UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

Washington,D.C.20549

FORM8-K

CURRENTREPORTPursuanttoSection13or15(d)

ofTheSecuritiesExchangeActof1934

DateofReport(Dateofearliesteventreported)

December6,2017

AMERICANEAGLEOUTFITTERS,INC.(Exactnameofregistrantasspecifiedinitscharter)

Delaware 1-33338 13-2721761

(Stateofincorporation)

(CommissionFileNumber)

(IRSEmployerIdentificationNo.)

77HotMetalStreetPittsburgh,Pennsylvania 15203-2329

(Addressofprincipalexecutiveoffices) (ZipCode)

(412)432-3300(Registrant’stelephonenumber,includingareacode)

N/A(Formernameorformeraddress,ifchangedsincelastreport)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the followingprovisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) orRule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM2.02. ResultsofOperationsandFinancialCondition

The information in this Item 2.02 of Form 8-K, including the accompanying exhibits, shall not be deemed to be “filed” for the purposes ofSection 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall suchinformation be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the generalincorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

On December 6, 2017, American Eagle Outfitters, Inc. (the “Company”) issued a press release announcing, among other things, the Company’sfinancial results for the third quarter ended October 28, 2017. A copy of this press release is attached hereto as Exhibit 99.1. The Company’sManagement team held a conference call on December 6, 2017 at 9:00 a.m. Eastern Time to review the aforementioned financial results. Areplay of the conference call will be available beginning December 6, 2017 at 12:00 p.m. Eastern Time through December 13, 2017. To listen tothe replay, dial 1-844-512-2921, or internationally dial 1-412-317-6671, and reference confirmation code 13652048. An audio replay of theconference call will also be available at http://investors.ae.com. A copy of the conference call transcript is attached hereto as Exhibit 99.2.

ITEM9.01. FinancialStatementsandExhibits

(d) Exhibits Exhibit

No. Description

99.1* Press Release dated December 6, 2017 announcing third quarter 2017 financial results

99.2* Conference Call Transcript dated December 6, 2017 * Such Exhibit is being “furnished” (not filed) pursuant to Item 2.02 of the Current Report on Form 8-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersignedhereunto duly authorized.

AMERICAN EAGLE OUTFITTERS, INC. (Registrant)

Date: December 8, 2017 By: /s/ Robert L. Madore Robert L. Madore Executive Vice President, Chief Financial Officer

EXHIBIT99.1

AMERICANEAGLEOUTFITTERSREPORTSRECORDTHIRDQUARTERSALES,COMPSALESINCREASED3%

INTRODUCESFOURTHQUARTERGUIDANCEHOLIDAYSALESSTARTSTRONG

PITTSBURGH–December 6, 2017 - American Eagle Outfitters, Inc. (NYSE:AEO) today reported EPS of $0.36 for the third quarter ended October 28, 2017.Excluding restructuring and related charges of $0.01 per diluted share, the company’s Adjusted EPS* was $0.37 for the third quarter. Included in our GAAP andAdjusted EPS is a discrete charge to reserve against a receivable of $14 million, or $0.05 per diluted share, which is recorded in Other Expense.

Jay Schottenstein, Chief Executive Officer commented, “The third quarter produced record sales, sequential margin improvement and marked eleven straightquarters of comp sales growth. Digital sales continued to grow at a rapid pace, while we also saw store sales strengthen. These results validate our investments inproduct leadership, innovation, quality and brand equity. I’m very pleased to see strong momentum continue into the fourth quarter, positioning us well for the nextfew critical weeks of the holiday season.”

ThirdQuarter2017Results

• Total net revenue increased 2% to $960 million from $941 million last year.

• Consolidated comparable sales were up 3%, following a 2% increase last year.

• Gross profit of $375 million compared to $378 million last year with a gross margin rate of 39.0% to revenue compared to 40.2% last year, a 120 basispoint decline. The reduction in margin rate was due to higher promotions and increased shipping costs associated with a strong digital business.

• Selling, general and administrative expense declined $3 million, or 1% to $217 million compared to $220 million last year. Positive sales combined

with lower expenses drove 80 basis points of leverage to a rate of 22.6% to revenue. Lower incentives and expense discipline were partially offset byhigher wages.

• Operating income of $111 million includes $4 million of restructuring charges related to severance and a lease buy-out. Adjusted operating income* of$115 million compared to $118 million last year with a rate of 11.9% to revenue compared to 12.6% last year.

• Other expense of $13 million includes a discrete charge of $14 million to reserve against a receivable.

• EPS of $0.36 and Adjusted EPS* of $0.37 both include a discrete charge of $0.05 per diluted share compared to EPS of $0.41 last year. * Adjusted amounts are based on Non-GAAP results, as presented in the accompanying GAAP to Non-GAAP reconciliation.

ShareholderReturns,Cash

The company ended the quarter with total cash of $258 million compared to $292 million last year. Over the past 12 months, we returned $88 million in sharebuybacks, $89 million in dividends and invested $189 million in capital expenditures, resulting in a lower cash balance.

Inventory

Total ending inventories at cost increased 8% to $534 million, reflecting investments in bottoms, women’s tops and Aerie apparel to support strong sales trends.

CapitalExpenditures

In the third quarter, capital expenditures totaled $48 million. We continue to expect fiscal year 2017 capital expenditures in the range of $160 million to$170 million, with roughly half of the spend related to store remodeling projects and new openings, and the balance to support the e-commerce business, omni-channel tools and general corporate projects.

StoreInformation

This quarter we opened 4 new AE stores, with 1 in Mexico, 1 in Canada and 2 in the U.S. Additionally, we opened 1 new Aerie location in Canada. We alsoopened 11 international licensed stores and closed 1. The company is on track to close a total of 25 to 30 stores this year. For additional store information, see theaccompanying table.

FourthQuarterOutlook

Based on an anticipated comparable store sales increase in the mid-single digits, management expects fourth quarter 2017 EPS to be approximately $0.42 to$0.44. This guidance excludes potential asset impairment and restructuring charges. Last year’s fourth quarter reported EPS of $0.30 included approximately $0.09per share of asset impairment, restructuring and related charges. Excluding these items, last year’s fourth quarter adjusted EPS was $0.39. See the accompanyingtable for the GAAP to Non-GAAP reconciliation.

ConferenceCallandSupplementalFinancialInformation

Today, management will host a conference call and real time webcast at 9:00 a.m. Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial1-201-689-8562 or go to http://investors.ae.com to access the webcast and audio replay. Also, a financial results presentation is posted on the company’s website.

