 Investment History and Performance  Review of the Company and its Business  Industry and Competitor Analysis  Relevant Stock Market Prospects  Financial Analysis  Financial Projections  Application of Valuation Tools  Recommendation 2

 Transaction history  Dec 1999 – Buy $44  Jan 2000 – Buy $27  Mar 2000 – Buy $15.63  Feb 2001 – 3:2 Split  Mar 2005– 2:1 Split  Apr 2005 – Sell $  Nov 2005 – Sell $23.33  Nov 2006 – Sell $47.15  Dec 2006 – 3:2 Split  Nov 2007 – Sell $22  Dec 2008 – Buy $9.07  Nov 2010 – Sell $17.00  Apr 2011 – Sell $16.04  Current Price: $19.34  Current Position: Long 1500 shares of AEO with a weighted average price of $ As of November 14, 2012 Source: Yahoo! Finance

4 Red indicates that AEO missed quarterly analyst expectations for earnings and revenue and green indicates that AEO beat analyst expectations. Unrealized Capital Gain: % Annualized Capital Gain: 21.22% Year-to-date ROE: 42% Source: Yahoo! Finance

 Opened in 1977, American Eagle designs, markets, and sells apparel throughout the United States and Canada. Their online retail website ships to more than 75 countries. 5

1977 – The first AE store opens  The first AE store opens in Twelve Oaks Mall in Novi, MI 1994 – AE goes public  Initial public offering of 2.1 million shares on the Nasdaq under “AEOS” symbol, and was moved to the NYSE with ticker “AEO” in – First flagship store  American Eagle opens its first flagship store in downtown San Francisco 2000 – AE opens its 500th store  Annual sales surpass $1 billion on – AE crosses the border to Canada 2006 – aerie launched nationwide 2010 – AE goes global  AE kicks off its international expansion with its first store in Dubai, closely followed by stores in Kuwait, Hong Kong, Russia and Shanghai 6 Source: AEO website,

 Three operating segments  U.S. and Canadian AE retail stores: 908  Aerie stand-alone retail stores: 155  AEO Direct-Online business: 77 countries 7 Employees: 34,900 Yearly Revenue: $2.99 Billion Headquarters in Pittsburgh, PA 39 International Franchise stores Source:10-Q

8

9 Source: AE Better World, corporate website,

10 Source: AE Better World, corporate website, Made in Vietnam, India, Guatemala, and China.

 Internal development of new brands: aerie  Relationship and conditions of vendors  Performance during back-to-school and year-end holiday sales periods  Global expansion  Number and timing of new stores; existing store remodels and expansions  Acceptability of seasonal merchandise offerings  Timing and level of markdowns  Store closings and remodels  Competitive factors, weather and general economic conditions 11 Source: 10-K

12 Revenue is cyclically strong around the November/December period, as well as during the back- to-school season. Quarterly EPS is not exactly correlated with revenue. After phasing out underperforming 77kids and Martin+OSA, management hopes to improve EPS for this holiday season. Source: 10-K

StrengthsWeaknesses Strong brand with no debt Aerie gains a niche in underserved teen intimate apparel market Strong multi-channel operations will continue to drive sales Target customer base makes it difficult to sustain competitive advantage Weak competitive position as the prominence of value retailers and premium luxury brands increases OpportunitiesThreats Growing demand for footwear Expansion in emerging markets through franchisee stores (Asia, Middle East) Sluggish discretionary spending Potential raw material inflation and increase in labor cost Seasonality as a large portion of sales and income in the third and fourth fiscal quarter 13 Source: COMPANY PROFILE, American Eagle Outfitters, Inc., Marketline

AEO Management’s Projections PROFIT MARGIN CURRENT PENETRATION TARGET PENETRATION MAINELINE STORES20%76%65% FACTORY STORES28%10%15% AE.COM30%14%20% 14 Source: Corporate Website, Investor Presentation,

15 Source: Corporate Website, AE_Investor_Presentation_ ,

 77kids brand introduced online in 2008, and then became bricks and mortar with 22 stores  In 2012, announcement to exit children’s business (77kids)  After-tax loss of $24 million on sales of $40 million in fiscal 2011  $28.2 million loss from discontinued operations (1.84% of net sales), net of tax, for the 26 weeks ended July 28, 2012 (3.22% for 13 weeks ended) 16 Source: 10-K, 10-Q, Press Release, Corporate website

17 Source: Corporate Website, Supplemental Financial Tables,

 Introduction of first international stores  Middle East (Dubai and Kuwait City) - Mar 11, 2010  Physically present in 13 countries  39 international franchise stores in 12 countries on July 28, 2012 (compared with 9 one year ago)  Middle East, Northern Africa, Eastern Europe, Hong Kong, China, Israel and Japan  Ship online to 77 countries internationally at the close of 2012  49 at the end of Fiscal 2012, including 28 new franchise stores this year  Agreements with regional leading international retailer and franchise operator  No capital investment & minimal operational involvement  Partners handle local operational functions  Royalty revenue generated based upon a percentage of merchandise sales by the franchisee 18 Source: Corporate Website, Press Release, 10-K, 10-Q,

