American Eagle Outfitters Inc reported higher-than-expected quarterly profit as demand for its Aerie line of lingerie helped the apparel retailer sell more products at full price, sending its shares up about 8 percent in extended trading. The company’s total net revenue rose about 14 percent to $1.04 billion but fell short of analysts’ average estimate of $1.07 billion. Despite the shortfall, American Eagle’s profit soared as the company cut costs and sold more merchandise at full price.
Sales at Aerie, which accounted for about 16 percent of total sales, rose 27 percent in the quarter. This was primarily due to strong demand for its bras and bralettes, as well as other intimate apparel.
American Eagle has been investing heavily in Aerie, opening new stores and expanding its digital operations to take on Victoria’s Secret, owned by L Brands Inc, and other established rivals in the lingerie segment. This strategy seems to be paying off, with Aerie contributing significantly to profit growth. Internationally, the brand has been able to gain a foothold in new markets thanks to a strong online presence.
However, slower-than-expected sales growth overall indicates that American Eagle still has some challenges to overcome in a saturated retail market. The company might need to either increase its marketing efforts or introduce more popular products to boost sales further.
American Eagle profit soars, but sales grow slower than expected
American Eagle Outfitters Inc reported higher-than-expected quarterly profit as demand for its Aerie line of lingerie helped the apparel retailer sell more products at full price, sending its shares up about 8 percent in extended trading. The company’s total net revenue rose about 14 percent to $1.04 billion but fell short of analysts’ average estimate of $1.07 billion. Despite the shortfall, American Eagle’s profit soared as the company cut costs and sold more merchandise at full price.
Sales at Aerie, which accounted for about 16 percent of total sales, rose 27 percent in the quarter. This was primarily due to strong demand for its bras and bralettes, as well as other intimate apparel.
American Eagle has been investing heavily in Aerie, opening new stores and expanding its digital operations to take on Victoria’s Secret, owned by L Brands Inc, and other established rivals in the lingerie segment. This strategy seems to be paying off, with Aerie contributing significantly to profit growth. Internationally, the brand has been able to gain a foothold in new markets thanks to a strong online presence.
However, slower-than-expected sales growth overall indicates that American Eagle still has some challenges to overcome in a saturated retail market. The company might need to either increase its marketing efforts or introduce more popular products to boost sales further.