Non-GAAPMeasures

This press release includes information on non-GAAP financial measures (“non-GAAP” or “adjusted”), including earnings per share information and theconsolidated results of operations excluding non-GAAP items. These financial measures are not based on any standardized methodology prescribed by U.S.

generally accepted accounting principles (“GAAP”) and are not necessarily comparable to similar measures presented by other companies. The company believesthat this non-GAAP information is useful as an additional means for investors to evaluate the company’s operating performance, when reviewed in conjunctionwith the company’s GAAP financial statements. These amounts are not determined in accordance with GAAP and therefore, should not be used exclusively inevaluating the company’s business and operations.

* * * *

AboutAmericanEagleOutfitters,Inc.

American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care productsat affordable prices under its American Eagle Outfitters ® and Aerie ® brands. The company operates more than 1,000 stores in the United States, Canada, Mexico,China and Hong Kong, and ships to 81 countries worldwide through its websites. American Eagle Outfitters and Aerie merchandise also is available at more than200 international locations operated by licensees in 24 countries. For more information, please visit www.ae.com .

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which represent ourexpectations or beliefs concerning future events, including fourth quarter 2017 results. All forward-looking statements made by the company involve material risksand uncertainties and are subject to change based on factors beyond the company’s control. Such factors include, but are not limited to the risk that the company’soperating, financial and capital plans may not be achieved and the risks described in the Risk Factor Section of the company’s Form 10-K and Form 10-Q filed withthe Securities and Exchange Commission. Accordingly, the company’s future performance and financial results may differ materially from those expressed orimplied in any such forward-looking statements. The company does not undertake to publicly update or revise its forward-looking statements even if future changesmake it clear that projected results expressed or implied will not be realized. CONTACT: American Eagle Outfitters, Inc.

Olivia Messina, 412-432-3300

AMERICANEAGLEOUTFITTERS,INC.CONSOLIDATEDBALANCESHEETS

(Dollars in thousands)

October28,2017

January28,2017

October29,2016

(unaudited) (unaudited) ASSETS

Cash and cash equivalents $ 257,527 $ 378,613 $ 291,667 Merchandise inventory 534,019 358,446 492,602 Accounts receivable, net 77,113 86,634 74,812 Prepaid expenses and other 61,553 77,536 77,768

Total current assets 930,212 901,229 936,849

Property and equipment, net 726,168 707,797 708,488 Intangible assets, net 46,979 49,373 49,993 Goodwill 14,972 14,887 17,315 Non-current deferred income taxes 29,025 49,250 49,627 Other assets 54,424 60,124 60,268

Total Assets $ 1,801,780 $ 1,782,660 $ 1,822,540

LIABILITIESANDSTOCKHOLDERS’EQUITY Accounts payable $ 330,716 $ 246,204 $ 314,111 Accrued compensation and payroll taxes 43,561 54,184 56,939 Accrued rent 80,580 78,619 79,255 Accrued income and other taxes 17,262 12,220 29,373 Unredeemed gift cards and gift certificates 29,475 52,966 30,130 Current portion of deferred lease credits 12,887 12,780 12,783 Other current liabilities and accrued expenses 38,359 36,810 40,288

Total current liabilities 552,840 493,783 562,879

Deferred lease credits 50,439 45,114 47,677 Non-current accrued income taxes 4,590 4,537 4,573 Other non-current liabilities 30,712 34,657 35,451

Total non-current liabilities 85,741 84,308 87,701

Commitments and contingencies — — — Preferred stock — — — Common stock 2,496 2,496 2,496 Contributed capital 588,978 603,890 597,919 Accumulated other comprehensive income (34,798) (36,462) (31,160) Retained earnings 1,812,821 1,775,775 1,744,227 Treasury stock (1,206,298) (1,141,130) (1,141,522)

Total stockholders’ equity 1,163,199 1,204,569 1,171,960

Total Liabilities and Stockholders’ Equity $ 1,801,780 $ 1,782,660 $ 1,822,540

Current Ratio 1.68 1.83 1.66

AMERICANEAGLEOUTFITTERS,INC.CONSOLIDATEDSTATEMENTSOFOPERATIONS(Dollars and shares in thousands, except per share amounts)

(unaudited)

GAAPBasis13WeeksEnded

October28,

2017 %of

Revenue October29,

2016 %of

Revenue Total net revenue $ 960,433 100.0% $ 940,609 100.0% Cost of sales, including certain buying, occupancy and warehousing expenses 585,520 61.0% 562,793 59.8%

Gross profit 374,913 39.0% 377,816 40.2% Selling, general and administrative expenses 217,146 22.6% 219,912 23.4% Restructuring charges 3,695 0.4% — 0.0% Depreciation and amortization 43,149 4.5% 39,636 4.2%

Operating income 110,923 11.5% 118,268 12.6% Other (expense) income, net (13,243) -1.4% 603 0.0%

Income before income taxes 97,680 10.1% 118,871 12.6% Provision for income taxes 33,947 3.5% 43,111 4.6%

Net income $ 63,733 6.6% $ 75,760 8.0%

Net income per basic share $ 0.36 $ 0.42 Net income per diluted share $ 0.36 $ 0.41

Weighted average common shares outstanding - basic 177,288 181,819 Weighted average common shares outstanding - diluted 179,132 184,615

GAAPBasis

39WeeksEnded

October28,

2017 %of

Revenue October29,

2016 %of

Revenue Total net revenue $2,566,826 100.0% $2,512,619 100.0% Cost of sales, including certain buying, occupancy and warehousing expenses 1,621,441 63.2% 1,534,194 61.1%

Gross profit 945,385 36.8% 978,425 38.9% Selling, general and administrative expenses 615,842 24.0% 615,503 24.5% Restructuring charges 18,888 0.8% — 0.0% Depreciation and amortization 123,878 4.8% 117,319 4.6%

Operating income 186,777 7.2% 245,603 9.8% Other (expense) income, net (19,574) -0.8% 2,403 0.1%

Income before income taxes 167,203 6.4% 248,006 9.9% Provision for income taxes 56,997 2.2% 90,179 3.6%

Net income $ 110,206 4.2% $ 157,827 6.3%

Net income per basic share $ 0.62 $ 0.87 Net income per diluted share $ 0.61 $ 0.86

Weighted average common shares outstanding - basic 178,272 181,196 Weighted average common shares outstanding - diluted 180,260 183,651

AMERICANEAGLEOUTFITTERS,INC.GAAPTONON-GAAPRECONCILIATION(Dollars in thousands, except per share amounts)

(unaudited)

13weeksEndedOctober28,2017

Operatingincome Netincome

Dilutedincomepercommon

share GAAPBasis $110,923 $ 63,733 $ 0.36% of Revenue 11.5% 6.6%

Add: Restructuring Related Charges (1): 3,695 2,065 0.01

3,695 2,065

Non-GAAPBasis $114,618 $ 65,798 $ 0.37% of Revenue 11.9% 6.8%

(1) - $3.7 million pre-tax restructuring related charges, consisting of:

• Corporate severance and related charges of ($2.4M) and corporate lease buyout charges of ($1.3M)

