To celebrate Hispanic Heritage Month, Robinson, Manager – Disaster Recovery shares how his heritage has shaped his perspective, what this month means to him and how he helps his sons learn about the Latinx culture.
How long have you been with AEO? What is your current role and can you tell us a little about what you do?
I joined AEO in April 2024 as an Information Technology Disaster Recovery (ITDR) manager. I aim to improve the resiliency of AEO’s technology through the systematic development of a mature ITDR program.
Tell us more about your family’s heritage. How do you celebrate your culture and traditions?
I was born in Medellín, Colombia and my parents brought me to Toronto, Canada when I was 5-years-old. My parents ensured I understood our culture by speaking Spanish at home, cooking Colombian foods and maintaining a relationship with extended family. My parents have since moved back to Colombia, and I continue to enjoy Colombian food, and try to stay involved in Pittsburgh’s Latino community.
How has heritage shaped your perspective and influenced who you are today?
As a child I watched my parents struggle while living in a place that didn’t speak their language or always understand their culture. This made me understanding and respectful of other people, no matter where they came from or what language they speak.
What does Hispanic Heritage Month mean to you personally?
To me, Hispanic Heritage Month is a time to share my Latinx culture with my two sons who were born in Pittsburgh. There are different Hispanic Heritage Month events throughout the city, which give me teaching moments to educate them.
How do you get to celebrate your heritage and culture at AEO?
I have the pleasure of being part of the steering committee for AEO’s Latinx/Hispanic network, AEO Juntos. AEO Juntos is a place where Latinos and allies can come together to form a community, share thoughts and have fun!
Rivet: Young at Heart – How American Eagle Became Gen Z’s Favorite Brand for Jeans
American Eagle Outfitters Inc. knows what lane it is driving in.
The retailer’s ability to track and pivot into emerging trends and categories helps make its American Eagle (AE) brand the No. 1 jeans line for its targeted core customer between ages 15 to 25. A wide assortment of fits and washes that nod to past eras, coupled with comfort-driven fabrics have made AE denim a staple in closets for back-to-school, while denim accessories, co-branded collections and licensed gear keeps consumers coming back for more.
“As a leading jeans brand, we are so excited to be in a denim cycle right now,” said Renee Heim, AE’s chief product officer.
Heim joined American Eagle as senior vice president for women’s apparel and accessories in January 2021. Her background in product and merchandising in past leadership roles at Vineyard Vines and J.Crew gives her the expertise to create a new denim experience for consumers through product, storytelling and newness.
Here, Heim sheds light on AE’s latest strategies for denim, fabrications and the back-to-school season.
Rivet: The company has been driving growth in the American Eagle brand by going deeper in casual wear. What are some of the casual dressing options or extensions that you’ve invested in to complete a denim outfit?
Renee Heim: American Eagle launched its “Live Your Life” brand platform in late July, empowering customers to go out and do the things they love in the clothes that make them happy. As a leading jeans brand, we are so excited to be in a denim cycle right now. We are leveraging denim to inspire a full lifestyle, seeing success with pieces that support year-round wear, like our women’s Dreamy Drape collection. This reflects the social casual fashion trend we’re seeing now.
We’re blending street, social and runway influences to create easier fits with bottoms that complement casual tops. For women, this means incorporating femme details like ruffles and bows. For men, we’re offering wider, boxier tops and standout prints. We interpret these trends through AE’s unique fabrications, using soft, stretch fabrics that provide comfort without sacrificing style.
Rivet: Who is your core American Eagle customer and targeted age range?
RH: AE is the No. 1 jeans brand for 15-to-25-year-olds, the No. 1 jeans brand for women overall, and the No. 2 jeans destination across all demographics.
This broad appeal is due to our ability to quickly pivot into emerging trends and categories, offering a wide range of styles that accommodate multiple generations. While our Gen Z customer might drive trends through platforms like TikTok, we offer something for everyone, like moms and young professionals who appreciate balance, variety, and more elevated dressing, which can be found within the brand’s AE77 collection.
