At AEO, we believe we have a responsibility to do better, to be better and to build a better world. We are committed to showing the world that there’s REAL power in the optimism of youth by supporting causes that matter to all of us and the world.

Our grant recipient spotlight series features the amazing work of the nonprofits supported by the AEO Foundation.

Imagine having the chance to travel from one coast to the other – adventuring across some of America’s most breathtaking roads and sites. This has become a reality for many at-risk youth throughout the Pittsburgh region thanks to the non-profit Pittsburgh Youth Leadership (PYL) – an organization that seeks to promote positive leadership skills, develop outdoor adventurous spirit and provide opportunity to accomplish ambitious goals through all-expenses paid biking adventures.

Since the organization’s inception in 2006, more than 170 kids have cycled nearly 418,000 miles (almost a trip to the moon and back!) on cross-county trips, taking them out of their local communities – many for the first time – and offering them the chance to see some of the amazing things that the world has to offer.

AEO has been a supporter of PYL for more than a decade, most recently awarding the organization a $50,000 grant during the 2021 AEO Foundation Golf Tournament.

The gear, lodging, meals and everything in between come at no cost to the kids, and “It’s all thanks to companies like AEO,” said PYL President, Mark Rubenstein. “We would not be able to do what we do without our supporters.”

Mark adds, “You could have a kid who has never left Pittsburgh and they might be on the fence between making good decisions and bad decisions, and because we get funding from our sponsors, they now have the opportunity to take a cycling trip to somewhere like Utah or Arizona. They will be around other kids and staff who have made similar trips, and they will ultimately be positive influences in their life. The kids get to see that there is a whole different world outside of what they know and – maybe for the first time – realize that it’s something they want to be a part of.”

If there were any curiosity about the impact PYL has had on local youth, you’d need to look no further than their staff – as they employ many former program participants. Cody Wagner, full-time Program Director at PYL, went on multiple cycling trips with the nonprofit throughout all four years of high school. The first in his family to graduate college, Cody credits much of the success and the opportunities he’s had to his time spent with PYL.

Cody shares, “For me to be a part of this is incredible. I have kids and a city depending on me, and the gratification I get from being able to uplift and help build a community – while utilizing all of the leadership skills I’ve learned from PYL – is motivating and exciting. When I see all of the opportunities that the kids have, such as learning healthy eating habits and the value of mentorship, it feels good to know that I’m doing good in the world. The kids depend on us, and companies like AEO depend on us to make an impact too.”

At AEO our purpose is to show the world that there’s REAL power in the optimism of youth, and we’re proud to team up with organizations like Pittsburgh Youth Leadership and inspire today’s youth by making a difference in their lives and in their communities.

To learn more about Pittsburgh Youth Leadership, click here. 

By Kellie Ell | Link to article

The retailer expects to meet its operating-income target two years ahead of schedule.

The holidays are looking bright at American Eagle Outfitters Inc.

While other companies throughout the retail industry are struggling to fill shelves and hire workers, American Eagle Outfitters — parent company to the American Eagle, Aerie, Offline by Aerie, Todd Snyder, AE77 and Unsubscribed brands — continues to leverage its foothold in the market and gain share, thanks to a formula that includes new products, key leadership changes and the acquisition of two different last-mile logistics firms in the most recent quarter.

“We’re light years ahead of the competition,” Jay Schottenstein, executive chairman and chief executive officer of American Eagle Outfitters, told WWD in an exclusive interview. “It was our strongest third quarter ever. We built the right systems and we brought the right people aboard

with us. And people like our product. They see we’re making better quality with great value on it and great fit and great selection. Everything is selling across the board pretty well. Our denim is driving a lot of business. Our leggings are strong; our tops are getting stronger. So we’re very excited about it.”

The CEO added that the acquisition of two last-mile logistics firms in the last quarter — AirTerra for an undisclosed amount in August and Quiet Logistics for $350 million in cash earlier this month — means the company has “the ability to get merchandise fast to our stores and keep it in stock at all times. That’s a big plus. And that’s why we have success there. And we still see it as a great growth opportunity.”

Recent leadership changes — including Jennifer Foyle’s recent promotion to president, executive creative director of both the American Eagle and Aerie, an elevated title she was given earlier this year to better reflect her additional responsibilities at AEO, as well as the new heads of design, merchandise and marketing at the AE brand brought on by Foyle — have also helped fuel the company’s growth, Schottenstein explained. There’s also the addition of key logistics players, such as AirTerra founder Brent Beabout, who is the former Nordstrom chief supply chain officer.

