(Filed Under wholesale Lingerie News). Aerie comparable sales jumped 26% in the fourth quarter and 20% for the year ended February 1, 2020. It marked the “fifth straight year of double-digit sales growth” as well as a “28% sales increase” over fiscal 2018, according to Jen Foyle, global brand president for the intimates division of American Eagle Outfitters.
Aerie ended the fiscal year with 148 “stand alone” stores and 174 “side-by-side” stores, which are attached to other American Eagle stores. The company added that in fiscal 2020 it plans to open another 55 to 60 Aerie stand alone stores while closing five to ten.
Although Foyle and other executives have teased repeatedly, over the past several years, that Aerie annual sales were closing in on $1 billion, the brand still has not achieved that goal. She remarked, in the conference call with analysts to discuss the results, “We’ve entered 2020 with momentum and we look forward to achieving our milestone of $1 billion in short order.” But again, no sales totals for the brand were released.
By comparison, Victoria’s Secret total sales for fiscal 2019 were $6.8 billion.
American Eagle as a whole, which sells a variety of apparel for men and women, including under such brands as Tailgate Clothing Co. and Todd Snyder, earned $191.3 million on sales of $4.3 billion in 2019 compared to $261.9 million on sales of $4.04 billion in the year ended February 2, 2019.
Foyle explained that the fourth quarter “marked our 21st consecutive quarter of double-digit sales growth. Key performance metrics continued to be very, very healthy. We saw an increase in transactions and a higher average transaction size. This was delivered by a meaningful rise in the average unit retail price in a highly competitive season, we were able to control promotions, improving our growth and operating margins compared to last year. Strong performance continues to be broad-based with our major categories delivering comp increases. Our apparel growth was led by strengthened leggings and important loyalty category for us. Our core bras and undies remain consistent growth categories as well.”
“Our newly launched Real Good, sustainable swim line, made from recycled water bottles has been amazing. We are looking forward to building an additional Real Good, sustainable product lines in the future.” She continued, “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. As we have discussed in the past, our store strategy fuels our digital business which now represents more than 45% of the revenue.”
Asked if Aerie is expanding too rapidly, Foyle replied, “We’re going to open up another roughly 60 because we still are not in every market. So we have to cover every market but we definitely aren’t going to over expand. We’re going to be really smart about where we are growing and what markets we enter and what grade level malls we’re going to get into. The other interesting thing that’s been happening is our renovations. They’ve been just doing amazing for us. So when we can put our new market design into some of our older stores, we’re seeing really nice comps there. And then I guess I would say when you think about the other part of our growth is where we have some older side-by-side and we can work out a nice deal on the mall.” She concluded “we’re not going to get sloppy with the square footage. We’re going to be very strategic. We’re not going to oversize the ship by any means.”
In answer to a questions about the comparative results from the different types of Aerie stores, American Eagle CEO Jay Schottenstein explained, “The standalone locations versus the side-by-side locations have a slightly lower square foot productivity and it really only has to do with the size of the box compared to the side-by-side box. From a digital halo perspective, on average what we see is approximately 50% of a stores sales volume being captured on the digital side of the business.”
During the call, company executives received questions about China production. EVP and CFO Bob Madore noted “We source approximately 20% of our product from China today and are constantly looking to migrate those other countries over time, even regardless of the coronavirus situation.” Added COO Michael Rempell, during the early March discussion, “I’m happy to say a 100% of our factories and mills are back operating. They’re operating at about 75% capacity now.” He continued, “It’s really too early to tell if there’ll be residual impacts from mills opening later, factories opening later and the amount of work that they have to catch up on.”
The only negative comment about Aerie during the call (and it was very mild) came from American Eagle EVP and global brand president Chad Kessler. “Although the men’s Aerie has been more challenging, customers remain highly engaged for the AE brand and continue to fuel up driving trends in jeans, active bottoms, underwear and fleece.” — NM
The complete conference call transcript can be found here: https://seekingalpha.com/article/4329741-american-eagle-outfitters-inc-aeo-ceo-jay-schottenstein-on-q4-2019-results-earnings-call?utm_source=conferencecalltranscripts.org
Disclaimer: The views expressed in comments published on bodymagazine.us are those of the comment writers alone. They do not represent the views or opinions of Bodymagazine or its staff.
NOTE: Your Email will not be displayed.