Rivet: What is the proportion between men’s and women’s in the overall assortment mix?
RH: Our assortment mix is approximately 65 percent women to 35 percent men. Denim plays a more significant role in our women’s business, particularly with women embracing new styles, like wider-leg silhouettes. For our AE guy, we’re iterating on various pants and casual bottoms to keep up with evolving trends, and to ensure men are choosing AE when they’re in the market for new jeans.
Rivet: What are some key fabrications and finishes for men’s and women’s denim?
RH: For women, our styles are focusing on a more classic, heritage look in line with trends, while still maintaining AE jeans’ foundation of comfort and stretch for a modern approach to denim. Men’s trends are leaning into cleaner, more traditional washes with straight fits. Our fabrication still reflects a super-soft feel, offering the look of rigid denim with a touch of stretch in all the right places.
This shift requires significant innovation to maintain comfort and style. We’ve introduced our Strigid denim, which combines stretch in essential areas like the waistband and backside with a rigid front for a classic look with modern comfort. And, our Dreamy Drape fabric has been a customer favorite, featuring soft, lightweight denim with a wide leg for a cool, slouchy fit.
Our EasyFlex fabrication for men offers the rigid denim look with the comfort of stretch, making traditional denim styles more wearable.
Rivet: Y2K has been a big trend in denim. Any thoughts on what might be the next decade that will drive denim trends?
RH: We’re seeing an eclectic mix right now, blending influences from the ’70s, ’90s, and 2000s. Trends from the ’70s reflect silhouettes that are getting lower and looser, while more neutral and block-inspired patterns nod to the early aughts. This eclectic influence of past generations allows us to keep our offerings diverse and interesting.
Rivet: What is AE’s strategy for licensed collections and collaborations?
RH: AE has always been at the forefront of culture, and our licensed collections, like those with Mickey Mouse and Peanuts, resonate because they speak to the optimism and nostalgia of our customers. Our recent success with the Peanuts collections and the hit series “The Summer I Turned Pretty” demonstrate the range and relevance of our collaborations, showcasing how we create connections across generations. These products and partnerships keep the conversation going with our customers, complement our core assortment, and provide the opportunity to add newness and excitement.
Rivet: This summer, American Eagle and Aerie released their first collaboration. How was the collection received by customers?
RH: The AE x Aerie A Match Made in Denim collaboration was very well received. It demonstrates the power of how our brands are better together and appeals to a broader range of consumers. We know our best customers shop across brands, and we’re always looking for ways to innovate by giving customers a reason to explore all of our brands.
Rivet: Western trends gained a lot of buzz this year. Has it affected AE?
RH: The Western trend was significant, especially with cultural moments—like Beyoncé’s album launch—instantly influencing fashion. We approached the Western trend with a subtle touch, inspiring customers to express their individuality, whether that’s through simple touches or bold statements. We offer pieces like cowboy boots, Western-inspired jewelry, and a variety of denim, providing versatility in styling and excitement for the consumer who’s all-in on the trend and the one who prefers to dabble around the edges.
We even had some fun showcasing this trend within our Peanuts collection, offering Western-inspired pajamas and crew socks featuring a yeehaw-ready Snoopy.
Rivet: Other brands have reported success with denim tops, dresses, skirts—items besides traditional 5-pocket jeans. Has that filtered down yet to the younger customer? What about denim accessories?
RH: We are all about providing our customers the head-to-toe denim styles they’re craving. When denim is trending, we make sure every category has a denim option, from tube tops to jackets. Denim accessories like boho bags, hair scrunchies, and earrings are also popular. This comprehensive approach helps us stay relevant and appeal to our denim-loving customers.
Rivet: What is AE’s approach for back-to-school this year?