AMERICANEAGLEOUTFITTERS,INC.GAAPTONON-GAAPRECONCILIATION(Dollars in thousands, except per share amounts)

(unaudited) 39WeeksEnded October28,2017

Grossprofit Operatingincome

Other(expense)income Netincome

Dilutedincomepercommon

share GAAPBasis $ 945,385 $186,777 $(19,574) $ 110,206 $ 0.61% of Revenue 36.8% 7.2% -0.8% 4.2%

Add: Restructuring Related Charges (1): 1,669 20,557 — 12,961 0.08 Add: Joint Business Venture Charges (2): — — 9,311 5,870 0.03

1,669 20,557 9,311 18,831 0.11

Non-GAAPBasis $ 947,054 $207,334 $(10,263) $ 129,037 $ 0.72% of Revenue 36.9% 8.1% -0.4% 5.0%

(1) - $20.6 million pre-tax restructuring related charges, consisting of:

• Inventory charges related to the restructuring of the United Kingdom, Hong Kong, and China ($1.7M), recorded as a reduction of Gross Profit

• Lease buyouts, store closure charges and severance and related charges ($18.9M), which includes charges for the United Kingdom, Hong Kong, and Chinaand corporate overhead reductions, recorded within Restructuring Charges.

(2) - $9.3 million pre-tax charges for the charges related to the planned exit of a joint business venture, recorded within Other (expense) income, net.

AMERICANEAGLEOUTFITTERS,INC.GAAPTONON-GAAPRECONCILIATION

(unaudited) 13WeeksEnded January28,2017

Dilutedincome

percommonshare GAAPBasis $ 0.30% of Revenue

Add: Asset Impairment and Restructuring Charges (1) : 0.07 Add: Tax (2) : 0.02

Non-GAAPBasis $ 0.39% of Revenue

(1) - $21.2 million pre-tax asset impairments and restructuring charges relating to our wholly-owned businesses in the United Kingdom and Asia.(2) - GAAP tax rate included impact of valuation allowances on asset impairment and restructuring charges. Excluding the impact of those items resulted in a33.9% tax rate for the quarter.

AMERICANEAGLEOUTFITTERS,INC.COMPARABLESALESRESULTSBYBRAND

(unaudited)

ThirdQuarterComparableSales

2017 2016 American Eagle Outfitters, Inc. (1) 3% 2%

AE Total Brand (1) 1% 0.4% aerie Total Brand (1) 19% 21%

YTDThirdQuarterComparableSales

2017 2016 American Eagle Outfitters, Inc. (1) 2% 4%

AE Total Brand (1) 0% 2% aerie Total Brand (1) 23% 25%

(1) AEO Direct is included in consolidated and total brand comparable sales.

AMERICANEAGLEOUTFITTERS,INC.STOREINFORMATION

(unaudited) ThirdQuarter YTDThirdQuarter Fiscal2017 2017 2017 GuidanceConsolidated stores at beginning of period 1,057 1,050 1,050

Consolidated stores opened during the period AE Brand 4 13 15-20aerie 1 12 15Tailgate Clothing Co. 0 0 0Todd Snyder 0 1 1

Consolidated stores closed during the period AE Brand (3) (13) (20) - (23)aerie 0 (4) (4) - (7)Todd Snyder (1) (1) (1)

Totalconsolidatedstoresatendofperiod 1,058 1,058 1,050-1,061

Stores remodeled and refurbished during the period 14 43 50Total gross square footage at end of period (in ‘000) 6,641 6,641 Not Provided

International license locations at end of period (1) 205 205 227 (1) International license locations are not included in the consolidated store data or the total gross square footage calculation.

Exhibit99.2

AmericanEagleOutfitters,Inc.

ThirdQuarter2017Earnings

ConferenceCallTranscriptDecember6,2017

Operator:Greetings, and welcome to the American Eagle Outfitters Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-onlymode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Judy Meehan, Vice President of Investor Relations for American Eagle Outfitters. Thank you. You may begin.

JudyMeehan–AmericanEagleOutfittersInc.–VP,IR:Good morning, everyone. Joining me today for our prepared remarks are Jay Schottenstein, ChiefExecutive Officer; Chad Kessler, Global Brand President of the AE Brand; Jen Foyle, Global Brand President of Aerie; and Bob Madore, Chief Financial Officer.

Before we begin today’s call, I need to remind you that we will make certain forward-looking statements. These statements are based upon information thatrepresents the company’s current expectations or beliefs. The results actually realized may differ materially based on risk factors included in our SEC filings. Thecompany undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwiseexcept as required by law.

Also, please note that during this call and the accompanying press release, certain financial metrics are presented on both a GAAP and non-GAAP adjusted basis.Reconciliations of adjusted results to the GAAP results are available in the tables attached to the earnings release, which is posted on the company’s website atae.com in the Investor Relations section. Here, you can also find the third quarter investor presentation.

And now, I’d like to turn the call over to Jay.

JaySchottenstein–AmericanEagleOutfitters,Inc.–CEO:Good morning, and thank you for joining us today. I’m pleased to report that we achieved recordthird quarter sales and posted the best comparable sales so far this year. The third quarter marked the 11th consecutive quarter of positive sales growth. Wecontinue to see consistency in our top line growth, which reflects the multi- year investments we’ve made in product leadership, innovation, quality in our brands.

Progress was also apparent within profit margins where we experienced quarter-over-quarter sequential improvement. In the fourth quarter, we are seeing businessmomentum continue. Our teams continued to execute well against our strategic brands, making excellent progress throughout the fall and holiday seasons. Weworked hard on product categories that needed to be strengthened.

We made key internal changes to both talent and structure, and we refocused the teams on key performance metrics to drive results. Thanks to these efforts, wedelivered a solid quarter of growth and a strong Thanksgiving and Cyber Week, which surpassed our expectations.

As we look forward, I remain very optimistic about our prospects and ability to expand our brands. The transformation across the industry is an opportunity forAEO to continue to capture market share. First, the strength of AE jeans and bottoms, which has now produced 17 quarters of consecutive record volume, is asignificant competitive advantage. Our goal is to build broader awareness around our jean business and make AE the undisputed leader in jeans.

Second, Aerie has unique appeal in today’s marketplace and represents a significant growth opportunity. We’ve been thrilled with Aerie’s growing brand equity,and our goal is to reach $1 billion over the next few years. Across brands, we are working to create stronger customer experiences at every touch point. Thisincludes investing in our rapidly growing digital channel and our brick-and-mortar stores. For example, we recently unveiled AE Studio at Union Square, a newstore concept designed to raise the bar on customer engagement. And as Jen will discuss, we just opened exciting new Aerie store in Miami Beach.

