American Eagle Outfitters (AEO) reported its 13th consecutive quarter of positive comparable sales Thursday. The sales lead to an increased operating margin and earnings growth, which exceeded the company’s expectations.
In a nutshell: The American Eagle brand achieved its 19th straight quarter of record jeans sales. “We remain highly focused on developing the very best new fabrics, fits and styles to continue to be the leader in jeans. We also are looking beyond bottoms to ensure we have the best merchandise offering across categories. Our upcoming product lines are terrific and we see further run rate of fuel the American Eagle brand,” AEO CEO Jay Schottenstein said.
All regions in the U.S. and the brand’s global markets, including Canada, Mexico and Asia were positive in the first quarter. AEO’s digital business increased 20 percent and stands at 29 percent of the company’s overall business.
Sales: Total net revenue for the first quarter of 2018 increased 8 percent to $823 million compared to $762 million last year. Comparable sales increased 9 percent, driven by strategic initiatives and ability to gain market share through and compelling merchandise, Schottenstein said. American Eagle’s comparable sales grew 4 percent, while AEO’s intimates label Aerie increased 38 percent, buoyed by a successful body positive campaign.
Earnings: Net income totaled $39.9 million, or 22 cents per share, up from $25.2 million, or 14 cents per share, for the same period last year. Adjusted EPS increased 44 percent was 23 cents.
CEO’s Take: “American Eagle leveraged strong brand equity and its dominant jeans business to deliver comparable sales gains across brick and mortar stores and e-commerce,” Schottenstein said. “We are highly focused on our strategic plan, centered on expanding American Eagle, accelerating Aerie’s growth, elevating the customer experience and delivering strong financial returns.”