American Eagle on track with cautious targets
05/12/2024
Net revenues for the period decreased 1% at $1.3 billion. This, the group pointed out, is due to the retail calendar, Q3 of 2023 having one more week than the same period in 2024. Gross profit was down as well, by 3% to $527 million, a reflection of increased markdowns, the group said in a statement.
Total inventory at the end of the quarter was up 5% to $804 million, which AEO considers “healthy” and positioning it well for the holiday season.
“Led by a strong back-to-school season, we achieved comparable sales growth across brands and channels, and delivered adjusted operating income at the high end of our guidance range,” commented Jay Schottenstein, head of the board and CEO.
Moves taken to reduce costs have led to restructuring charges (of $18 million), and the streamlining of various operations. Thus the group’s retail operations in Hong Kong, which it previously owned, have now been transferred to a licensee.
AEO said it expected comparable sales to increase 1% for the fourth quarter, and 3% for the full year, with actual total revenues up only 1% due to the extra selling week in 2023.
Image: American Eagle instagram account
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