We’ve also added experienced leadership to the field organization. We are focused on making sure our associates have the right tools and training to fully engageour customers, build baskets, drive conversion and provide a great shopping experience. Our digital business is growing at a rapid pace, and our shopping site isconsistently ranked as one of the best. And we continue to make improvements. This includes updating site functionality and growing our mobile and appcapabilities. I’m extremely pleased to report that Cyber Monday was our best online day ever, with a 30% comp increase and seamless execution. Congratulationsto the team.

Lastly, I’m extremely pleased with our results so far this holiday season, and I’m optimistic that we would deliver a strong fourth quarter. Longer term, we arecommitted to driving our brand forward, strengthening the customer experience and leveraging our talented associates to achieve our objectives.

And with that, I will now turn the call over to Chad.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:Thanks, Jay. Good morning, everyone. I’m very pleased with ourperformance in the third quarter. The American Eagle brand posted a positive 1% comp. Our digital sales continued to be strong, and we also saw a pickup in storeswith traffic outpacing the mall. We showed improved sales trends as the quarter progressed with fewer promotions. As a result, we saw meaningful sequentialimprovement in our third quarter margins compared to the first and second quarters. We will seek further opportunity to lower promotions and strengthen profitflow-through.

We saw positive comps in both men’s and women’s. Women’s apparel increased in the mid-single digits, offset by weakness in accessories. AE Jeans continue toset record volumes. In fact, every men’s and women’s bottoms category posted best ever third quarter results. As Jay mentioned, we have an incredible track recordof consistent growth across these categories. Led by jeans and bottoms, we saw strength in women’s tops, and I’m also pleased to report our recovery in men’stops. As I noted on the last conference call, the team has done great work to evolve the men’s business. That work is paying off. Congratulations to our teams forcontinued innovation and strong execution.

Now, a little color on our holiday season. I know I speak for the team when I say we’ve never been more ready. I believe we entered the season with the rightproduct, the right events and the right promotions. Thanksgiving weekend and Cyber Week exceeded our expectations. Although we have a lot of holiday businessahead of us, I am extremely pleased to see stronger sales trends with promotions contained at last year’s level.

During the quarter, we were excited to unveil a new store concept, AE Studio at Union Square. The physical space highlights AE Jeans and a unique presentationand allows for greater customer engagement where we can test new ideas. Features include a customization station, product collaborations and an in-house socialmedia team to bring us closer to our customers and create real-time authentic content. Our objective is to take the best features of the store to other locations. Iencourage all of you to check it out and get your next favorite pair of jeans. After that, please visit our new Todd Snyder City Gym popup store right around thecorner.

Before I turn the call over to Jen, I’d like to emphasize our priority to drive the AE Brand forward and to put our jeans in the hands of more customers. We have agreat opportunity in today’s environment to gain market share. We have the best merchandise and marketing, we lead in innovation and have strong brand equity.Our recent launch of AEO Connected was successful. We have added over 1 million new members to the 15 million we migrated on day one.

AE is consistently ranked at the top of customer surveys, and we have been strengthening our position over the past few years. I’m proud and grateful for the manycontributions our teams have made this year. We look forward to a strong finish to the holiday season and continued success in 2018. Thanks.

And now I’ll turn the call over to Jen.

JenFoyle–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–Aerie:Thanks, Chad. Good morning, everyone. I’m thrilled to report another strongquarter for Aerie. In fact, we posted our 14th consecutive quarter of positive comps. In the third quarter, we achieved a 19% comp sales growth, which built on a21% increase last year. We experienced sales growth in stores across all formats, driven by traffic increases, and digital sales were extremely strong. We continueto build our customer file, adding 13% to our loyalty members in the third quarter.

It’s extremely gratifying to see our customers responding to a broad range of merchandise that completes the Aerie lifestyle. In addition to strength in coreintimates, including bras and undies, we saw strength in apparel, activewear and swimwear. Our active collection, Chill Play Move, is exceeding our expectations.New fabrics and fits have been very well received and go great with our new cozy fleece tops. To-date, the holiday season has been terrific. We’ve had a verystrong response to the holiday assortment and our gift items also across the board.

I’m extremely proud of what our team has created in Aerie. In addition to exceptional merchandise, which continually improves, we are building strong brandequity. The brand has been successful because we listen and respond to our customers. Aerie REAL and our focus on empowerment and body positivity resonatesso well with our customer base, and this is such an important message particularly in today’s environment.

We are also fortunate to have amazing Aerie brand ambassadors. Iskra Lawrence is a perfect example. She has been a leader and a strong advocate in the bodypositivity movement. And now we are thrilled to announce that Aly Raisman, Olympic gold medalist, will also be joining Aerie as a role model with a campaignlaunching early next year. Aly is amazing in so many ways and we’re absolutely honored that she will be joining Aerie to inspire young women around the world.

As our brand expands, new store growth and customer acquisition are major priorities. New stores drive digital sales in those markets. We recently opened up onMiami’s Lincoln Road with an updated store format where we took some of the best learnings and brand experiences from our SoHo pop-up store. We tailored thatstore to the market with an expanded swimwear collection, and we are very excited with the early success. Many thanks to the entire Aerie team for outstandingexecution. We are more excited than ever about the future of Aerie.

And now, I’ll turn the call over to Bob.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Thanks, Jen, and good morning, everyone. We are proud of the significant progresswe’ve made across our business in the third quarter. Comparable sales growth strengthened with both AE and Aerie posting positive comps. Our digital businesswas strong with sales penetration increasing to 25% in the third quarter, up from 21% last year. We also saw better trends in brick-and-mortar stores. Marginsdemonstrated sequential improvement, and year-over-year margin erosion narrowed significantly.

SG&A expense declined compared to last year, resulting in expense leverage. And we’re pleased to see positive trends continuing into the fourth quarter with BlackFriday and Cyber Monday exceeding our expectations.

Now looking more closely the details of the third quarter, total revenue increased 2% to a third quarter record of $960 million from $941 million last year.Comparable sales were up 3% for the period, following a 2% increase last year. Additional sales information can be found on page nine of the investorpresentation.

By brand, third quarter American Eagle comps were up 1% and Aerie comps increased 19%. The digital business increased in the high-teens, partially offset by aslight decline in store comp sales, demonstrating the recovery from recent trends. Regarding our quality of sale metrics, traffic and transactions increased and storetraffic outperformed the mall for both brands. We also saw a low-single-digit increase in the average unit retail price due to favorable product mix. The averagedollar sale declined slightly due to lower units per transaction.

Gross profit decreased 1% to $375 million from $378 million last year. The gross margin rate declined 120 basis points to 39% of revenue. However, as Imentioned, we saw sequential improvement from declines of 270 basis points in the first quarter and 240 basis points in the second quarter. The reduction inmargin rate was due to higher promotions and increased shipping costs associated with a strong digital business.

SG&A expense declined $3 million or 1% to $217 million compared to $220 million last year. Positive sales combined with lower expenses drove 80 basis pointsof leverage to a rate of 22.6% of revenue. Lower incentives and expense discipline were partially offset by higher wages.

