American Eagle Outfitters saw its net revenue increase $63 million year over year, signifying a 6% increase over 2018. The $1.07 billion the apparel retailer collect in the third quarter signifies the best Q3 in the company’s history.
“Strong top line performance across brands and channels led to our 19th consecutive quarter of comparable sales growth and record third quarter revenue,” said Jay Schottenstein, chairman and chief executive officer, AEO. “In a tough environment, we reported EPS in line with our guidance. We continued to deliver on our strategic pillars, with Aerie and American Eagle Jeans demonstrating strong sales and profit growth.”
Key Third Quarter Results:
- Total net revenue increased $63 million, or 6% to a record $1.07 billion compared to $1.00 billion last year.
- Consolidated comparable sales increased 5%, following an 8% comparable sales increase last year.
- American Eagle’s comparable sales increased 2%, following a 5% increase last year. Aerie’s comparable sales increased 20%, building on a 32% increase last year and marking the 20th consecutive quarter of double-digit sales growth.
- Gross profit rose 2% to $407 million from $399 million. The gross margin rate of 38.2% compared to 39.8% last year. The decline primarily reflected increased markdowns. “Softer demand in certain AE apparel categories led to higher markdowns and has persisted into the fourth quarter,” said Schottenstein. “The team has been working hard to quickly course correct, and our focus is squarely on continuing to capitalize on the strength of our brands, accelerating the growth of Aerie, and creating shareholder value.”
- Capital expenditures totaled $58 million, primarily related to store remodeling projects and new openings, with the balance to support the digital business and corporate IT. On a year-to-date basis, capital expenditures have totaled $150 million, with the annual capital expenditures expected to be in the range of $200 to $215 million.
- The company opened six American Eagle stores, ending with 945 American Eagle stores, including 170 Aerie side-by-side locations. Additionally, the company opened 12 Aerie standalone stores and closed one, ending with 142 Aerie stand-alone stores. Internationally, the company ended the quarter with 241 licensed stores compared to 223 last year.