American Eagle Outfitters Inc. reported second quarter profit and sales that exceeded expectations amid rising demand and cost-cutting efforts.
“Demand picked up in June and July reflecting brand strength and on trend collections that are resonating well with customers, supported by exciting new marketing campaigns,” said Jay Schottenstein, chairman and CEO. “It’s encouraging to see positive momentum continue into the third quarter, across brands and channels.”
The apparel and accessories retailer company reported net income of $48.57 with earnings per share of $0.25 for the quarter ended July 29, compared to a loss of $42.46 million in the year-ago period. Analysts had expected earnings per share of $0.16.
Total net revenue inched up to $1.200 billion from $1.198 billion in the prior year. Store revenue rose 4%. Digital revenue declined 7%.
At American Eagle, revenue fell 1% to $767 million and comp sales declined 2%. Aerie’s revenue rose 2% to $380 — a second-quarter record. Its comp sales were flat.
Total ending inventory declined 7% to $637 million compared to $687 million last year, with units down 11%. The company said it continues to maintain inventory discipline.
“Looking to the second half, we are excited about future product arrivals, leveraging the positive response to early fall goods and delivering innovative customer connections,” said Schottenstein. At the same time, we are keeping a sharp eye on the consumer environment and planning appropriately. We are taking action to position the business for improved profit, with preliminary initiatives included in our increased 2023 outlook.”
For the year, management expects revenue to be up low single digits to last year, compared to its prior guidance for revenue in the range of flat to down low single digits. Operating income is expected to be in the range of $325 to $350 million, up from prior guidance of $250 to $270 million.
“This reflects better than expected business performance in the second quarter, in addition to strengthened demand and continued profit improvement in the back half of the year,” the company said.
The outlook includes approximately $25 million in benefits from the company’s profit improvement initiatives.
The retailer operated 1,184 stores at the end of the second quarter, including 866 American Eagle stores, 300 Aerie stores, 13 Todd Snyer stores and five Unsubscribed stores.
GameStop narrowed its second-quarter loss in a big way.
The videogame and electronics retailer reported a net loss of $2.8 million, or a loss of $0.01 per share, for the quarter ended July 29, compared to a net loss of $108.7 million, or a loss of $0.36 per share, for the year-ago quarter. Net sales inched up to $1.164 billion, compared to $1.136 billion in the prior year.
Once again, GameStop did not hold an earnings call regarding its results, which follow the firing of company CEO Matt Furlong in June and the election of elected Ryan Cohen as executive chairman. In its quarterly securities filing at the time, the company said Cohen’s leadership would “unlock long-term value creation for our stockholders.”
Transition costs related to European restructuring efforts were $4.3 million for the second quarter.
GameStop ended the quarter with cash, cash equivalents and marketable securities of $1.195 billion. Its long-term debt remains limited to one low-interest, unsecured term loan associated with the French government’s response to COVID-19.
Crafter’s Companion moves warehouse management to the cloud
An international direct-to-consumer specialty craft retailer is improving warehouse management with cloud-based technology.
Crafter’s Companion, which is headquartered in California and the U.K. and sells its arts and crafts products via multiple channels in more than 40 countries across Europe, Asia, Australia and North and South America, is deploying the cloud-based e-commerce warehouse management solution (WMS) from Descartes Systems Group.
The retailer intends to obtain higher customer satisfaction as a result of faster order processing, and says it has significantly reduced its fulfillment error rate by increasing the accuracy of its existing pick and pack process using barcode-based scanning processes.
Specifically, Crafter’s Companion says it has achieved a 25% increase in fulfilment efficiency with an error rate of less than 1%. Order information is automatically available to be executed via mobile-driven multi-order pick-and-pack strategies, and then fed into Descartes and third-party parcel shipment systems.
“We’re thrilled to be working with Descartes and implementing its e-commerce WMS in our global, 54,000-sq.-ft. distribution center is an important milestone for the business,” said Sara Davies, founder and creative director of Crafter’s Companion. “The software is helping us operate to our full potential, as we continue to service our amazing worldwide community of customers.”
“We’re proud to enable Crafter’s Companion to pursue its global growth strategy with scalable processes and highly accurate fulfilment operations,” said Dirk Haschke, VP & GM, e-commerce at Descartes. “The company’s focus lies on its customers’ satisfaction and by ensuring efficient intralogistics processes, Descartes’ ecommerce WMS helps to fulfill the promises made.”
Founded in 2005 by Sara Davies, Crafter's Companion supplies its products directly to consumers online and through its retail stores, as well as via its trade, wholesale and TV shopping partners.
Dollar General names global supply chain head
Dollar General has promoted an 18-year company veteran.
Dollar General said it has promoted Rod West to executive VP of global supply chain effective September 1, 2023. He will lead the company’s distribution center operations, transportation, supply chain modernization and its private fleet.
Dollar General’s distribution network consists of 31 distribution centers, which employ more than 15,000 individuals. In August, the company opened its first-ever dual distribution center, which is designed to combine the efficiencies of traditional and DG Fresh supply chain functionalities.
West, who most recently served as DG’s senior VP of distribution, joined Dollar General in 2005 as VP of process improvement and led supply chain, finance, merchandising, marketing and store operations initiatives. He served as the VP of perishables growth and development from 2019 to 2021 where he strategically led the DG Fresh initiative from ideation to full implementation.
“Rod is an outstanding leader who will continue driving Dollar General forward through his considerable internal knowledge and experience on our supply chain team,” said Jeff Owen, CEO, Dollar General. “I am confident his leadership and expertise will further benefit Dollar General’s business, customers and communities.”
Prior to joining Dollar General, West held roles of increasing responsibility within the retail and consumer products consulting practice at Kurt Salmon Associates.
As of August 4, 2023, the company’s 19,488 Dollar General, DG Market, DGX and PopShelf stores across the U.S. and Mi Súper Dollar General stores in Mexico.
Regional grocer Festival Foods optimizes price with AI
Wisconsin-based Festival Foods is expanding its omnichannel competitive intelligence program.
Festival Foods is adding the Price Image Management suite from Engage3 Powered By Dexi to its existing Engage3 competitive intelligence platform. Leveraging its new solution, the retailer will utilize data science and proprietary machine learning (ML) to identify and optimize the items with the greatest influence on customers' price perception.
As a result, Festival Foods hopes to generate price recommendations that drive revenue and margin growth while growing customer loyalty. Festival Foods relies on Engage3 for omnichannel data visibility via in-store audits and online web scraping, as well as the Engage3 Lighthouse AI-based product linking module.
"The customer is at the heart of everything we do at Festival Foods," said Benjamin Plaza, Festival Foods manager of business analytics. "Engage3's Price Image solution gives us unprecedented insights into customer psychology that help us deliver exceptional customer experiences while growing revenue and trips."
"We're happy to build on our previous success with Festival Foods and provide new tools to help them build trust and loyalty with their customers," said Engage3 CEO, Edris Bemanian. "The addition of Price Image Optimization gives Festival Foods a completely new way to balance customer engagement with bottom-line growth.”
Founded in 1946 as Skogen's IGA, Festival Foods is a Wisconsin family- and employee-owned grocer that began operating as Festival Foods in 1990 and today operates 32 full-service supermarkets across the state of Wisconsin.