AMERICAN EAGLE OUTFITTERS INC Fair Value Disclosure
4. Fair Value Measurements
ASC 820, Fair Value Measurement Disclosures ("ASC 820"), defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date.
Financial Instruments
Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
The Company’s cash equivalents and short-term investments are Level 1 financial assets and are measured at fair value on a recurring basis, for all periods presented. Refer to Note 3, Cash and Cash Equivalents and Short-term Investments, to the Consolidated Financial Statements for additional information regarding cash equivalents and short-term investments.
The Company had no other financial instruments that required fair value measurement for any of the periods presented.
Long-Term Debt
As of January 31, 2026 and February 1, 2025, there were no outstanding borrowings under the Company's Credit Facility.
Refer to Note 8, Long-Term Debt, Net, to the Consolidated Financial Statements for additional information regarding long-term debt and other credit arrangements.
Non-Financial Assets
The Company’s non-financial assets, which include intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur and the Company is required to evaluate the non-financial asset for impairment, a resulting impairment would require that the non-financial asset be recorded at the estimated fair value. Certain long-lived assets were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in ASC 820.
During Fiscal 2025, the Company recorded asset impairment charges of $33.4 million related to operating lease ROU assets and $37.2 million related to fixed assets. The Company also recorded asset impairment charges of $1.3 million related to Quiet Platforms definite-lived intangible assets. These assets were adjusted to their fair value and the loss on impairment was recorded within Impairment, Restructuring and Other Charges in the Consolidated Statements of Operations for the fiscal year ended January 31, 2026.
During Fiscal 2024, the Company recorded asset impairment charges of $6.4 million related to the sale of its Hong Kong retail operations.
Refer to Note 15, Impairment, Restructuring and Other Charges, to the Consolidated Financial Statements for additional information.
The fair value of the Company’s assets in Fiscal 2025 and Fiscal 2024 was determined by estimating the amount and timing of net future cash flows and discounting them using a risk-adjusted rate of interest. The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located.
The fair value of the Company's ROU assets was based upon market rent assumptions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 30, 2026 | Showing above |
| 2025 | Mar 20, 2025 | |
| 2024 | Mar 15, 2024 | |
| 2023 | Mar 13, 2023 | |
| 2022 | Mar 14, 2022 | |
| 2021 | Mar 11, 2021 | |
| 2020 | Mar 12, 2020 | |
| 2019 | Mar 14, 2019 | |
| 2018 | Mar 16, 2018 | |
| 2017 | Mar 10, 2017 | |
| 2016 | Mar 10, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.