“At the end of the day, we think at all levels of our company, we have great talents — whether it be in the design side, the merchandise side, the logistics side or operations side, our art team side, the culture side of the company, the human resource side — we believe we have a great team, a strong team and we believe that the culture of the company is great,” Schottenstein said. “I think the morale of the company is good, as good as it’s ever been. And the great thing, as you know in this season coming up, there will be a lot of shortages out there of workers in stores. But we’re staffed.”

The company exceeded analysts’ expectations in the most recent quarter ending Oct. 30, growing revenues by 24 percent to $1.27 billion, up from $1.03 billion a year earlier. By brand, revenues at American Eagle rose 21 percent to about $941 million, up from nearly $776 million the same time last year. At Aerie, revenues increased 28 percent to $315 million, up from nearly $247 million a year ago.

American Eagle Outfitters logged $152 million in profits as a result, up from $58 million a year earlier, and said the firm will exceed $600 million in operating income by the end of the year — far before its original 2023 target of $550 million, given during January’s Investor Day.

“I think [the momentum] is going to stay strong,” Schottenstein said. “My gut is that it’s going to be strong. We’re very optimistic that this could be a strong period of retail. Hopefully, [with the vaccine] life can go back to normal where you can go into stores, go inside again and feel normal again. And from the standpoint of going out, more people feel more comfortable. And they’re excited to get out. Everybody is happy to see everybody. And they know that going to a store is a safe environment and it’s safe to shop.”

The company did acknowledge higher freight costs and other supply chain issues currently plaguing the industry.

“But I think our team has done a great job preparing for these challenges,” Schottenstein said. “This time of season, we want to get the goods to the customer. And in the stores right now, we have a great selection of merchandise: It’s all current goods; it’s all timely goods. We’re very fortunate — despite all the headwinds — we’ve been able to maneuver very well against these headwinds and get our merchandise, despite countries closing down. It wasn’t like a factory closed down. A whole country slowed down. Despite all the headwinds, we’ve been able to be very functional and get our merchandise in the stores; we’re able to serve the customers. We’ve served the customers on a very timely basis.”

“And Quiet [Logistics] has a big ability to grow,” he continued. “We have several warehouses in operation. But in the next year or so, there’s going to be a lot more warehouses that will be added on to the Quiet system, and in a lot of other cities, too. And it doesn’t stop. And at the same time, we have our Offline business and our Aerie business, which still have tremendous growth potential. And our American Eagle business is getting stronger and stronger. Everyone is pleased with the performance at American Eagle stores. It’s just getting stronger and stronger.”

The CEO added that the company will continue to roll out additional technologies in the near-term, such as live retailing on its app.

American Eagle Outfitters ended the quarter with nearly $741 million in cash and cash equivalents, $336 million in long-term debt and more than 1,100 brick-and-mortar locations.

Shares of American Eagle Outfitters, which closed up 1.97 percent to $27.46 apiece Monday, are up 51 percent, year-over-year.

American Eagle Outfitters Reports Record Third Quarter Results with Revenue Rising 24% and Operating Income More Than Doubling. This Reflects Strong Customer Demand and Excellent Execution on the “Real Power. Real Growth.” Value Creation Plan

November 23, 2021

Third Quarter 2021 Highlights Compared to Third Quarter 2020

• Record revenue of $1.27 billion increased 24%
• Operating income of $210 million more than doubled, reaching a new third quarter high
• Strong demand, higher full-priced sales, reduced promotions and controlled costs fueled gross margin expansion to 44.3% and operating margin to 16.5%
• American Eagle net revenue rose 21% and operating income was up 68%
• Aerie net revenue increased 28% and operating income rose 46%

PITTSBURGH — (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the third quarter ended October 30, 2021.

“As strong demand for our merchandise and brands continues, I’m very pleased to report another quarter of record revenue and profit. The work on our Real Power. Real Growth. value creation plan is driving meaningful improvements to our profitability through real estate and inventory optimization; omni-channel and customer focus; and our supply chain initiatives. The power of our brands, operations and talent are clearly evident and we are intensely focused on ensuring these strengths continue to take AEO to new heights,” said Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

“This quarter, we took an important next step in our supply chain transformation with the planned acquisition of Quiet Logistics to ensure ongoing efficiencies and procure a state-of-the-art logistics platform with meaningful growth potential. With our customer-first focus, the teams did a great job bringing in goods to meet strong demand this holiday season. I am extremely proud of the team’s ability to execute with precision at a time of volatility and am confident that we will exceed $600 million of operating income for the year, well above the $550 million 2023 target,” Jay continued.

