American Eagle Outfitters (AEO) Beats Q1 Expectations Amid Recovering Sales

American Eagle Outfitters Inc (NYSE:AEO), founded in 1977, is a famous lifestyle and clothing retailer in the United States.  It offers quality clothing, accessories, and personal care products under American Eagle and Aerie brands. The company primarily targets young adults with its trendy merchandise, but older adults also wear the brand (see best retail stocks to buy).

The Pennsylvania-based company recently announced better-than-expected financial results for the first quarter, driven by recovering sales of denim, swimwear, and sweats. American Eagle reported earnings of 46 cents per share for the three months ended May 1, significantly higher than 23 cents per share in the comparable period of 2019. The apparel and accessories retailer earned 48 cents per share on an adjusted basis, topping the consensus forecast of 46 cents per share.

Revenue for the quarter surged 17 percent to $1.03 billion, just ahead of analysts’ average estimate of $1.02 billion. If we look at the performance of key brands, American Eagle revenue marginally rose to $728 million, while Aerie revenue climbed 89 percent to $297 million. Store revenue in the quarter was relatively flat, mainly due to store closures as a result of the Covid-19 pandemic. On the bright side, digital revenue jumped more than 55 percent in the quarter.

Follow American Eagle Outfitters Inc (NYSE:AEO)

Commenting on the results, CEO Jay Schottenstein said in a statement, “Demand for Aerie’s product and powerful brand platform continued at a rapid pace, which drove significantly higher sales, margins, and profitability. The American Eagle initiatives to reignite the brand, optimize inventory, and reduce promotions resulted in a meaningful recovery in margins, with more runway ahead.”

See also Biggest Retailers In The World.