By
Fibre2Fashion
Published
Nov 22, 2023
For the third quarter of fiscal 2023, ended October 28, American Eagle Outfitters has reported a total net revenue increase of 5% to $1.3 billion. Store revenue saw a 3% rise, while digital revenue grew by 10%. Notably, Aerie’s revenue climbed 12% to $393 million, with comparable sales also up by 12%. American Eagle’s revenue increased by 2% to $857 million with a similar rise in comparable sales.
Gross profit reached $544 million, a 13% improvement, benefitting from strong demand, reduced product and freight costs, and efficiency gains from profit improvement measures. These factors contributed to a gross margin rate of 41.8%, up 310 basis points.
Operating expenses rose 16% to $362 million, aligned with the company’s guidance and strong performance. A significant portion of this increase was attributed to incentive compensations and higher store payroll due to increased wages. Operating income stood at $125 million, reflecting a 9.6% margin, and diluted earnings per share increased by 17% to $0.49, the company said in a press release.
In terms of inventory, the company reported a 4% decline to $769 million, maintaining a disciplined approach. Capital expenditures for the third quarter were $43 million, contributing to a year-to-date total of $135 million.
Looking ahead, American Eagle Outfitters remains committed to cost structure optimisation, expecting these initiatives to boost gross margins and operational efficiency in 2024. For Fiscal 2023, the company anticipates revenue growth in the mid-single digits, with operating income expected to reach the higher end of the $340 to $350 million range. The fourth quarter outlook is positive, with anticipated revenue growth in the high-single digits and operating income between $105 to $115 million, the release added.
“I am pleased with our third quarter results which demonstrated the strength of our brands and reflected continued progress on our growth and profit improvement initiatives. Our strategic priorities, underpinned by our customer-first focus and commitment to operational excellence, are propelling us forward,” commented Jay Schottenstein, AEO’s executive chairman of the board of directors and chief executive officer.
