AEO Direct:
The company's direct business, which includes ae.com, aerie.com and martinandosa.com, is also an important area of growth. For the quarter, sales grew approximately 21% over last year, driven primarily by increases in both traffic and conversion.
Capital Expenditures:
For the second quarter, capital expenditures were approximately $83.9 million. For fiscal 2008, management continues to expect capital expenditures to be in the range of $250 to $275 million. Of this amount, approximately one half relates to new and remodeled stores.
The balance of the 2008 capital spend relates to investments in the company's home office, distribution centers and IT initiatives to support AEO Direct and brand growth. In 2009, the company expects capital expenditures to be in the range of $150 to $175 million.
Cash and Cash Equivalents, Short-term Investments and Long-term Investments:
The company ended the first quarter with total cash and cash equivalents, short-term investments and long-term investments of $689 million. This included approximately $333 million of investments in auction rate securities.
Outlook:
The company's August month-to-date comparable store sales are down 6%. At this time, management is providing third quarter earnings guidance of $0.31 to $0.36 per share, compared to $0.45 per share last year. This guidance reflects a view that the business environment remains challenging through the second half of this year.
American Eagle Outfitters Inc
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