Third Quarter 2021 Results

• Total net revenue increased $242 million, or 24% to $1.27 billion, compared to $1.03 billion in the third quarter of 2020.
• Aerie revenue of $315 million rose 28% from third quarter 2020 on top of 34% growth last year. American Eagle revenue of $941 million rose 21% versus third quarter 2020 following an 11% decline last year.

• Consolidated store revenue increased 29%. Total digital revenue increased 10%. Compared to the pre- pandemic third quarter 2019 base, store revenue increased 9% and digital revenue increased 42%.
• Gross profit of $565 million rose 36% from $415 million in the third quarter of 2020.
• Gross margin of 44.3% expanded 410 basis points from 40.2% in the third quarter of 2020 and reflected the highest rate since 2007. The increase from 2020 largely reflected leverage on rent and delivery, as well as strong product demand, higher full-priced sales, lower promotions and inventory optimization initiatives, partially offset by higher freight costs.
• Selling, general and administrative expense leveraged 190 basis points as a rate to sales versus third quarter 2020 due to strong revenue growth and lower incentive compensation.
• Depreciation and amortization expense of $41 million compared to $39 million in the third quarter of 2020 and leveraged 60 basis points as a rate to sales due to strong revenue growth.
• Operating income was $210 million. This compared to operating income of $96 million in third quarter 2020 or $103 million on an adjusted basis. Aerie’s operating income of $52 million increased 46% from $36 million in the third quarter of 2020 and American Eagle’s operating income of $261 million increased 68% from $155 million in the third quarter of 2020.
• Operating margin of 16.5% reflected the highest rate since 2007. Aerie’s operating margin of 16.5% expanded 200 bps from 2020 and American Eagle’s operating margin of 27.8% expanded 780 bps from 2020.
• Average diluted shares outstanding were 205 million compared to 184 million in the third quarter of 2020. The increase primarily reflected 34 million shares of unrealized dilution associated with the company’s convertible notes.
• EPS of $0.74. Adjusted EPS of $0.76 this quarter excludes $0.02 of non-cash interest expense on the company’s convertible notes.

Inventory

Total consolidated ending inventory at cost increased 32% to $740 million compared to a 13% decline last year. The increase was partially driven by higher air freight due to global supply chain disruptions.

Capital Expenditures

In the third quarter of 2021, capital expenditures totaled $58 million, and year to date totaled $144 million. For fiscal 2021, the company now expects capital expenditures to be at the low end of our prior guidance range of $250 to $275 million.

Cash Flow and Balance Sheet

The company ended the period with total cash of $741 million. This compares to $692 million in third quarter 2020.

Shareholder Returns

The company’s third quarter cash dividend of $30 million was paid during the quarter.

Conference Call and Supplemental Financial Information

Today, management will host a conference call and real time webcast at 9:30 a.m. Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 or go to www.aeo-inc.com to access the webcast and audio replay. Additionally, a financial results presentation is posted on the company’s website.

Non-GAAP Measures

This press release includes information on non-GAAP financial measures (“non-GAAP” or “adjusted”), including consolidated adjusted operating income and earnings per share, excluding non-GAAP items. These financial measures are not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“GAAP”) and are not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Management believes that this non-GAAP information is useful for an alternate presentation of the company’s performance, when reviewed in conjunction with the company’s GAAP consolidated financial statements, as it helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude in such non-GAAP measures. Accordingly, we believe that adjusted operating income provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making.

These amounts are not determined in accordance with GAAP and therefore, should not be used exclusively in evaluating the company’s business and operations. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

* * * *

About American Eagle Outfitters, Inc.

