(Filed Under wholesale Lingerie News). Aerie operating income jumped to $69.978 million on higher net revenue of $297.487 million in the quarter ended May 1, 2021 compared to an operating loss of $19.129 million on sales of $154.981 million in the same quarter last year.

The quarter went so well that the company upped the number of Aerie stores it plans to open this year (from the 50 it was projecting in an investor presentation back in March) to 60, and got company executives to boast it will be a $2 billion brand sooner than the 2023 it had talked about in that same investor presentation.

“Aerie is on fire,” enthused Jay Schottenstein, CEO of parent company American Eagle Outfitters, during the earnings call. “Our goal was in -- by 2023 to be a $2 billion Aerie company, and I think we’ll be there within the next 12 months. It’s very strong.” He added that Offline, the company’s new activewear brand, “is starting out great. We think Offline has the potential like to get -- to be like another Aerie. So we’re very optimistic.”

Jen Foyle, president, executive creative director for American Eagle and Aerie, also spoke about Aerie during the call: “we continue to set records across the brand. Building on the momentum throughout last year, the first quarter accelerated. Sales rose an incredible 89% from 2019. The consistency we are experiencing is truly amazing. This was the 26th consecutive quarter of double-digit growth. As Aerie.com becomes a go-to destination for our customers, the online business more than doubled, posting a growth of 158%.”

“Store revenue increased 36% with about one-third from new store opening. Aerie’s active customer file expanded approximately 40% as we entered new markets, and we increased engagement on social channels, including TikTok where we saw tremendous response. With new customers attracted to our brand and demand for our merchandise accelerating, brand equity scores show growing awareness.”

“Sales metrics were strong across the board, and notably our AURs [average unit retail] were up 50%. High demand is driving greater pricing power. A significant reduction in promotions contributed to an over 700% increase in operating profit and a 23.5% operating margin.”

“Across categories, we saw broad-based strength with all areas rising in the double-digit. Intimates was terrific as was swimwear, where product innovation and newness are fueling demand. Aerie signature legging business is exceptional and continues to expand with the success of our new Offline by Aerie activewear brand. Related categories such as fleece, tanks and sports bras are also tracking very well.”

“Geographic expansion is a major priority and opportunity for Aerie. We opened six new stores in the quarter, including a new Offline by Aerie store, bringing our running total of Offline openings to five stores. We are very pleased with the early results.” — NM

The complete call transcript can be found here: https://www.fool.com/earnings/call-transcripts/2021/05/26/american-eagle-outfitters-inc-aeo-q1-2021-earnings/

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Published 06-01-2021 by Nick Monjo