American Eagle (AEO) Q2 2021 Results

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A customer walks past an American Eagle store in the mall.

Tim Boyle | Getty Images News | Getty Images

American eagle shares fell on Thursday after the company reported second-quarter revenue lower than analysts’ estimates, as its e-commerce business slowed from a year earlier.

Its shares fell around 8% at the start of the session following the news.

American Eagle’s earnings, however, exceeded expectations. The company, which also owns the Aerie lingerie brand, said cutting promotions and containing costs have helped fuel its profitability in the summer months.

“We’ve learned that you can still move a lot of goods without discount,” CEO Jay Schottenstein said in a telephone interview. “Our stores are very productive.

Here’s how American Eagle fared for the quarter ended July 31 compared to what Wall Street expected, using Refinitiv’s estimates:

  • Earnings per share: 60 cents adjusted vs. 55 cents expected
  • Turnover: $ 1.19 billion against $ 1.23 billion expected

American Eagle’s net income reached $ 121.5 million, or 58 cents per share, from a loss of $ 13.8 million, or 8 cents per share, a year earlier. Excluding one-off items, it gained 60 cents per share, ahead of the 55 cents analysts were looking for.

Revenue increased 35% to $ 1.19 billion, from $ 883.5 million a year ago. This came below analysts’ forecast for $ 1.23 billion.

Aerie’s revenue of $ 336 million increased 34% from the previous year. American Eagle’s revenue increased 35% to $ 846 million during the same period.

Digital sales are down 5% from 2020 levels. Last summer, many consumers chose to shop online rather than visit stores due to the Covid pandemic. Digital revenues jumped 66% on a two-year basis, American Eagle said.

The company did not offer any outlook for the next quarter or for the year. However, he said he is still on track to meet its previous three-year goals. By fiscal year 2023American Eagle expects revenue to reach $ 5.5 billion and Aerie to reach a mark of $ 2 billion.

BMO Capital Markets analyst Simeon Siegel said investors are focusing on future trends as companies face pent-up demand and supply chain backlogs.

American Eagle is in the midst of back to school, and manufacturing and shipping constraints have been a cloud hanging over the industry. Rival Abercrombie & Fitch reported at the end of last month quarterly sales below analysts’ expectationsbecause it faced transportation delays that left inventory on hold and some store shelves empty.

Schottenstein said American Eagle has been investing in its supply chain for years to be more agile and less dependent on factories overseas.

“We know there are issues, but we think what we have invested in will differentiate us in the second half to come,” he said.

As of Wednesday’s market close, shares of American Eagle are up nearly 50% year-to-date. The company’s market capitalization is $ 5.04 billion.

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