American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle® and Aerie® brands. Our purpose is to show the world that there’s REAL power in the optimism of youth. The company operates stores in the United States, Canada, Mexico, and Hong Kong, and ships to 81 countries worldwide through its websites. American Eagle and Aerie merchandise also is available at more than 200 international locations operated by licensees in 33 countries. For more information, please visit www.aeo-inc.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This release and related statements by management contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which represent our expectations or beliefs concerning future events, including fourth quarter and annual fiscal 2021 results. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on many important factors, some of which may be beyond the company’s control. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “potential,” and similar expressions may identify forward-looking statements. Except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise and even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. The following factors, in addition to the risks disclosed in Item 1A., Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended January 30, 2021 and in any other filings that we may make with the Securities and Exchange Commission in some cases have affected, and in the future could affect, the company’s financial performance and could cause actual results for fiscal 2021 and beyond to differ materially from those expressed or implied in any of the forward-looking statements included in this release or otherwise made by management: the negative impacts of the COVID-19 pandemic and related operational disruptions; the risk that the company’s operating, financial and capital plans may not be achieved; our inability to

anticipate customer demand and changing fashion trends and to manage our inventory commensurately; seasonality of our business; our inability to achieve planned store financial performance; our inability to react to raw material cost, labor and energy cost increases; our inability to gain market share in the face of declining shopping center traffic; our inability to respond to changes in e-commerce and leverage omni-channel demands; our inability to expand internationally; difficulty with our international merchandise sourcing strategies; challenges with information technology systems, including safeguarding against security breaches; and global economic, public health, social, political and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, which could have a material adverse effect on our business, results of operations and liquidity.

CONTACT:

Olivia Messina

412-432-3300

LineMedia@ae.com

By Angela Velasquez | Link to article

Reclaimed materials, sustainable packaging and local design are some of the elements in AE77’s second store that underscore the new brand’s focus on sustainability.

Located 20 miles northwest of Philadelphia at the King of Prussia mall, the 2,600-square-foot unit opened Wednesday offering the AEO, Inc.-owned brand’s full range of men’s and women’s denim, apparel and accessories.

The company introduced AE77 in September as a premium-tier brand with a denim range “meant to be lived in, repaired and recycled” at its core. At the time of the launch, Jay Schottenstein, AEO Inc. CEO and executive chairman of the board, described AE77 as a concept that leverages the company’s leadership in jeans and capitalizes on its innovation in style, fit and sustainability practices.

To read the full article, click here.

At the very heart of AEO is our PEOPLE. Our associates are REAL – authentic, resilient, and optimistic – each with their own story. Our REAL PEOPLE series highlights those who drive innovation, embrace teamwork and strengthen AEO’s inclusive culture.

In honor of Veteran’s Day, we are highlighting Reddisha (Redd), Global Asset Protection Corporate Safety and Security Lead at the AEO Ottawa distribution center and former U.S. Navy Petty Officer Third Class.

“I am very blessed with the opportunity to work for a great company that truly cares for their employees. I can wholeheartedly say AEO invests in their people and provides a workplace filled with so much opportunity.”

At a crossroads in her life, Redd took a leap from college student to U.S. Navy Steelworker in 2008. During her eight years in the Navy, Redd served three tours in Afghanistan, doing everything from steelwork and welding to assisting her Commanding Officer (CO), and eventually meeting her husband, Michael, a fellow sailor and Petty Officer First Class. Redd’s time in the military was full of life-changing experiences that truly helped shape the person she is today.

“The whole reason for joining the military was to be a part of something and make a difference…a REAL difference,” said Redd. “Serving in the military gave me the ability to be selfless, love and see the positive in all situations. I learned how to communicate effectively and how to treat people differently because you understand that everyone is different.”

After the military, Redd knew she wanted to continue to do something meaningful with her civilian career so she jumped back into school, exploring the pharmacy and medical billing field before landing in HR. “I feel like HR makes a difference, especially when you have a good HR team that is not only focused on the business but its people.” Redd earned her master’s degree in HR and went on to recruit for a trucking company before joining AEO as an HR Coordinator at the distribution center in Ottawa in June 2020.

Never one to shy away from a new opportunity, Redd decided to take another leap and join the AEO Global Asset Protection team in May 2021. In her current role, Redd leads safety and security for the weekend and evening shifts, managing a team of security guards. Redd believes her new role provides the opportunity to continue her service, just in a different way.

“My management team understands the military. They trust you and understand you may have PTSD or other things going on from your service. They want me to do what I can, the best I can, without any pressure. We’re very transparent and the open line of communication from my management team helps to alleviate stress.”

Redd shared that many of her coworkers at AEO are former military and it’s been great to have that sense of camaraderie, which she feels has ultimately helped her grow in her career. “I am very blessed with the opportunity to work for a great company that truly cares for their employees. I can wholeheartedly say AEO invests in their people and provides a workplace filled with so much opportunity.”

