Record high revenues and robust comparable store sales pushed up earnings of apparel retailer American Eagle Outfitters (AEO) in the first quarter. The results particularly benefitted from the strong performance of the Aerie lingerie brand, and topped analysts’ forecast.
First-quarter profit climbed 57% to $39.9 million or $0.22 per share from the same period last year. On an adjusted basis, earnings climbed 44% to $0.23 per share and surpassed market views.
Net revenues advanced 8% annually to $822.96 million, driving the bottom line growth. Benefitting from the company’s strong brand equity, comparable store sales advanced 9% during the quarter, supported by a 38% growth in the sales of the Aerie underwear brand. Comparable sales of the American Eagle brand increased 4%.
“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,” said American Eagle CEO Jay Schottenstein.
Comparable store sales advanced 9% during the quarter, benefitting from the strong brand equity
In recent years, the popularity of Aerie brand grew significantly resulting in strong market share expansion, giving competitors a run for their money. The other contributors to the impressive first quarter results were the aggressive expansion of the company’s e-commerce platform and the growing demand for its jeans brand.
In the first quarter, American Eagle repurchased 2.3 million of its shares for $45 million and paid dividends of $24 million. During the period, the company opened 4 new stores and closed 2, bringing the total store count to 935.
The Pittsburgh-headquartered company anticipates strong year-on-year growth in its second quarter earnings and is expected to come in the range of $0.27 to $0.29 per share, reflecting an anticipated mid-single digits increase in comparable store sales.
Though American Eagle shares made some notable gains soon after the earnings announcement Thursday, they retreated later paring some of the gains.
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