The rewards of success. American Eagle has turned its fortunes around and returning interim CEO Jay Schottenstein is now permanent. The intimates Aerie brand is going from strength to strength and the shares are on an upward trajectory.
Holiday season sales at the youth retailer are off to a “solid start” and should rise in the mid-single digits for the season. After zero growth a year ago, that must bring a smile to Schottenstein’s face.
The company’s latest quarterly profits also proved impressive. Net profits soared above expectations to $74.1m/38 cents per share from $9m/5 cents a year ago, even though the healthy revenue rise (up 7.6% to $919.1m) didn’t quite reach what analysts had been looking for.
But with comp sales up 9% (boosted by the Aerie effect), the news could be said to be virtually all good.
So how did they do it? Well, as we know, the Aerie sub-brand is strong. The company also controlled its inventory better this year and improved its margins by scaling back on logos, making its offer more trend-led with strong pieces for festival season, and a compelling denim line-up beyond the standard jeans and jackets.
The company’s confidence is underscored by the latest ad campaign for Aerie. It features Emma Roberts in a series of un-retouched pictures. In fashion, anyone who lets their ad visuals through without retouching must feel pretty good about their offer. Yes, it helps when you’ve got a gorgeous young celeb fronting your brand but even so, how many other labels would do that?