American Eagle Outfitters reported a 6% increase in total net revenue to $1.1 billion for the first quarter of fiscal 2024, with store revenue up 4% and digital revenue up 12%. Aerie, a flagship brand, saw its revenue grow by 4% to $373 million, with comparable sales up 6%. American Eagle’s revenue also increased by 8% to $725 million, with comparable sales growing by 7%. Gross profit for the quarter rose by 12% to $464 million, with a gross margin rate of 40.6%. The company attributed this improvement to effective inventory management, a more profitable clearance strategy, and reduced product and transportation costs.
The company’s operating income in the quarter rose to $78 million, a significant increase from last year’s operating income of $23 million. Adjusted operating income was $44 million, a 76% rise. The operating margin expanded by 270 basis points to 6.8%. Selling, general, and administrative expenses increased by 7% to $333 million, in line with sales growth. Diluted earnings per share were $0.34, with 201 million diluted shares outstanding.
American Eagle Outfitters saw a 9% increase in total ending inventory to $681 million, driven by a 10% rise in units due to a successful clearance strategy. The company gave back $60 million to shareholders through share repurchases and a quarterly cash dividend, totaling $25 million. Capital expenditures for the first quarter were $36 million. For FY24, capital expenditures are expected to be $200 to $250 million. Operating income for FY24 is projected to be between $445 to $465 million, with revenue growth of 2 to 4 percent. Despite a one-week retail calendar shift, revenue is expected to rise.
American Eagle Outfitters reported strong first-quarter results, showcasing the success of their iconic brand portfolio and progress on their growth strategy. Record revenue was achieved, highlighting the leading market positions of American Eagle and Aerie in casual apparel. The company’s focus on merchandise collections, customer experiences, and operational efficiencies led to significant profit expansion, exceeding expectations. AEO’s executive chairman and CEO, Jay Schottenstein, expressed satisfaction with these results.
