Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

American Eagle sees sales rising on pent-up demand for apparel

Published 05/26/2021, 04:18 PM
Updated 05/26/2021, 06:25 PM
© Reuters. FILE PHOTO: Clothing is seen for sale in an American Eagle Outfitters retail store in Manhattan, New York, U.S., May 13, 2016. REUTERS/Mike Segar

© Reuters. FILE PHOTO: Clothing is seen for sale in an American Eagle Outfitters retail store in Manhattan, New York, U.S., May 13, 2016. REUTERS/Mike Segar

(Reuters) -American Eagle Outfitters Inc said on Wednesday sales of its jeans and tops was accelerating, after the apparel retailer reported a first-quarter results beat on increased spending, driven by stimulus checks.

Stimulus-led spending confidence among customers allowed the apparel retailer to cut promotions and sell at full prices, pushing the company's gross margin to 42.2% from 36.7% in 2019.

"High demand is driving greater pricing power," Chief Creative Officer Jennifer Foyle told analysts on a post-earnings call.

The company also said it was optimistic about the back-to-school season denim trends as it revamps fashion styles to cater to the looser fits that millennials and teens are sporting these days.

Pent-up demand for loose-fit jeans, tops and leggings coupled with the $1,400 stimulus checks that Americans received in March lifted the company's sales for the first time since the onset of the pandemic.

The company also reported a 57% surge in digital revenue in the first quarter compared to 2019 levels, fueled by a redesigned app and enhanced curbside and in-store pickup features.

Brand Aerie recorded an 89% rise in revenue compared to 2019 levels, while revenue at the American Eagle (NYSE:AEO) label rose marginally.

Excluding one-time items, the company earned a profit of 48 cents per share, above analysts' average estimate of a profit of 46 cents per share, according to IBES data from Refinitiv.

© Reuters. FILE PHOTO: Clothing is seen for sale in an American Eagle Outfitters retail store in Manhattan, New York, U.S., May 13, 2016. REUTERS/Mike Segar

Total net revenue surged nearly 90% to $1.03 billion compared with expectations of $1.02 billion.

Shares of the company which have gained about 75% this year, were up marginally in after market trade, after closing up on Wednesday, spurred by better-than-expected results from rival Abercrombie & Fitch.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.