American Eagle Outfitters in $200 million buyback agreement, other moves

American Eagle Outfitters announced a series of moves to strengthen its capital structure.

The teen apparel retailer has entered an accelerated share buyback agreement with JP Morgan Chase for $200 million of its stock. The amount is equal to about 16.7 million shares based on the closing price on June 2, or about 8% of its fully diluted shares outstanding at that date.

American Eagle said it has also entered exchange agreements with certain holders of its 3.75% convertible senior notes that mature in 2025. The notes represent about $342 million of the outstanding principal amount, and will leave just $70 million remaining once the deal closes.

The retailer is also seeking to upsize and extend an ABL facility to $600 million with a five-year term to unlock additional liquidity.  

American Eagle’s first-quarter total revenues rose 2% to approximately $1.05 billion. The company posted $31.7 million in profits, down from $95.4 million in the year-ago period, amid higher supply chain costs.

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