When asked her advice for anyone transitioning out of the military, her response was simple: take a break! “Think about what it is that you want to do and go for it! Take the time to reflect, learn what your skills are, what you truly want to be and go for it head on.”

Redd is an active member of the Veteran & Military Employee Resource Group (VMERG) at AEO, one of the many Networks & Connections at the company that brings our associates together to celebrate what makes us real. The VMERG’s vision is to foster camaraderie and support among United States Military Veterans within AEO and the community and ensure veterans are respected for their service, supported during deployments, assisted in the transition to civilian roles at AEO and offered the opportunity to serve their community. 

Thank you for your service, Redd!

By Chris Rovzar | Link to article

The menswear designer, famous for his riffs on everything from Champion sweatshirts to L.L. Bean’s Maine kitsch, takes another pass at Americana.

Fresh off the second collection he created in partnership with L.L. Bean, menswear designer Todd Snyder is doing another take on America’s preppy heritage.

Catalogs that feature a new collaboration with tailoring emporium J. Press will hit mailboxes on Nov. 8. A capsule collection of clothes will appear in shops for both brands starting around Nov. 19.

“As I think about each season, I always start with some sort of historical reference,” Snyder explained in an interview. “And classic Americana was something that came to mind for this season.” 

J. Press was founded in 1902 on the campus of Yale in New Haven, Conn., and has stores in New York City and Washington, D.C. Over the course of the century, it became known for a quintessential Ivy League style, offering shaggy sweaters, oxford shirts, duffel coats, and colorful scarves to students and others seeking a refined, comfortable Northeastern look.

“I’ve always admired that style because I think it’s truly American,” said Snyder. “I think of it as breaking of the rules of all the things about menswear that was British or French or Italian. Americans said, That doesn’t really work for us, we’re going to do something a little different. And J. Press really embodied what that was about.”

The point of these kinds of collaborations is two-fold, he says: first, it gives him inspiration as a designer to create something that excites him. And second, it amplifies the Todd Snyder brand by introducing it to a new clientele. “It’s a great way to do marketing, an affordable way,” he said. “People love authenticity, they love that real story.” 

According to Snyder, who is known for his collaborations with brands from Champion to New Balance to Timex, the two seasons of clothes in 2020 and 2021 which he designed in partnership with L.L. Bean were a huge success.

“L.L. Bean was such a great moment for me. Everyone knows who L.L. Bean is. Most people don’t know who I am,” he said. “We end up getting about 40% of the people who stay with us. We measured it.”

Typically, he added, customers who come to Todd Snyder’s store or website stick around to buy purely Todd Snyder products around 25% of the time. The first season of L.L. Bean products sold out, and with better stock planning, the debut of the second season was the company’s best day of sales ever—50% of customers bought Todd Snyder products as well.  

“That’s part of the strategy,” Snyder says. “You can’t just put up a big billboard any more, buy an ad, do affiliate work, any of that stuff. It works, but not as well as doing something authentic.”

Snyder’s company has been owned by Pittsburgh-based American Eagle Outfitters since 2015. He founded the company in 2011, after a career working at brands including Polo Ralph Lauren and J.Crew.

From J. Press’s perspective, the benefits of the collaboration with Snyder are similar. 

“We’d like to get the brand of J. Press and the look of J. Press out to a wider audience,” explained Robert Squillaro, senior vice president of J. Press, in an interview. “A new audience that maybe shops with Todd and is unaware of what J. Press has to offer.” Squillaro says that the partnership was Snyder’s idea, and that part of its appeal was the chance to get in front of younger shoppers. J. Press has been moving to court such an audience in recent years by introducing tailored fits and using non-traditional models in their catalogs and ad campaigns. J. Press is owned by the Japan-based Onward Holdings Ltd.

“We went through what we thought were the J. Press iconic looks and fabrics, provided him with catalogs and stuff,” he said. “Our most iconic item for fall is our shaggy dog sweater, which we’ve been very protective off. Todd treaded it with the utmost respect.”

Colorful versions of the sweater are among the 38 items in the collection, which will be available for sale on the websites for both brands, in Snyder stores, and in the New York outpost of J. Press. 

By: Vicki Young | Link to article

Cash-flush American Eagle Outfitters Inc. is shelling out yet again for a mission-critical supply-chain partner. CEO Jay Schottenstein said the company’s second logistics acquisition in roughly two months is all about enabling “brand success.”

