(Filed Under wholesale Lingerie News). Aerie sales rose but operating income fell in the first quarter, with the intimates division of American Eagle Outfitters (AEO) pointing to weakness in swimwear as the cause.
Aerie reported sales of $321.712 million in the 13 weeks ended April 30, compared to $297.487 million in the same period last year. Operating income at the division was $43.073 million in the quarter, compared to $69.978 million in the three months ended May 1, 2021.
In the conference call to discuss the results, AEO president Jen Foyle, explained, “swimwear was weak, we believe, driven by weather. Excluding swim, Aerie revenue grew 15% with intimates, leggings, apparel and beauty and also accessories also posting growth versus last year. Offline by Aerie,” the company’s new active brand, “grew in the strong double digits.”
“In the near-term,” she continued, “as weather has improved, we have seen seasonal categories tick up. However, we expect the environment to remain a bit choppy. We also have excess spring merchandise and are focused on clearing through it during the second quarter. This will position us for an improved second half when buys will be better aligned with demand. For the fall season, we have exciting new product launches, and these are excellent additions to the Aerie collection. Looking out longer term, I remain extremely confident in the Aerie and the Offline potential growth.”
CFO Mike Mathias noted during the call, “we continue to be pleased with our returns on new Aerie openings, with first year returns of approximately 50%. In the first quarter, we opened 12 new Aerie stores, including a mix of stand-alone and Aerie Offline side-by-side formats.”
AEO as a whole, which sells a variety of other apparel, reported net income of $31.740 million on sales of $1.055 billion in the first quarter, compared to net income of $95.463 million on sales of $1.035 billion in the same period last year.
Referring to the company-wide results, chairman Jay Schottenstein complained, “The first quarter proved challenging, with demand well below our expectations, pressuring operating profit. Comparisons from an extraordinary spring last year driven by stimulus payments and pent-up customer demand, were compounded by rising inflation, higher gas prices and a stronger than anticipated pivot to other discretionary categories. In hindsight, our plans entering the year were too optimistic. We are taking swift measures to adjust our inventory and expense base with a firm goal of entering the second half better aligned with demand trends." — NM
The complete conference call transcript can be found here: https://seekingalpha.com/article/4514875-american-eagle-outfitters-inc-aeo-ceo-jay-schottenstein-on-q1-2022-results-earnings-call
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.