american eagle & buckle inc financial analysis 2013
TRANSCRIPT
Abdou Diop Carlos Encarnacion Maceo Lofton Leudy Lugo Sooyeon Park
Agenda
BuckleInc.FinancialInformation
AmericaEagleFinancialInformation
CompanyOverview:BuckleInc.
CompanyOverview:AmericanEagleOut7itters
CompareAnalysis
AmericanEagleOut7ittersOverview
• 1977theCirstAmericanEaglewasestablishinTwelveOaksMallinNovi,Michigan
• Morethan1,000storesineveryUSstate(includingPuertoRico,
Canada,MiddleEast,andonline)
• Providinghigh-qualitymerchandise,on-trendingclothes,accessories,
andpersonalcareproductsataffordableprices
• Thecompanyonlinebusiness,AEODirect,shipstocountriesworldwide
• In2006AmericanEagleranked#1injeanssales(age15-25yearsold)andnamed#1brandofcollegestudents
Agenda
BuckleInc.FinancialInformation
AmericaEagleFinancialInformation
CompanyOverview:BuckleInc.
CompanyOverview:AmericanEagleOutCitters
CompareAnalysis
CurrentAssets $1,141,800,000CurrentAssetsCashandcashequivalents
Short-terminvestments
MerchandiseInventory
Assetsheldforsale
AccountsReceivable
PrepaidexpensesandOther
Deferredincometaxes
$1,141,800,000509,119,000
121,873,000
332,452,000
-
46,321,000
73,805,000
58,230,000
Ratio(CurrentAssets:TotalAssets) 0.6502
FinancialInformation–CurrentAssets
CurrentLiabilities $1,141,800,000CurrentLiabilitiesAccountsPayable
Accruedcompensationandpayrolltaxes
Accruedrent
Accruedincomeandothertaxes
Unredeemedgiftcardsandgift
certi7icates
Currentportionofdeferredleasecredits
Otherliabilitiesandaccruedexpenses
$435,902,000176,874,000
65,533,000
77,873,000
29,155,000
46,458,000
13,381,000
26,628,000
Ratio(CurrentLiabilities:TotalLiabilities) 0.815
FinancialInformation-CurrentLiabilities
CurrentAssets CurrentLiabilities
Merchandiseinventory
Accountsreceivable
Prepaidexpensesandother
Otherassets
Accountspayable
Accruedcompensationandpayroll
taxes
Accruedincomeandothertaxes
Unredeemedgiftcardsandgift
certi7icates,
Deferredleasecredits
Accruedliabilities
FinancialInformation-CurrentLiabilities
Retained Earnings ($218,406)
NetIncome $232,108,000
FinancialInformation
Dividend ($414,301)
AmericanEagleCompanyAuditorandReportFinancialStatement
• Ernest&YoungLLP
• ErnstandYoungLLP’sbelievesAmericanEagleOutCitters,Inc.
maintainedeffectiveinternalcontroloverCinancialreportsand
Cinancialstatements.
Agenda
BuckleInc.FinancialInformation
AmericaEagleFinancialInformation
CompanyOverview:BuckleInc.
CompanyOverview:AmericanEagleOutCitters
CompareAnalysis
• 1948-FirstBucklestoreopensinKearny,Nebraska
• Leadingstoreofmediumtoimprovedpricedcasualattire,footwear,
andaccessoriesforfashion(towardtoyoungmale&female)
• Functionsover450storesin43states,underthenameBuckle&the
Buckle
• ThecompanyhighlightsmodiCieddevotiontoitscustomersand
providesindividualcustomerserviceslikefreechanges,layaways,
andfrequentshopperprograms.
Agenda
BuckleInc.FinancialInformation
AmericaEagleFinancialInformation
CompanyOverview:BuckleInc.
CompanyOverview:AmericanEagleOutCitters
CompareAnalysis
CurrentAssets $276,873,000
CurrentAssets: $276,873,000
CashandCashequivalentShort-terminvestments(NotesA,B,andC)ReceivableInventoryPrepaidexpensesandotherAssets(NoteF)
$117,608,00026,414,0003,470,000103,853,00025,528,000
Ratio:(CurrentAsset/TotalAsset)
0.57926373
FinancialInformation-CurrentAssets
BuckleInc.referstoitsIncomeStatementastheConsolidatedStatementsofincome.
