Shares of AEO Inc. fell 10% after the quarter, driven by investor disappointment with deceleration in American Eagle’s women’s bottoms segment, ongoing margin pressures, and a cautious outlook despite strong growth at Aerie.
- Consolidated revenue rose 10% to $1.2 billion, supported primarily by Aerie’s 34% revenue growth to $481 million.
- Aerie surpassed $2 billion on a trailing 12-month basis, fueled by a 45% comp in Aerie apparel, led by strong performances in intimates and sleepwear categories.
- American Eagle delivered mixed results with strength in men’s apparel but notable softness in women’s bottoms, including denim, compounded by seasonal pressures from a colder spring.
- Management highlighted the need to improve conversion, refine assortments, and boost productivity in women’s categories to address weaker trends.
- The company is actively recalibrating marketing investments and optimizing operations with the opening of a new West Coast distribution center in Phoenix, but remains cautious amid ongoing macroeconomic uncertainty.
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