(Filed Under wholesale Lingerie News). In the third quarter, “Aerie’s revenue increased 34%, following a 26% increase last year,” according to parent company American Eagle Outfitters (AEO), driven by 83% growth in digital revenue. Annual sales for the lingerie division should hit $1 billion this year.
As a whole, American Eagle, which sells a variety of apparel under several brand names, reported a profit of $58.108 million on sales of $1.032 billion in the thirteen weeks ended October 31. In the same quarter last year the company earned $80.761 million on sales of $1.066 billion.
During the conference call to discuss the results, Jen Foyle, Aerie’s president and AEO’s new chief creative officer, noted that this was the lingerie division’s “24th consecutive quarter of double-digit growth,” explaining that in addition to the huge growth in Aerie’s digital business, “stores were up modestly. Across the board our metrics were positive.”
“Aerie saw a meaningful improvement in overall profitability, which hit record levels fueled by strong growth,” Foyle said, adding, at one point, that her “team planned to hit $1 billion by the end of 2020 and it’s right in front of us.”
She continued, “customer acquisitions were up 15% in total and 62% in our digital channel. We continued to engage with our customers through social media and grassroots efforts to build the community of Aerie’s loyalists. In fact, we had some of our most incredible brand momentum on TikTok, which fuels demand and brings new customers to Aerie.”
As of October 31 there were 167 Aerie stand alone stores in the U.S. as well as 177 side-by-side Aerie shops which are considered part of the American Eagle stores to which they are attached. During the third quarter, Aerie opened seven and closed no stand alone stores, but noted it has included, some Offline store openings in the Aerie count. (Offline is AEO’s new activewear brand).
AEO’s CFO, Mike Mathias, emphasized the company will continue to grow Aerie next year, explaining “we are definitely excited about the continuation of the Aerie story and investing in Aerie and new stores, and we are also preliminarily excited about Offline performance and what that could look like in future years as well starting in 2021.”
Added Foyle, “I am thrilled to report that our new Offline active wear brand has had an incredible debut. In October we opened our first store with a very strong customer response and now we have four stops up and running.”
While Aerie has been thought of as appealing to mostly younger consumers, Foyle revealed that “based on some of our new product offerings, including Offline, we are starting to see a little hedge towards an older customer.” — NM
The full conference call transcript can be found here: https://seekingalpha.com/article/4391411-american-eagle-outfitters-inc-s-aeo-ceo-jay-schottenstein-on-q3-2020-results-earnings-call
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