RH: It’s a good mix of both core AE basics and statement pieces. What’s interesting is that when a fashion item hits TikTok and gains popularity, it often becomes a core piece in our assortment. AE has consistently been on the forefront of fashion trends and having the ability to pivot quickly has set us up with a strong foundation for when the back-to-school season approaches. Our collections celebrate individuality and living your life in your favorite AE styles, reflecting our spirit of innovation and adaptability.
Rivet: Tell me about AE’s fall collection.
RH: This fall and beyond, we’re excited about newer fits like the stovepipe, which comes in classic, cuffed, and a variety of washes. The emerging barrel fit has been an incredible opportunity for us. We’re seeing a lot of fun, fresh trends for women, with styles emphasizing puddling around the shoe. After the success of the cargo pants trend last year, we’ve tapped into some of our favorite denim silhouettes, such as Dreamy Drape, to extend our bottoms styles beyond jeans.
For men, athletic fits, bootcut, and straight jeans featuring our EasyFlex fabrication are crucial, offering guys the authentic denim look they want with just enough flex for all-day comfort.
It’s all about versatility of product. We have something for the high-trend consumer, as well as those who might be interested in more classic fits. For women and men, we’re really leaning into full outfitting, ensuring customers know how to wear our products from head to toe. AE jeans can stand alone. However, we’re [also] providing really great tops and accessories that our customers can relate to and live their life in.
WWD: American Eagle, Timberland Team on Outdoors-inspired Collection
Three drops of the co-branded assortment of shirts, pants, jackets and shoes will be offered through the end of the year.
Vertical retailers are not traditionally known for carrying other brands, but American Eagle Outfitters is making an exception for this fall and holiday season.
Starting Sept. 26, American Eagle will launch a ‘90s-inspired men’s collection in partnership with Timberland that is intended to blend fashion and outdoors. The collection, which will be offered in three drops, will include a wide range of tops, bottoms, accessories and footwear.
Craig Brommers, chief marketing officer of American Eagle, said Timberland was founded in 1973 and American Eagle in 1977 and “both have a Northeastern heritage.” AE is based in Pittsburgh and Timberland traces its roots to Massachusetts and then New Hampshire.
“American Eagle is the number-one specialty vertical retailer for Gen Z,” he said, “and Timberland is red-hot right now and just did a collaboration with Louis Vuitton.” He said that because the era of the ’90s is also “having a moment,” the American Eagle design team pored through the Timberland archives as it sought inspiration for the collection.
“What we’re doing together is both a nod to the past and a nod to the future,” Brommers said.
“Timberland and American Eagle are two iconic brands. This new collection fuses American’s Eagle’s Americana spirit with our rich heritage in craftsmanship and weather-ready style,” said Gautham Rao, vice president and general manager of Americas at Timberland. “By revisiting pieces from our archives and infusing them with fresh, stylish perspectives from their team, we’ve crafted a collection that is both unexpected and unique. We’re thrilled to offer our existing and new consumers something truly special.”
“We believe in the power of collaboration. We love to work with brands who complement our deep commitment to quality and who champion the values of this generation to get out and live life,” added Jennifer Foyle, president and executive creative director of American Eagle and its sister brand Aerie. “By infusing American Eagle’s expertise in denim with Timberland’s craftsmanship, the collection inspires adventure with a ’90s vibe that features denim jackets, flannels and Timberland’s iconic lace-up boots.”
The first drop will focus on graphic T-shirts, crewneck sweatshirts, cargo sweatpants, ripstop pants, lightweight anorak jackets and baseball caps.
The second drop on Oct. 24 will offer outerwear and footwear including insulated anorak jackets, sherpa fleece jackets, corduroy popover shirts, flannel shirts, puffer vests, graphic T-shirts, embroidered hoodies, ripstop pants, beanies and hiker boots.
The third and final drop on Dec. 12 will be centered around denim and footwear and will include denim jackets and shackets, jeans, flannel shackets, graphic T-shirts, cotton hoodies, classic lace-up boots and boat shoes.
Although originally designed as a men’s brand, the collection can be worn by women as well, Brommers said.
