US firm AEO's revenue surges 5% in FY23

08 Mar '24

3 min read

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American Eagle Outfitters reported a 5 per cent increase in FY23 net revenue, reaching $5.3 billion, with Aerie's revenue up by 11 per cent to $1.7 billion.
The company's adjusted gross profit rose 17 per cent yearly, leading to a 38.7 per cent gross margin rate.
The fourth quarter of FY23 saw a 12 per cent revenue increase to $1.7 billion.

US’ lifestyle and clothing retailer American Eagle Outfitters (AEO) has reported a 5 per cent increase in its total net revenue in fiscal 2023 (FY23), reaching $5.3 billion. Store revenue saw a 6 per cent rise, while total digital revenue also climbed by 6 per cent. Notably, Aerie, the company's lingerie and lifestyle retailer, reported an 11 per cent increase in revenue to $1.7 billion, with comparable sales up by 8 per cent. The American Eagle brand saw its revenue increase by 3 per cent to $3.4 billion, with comparable sales growth at 1 per cent.

The company's gross profit reached $2 billion, marking a significant 17 per cent increase on an adjusted basis, leading to an adjusted gross margin rate of 38.7 per cent, up by 370 basis points. Selling, general, and administrative expenses rose by 13 per cent to $1.4 billion.

The operating income under GAAP stood at $223 million, with the adjusted operating income hitting $375 million, and the adjusted operating margin expanding by 170 basis points to 7.1 per cent. The GAAP diluted earnings per share were $0.86, with the adjusted figure at $1.52, the company said in a press release.

For the fourth quarter of FY23, total net revenue saw a 12 per cent increase to $1.7 billion. Store revenue and total digital revenue rose by 10 per cent and 19 per cent respectively. Aerie continued its strong performance with a 16 per cent revenue increase to $538 million and a 13 per cent rise in comparable sales. American Eagle's revenue grew by 11 per cent to $1.1 billion, with a 6 per cent increase in comparable sales.

The quarter's GAAP gross profit was $615 million, with the adjusted gross profit reaching $626 million, a 23 per cent increase. This led to an adjusted gross margin rate of 37.3 per cent, up by 340 basis points. Selling, general, and administrative expenses surged by 22 per cent to $427 million. GAAP operating income was notably lower at $9 million, but the adjusted operating income stood at $141 million, expanding the adjusted operating margin by 200 basis points to 8.4 per cent. The GAAP diluted earnings per share were a mere $0.03, with the adjusted figure significantly higher at $0.61.

“I am proud of how the teams executed in the fourth quarter. As our profit improvement initiatives took hold, we delivered a material improvement in business, underscoring the power of our brands, operations and strategic focus. Customers responded well to our strong merchandise collections fuelling positive results across brands and channels,” said Jay Schottenstein, AEO’s executive chairman of the board and chief executive officer.

Fibre2Fashion News Desk (DP)

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