Growth In Aerie Helps American Eagle Beat Estimates
American Eagle Outfitters (NYSE:AEO) reported its second quarter results on August 17, 2016. The company beat consensus estimates for both EPS and revenue.
See our complete analysis for American Eagle Outfitters
American Eagle reported its eighth consecutive quarter of profit improvement, primarily due to a large demand for its Aerie line of lingerie, and personal care products. Comparable sales in the brand soared 24% in the quarter, a fifth consecutive quarter of 20% plus growth, much higher than the 3% overall comparable sales growth, and a 1% increase in its namesake brand.
The company managed to attain higher selling prices and transaction size across all of its brands, and this coupled with lower product costs helped to achieve an improvement in the merchandise margin and profitability.
While the sales momentum at the company has slowed down, with comps growth of 11% achieved in the second quarter of the previous year, due to increased competition for teen apparel and broader pressures for mall-based retailers, CEO Jay Schottenstein remains confident of continued growth at the company. This will be achieved through innovative styles, particularly in women’s jeans, and a higher focus on its omni-channel tools. The latter in particular has been exceptionally strong recently, with the online business delivering high growth, and the new Mobile-First website driving a 35% increase in mobile conversion. The company also remains on track to shut down 35 to 40 of its least profitable stores this year, and is tightly controlling inventory to avoid markdowns.
- American Eagle Outfitters Q2 Earnings: What Are We Watching?
- Rising 9% This Year, What Lies Ahead For American Eagle Stock Following Q1 Earnings?
- Will Q4 Results Help Extend The 14% Gain In American Eagle Stock Since Beginning of This Year?
- American Eagle Stock Up 32% Over Last Twelve Months, What’s Next?
- Can American Eagle Stock Return To Pre-Inflation Shock Highs?
- American Eagle Stock Has Upside Potential To Its Pre-Inflation Peak
Have more questions about American Eagle Outfitters? See the links below:
- How Will American Eagle Perform In The Second Quarter Of Its FY 2016?
- How Has The Merchandise Mix Of American Eagle Changed Over The Last Three Years?
- Why Will American Eagle’s Aerie Brand Be A Key Growth Driver In The Future?
- Why Are We Bullish On American Eagle?
- What Can Move American Eagle’s Stock Down In The Next Couple Of Years?
- What Is American Eagle Outfitters’ Revenue & Net Income Breakdown In Terms Of Different Operating Segments?
- How Has American Eagle Outfitters’ Revenue Composition Changed In The Last Five Years?
- What’s American Eagle Outfitters’ Fundamental Value Based On Expected 2016 Results?
- Where Will American Eagle Outfitters’ Revenues Come From In The Next Five Years?
Notes:
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap |More Trefis Research