19 Fiscal 2009Fiscal 2010Fiscal 2011Fiscal 2012 Plan Consolidated stores from continuing operations at beginning of period1,0701,0751,0771,069 AE Brand Opened Closed(24)(23)(29)(20) - (30) aerie Opened Closed000(5) - (10) Consolidated stores from continuing operations at end of period1,0751,0771,0691, ,059 Store remodels and refurbishments International franchise stores at end of period Source: Second Quarter 2012 Financial Results Presentation,

 Disposable Personal Income 20 Source :

 Retail Sales Changes & Consumer Confidence 21 Source:

 United States apparel retail industry value: $ million, 2007–11(e) 22 Source : Apparel Retail in the United States, June 2012, MarketLine

 US apparel retail industry value forecast: $ million, 2011 –16 23 Source : Apparel Retail in the United States, June 2012, MarketLine

24 Five Forces Power of Buyers (Moderate) Power of Suppliers (Moderate) Rivalry within the industry (Moderate) Threat of New Entrants (Strong) Threat of Substitutes (Moderate) Source : Apparel Retail in the United States, June 2012, MarketLine

Urban Outfitters Inc. operates lifestyle specialty retail stores, which sell women’s and men’s fashion apparel, footwear, accessories, and gifts, as well as apartment wares. A leading global specialty retailer offering clothing, accessories and personal care products for men, women, children and babies. Aéropostale, Inc., together with its subsidiaries, operates as a mall-based specialty retailer of casual apparel and accessories. Abercrombie & Fitch Co., through its subsidiaries, operates as a specialty retailer of casual apparel for men, women, and kids. Abercrombie & Fitch Co. (NYSE:ANF) Aéropostale, Inc. (NYSE:ARO) Urban Outfitters Inc. (NasdaqGS:U RBN) The Gap, Inc (NYSE:GPS) 25 Source: Capital IQ, Corporate Website

26 Source: Yahoo! Finance

27 Source: Yahoo! Finance

 Revenue source  AE Retail Sales  AE Direct  International franchisee royalty 28 (In million)

29  Revenue - Geographically Source: 10-K, Capital IQ (In millions)

 Sales/Sq. Ft. Owned/Operated (Net) vs. Sales/ Store (Net) 30 Source: 10-K

 Margin Analysis 31 Source: Capital IQ

 Capital Expenditure  Fiscal 2011 capital expenditures were $100.1 million, compared to $84.3 million in Fiscal Source: 10-K

E2013E2014E2015E2016E2017E2018E2019E2020E2021E Revenue from Retail Sales 2, , , , , , , , , ,784.5 Sales / Square Foot Total Square Feet Other Revenue Total Revenue 3, , , , , , , , , ,541.3 Growth Rate for Total Square Feet1.5% 1.0% Growth Rate for Sales/Square Foot2.5% 1.5% Growth for Other Revenue8% 6% Other Revenue (% of Total)14.4%14.9%15.5%16.1%16.9%17.5%18.1%18.7%19.3%20.0% Total Growth Rate4.6%4.5%4.6% 3.5%3.0% 3.1% CAGR ( )3.8% (In millions except for Sales / Square Foot) 1.Other revenue includes revenue from AEO Direct and royalty revenue from franchise stores 2.Revenue from Retail Sales=Sales/Square Foot ×Total Square Feet

34 (1)Phase out 77 kids (2)Transition to factory and online stores (3)Improve markdowns (4)Decrease occupancy and warehousing costs with higher comparable store sales and efficient inventory management Source: 10-K Increase in material and labor costs remains to be a threat

35 Source: Second Quarter 2012 Financial Results Presentation,

36 Source: Second Quarter 2012 Financial Results Presentation, 15% increase in sales for AEO Direct in Fiscal 2011

37 Enterprise Value Implied Equity Value and Share Price Cumulative Present Value of FCF $1,917.5Enterprise Value $3,228.5 Less: Total Debt - Terminal ValueLess: Preferred Securities FCF $503.6Plus: Cash And Equivalents Growth Rate3.00%Less: Non-controlling interest - Terminal Value $4,550.2 WACC14.4% Implied Equity Value $3,924.5 Present Value of Terminal Value $1,311.0 % of Enterprise Value 40.6% Number of Shares Outstanding Enterprise Value $3,228.5 Implied Share Price $19.96 (In millions except for share price)

Company NameTickerP/EP/BP/SEV/EBITDA American Eagles Outfitters, IncAEO Abercrombie and FitchANF Aeropostale, IncARO Urban Outfitters, IncURBN Gap, IncGPS Mean Median High Low MultiplePriceWeightWeighted price P/E P/B P/S EV/EBITDA Value Source: Capital IQ, Company Filings, I/B/E/S

 Hold the position of 1500 shares. 39 Current Share Price: $19.34 DCF Implied Price: $19.96 Market Multiples Price: $21.01

 Next earnings on November 26 th, possibility for growth.  ANF beat earnings and revenue estimates on November 14 th.  Other earnings to watch: GPS (November 15), ARO (November 29).  Anticipate high revenue in the coming holiday season.  Be aware of industry trends indicating strength or weakness in retail performance. 40