American Eagle Outfitters Inc (AEO) recently reported strong quarterly results for the first quarter and issued better-than-expected profit outlook for the current quarter.
The Pittsburgh, Pennsylvania-based company’s comparable sales also increased 9 percent in the just-ended quarter, as compared to a rise of 5.5 percent forecasted by analysts.
The results for the latest quarter were mainly driven by high demand for its Aerie line of lingerie. Comparable sales at Aerie jumped 38 percent, its biggest growth rate so far.
Speaking to investors on a conference call, CEO Jay Schottenstein attributed the strong results to the company’s jeans segment and the Aerie lingerie brand, which according to him is nothing short of spectacular, and has posted record growth rates following its body-positive marketing campaign.
Aerie brand of lingerie has become extremely famous over the recent years, particularly among young adults, and has been stealing market share from L Brands’ Victoria’s Secret.
Looking forward, American Eagle expects earnings in a range of 27 cents a share to 29 cents a share for the second quarter, as compared to consensus forecast of 25 cents a share.
Investment in e-commerce also helped the first-quarter results, according to Schottenstein. However, sales of seasonal items, such as shorts, took a hit from prolonged winter season.
Overall, the company reported net income of $39.9 million, or 22 cents a share in the three-month period ended May 5, well above $25.2 million, or 14 cents a share in the same period last year. On an adjusted basis, it earned 23 cents a share that surpassed consensus forecast of 22 cents.
Revenue for the quarter came in at $823.0 million, versus $761.8 million in the comparable quarter, one year ago. Analysts surveyed by FactSet had forecasted revenue of $811.0 million.