CurrentLiabilities $128,956,000
CurrentLiabilitiesAccountsPayableAccruedemployeeCompensationAccruedStoreoperatingexpensesGiftcerti7icatesredeemableIncometaxespayable
$128,956,00034,124,00042,183,00010,121,00022,221,00020,307,000
Ratio:(CurrentLiabilities/Totalliabilities)
0.68475242
FinancialInformation-CurrentLiabilities
� � Receivables 596,000
� Inventory 356,000
� Prepaid expenses and other assets (10,281,000)
� Accounts Payable 6,534,000
� Accrued Employee Comp. (671,000)
� Accrued Store Operating Exp. (1,004,000) � Gift Certificate Redeemable 1,935,000 � Differed rent liabilities and deferred Comp. 2.463,000
The change in retained earning from 2012 to 2013 was 23,500,000
Net Income $164,305,000
FinancialInformation
Increase from previous two years
Dividends $254,633
FinancialInformation
Largest inflow for Investing activities
Proceedsfromsales/maturitiesofinvestment
$37,294,000
LargestOutClowforInvestingactivities
Purchaseofpropertyandequipment
($30,297,000)
Largestin7lowforFinancingactivities
Excesstaxbene7itfromstockoptionexercises
$5,609,000
LargestOutClowforFinancingactivities
PaymentofDividends ($254,178,000)
BuckleInc.CompanyAuditorandReportFinancialStatement
• Deloitte&ToucheLLP
• Thecompanymaintainedaneffectiveinternalcontrolover
CinancialreportingofFebruary2,2013.Therewerenochangesin
thecompany’sinternalcontroloverCinancialreportingthat
occurredduringthecompany’slastCiscalquarter.
Agenda
BuckleInc.FinancialInformation
AmericaEagleFinancialInformation
CompanyOverview:BuckleInc.
CompanyOverview:AmericanEagleOutCitters
CompareAnalysis
� TotalAssets:$1,756,053,000� TotalLiabilities:$534,866,000� NetIncome:$232,108,000� GrossProCit:$1,390,322,000
� TotalAssets:$477,974,000� TotalLiabilities:$188,325,000� NetIncome:$164,305,000� GrossProCit:$499,315,000
• AmericanEagleOutCitter’sInc.reportedhighertotalassetsat$1,756,053,000.• AmericanEagleOutCitter’sInc.reportedhighertotalliabilitiesat$534,866,000.
VS
CompareAnalysis
VS
• Ifacompany’scapitalstructureisdisproportionatetowardsliabilitiesandtheyhavealmostasmuchliabilitiesastheydoassetsthanthe
companymaybemoreriskytocreditors.
• AmericanEagleOutCitters,Inc.astheirFinancialLeverageRatioat1.41isactuallylowerthanBuckle’sFinancialLeverageRatio,whichisat1.55,
indicatingthatBuckleCinancesitsassetsthroughahigherproportionof
debtthanshareholder’sequitythanAmericanEagleOutCitter’sInc.does.
• Accordingtothisratio,BuckleisactuallyriskierthanAmericanEagle
OutCitter’sInc.fromacreditor’spointofview.
CompareAnalysis
� TotalAssets:$1,756,053,000� TotalLiabilities:$534,866,000� NetIncome:$232,108,000� GrossProCit:$1,390,322,000
� TotalAssets:$477,974,000� TotalLiabilities:$188,325,000� NetIncome:$164,305,000� GrossProCit:$499,315,000
VS
CompareAnalysis
• AmericanEagleOutCittersInc.generateshighernetincome.
• OneoftheprimaryfactorsthatcontributetothechangeinnetproCitisanincreaseor
decreaseofthepriceofthesoldunits.Pricechangesgreatlyaffecthowmanyunitsa
companycansell,whichinturninCluencestheoverallproCitnumbers.
• Inventoryisanotherfactorthatcontributestochangesinacompany'snetproCit
• (Chartresults)
VS
CompareAnalysis
• InvestorswantmostproCitablecompany
• FactorstoAnalyze:
• HowlongthecompanycanmaintainproCitabilityinthemarket
• Comparisontorecentyears
• GrowthTrajectory
• OperatingProCitability-AssetTurnoverRatio
AmericanEagle 1.87
Buckle,Inc. 2.22