Depreciation and amortization increased $4 million to $43 million and deleveraged 30 basis points to 4.5% as a rate of revenue. In the third quarter, we incurredrestructuring charges of $4 million or $0.01 per share. Excluding this restructuring charge, adjusted operating income of $115 million compared to $118 millionlast year. Adjusted earnings per share of $0.37, which includes the discrete charge of $0.05 per share resulting from a reserve against a receivable. Last year, wereported EPS of $0.41.

Now regarding inventory, which can be found on page 10 of the investor presentation, we ended the quarter with inventory up 8% to $534 million. The increasereflects investments in bottoms, women’s tops and Aerie apparel to support strong sales and a change in our prior season’s inventory liquidation strategy. We madechange from exclusively using external vendors. We converted 5 AE outlet locations to clearance stores during the quarter where we are seeing positive results.

We expect fourth quarter ending inventory to be up approximately 10%, reflecting strategic investments in up trending categories as well as the change in ourinventory liquidation process strategy. Capital expenditures totaled $48 million in the third quarter, and we continue to expect CapEx to be in the range of$160 million to $170 million for the year. Roughly half of this spend relates to store projects and the balance to support digital business, Omni-channel tools andgeneral corporate projects.

We ended the quarter with a total cash balance of $258 million compared to $292 million last year. Over the past 12 months, we returned $88 million in sharebuybacks and $89 million in dividends and invested $189 million in capital expenditures.

Details of our store openings and closings are on page 13 through 15 of the investor presentation. We have a highly profitable store fleet, and as I’ve notedpreviously, over half of the stores have lease terms under three years. Although the digital business is growing rapidly, our stores remain a very important customertouch point. We are looking to sharpen our market presence and refine the store base. This will include closures as well as remodels, relocations and select storeopenings.

We are continually reviewing the fleet with a focus on market-based views of our customer data analytics. We] look at customer acquisition and how our existingcustomers shop across channels, locations, brands and categories. We do this so that we’re making decisions to optimize our business as a whole.

As the team discussed, we are also testing new store designs to improve the overall customer experience. Strengthening customer data analytics is a major priority.With the database of over 17 million active customers, we have an opportunity to leverage this asset to a much larger degree. Recently, we have hired anexperienced data analytics leader to help us gain greater customer insights, understand shopping patterns, drive personalization and a higher level of customerengagement and knowledge.

Now, looking ahead to the fourth quarter, we expect fourth quarter earnings per share of $0.42 to $0.44, which is based on an anticipated comp store sales increasein the mid-single digits. The guidance reflects continued sequential improvement to margins and higher net income. This compares to adjusted earnings per share of$0.39 last year and excludes any potential impairment or restructuring charges.

Just to reiterate, we are pleased with the continued progress of sequential improvements across our business, including sales and profit margins. And we arefocused on delivering the successful holiday season and finishing the year very strong.

Thank you. And now we will take questions.

Operator:Thank you. At this time, we’ll be conducting a question-and-answer session. Our first question comes from line of Matthew Boss with JPMorgan.Please proceed with your question.

StevenZaccone–JPMorganAnalyst:Yeah, good morning. This is Steve Zaccone on for Matt. Thanks for taking our question and congrats on a good quarter. Soour question is on the gross margin side. Can you talk a little bit about the expectations for the 4Q markdown rate performance and then just address anyopportunity to recapture some of the margin weakness you’ve seen this year? I think the last time you’ve seen this level of margin decline for several quarters, itresulted in subsequent quarters of margin expansion. So anything to think – any way to think about the outlook from margin performance next year.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:For next year or for Q4?

StevenZaccone–JPMorganAnalyst:Both.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Okay. So for Q4, we expect the trends that we’ve been experiencing the sequentialimprovement in the margin to continue. Gross margin rate will be slightly below last year’s rate, and we expect markdowns and the promotional environment toremain pretty consistent with last year, which is what we’ve seen in the beginning of the holiday season thus far.

Looking to next year, to be honest with you, Steve, we are right in the middle of our budgeting process. So to give you guys any guidance would be a little toopreliminary at this point for FY 2018. Having said that, I do expect these more recent trends or the sequential improvements to carry into and continue into nextyear, not only gross margin but on an operating margin level per basis.

StevenZaccone–JPMorganAnalyst:Great. Thanks very much.

Operator:Thank you. Our next question comes from the line of John Morris with BMO Capital Markets. Please proceed with your question.

JohnDygertMorris–BMOCapitalMarkets:Thanks. Good morning, everybody. Congratulations on great results here and good progress in the season. Firstquestion was, I think at the beginning, you had talked about, in the prepared remarks, key internal changes to talent and structure that have been made. I know thisis over the course of the year, but highlight for us where those key changes, especially to talent, have come. So maybe if you can talk about that a little bit.

And then I wanted – Bob, maybe this is for you. A little bit more about – when you talked about the inventory, change in liquidation strategy, what is that exactly?Wondering if that’s part of what’s behind the inventory increase, but does that also mean that there is opportunity for margins as a result of that? So a littleclarification there as well. Thanks.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Yeah, sure. Sure, John. So I’ll recap some of the key internal talent changes. Over thecourse of the last year, there’s a number.

JaySchottenstein–AmericanEagleOutfitters,Inc.–CEO:Yeah, we had something, we brought like a new Chief Marking Officer on, number one.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Yeah.

JaySchottenstein–AmericanEagleOutfitters,Inc.–CEO:We brought some new merchants on with us. We brought some new designers on. There’s been awhole transition there too.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:In addition to that, the areas that Jay mentioned, there has been significant upgradingof talent within our entire stores organization, not only at a senior leadership level, but out in the field specifically, regionals, district managers, store ops team, etcetera, in the areas that Jay mentioned.

JohnDygertMorris–BMOCapitalMarkets:Yeah. Is it merchant and designers or maybe that’s for Chad also, but was that also in the men’s side too? Justdidn’t know if I missed that before.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:Yeah. In the last year, we’ve hired a new head of men’smerchandising, new head of men’s design. And with those leads changing, we’ve had a lot of upgrading in the teams below those new leaders. And I think we’reseeing the results. We’re in early days of what they’ve – what’s in stores, what the new team has delivered, but I think we’re already starting to see thatimprovement in the product for 2018 I’m very optimistic about.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:And on your question around the change in the inventory strategy, John, a couple ofthings with that. Yes, that is part of the reason for the increase in inventory levels. So we had guided for inventory to be up mid-single digits at the end of Q3 forQ4. We ended the quarter up 8% and there’re really two to three reasons that drove that. One was the change in liquidation strategy, which essentially encompasses.We converted five outlet stores to clearance outlet stores only. So they don’t have made for outlet product. They are literally clearing prior season’s inventory.

