American Eagle Outfitters to accelerate Aerie growth
American Eagle Outfitters’ fourth-quarter sales and earnings beat analysts’ estimates fueled by strong demand for its Aerie intimates brand.
Aerie has been a major growth driver for the company in recent years, with its inclusive, body-positive messaging resonating with younger shoppers. American Eagle intends to build on the brand’s growing momentum. It intends to accelerate the growth of Aerie in 2020, opening 60 to 70 stores, with a heavy emphasis on stand-alone locations, executives said on the company’s quarterly earnings call with analysts.
“We are seeing very strong returns from our investments in new and remodeled stores as well, including exceptional growth trends in newer markets like Dallas, Houston and Denver,” Jennifer Foyle, executive VP and global brand president-Aerie, said during the call. “We've entered 2020 with momentum and we look forward to achieving our milestone of $1 billion in short order.”
American Eagle reported net income of $3.8 million, or $0.3 a share, for the quarter ended Feb. 1, compared to $76.2 million, or $0. 43 a share, in the year-ago period. Adjusted earnings were $0. 37 cents a share, beating analysts’ estimates by one cent.
Revenue rose 6% to $1.31 billion from $1.24 billion in the year-ago period. Analysts had estimated revenue of $1.27 billion.
Consolidated comparable sales increased 2%. It was the 20th consecutive quarter of positive comparable sales. By brand, American Eagle comparable sales decreased 3%. Aerie’s comparable sales increased 26%, following a 23% increase last year, marking the 21stconsecutive quarter of double-digit sales growth.
For the full year, American Eagle’s net revenue increased 7% to a record $4.3 billion. Consolidated comparable sales increased 3%. By brand, American Eagle comparable sales were up slightly. Aerie’s comparable sales increased 20%
“Although we faced some challenges in 2019, we made good progress on our strategic growth pillars, posting record revenues, said Jay Schottenstein, AEO’s chairman and CEO. “We saw strong customer engagement and positive traffic across brands and channels. Aerie delivered exceptional growth, led by its unique brand positioning and strong customer connection, and has significant runway ahead. American Eagle also saw growth in its signature jeans and bottoms categories, where we continue to gain meaningful market share. I’m also pleased that we successfully cleared through excess holiday inventory, ending the year well-positioned.”
The retailer ended the year with a total of 1,095 stores. During the year, American Eagle opened 37 Aerie standalone stores, ending the year with 148 Aerie stand-alone locations (included in total store count.)