A shopper walks past an American Eagle store in the mall.
Tim Boyle | Getty Images News | Getty Images
American Eagle Outfitters announced Wednesday that its business is ahead of expectations for the first fiscal quarter, as stimulus controls and accumulated demand are fueling sales of jeans, sleeker tops and leggings.
Revenue is on track to surpass $ 1 billion, he said. According to a Refinitiv survey, analysts had asked American Eagle to earn 23 cents per share on sales of $ 904.1 million. The company did not provide a new profit estimate.
Its shares jumped more than 8% in out-of-hours trading.
The teenage clothing retailer said demand for products in both its eponymous American business Eagle and Aerie, which sells comfortable underwear and loungewear for young women, has been stronger than expected. . This is due in part to external factors such as economic stimulus, renewed consumer optimism and bottled customer demand, he said.
American Eagle’s denim business has been particularly strong and buyers have also started buying more tops, CEO Jay Schottenstein said during a phone interview with CNBC.
“There’s a lot of money,” 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 leave and want to return to what was once normal. “
Trends offer another sign that people are ready to dress up again, after months sitting at home during the Covid pandemic in swimsuits or pajamas. Other retailers, such as Levi’s, have recently made similar comments about the popularity of denim, especially among Generation Z customers.
Within Aerie, which has grown much faster than the American Eagle, the boost in leggings has not slowed, said Jennifer Foyle, its global brand president. Retailers like Lululemon and Gap Athleta have also benefited from the leggings boom. These funds are no longer just for yoga, as more and more women are taking them basically everywhere.
Last summer, in the midst of a health crisis, Aerie sculpted a new leisure brand called Offline by Aerie. The brand sells printed sports bras, joggers, graphic t-shirts and other active items. Although sold in Aerie stores, American Eagle plans to open between 25 and 30 Offline for Aerie stores this year.
Although the field is full of people to play at leisure, Foyle said the size of the market is huge. “I think there’s room for market share,” Foyle said.
He 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 have improved thanks to the sale of more items at full price and less reliance on promotions.
Shares of American Eagle have risen more than 270% in the last twelve months. It has a market capitalization of $ 5.5 billion, larger than its rival and owner of Hollister Abercrombie & Fitch.
American Eagle will present a virtual talk at the campfire on Thursday at JP Morgan’s seventh annual retail meeting. It is expected to report financial results for the quarter ending May 1 to May 26, following the market close.