Prices range from $34.95 to $139.95 for the apparel and $19.95 to $170 for the hats and boots.
To publicize the launch, American Eagle is bringing Role Model, a singer-songwriter also known as Tucker Pillsbury to star in the campaign.
“Music is very important to the American Eagle and Timberland customers,” Brommers said, so it made sense to bring someone like Role Model on board as the face. Additionally, he hails from Maine, another Northeastern connection point.
Brommers said if the collaboration product is successful, the relationship could continue into the future. “We have the three drops, but who knows where we can go in the future. With 750 stores in the U.S. alone, it gives Timberland access to a highly desirable customer.”
AEO Building a Better World Volunteer of the Month: Ashleigh, Sr. Brand Ambassador
AEO associates share our commitment to doing better, being better and building a better world. We’re proud to spotlight our people who are making a real and lasting impact in their communities.
Meet Ashleigh, Sr. Brand Ambassador and volunteer with Camp Quality Ohio. Each summer, Ashleigh looks forward to working as a photographer at the organization’s week-long overnight camp, capturing campers’ joy, excitement and those core memories.
Tell us about your volunteer service at Camp Quality Ohio!
I am one of two photographers at camp who capture all the joy and excitement the campers, their siblings and volunteers are having throughout the week of camp. I then share these amazing moments on our social media pages for their parents/guardians to see.
Why is volunteering at Camp Quality Ohio important to you?
The camp is a place where kids with cancer just get to be kids, giving them a week with their siblings and friends in similar situations. With my perspective, I get to help share these moments that might go unnoticed and to see these kids not worry about what is to come after camp. Within my own family, cancer has made its own impact and to be able to see these kids having fun makes my whole experience.
How many years have you been volunteering with Camp Quality Ohio and in your community?
I’ve been involved for about 7 years now with small events throughout the year, and the past two summers I have been able to attend their week-long overnight camp. I have always been committed to volunteering throughout my life and the earliest memories I have are when I was in middle school helping out with Vacation Bible School.
How do you think that Camp Quality Ohio helps to Build a Better World?
The camp creates an environment where the kids with cancer and their siblings just get to be together without the worries that a cancer diagnosis brings to the whole family.
What are some of the benefits you have found in volunteering? What have you learned?
Some benefits that I have found in volunteering are how much you can grow yourself, the difference you can make on those around you, and how much fulfillment it can bring. I was hesitant when I first started volunteering with Camp Quality Ohio, but throughout the events and camp, I cannot imagine being anywhere else now.
WWD: American Eagle Outfitters Marks 30 Years on Wall Street
Jay Schottenstein celebrated the milestone by ringing in the trading day on the trading floor.
American Eagle Outfitters Inc. touched back down on Wall Street Tuesday to mark 30 years as a public company.
Jay Schottenstein, executive chairman and chief executive officer, rang the opening bell at the New York Stock Exchange, flanked by Jennifer Foyle, president, executive creative director of American Eagle and Aerie, and other members of the company’s leadership.
The company, which opened its first store in 1977, went public on the Nasdaq exchange in 1994 and began trading on the NYSE under the “AEO” symbol in 2007.
“It’s an incredible honor to be able to celebrate AEO and our 30-year anniversary as a public company with so many of our associates and executive leadership team,” Schottenstein said. “Since we began trading on the NYSE, we have truly valued the exchange’s strong partnership and support as we’ve continued to grow our portfolio of enduring and beloved brands. Today, we are at a pivotal moment for AEO and I have never been more optimistic about our future.”
Shares of the company ticked up 0.3 percent to $19.39.
It’s been a good year for the retail stock, which is up 33.9 percent over the past 12 months.
The retailer was also commemorating a decade of “the #AerieReal movement,” which seeks to inspire women to be their authentic selves, as well as two decades of American Eagle’s Live Your Life brand platform, which looks to inspire the brand’s youngest consumers to “do the things they love in the clothes that make them happy.”