What we found in early tests with that change is that the average unit retail that we’re realizing through the liquidation in our own channel is about 100% betterthan what we had done through a third-party jobber. So we feel like there’s an opportunity to not only continue to test within those five stores, but possibly expandit to an additional five stores, and we’re going to read and react a little longer before we go ahead and do that. We held back roughly about a million units to feedthose stores going forward, and again that was one of the reasons that drove the increase in inventory. The other reason for the increases in inventory is two things.As Chad pointed out, there’s certain categories particularly within the AE Brand of bottoms that are trending extremely positive.

On top of that, you’ve got the Aerie business that’s experiencing significant growth, particularly areas like swim and apparel, apparel who’s running a 60 comp thislast quarter. So we’re fueling the business in the areas that are really driving the performance, and we feel like our inventory levels are very clean. I look atinventory currency, as I call it, really kind of current presentation inventory versus prior seasons, and we’re in very good shape from an aging perspective.

Operator:Thank you. Our next question comes from the line of Brian Tunick with Royal Bank of Canada. Please proceed with your question.

BrianTunick–RBCCapitalMarketsLLCAnalyst:Thanks. Good Morning. I’ll add my congrats as well. I guess two questions. One for Chad, congrats on the,I guess, record bottoms trends in the quarter, but we were curious about the tops opportunities. What could happen here as we get past the fourth quarter and intonext year? Is it men’s or women’s tops that can help drive that business and the potential AUR implications?

And then for Bob, we weren’t sure you specified what that receivable charge was. And then also if you can just maybe help us understand the gross margin pressurehere in the third quarter. What was markdowns versus shipping for the e-comm business? Thanks very much.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:Hi, Brian. Yeah, as I just mentioned, we’re very excited about – I’mvery excited about the progress the men’s team is making, the new team has been in place for much of this year. The new merchant and design leads really came inin the middle of this fourth quarter product development cycle. And so they were able to make refined strategies and make some adjustments to the product, andwe’re seeing those improvements coming through in the business now, which is great to see.

But I think really looking into 2018, as they are able to work start-to-finish on the assortment in men’s, we’re going to see a really nice pickup in acceleration in themen’s business. I’m very optimistic there. We are – of course as we talk all the time, we definitely read and react to the business, so we aren’t getting ahead ofourselves, but we have strategies in place to accelerate that men’s tops business as it starts to – or as it continues to show improvement over the last year.

Women’s tops continues also to be strong. It’s really been one of our strengths over the past few years, and I think that that is continuing and will continue goingforward. We really look at the assortment based on where we’re going in bottoms, what are the key bottom silhouettes and what are the emerging bottomsilhouettes, and making sure that we have the outfitting to go with that. And we find that that’s a winning strategy so far. The customers really come in, they’reengaged in the bottoms and they’re able to find tops that easily work back to it.

I think we’ll see – in terms of AUR, I think we’ll continue to see expansion in the AE Brand both through mix of the growth in the bottoms business, but also themen’s tops business, as that shows improvement, we should be able to run that closer to a ticket price than we did in 2017 when we had some fashion challenges inthe first half. So I think we’ll see improvement in the AUR – growth in the AUR in total throughout 2018.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:And Brian, on your two additional questions, first, on the AR charge, so that chargeof $14 million, which had a $0.05 per share impact in the quarter, really related to a primary inventory liquidation vendor that ran into significant cash flow issues,which called in the question their ability to repay us or the collectability of the receivable. We have already transitioned to a new inventory liquidator in addition tohaving a few other vendors to work with. The change in the inventory liquidation strategy or the test with the clearance outlets really had nothing to do with thischarge whatsoever. We felt like we had an opportunity to realize higher AUR and profit on self- liquidation within a limited extent. This new strategy is not goingto roll out to any greater than 10 to 15 doors in the future if it continues to be as successful as it has been, but we do believe it represents a pretty significantopportunity to realize greater cash on the liquidation of some of the inventory.

Regarding gross margin – a little color on gross margin pressure in the quarter, really two things drove the 120 basis point decrease versus last year. One was on themerch margins driven by higher promotion dollars year- over-year that drove about half of that decrease and then the deleveraging of buying occupancy andwarehousing cost really driven by increased digital delivery expense. Our digital business was up 30%, and our transactions in that space or channel were up 22%in the quarter. So it was really just driven by higher delivery expense that drove the remainder of the remaining 60 basis point decrease year-over-year.

Operator:Thank you. Our next question comes from the line of Adrienne Yih with Wolfe Research. Please proceed with your question.

AdrienneYih–WolfeResearchAnalyst:Good morning. Let me add my congratulations. The stores look great. Can you talk about the – I don’t know who this isfor. It might be for Chad, but the number of loyalty members, Chad or Jen, that cross-shop between AE Brand and Aerie. And then for Bob, you were just talkingabout the BOW leverage point. As we transition to – as e-comm growth starts with the direct channel, how should we think about that BOW line and where aconsolidated comp would break even? Thank you very much.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:Hi, Adrienne. It’s Chad. So we have significant customer overlap intotal between Aerie and the AE women’s business, and it’s actually a fantastic growth opportunity for us because the number of Aerie customers who shop AE is avery high percent. The majority of Aerie customers shop AE, but the majority of AE women’s customers do not yet shop Aerie, though. We’re putting in placesome strategies with the marketing team and sort of crosspollination to encourage those AE women’s customers who are not yet shopping Aerie to becomeintroduced to the brand and to shop Aerie.

And then in the loyalty program, there is also a significant overlap. It’s not as significant, but it is a very large percentage of the loyalty – the female loyaltycustomers are connected both through AE and Aerie. And that’s why we see it as really a strength that we have one program as a company. We’re strategicallytrying to get these customers to buy jeans and bras, and so we specifically reward those categories in the loyalty program. And then we’ve changed the balance ofthe rewards program. You now get cash coupons instead of percent off, and those coupons are rolling throughout the year as you earn them. And so far, we’reseeing higher redemption, meaning we’re seeing higher participation in the program with the customers who are signed up, so. It’s still early days. It’s only been afew months since we launched, but we’re really excited with how the program is working. We’re excited to use it to grow both brands and our key categories. Andwhat we have today is really the baseline. We’re also excited to add new rewards, new ways to engage and evolve the program as we go forward.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:And Adrienne, on your second question related to BOW leverage, the way to reallythink about that is we can leverage BOW expenses, particularly direct delivery expense at about a positive mid-single-digit comp rate.

Operator:Thank you. Our next question comes from the line of Janet Kloppenburg with JJK Research. Please proceed with your question.

JanetKloppenburg-JJKResearchAnalyst:Good morning, everyone, and congrats on the current trend and a great quarter. A couple of questions. Bob, this isvery picky, but if you could just talk about that tick-up in depreciation. It was a little bit higher than I expected in the quarter and what we should look forwardgoing – look, how we should be planning that going forward.

