A consumer walks previous an American Eagle retailer within the mall.
Tim Boyle | Getty Images News | Getty Images
American Eagle Outfitters introduced Wednesday that its enterprise is pacing forward of its expectations for the fiscal first quarter, as stimulus checks and pent-up demand are fueling sales of denims, dressier tops and leggings.
Revenue is on monitor to top $1 billion, it stated. Analysts had been calling for American Eagle to earn 23 cents a share on sales of $904.1 million, in accordance to a ballot by Refinitiv. The firm did not present a recent earnings estimate.
Its shares jumped greater than 8% in after-hours buying and selling.
The tween-and-teen attire retailer stated demand for items at each its namesake American Eagle enterprise and at Aerie — which sells snug lingerie and loungewear for younger females — has been stronger than anticipated. That’s partly due to exterior elements, together with financial stimulus, renewed shopper optimism and bottled-up demand from prospects, it stated.
American Eagle’s denim enterprise has been notably sturdy, and buyers have additionally began shopping for extra tops, Chief Executive Jay Schottenstein stated throughout a cellphone interview with CNBC.
“There’s a lot of money out there,” he stated. “We think the environment for the next few years, it’s going to be a very good environment. … People will want to spend [and] people are going to want to go out and they’re going to want to get back to what was normal before.”
The traits provide one other signal that persons are ready to dress up again, after months of sitting round the home throughout the Covid pandemic in sweatpants or pajamas. Other retailers, similar to Levi’s, have not too long ago made comparable feedback concerning the popularity of denim, particularly amongst Gen Z customers.
Within Aerie, which has been rising a lot quicker than American Eagle, the momentum for leggings has not slowed down, stated Jennifer Foyle, its world model president. Retailers similar to Lululemon and Gap‘s Athleta have benefited from the leggings growth, too. These bottoms are clearly not only for yoga anymore, as an increasing number of ladies are sporting them mainly in all places.
Last summer time, within the thick of the well being disaster, Aerie carved out a brand new athleisure model referred to as Offline by Aerie. The model sells printed sports activities bras, jogger pants, graphic tees and different lively gear. Although it’s offered in Aerie outlets, American Eagle plans to open round 25 to 30 Offline by Aerie outlets this yr.
Even although the sector is crowded for athleisure, Foyle stated the dimensions of the market is large. “I think there’s room for some market share for us to take,” Foyle stated.
She added that the corporate is still on track to double its Aerie business to $2 billion in annual sales by 2023.
Additionally, American Eagle stated that its revenue margins have been bettering thanks to it promoting extra objects at full worth and relying much less on promotions.
American Eagle shares are up greater than 270% over the previous 12 months. It has a market cap of $5.5 billion, which is greater than its rival and Hollister proprietor Abercrombie & Fitch.
American Eagle is set to current Thursday in a digital hearth chat at J.P. Morgan’s seventh annual retail roundup. It’s anticipated to report monetary outcomes for the quarter ending May 1 on May 26, after the market closes.