AEO Steven A. Davis Scholarship for Social Justice Graduate Spotlight: Piper
Join us as we catch up with Steven A. Davis Scholarship recipients post-graduation to hear what they’ve been up to, what’s next and how the scholarship has impacted their education and career journey.
Meet Piper: A dedicated member of the greater St. Louis area community, fierce advocate for victims of domestic violence and 2022 AEO Steven A. Davis Scholarship for Social Justice recipient. After completing her undergraduate program this past spring, Piper is slated to graduate with a Master’s in Public Administration in May 2025 and plans to pursue a career in nonprofit development.
The beginning of Piper’s college experience was similar to many teens and young adults across the country as COVID made waves – it included a pandemic-prompted change of plans. After she initially enrolled at Missouri State University for her undergrad, Piper ultimately transferred to Southern Illinois University Edwardsville. As an only child close with her family, choosing to move home was a difficult but seemingly necessary decision.
“It was a really tough time,” Piper said of the decision. “Even though I was transferring and continuing my education, to me, I felt like I dropped out. I kind of felt like a failure… felt like I’d left and now had to come back and move back home– but it ended up being a great choice. I was exactly where I needed to be.”
Piper found herself settling into the part-new, part-familiar environment early on thanks to a few great professors, new connections– and her new job as a Brand Ambassador at Aerie following a chance encounter with friends from high school working there at the time.
“Being able to help people find cute outfits, give them a confidence boost—finding something I’m good at and feeling like I had the power to make someone’s day—really helped me through that transition which would have been tough otherwise,” Piper noted of the time.
Honing Into Her Passion
“I always knew I wanted to do Political Science– it was just what I wanted to do with [my degree].”
In high school, Piper was able to combine her passion for electoral politics with social justice work. Getting more involved with local advocacy groups, including organizing a chapter of Students Demand Action in her community, sparked a growing interest in public administration.
“I saw that there were other ways to make a difference, which got me into nonprofit work. I discovered that’s a way that I can make a difference that’s probably even more effective than going through electoral channels.”
Heading into 2022, with a renewed confidence in herself and growing interest in public administration, she applied for AEO’s Steven A. Davis Scholarship for Social Justice. Just a few months later, Piper learned she was selected as one of the associate recipients. With the additional financial support from the scholarship, she was able to pursue her passion for nonprofit community with AmeriCorps’ VISTA program.
“My time at Aerie and winning the scholarship empowered me to feel like it was time to do AmeriCorps. The scholarship helped alleviate financial worries so I was able to fully pursue that.
I was able to gain the confidence through my time at Aerie that allowed me to jump in feet first [to AmeriCorps]. I’ve loved it and have been there ever since.”
Love of Community
Through VISTA, Piper works with St. Louis-based domestic violence support service provider ALIVE where she helps with development and outreach efforts, event planning, grant writing and social media. The organization offers support for individuals in-need throughout any step of the journey of leaving an abusive partner and fills service gaps within the community.
Working for ALIVE has allowed Piper to be more connected and plugged into the St. Louis community– something important to her since childhood.
“As an only child, I was always searching for community as a kid,” she shared. “I was always looking for things to be a part of, so community has always been really important to me.
Doing nonprofit work in a certain area really ties you to that community. Now that I’ve done nonprofit work for the greater St. Louis community– this has been home forever, but now it’s home. This is my community and I’ve invested a lot into it.”
Looking Ahead
Asked what advice she would give a high school senior or freshman in college looking to get involved or give back based on her experience, Piper suggests staying local to see tangible results in your community.
“It’s so easy to get overwhelmed by everything that the world needs that you want to tackle something big. But I’ve found with my work in the community, whenever you can stay local, that’s when you can make the most impact, at least for me personally that’s where I’ve been able to affect the most change.
It’s overwhelming to think about the whole country or the whole world– but just look at your community and say, ‘what do these people need’ and ‘what can I provide?’ You don’t need to do it all! Pick a need and pick a population and make that need for that population.”