But for Chad and for Jen, Chad, I was wondering if you could talk a little about the men’s business. I think you cited improvements in men’s tops. I am not sure – Igot on a little late. Did the men’s business turn positive? And if it didn’t, do you expect it to in the near term? And Jen, if you could talk a little bit about theperformance by category and any promotional pressures you might be facing right now in the bra category. Thanks so much.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:So, Janet, on your question about depreciation, it really has a lot to do with just thetiming of our capital expenditures. We continue to be on track to spend for full year fiscal 2017 within a range of $160 million and $170 million. It’ll probably becloser to the higher end of the range. Maybe that’s part of the reason why the number surprised you a little bit. It’s about $3 million higher than what it was in Q2.Going forward, looking to Q4, you can plan depreciation expense around the same amount level as Q3. And as I pointed out in one of the earlier questions, lookingforward to fiscal 2018, we’re in the middle of our budgeting process. We don’t have our capital number or range completely nailed down at this point. So it’s alittle too early to give you a little guidance for fiscal 2018 at this point.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:And Janet, in terms of the men’s business, the total men’s businesswas positive in the third quarter, driven by bottoms and an improvement in trend in both men’s tops and accessories. We continue to see positive results out of themen’s business with men’s bottoms continuing to be very strong and with the men’s tops and accessories businesses continuing to improve. I hope for Q4 that willbe at least flat or positive in the total men’s tops excluding bottoms, the men’s business, and then that should improve – we have a lot of opportunity for that toimprove throughout 2018.

JenFoyle–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–Aerie:And Janet, how are you, by the way? Regarding bras, we went up against alaunch in August and we did not – we intentionally did not comp that launch. We actually launched our REAL bra in September, and I’ll speak to that. But goingback to August, our intention was to go after fleece and leggings. And as you heard from Bob, that did really well for us. We went after that business and we wonthere. And then upon the launch of our – so we saw some negative comp trends in August in bras, but we went after the REAL Me bra in September. And fromthere on, it was really interesting how the bra business turned around for us.

The core bra business has really turned on for us, Janet. We’re excited about that. And we’re definitely not taking our eyes off this business. This is where we buildloyalty. And the team has worked fast and furiously around bra launches for 2018. We have a couple coming our way right now and they’re very, very exciting. Ithink the customer is going to love them. Tried and true, performance bras that we know are going to work for us on some of our key categories that we alreadyhave had success in. And then throughout the year, you’re going to see the focus is coming back to bras for us. We know our customer loves our bras and our fits,and we’re excited what we see also in bralettes.

Really interesting, in Q4, we’re really starting to see, through the month of November, nice comps in our reg price business there. So there’s still a demand forbralettes. I think it got a little saturated out there, and we’re still going to keep that as a part of our business and it certainly we see the customer – there’s thedemand there as well. So bras are at the forefront of everything we do. So we’re excited about what’s ahead.

Operator:Thank you. Our next question comes from the line of Paul Lejuez with Citigroup. Please proceed with your question.

PaulLejuez-CitigroupGlobalMarketsAnalyst:Hey, thanks. Just at a high level, comps have been running up 2% to 3% all year. EBIT margins have beendown on those results. Just wondering as you think about next year, what comp level do you think is necessary to see EBIT margins move higher or are youthinking maybe less about EBIT margin and just trying to drive sales potentially at the expense of EBIT margins? So just a high-level one there. And then onSG&A, just curious what drove SG&A dollars down in the third quarter versus your guidance of up low singles and why incentives are lower this quarter when youbeat expectations. Thanks.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Yeah. So as I mentioned earlier, Paul, we’re right in the middle of our planningprocess for 2018, but I think directionally, thinking about comps at a plus 2% to 3% next year directionally would be safe. From EBIT margin, operating incomemargin perspective, we’re again looking to continue this sequential improvement that we’ve seen going forward. We believe we still have further opportunity inKPIs such as AUR, increasing IMU improvements. The sourcing production team for us has been doing a phenomenal job really driving higher IMUs, which havehelped us in these promotional environments and has really helped drive some of this sequential improvement there we’re talking about. So, more to come on thatas we finalize our 2018 budget.

From an SG&A perspective, this year, couple of things kind of drove the decrease year-over-year. Listen, we’ve been turning over every rock, looking at alldiscretionary expenses. We’re very committed to maintaining or continuing the sequential margin improvements that we’ve seen. That’s a piece of it, so managingdiscretionary expenses. But also, we’re experiencing a decrease in incentive comp expense year-over-year, and there was a timing difference essentially withinadvertising expense in Q3 of this year versus last year spend. So those are really the main contributors to the SG&A reduction.

Operator:Thank you. Our next question comes from the line of Anna Andreeva with Oppenheimer & Company. Please proceed with your question.

AnnaAndreeva–Oppenheimer&Co.Analyst:Great. Thanks so much. Good morning. And let me add my congrats as well. A couple of questions from us. Iguess a question on the 4Q comp guidance of mid-single. Should we think this is the run rate in the business currently, just thinking through the lull that wetypically see post Black Friday weekend? Any comments on that. And then secondly, curious, what kind of trends you guys saw by mall type during the quarter?And maybe remind us how many leases that you have coming due in the next couple of years? Thanks.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Yeah. So, Anna, on the Q4 comp, so we guided an EPS range of $0.42 to $0.44 in amid-single-digit comp. I can tell you that mid-single comp guide for the entire quarter is actually lower than what we’ve experienced quarter-to- date. As Jay andeverybody pointed out, we were extremely happy with our, we call it, Green Week, Black Friday, Cyber Monday performance in the range of low-teenperformance. We don’t expect to maintain that kind of low- teen performance throughout the quarter, hence the reason for guiding the mid-single digits, but thatmid-single- digit is running – is a little lower than what our current run rate is.

Operator:Thank you. Our next question comes from the line of Tiffany Kanaga with Deutsche Bank. Please proceed with your question.

TiffanyKanaga–DeutscheBankAnalyst:Hi, thanks so much for taking my question. I know it’s still very early and hypothetical at this point, but since you’restarting to work on your 2018 budget, as tax reform works provide you with incremental cash next year through a lower rate, what do you think would be yourpriorities among reinvestment opportunities and how might you think differently about returning cash to shareholders?

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Yeah. So, listen, as tax reforms stands presently, although it’s still being debated, andI’m expecting hopefully some additional changes, it’s definitely going to be positive to us both from an EPS and free cash flow or cash from operationsperspective. So, yes, it will drive higher cash flow for us and earnings. I don’t know that it really changes all that much our capital allocation strategies. First andforemost, we look to invest in our businesses where those investments are going to drive a significantly higher rate of return than our weighted average capital. Andthen secondly, we have always and we will continue to return – provide returns to shareholders. We’ve been a little inconsistent in the past, not by way ofdividends, I think we’ve done a very good job managing our dividends from a payout ratio, yield perspective and I think we compare very well to our peer group,but from a stock buyback perspective, we always look to minimize or eliminate any share accretion as a result of equity issuances.

