US-based lifestyle and clothing company American Eagle Outfitters (AEO) has reported total net revenue of $1.3 billion for the second quarter of fiscal 2024 (Q2 FY24), an 8 per cent increase compared to the same period last year. This growth includes an approximately $55 million positive impact from the retail calendar shift.

AEO's store revenue rose by 7 per cent, while digital revenue saw a substantial 12 per cent increase, highlighting the company’s effective omnichannel strategy. The Aerie brand continued its upward trajectory, with revenue reaching $416 million, a 9 per cent increase, and comparable sales growing by 4 per cent. The American Eagle brand also performed well, with revenue of $828 million, marking an 8 per cent increase and a 5 per cent rise in comparable sales, the company said in a press release.

The company’s gross profit for the quarter rose by 10 per cent to $499 million, reflecting a gross margin rate of 38.6 per cent, an improvement of 90 basis points. Selling, general, and administrative expenses increased by 4 per cent to $345 million, but the expense was leveraged by 90 basis points, indicating improved cost efficiency.

Operating income surged by 55 per cent to $101 million, with the operating margin expanding by 240 basis points to 7.8 per cent. This significant increase in operating income underscores AEO’s strong profitability in the second quarter. Diluted earnings per share were reported at $0.39, based on an average of 198 million diluted shares outstanding. Total ending inventory for the quarter increased by 4 per cent to $664 million.

“Our Powering Profitable Growth strategy is off to a great start, locking in a strong first half and setting us on track to achieve the high end of our prior operating profit outlook for 2024. The second quarter marked our sixth consecutive quarter of record revenue, and we successfully leveraged our cost base—advancing a number of strategic priorities to fuel growth across brands and channels and drive operating efficiencies,” said Jay Schottenstein, AEO’s executive chairman of the board and chief executive officer.

Fibre2Fashion News Desk (DP)