Overall, Piper feels hopeful about what the future holds and excited about the change she’s seeing in the social justice landscape, due in part to the growing understanding and embracing of intersectionality and its ability to unite advocates toward the shared causes benefiting the greater group.
“One of my favorite quotes is ‘a rising tide lifts all ships,’ and I believe that– a win for one sector of the social justice community is a win for all of us, and we can all take that momentum.”
Since 2021, AEO has awarded more than $1 million in scholarships to 59 associates through the AEO Steven A. Davis Scholarship for Social Justice.
WWD: American Eagle Outfitters Posts Q2 Gains, so Far so Good With New Strategic Plan
The operator of the American Eagle and Aerie brands says it’s very disciplined with inventories and expenses and that its price-value equation is resonating with consumers.
American Eagle Outfitters Inc., showing further signs its new strategic roadmap is bearing some fruit, reported on Thursday second-quarter top- and bottom-line gains with strength seen across both American Eagle and Aerie, as well as channels.
Net income in the period ended Aug. 3 rose to $77.3 million, or 39 cents per diluted share, from $48.57 million, or 25 cents per diluted share in the year-ago period. Revenue rose 8 percent to $1.3 billion from $1.2 billion.
Operating income of $101 million increased 55 percent, surpassing company expectations earlier in the year for operating income in the range of $95 million to $100 million. The gain included an approximately $20 million from the retail calendar shift. The operating margin expanded 240 basis points to 7.8 percent.
The operator of the American Eagle and Aerie brands slightly raised its outlook for 2024 operating income to $455 million to $465 million, from previous guidance of $445 million to $465 million. AEO also slightly lowered its guidance for total 2024 revenues to up 2 to 3 percent, from previous guidance for revenues to be up 2 to 4 percent. The company expects comparable sales in 2024 to increase approximately 4 percent and total 2024 revenues to be up 2 to 3 percent versus previous guidance of up 2 to 4 percent.
“We’ve exceeded our original plans and guidance for the first quarter and second quarter,” Michael Mathias, executive vice president and chief financial officer, told WWD. “Our second-quarter results were strong and build upon our strong first-quarter performance as well.”
Mathias cited strength across both the American Eagle and Aerie brands, as well as in stores and online during the second quarter.
American Eagle, he said, was fueled by the women’s side of the business. Menswear is “still a work in progress,” though some progress has been made, he added. At Aerie, the Offline subbrand has been driving growth, Mathias said.
Reports of consumers holding back on spending, particularly on discretionary products, have proliferated, but Mathias said, “We feel good about the consumer. Our value equation resonates with consumers. We are in that middle sweet spot where we can navigate the challenges of any specific consumer group.”
AEO’s customer, on average, tends to be in the middle or a bit above the average household income in the U.S., Mathias said. “We are a good alternative to other brands out there. We are less expensive. We are not the least expensive, but the quality of our product for the price is very attractive.”
In terms of the operations, Mathias said AEO’s inventory is “well positioned to our revenue trend and we feel that way for the rest of the year,” he said. Total ending inventory increased 4 percent to $664 million, in line with sales trends. Mathias also said that “expense management disciplines are working for us and we are on plan to control expenses through the rest of the year.” Gross profit of $499 million increased 10 percent, reflecting a gross margin rate of 38.6 percent, expanding 90 basis points.
Mathias told WWD that the company is pleased with how back-to-school business is tracking, while Jay Schottenstein, AEO’s executive chairman and chief executive officer, called out “positive reception we’ve seen to our early fall collections. Our winning formula of outstanding quality and style offered at a great value remains a cornerstone of our brands, positioning us perfectly for today’s consumers. In a dynamic macroeconomic environment, we will remain disciplined and focused on delivering profitable growth and long-term shareholder value.”
AEO’s “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,” Schottenstein said. “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.”