So we always look to do that first. And as we build cash and those cash reserves are in excess of what our working capital needs or investment needs are, are whenwe’ll think of getting into bigger share buybacks going forward. But our strategy is pretty consistent. The only thing I’ll say I’m looking to change a little bit is tobe a little more consistent in the share buyback activity.

Operator:Thank you. Ladies and gentlemen, as a reminder, we ask that you please ask one question each. Our next question comes from the line of PamelaQuintiliano with SunTrust Robinson Humphrey. Please proceed with your question.

PamelaQuintiliano-SunTrustHumphreyInc.Analyst:Great. Thanks so much for taking my question, guys, and congratulation. So a quick one on holiday.Obviously, the customers are responding well to the product. The commentary that you expect the lull, so you’re being cautious with the guidance. But to ensurethat momentum continues, is there anything else you’re doing differently this year versus last year in terms of the timing of product flows, gift-giving categories,messaging, marketing, just any way to think about this year versus last year?

And then just a quick question on denim. Who’s behind the denim? Is it a new customer that’s coming to the AE Brand that you’re able to capture now, an existingcustomer buying more or maybe a lapsed customer coming back? Any insight would be greatly appreciated. Thanks so much.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:Sure. So in terms of the holiday season and what we’ve donedifferently, we’ve sort of done everything you mentioned differently. We’ve moved up our new deliveries – our spring trans deliveries. We’re setting earlier thisyear than last year. Aerie set, I think yesterday, and AE is in the process of setting this week. We found last year that that drives customer enthusiasm for newproduct as well as stronger margins. We’ve also worked to expand our gift-giving categories and make sure that we have a really strong assortment of stockingstuffers priced primarily under $10. We’ve changed our marketing to be really focused both on – on three things on – or two things, primarily. Jeans, really takingadvantage of our leadership position in jeans and making jeans the number one gift. And then two, trying to be as explicit as possible to both the gift giver and thegift receiver that American Eagle is the gift destination for 2017.

And then finally, we’ve added in – we’re containing our total promotional level to the same levels as last year. And in fact, as the month goes on, there is anopportunity to even pull back from last year, but we are trying to make the messaging sound fresher and speak to those promotions in different ways. And so far,we feel like each of these strategies is having a payoff. But as Bob mentions, we have the majority of the quarter – about half the quarter still to come, so we don’twant to get ahead of ourselves on what the trend is.

In terms of jeans, we have definitely a loyal jeans customer. We are seeing right now just really strong results in jeans, driven I think largely by our reputationthat’s being America’s favorite jeans brand, but also the strong marketing messaging really pushing jeans as the gift for holiday.

Operator:Thank you. Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question.

DanaTelsey–TelseyAdvisoryGroupLLCAnalyst:Good morning, and congratulations on the results. The new AE Studio store looks terrific, and I have beenthere a number of times.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:Thanks.

DanaTelsey–TelseyAdvisoryGroupLLCAnalyst:Any learnings from that store of what you’d apply to other stores on just the initial couple of weeks that it’sbeen open. And also given the dividends that digital certainly has been paying, what are you seeing from Aerie in particular when you open a store or a shop withina shop, anything on conversion in digital with Aerie that would lend to higher transactions or increased conversion in the transactions? Thank you.

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:So Union Square, we’re really excited about the Union Squareopening and see it as a great test lab for us to learn about what could be next and what customers are engaged by. We’re seeing off the bat as I’m sure you’ve seenbeing there that jeans presentation is so powerful and we’re seeing strong results in jeans. And even without the new store environment, we believe that we canimprove our jeans presentation and even further improve jeans performance in all of our stores.

And then we’re also – we were anticipating a lot of excitement around the customization opportunities in Union Square, and that has been something that customerhas been highly engaged in and we want to try to bring that to as many as customers as possible, as we go forward. So we have to figure out how we can do thatmost effectively, but that has been something that people really find engaging. Denim is such a personal category, and to let people make the jeans even morepersonal so far has been something the customers have really appreciated.

BobMadore–AmericanEagleOutfitters,Inc.–ChiefFinancialOfficer:Yeah. And on your question, Dana, with Aerie digital, Aerie digital business isunbelievable. It’s almost 40% this quarter. And what we’ve seen is where we’ve opened in Aerie store – we currently operate in about 17 states, so there is a lot ofwhitespace for additional brick-and-mortar stores. But what we’ve found is where we open a brick- and- mortar store in the same kind of mile radius, it tends todrive digital demand at 1.5 times the store’s sales. So it’s clearly a driver of digital sales and demand and performance. And if you take that and look at all of theopportunities that we have to open additional brick-and-mortar stores, I think we’re going to continue to see really deep penetration of digital within the Aeriebrand.

Operator:Thank you. Our next question comes from the line of Susan Anderson with FBR Capital Markets. Please proceed with your question.

SusanAnderson–B.RileyFBRInc.Analyst:Hi, good morning. Nice jobs on the results. Let me add my congratulations also. Just a quick question on thebottoms and denim, obviously denim continues to be very strong and that’s kind of your key category. Are you seeing strength also in other bottoms? And I guessI’m kind of wondering just your thoughts around how long do you think that this bottom cycle can last as we kind of look into next year, do you see newness thatwill continue to drive that strength?

ChadKessler–AmericanEagleOutfitters,Inc.–GlobalBrandPresident–AEBrand:As I said in every call, I love talking about bottoms, so, thank you forthe question. We are very excited about our jeans business. And while jeans are the category that lead customer engagement and lead our bottoms results, as Imentioned earlier, we had record sales across all of our bottoms categories in both men’s and women’s, all of them, and that has continued so far into this quarter.

I think we really are clearly the jeans and bottoms destination in the mall and on the web. I don’t think there is anyone who offers the assortment or inventory depthor product knowledge, customer service, you name it, that we

do. And all of that comes back to the fact our confident in having the best innovation, the best fit, the best quality and the best value and a style for every singlecustomer. We anticipate our bottoms business to continue to expand through Q4 and into 2018 and even beyond that. As Jay mentioned, Q3 was our 17th quarter ofrecord bottoms sales, and it’s really a focus of mine and the team every single day. So, yes, we continue to think that that will expand and grow and that that’sgoing to do great.

I do want to take a moment just to call out the cross-functional team that we have working on bottoms. I talk about jeans all the time, but I just want to publicly saythat we have a fantastic cross-functional team and I appreciate their understanding of the customer and everything that they’re doing.

JudyMeehan–AmericanEagleOutfittersInc.–VP,IR:Okay. Melissa, I think we’re running out of time. So, thanks, everybody, for your participation todayand have a great day. Thank you.