The specialty retailer’s $350 million cash deal for Quiet Logistics, which has fulfilled online orders for M.Gemi, Outdoor Voices and Bonobos, supports the jeans seller’s focus on “agility, speed and diversification,” Schottenstein said in a statement Tuesday. Quiet was owned by Greenfield Partners, a property investment and logistics specialist, and Related Companies LP, a real estate and lifestyle company known for large-scale neighborhood development and the force behind Hudson Yards.

“Quiet Logistics has provided significant benefits to AEO over the past year and we are leveraging our healthy cash position to ensure ongoing advantages,” he said. “Also, as we continue to expand these services to other brands and retailers, we believe the business will scale, generating incremental value for our shareholders.”

The move follows the youth-centric merchant’s August deal for AirTerra, the Nordstrom alum-founded Seattle logistics startup helping mid-tier retailers compete for the last mile against their larger rivals.

To read the full article, click here.

By: Paul Berger | Link to article

AEO’s deal to buy Quiet Logistics follows the retailer’s purchase in May of e-commerce delivery startup AirTerra.

American Eagle Outfitters Inc. is acquiring digital fulfillment operator Quiet Logistics Inc., in a $350 million cash deal as the apparel retailer looks to take greater control of its supply chain.

The acquisition announced Tuesday is AEO’s second in the logistics arena this year and comes as retailers are struggling to get goods to stores to meet resurgent consumer demand and to adjust to the strong shift to e-commerce.

Quiet Logistics, based in Devens, Mass., has eight fulfillment centers in six cities where workers aided by robots fulfill shipping orders for digital apparel and lifestyle brands such as Mack Weldon, Outdoor Voices and Peloton.

The acquisition, which is expected to close before the end of the year, also includes Quiet Logistics’ investments in an undisclosed logistics business and a robotics company. The deal follows AEO’s purchase in May of e-commerce delivery startup AirTerra, which aggregates shippers.

Michael Rempell, AEO’s Chief Operations Officer, said Quiet Logistics and AirTerra will be run by one person, but will operate independently of each other and of the clothing retailer.

Mr. Rempell said the two firms will give AEO and the customers of Quiet Logistics and Air Terra greater scale, flexibility and efficiencies currently available to major shippers such as Amazon.com Inc. and Walmart Inc. by aggregating smaller shippers.

“We think it’s going to be a very big, very profitable and very successful business in its own right,” Mr. Rempell said.

Pittsburgh-based AEO, which sells American Eagle and Aerie brands, has used Quiet Logistics for order fulfillment during the coronavirus pandemic.

The logistics firm’s network of fulfillment centers are located in Boston, Chicago, Los Angeles, Dallas, St. Louis and Jacksonville, Fla. The sites are aimed at placing inventory for the company’s customers closer to the younger, urban consumers targeted by brands such as AEO and direct-to-consumer shippers.

The pandemic has accelerated the shift to e-commerce for many retailers. AEO’s digital sales accounted for 35% of total revenue in the second quarter of this year, up from 25% before the pandemic.

The shift to digital has allowed retailers to save costs by holding less inventory. But it also requires retailers to give priority to rapid delivery to homes, and the shipping costs can carve into the profit margins of the goods.

“Supply chain is becoming more of a consumer-facing activity,” said Shekar Natarajan, AEO’s chief supply-chain officer. “And in that world, you need to basically have consistency and control of your experience.”

General and specialty retailers on average held 48 days of inventory outstanding in the second quarter of 2021, down from 61 days in 2020, according to consulting firm The Hackett Group.

AEO last year started ordering smaller quantities of clothing from suppliers. Mr. Rempell said in the first half of this year the company reduced store inventory by 40% compared with the same period in 2019. The firm’s net revenue hit a record $1.19 billion in the second quarter of this year.

Quiet Logistics, founded in 2009, has been active in automation and created Locus Robotics, which makes robots designed to work alongside people.

These collaborative robots can guide workers to items to be picked and can transport goods across a warehouse to be packed and shipped. The robotics firm was spun off in 2015. Quiet Logistics was jointly acquired by the Related Cos. and property investor Greenfield Partners LLC for an undisclosed sum in 2019.

Gene Gorab, president and chief executive at Greenfield Partners and executive chairman of Quiet Logistics, said the logistics firm’s revenue quadrupled over the past three years and is expected to reach a forecasted $130 million to $135 million in the current financial year, which ends in March.