A shopkeeper walks past an American Eagle store in the mall.
Tim Boyle | Getty Images News | Getty Images
American Eagle Outfitters announced on Wednesday that its business is ahead of its expectations in the first fiscal quarter, as stimulus controls and accumulated demand fuel sales of jeans, blouses and leggings.
Revenue is on track to reach $ 1 billion, he said. Analysts demanded that the American Eagle earn 23 cents a share from $ 904.1 million in sales, according to a survey conducted by Refinitiv. The company did not provide a new revenue estimate.
Its shares increased by more than 8% when trading after the program.
The teenage clothing retailer said demand for goods for both the American Eagle business and Aerie – which sells comfortable lingerie and loungewear for young women – was stronger than expected. This is due in part to external factors, including economic stimulus, renewed consumer optimism and bottled customer demand, he said.
The American Eagle’s denim business has been particularly strong, and buyers have begun to buy even more charts, Chief Executive Jay Schottenstein said in a telephone interview with CNBC.
“There’s a lot of money out there,” he said. “We believe that the environment for the next few years will be a very good environment … People will want to spend [and] people will want to go out and want to go back to what was normal before. “
Trends provide another sign that people are ready to dress again after months of staying around the house during the Covid pandemic in sweatpants or pajamas. Other retailers, such as Levi’s, have recently made similar comments about the popularity of denim, especially among Gen Z customers.
At Aerie, which has grown much faster than the American Eagle, the momentum for leggings has not slowed, said Jennifer Foyle, its global brand president. Retailers such as Lululemon and Athleta Gap also benefited from the leg boom. These bottoms are clearly not just for yoga, as more and more women are wearing them practically everywhere.
Last summer, in the midst of a health crisis, Aerie sculpted a new sports brand called Offline by Aerie. The brand sells printed sports bras, joggers, graphic t-shirts and other active items. Although it is sold in Aerie stores, American Eagle plans to open between 25 and 30 Offline Aerie stores this year.
Even though the terrain is crowded for sports, Foyle said the size of the market is huge. “I think we have room for a part of the market to take,” Foyle said.
She added that the company is still on track to double its Aerie business to $ 2 billion in annual sales by 2023.
In addition, American Eagle said its profit margins improved due to the sale of more items at full price and less reliance on promotions.
American Eagle shares have risen by more than 270% in the last 12 months. It has a market capitalization of $ 5.5 billion, which is higher than its rival and owner Hollister Abercrombie & Fitch.
The American Eagle is set to present in a virtual fire discussion on Thursday at JP Morgan’s 7th annual retail round. It is expected to report financial results for the quarter ending May 1 to May 26, after the market closes.