American Eagle Outfitters Positive Reports Driven by Aerie

One year ago, American Eagle Outfitters sales were flat – and it exited the Singapore market.

Now the US apparel brand has reported a 14 per cent year-on-year increase in sales in its second quarter to US$965 million, with same-store sales up 9 per cent. New income rose 6.2 per cent to $60.3 million.

Alas, that wasn’t enough to satisfy shareholders, the company’s stock price falling 8 per cent after the company reduced its projections for the third quarter.

Aerie, the company’s spinoff lingerie brand targeting young women aged 15 to 22, delivered a 27 per cent increase in sales, the parent brand a more humble 7 per cent.

The company does not separate out e-commerce sales, but it did say in an earnings release that sales growth online was continuing at a “double-digit pace”.

Eagle CEO Jay Schottenstein said American Eagle Outfitters sales growth was boosted by the revamp of flagship stores and those of its Aerie brand (which was launched in 2006). Higher customer conversion rates, higher average transaction sales and increased foot traffic, including at mall stores, showed the initiative was working.

Aerie’s growth has inspired management to open between 50 and 80 stores in the US and selected overseas markets now planned over the next two years. It is also eyeing offshore opportunities for its namesake brand.