American Eagle Outfitters has reported a 5% increase in total net revenue for the third quarter of fiscal 2023. The company’s net revenue reached $1.3 billion, fueled by a 3% rise in store revenue and a significant 10% growth in digital revenue. Meanwhile, Aerie, a subsidiary of American Eagle Outfitters, saw a notable 12% increase in revenue, totaling $393 million, along with a 12% rise in comparable sales. The main American Eagle brand also experienced a positive 2% uptick in revenue, reaching $857 million, with comparable sales following suit.

The company’s gross profit saw a substantial 13% improvement, amounting to $544 million. This boost was attributed to strong demand, reduced product and freight costs, and efficiency gains. As a result, American Eagle achieved a gross margin rate of 41.8%, marking a significant increase of 310 basis points. Although operating expenses rose by 16% to $362 million, in line with the company’s guidance and strong performance, operating income stood at $125 million, reflecting a respectable 9.6% margin. Additionally, diluted earnings per share increased by 17% to $0.49.

American Eagle Outfitters demonstrated a disciplined approach to inventory management, reporting a 4% decline to $769 million. The company’s capital expenditures for the third quarter amounted to $43 million, contributing to a year-to-date total of $135 million.

Looking ahead, American Eagle Outfitters is focusing on optimizing its cost structure with the aim of boosting gross margins and operational efficiency by 2024. For fiscal 2023, the company expects mid-single digit revenue growth, with operating income projected to reach the higher end of the $340 to $350 million range. The fourth quarter outlook is also positive, with anticipated revenue growth in the high-single digits and projected operating income between $105 to $115 million.

Jay Schottenstein, AEO’s executive chairman of the board of directors and chief executive officer, expressed satisfaction with the company’s third quarter results. He emphasized the strength of their brands and highlighted the progress made in growth and profit improvement initiatives. Schottenstein underscored the importance of their strategic priorities, including a customer-first approach and a commitment to operational excellence, as key drivers of their success.

Useful Links:
1. American Eagle Outfitters Official Website
2. Aerie Official Website