AMERICAN EAGLE OUTFITTERS INC

15. Impairment, Restructuring and Other Charges

In Fiscal 2025, as part of our continued supply chain network optimization project, the Company made the decision to close the Quiet Platforms business and discontinue services for all third-party customers which resulted in $59.0 million in impairment and restructuring costs in Fiscal 2025.

During the fourth quarter of Fiscal 2025, the Company recorded an additional $42.6 million of impairment and restructuring charges to align the organization with its strategic priorities.

The following table represents impairment, restructuring and other charges. All amounts were recorded within impairment, restructuring and other charges on the Consolidated Statements of Operations, unless otherwise noted.

The following footnotes relate to the impairment and restructuring charges recorded in Fiscal 2025:

(1)

The Company recorded $50.7 million of asset impairment charges primarily related to closing Quiet Platforms fulfillment centers as part of its continued supply chain network optimization project. Of this amount, $30.5 million of charges relates to property and equipment, $18.8 million relates to ROU assets, and $1.3 million relates to definite-lived intangible assets. The Company recorded $6.4 million of employee severance, primarily related to closing Quiet Platforms fulfillment centers. Restructuring charges of $1.9 million were also recorded related to exiting third-party contracts.

(2)

The Company recorded $21.3 million of retail store asset impairment charges. Of this amount, $14.6 million relates to ROU assets and $6.7 million relates to property and equipment. All impairments were recorded due to insufficient prospective cash flows to support the asset values. The Company also recorded $13.8 million of impairment charges related to contract termination costs and $7.5 million of employee severance.

The following footnotes relate to the impairment and restructuring charges recorded in Fiscal 2024:

(1)

The Company recorded restructuring costs of $10.7 million related to employee severance.

(2)

The Company recorded impairment and restructuring costs of $6.8 million related to the sale of the Company's Hong Kong retail operations to a third-party buyer. These costs primarily consist of impairment of $6.4 million and employee severance.

The following footnotes relate to the impairment, restructuring and other charges in Fiscal 2023:

(1)

$11.0 million of inventory write-down charges related to the Company's international businessesas further described in paragraph 1 of note (3) below.

(2)

$119.6 million of charges related to the Quiet Platforms restructuring. Of this amount, the Company impaired definite lived intangible assets of$40.5 million consisting of $31.2 million of customer relationships and $9.3 million of trade names. The Company also impaired$39.6 million of goodwill and recorded $24.7 million oflong-term asset impairment primarily related to technology which is no longer a part of the long-term strategy. All impairments were recorded due to insufficient prospective cash flows to support the asset value, resulting from the restructuring of Quiet Platforms. The Company recorded $9.9 million of severance based on this revised strategy. We also recorded $4.9 million of contract related charges.

(3)

$10.9 million of charges related to exiting the Japan market, including the closure of allfour stores in January 2024, as well as impairment related to our Hong Kong retail operations. Of this amount, $4.7 million related to Japan ROU assets, $3.6 million of Japan store property and equipment, $1.3 million of Hong Kong store ROU assets, and $1.3 million of employee severance. All impairments were recorded due to insufficient prospective cash flows to support the asset values. Additionally, the Company recorded $11.0 million of inventory write-down charges related to restructuring our international operations, which was recorded separately in Cost of Sales and discussed in note (1) above.

(4)

$11.2 million, consisting of $6.0 million of employee severance related to corporate realignment and other asset impairment of $5.2 million of investments related to further strategic business changes.

A rollforward of therestructuring liabilities recognized in the Consolidated Balance Sheet is as follows: