

31 Driving Markdown Consistency Inventory Management Markdown Optimization Regional Performance Size Profiling Replenishment ae.com 31

32 Expense Discipline 28% 21% SG&A 14% 7% 0% BOW D&A ae.com 32

33 Structured for Sustainable Operating Margins ae.com

34 Structured for Sustainable Operating Margins Management Team Under CEO Jim O Donnell is Sharply Focused on Disciplined, Yet Flexible Operating Approach ae.com 34

35 Structured for Sustainable Operating Margins New Creative Talent Strengthened Design and Merchandising ae.com 35

36 Structured for Sustainable Operating Margins Improved Design Process Enhances On-Time Product Flows ae.com 36

37 Structured for Sustainable Operating Margins Frequent Customer Research Delivers On-Target Assortments ae.com 37

38 Structured for Sustainable Operating Margins Disciplined Inventory Management Minimizes Risk ae.com 38

39 Structured for Sustainable Operating Margins Powerful Growth Drivers Real Estate Destination AE aerie Intimates Sub-Brand ae.com MARTIN + OSA ae.com 39

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