Powering Profitable Growth was unveiled last March. It targets mid-to-high teens annual operating income expansion on 3 to 5 percent annual growth revenue, and about a 10 percent operating margin over the next three years. AEO hopes to add more than $700 million in sales over that stretch, pushing revenues up from $5.26 billion last year to possibly $6 billion. The strategy focuses on what executives describe as “amplifying” American Eagle and its denim business and expanding adjacent categories, fueling Aerie’s expansion, and accelerating activewear growth via Offline. The plan also calls for greater financial disciplines and “leveraging best-in-class” operating capabilities.
For the third quarter, the company expects operating income to be in the range of $120 million to $125 million. This reflects approximately $20 million of profit that shifted into the second quarter from the third quarter, due to the retail calendar. The company expects comparable sales to increase in the range of 3 to 4 percent, with total revenue flat to up slightly, also reflecting the impact from the retail calendar.
American Eagle Outfitters Reports Second Quarter Results
AEO Inc. Reports Record Second Quarter Revenue and Meaningful Operating Margin Expansion; Updates Full-Year Operating Income Outlook to the High-End of Prior Guidance
Record second quarter revenue of $1.3 billion, rose 8% to last year
Operating profit of $101 million, up 55% to last year
Aerie achieved all-time high second quarter revenue, with comps up 4%
American Eagle continued to see strong momentum, with comps increasing 5%
Updates full-year operating income outlook to $455 to $465 million, the high-end of prior guidance range
August 29, 2024 PITTSBURGH — (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the second quarter fiscal 2024 ended August 3, 2024.
“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,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.
“I am pleased with the positive reception we’ve seen to our early Fall collections. Our winning formula of outstanding quality and style offered at a great value remains a cornerstone of our brands, positioning us perfectly for today’s consumers. In a dynamic macroeconomic environment, we will remain disciplined and focused on delivering profitable growth and long-term shareholder value,” he continued.
Second Quarter 2024 Results:
Second quarter 2024 results are presented for the 13 weeks ended August 3, 2024 compared to the 13 weeks ended July 29, 2023. Comparable sales metrics are presented for the 13 weeks ended August 3, 2024 compared to the 13 weeks ended August 5, 2023.
Total net revenue of $1.3 billion rose 8%. This included an approximately $55 million positive impact from the retail calendar shift.
Store revenue rose 7%. Digital revenue increased 12%.
Aerie revenue of $416 million rose 9%, with comp sales up 4%. American Eagle revenue of $828 million increased 8%, with comp sales growing 5%.
Gross profit of $499 million increased 10%, reflecting a gross margin rate of 38.6%, expanding 90 basis points. Merchandise margins increased, led by favorable product costs. Gross margin expansion also reflected leverage on expenses, primarily in rent and digital delivery costs.
Selling, general and administrative expense of $345 million was up 4% and leveraged 90 basis points. The improvement was driven by leverage across compensation, including incentive costs, store and corporate payroll. Professional fees and services and supplies and maintenance costs, also improved as a rate to revenue.
Operating income of $101 million increased 55%. This included an approximately $20 million positive impact from the retail calendar shift. The operating margin expanded 240 basis points to 7.8%.
Diluted earnings per share was $0.39. Average diluted shares outstanding were 198 million.
Inventory Total ending inventory increased 4% to $664 million. Inventory levels are healthy and well positioned for the balance of the season.
Shareholder Returns In the second quarter, the company returned $120 million in cash to shareholders, bringing year-to-date returns to $180 million. This included 4.5 million shares repurchased in the second quarter for $96 million, bringing year-to-date repurchases to 6 million shares and $131 million. The company continues to have 24 million shares remaining for repurchase under the current authorization.
Additionally, the company paid a quarterly cash dividend of $0.125 per share, or approximately $24 million, bringing year-to-date cash dividends to $49 million.
Capital Expenditures Capital expenditures totaled $61 million in the second quarter and $97 million year-to-date. For fiscal 2024, management continues to expect capital expenditures to approximate $200 to $250 million.
Outlook For the third quarter, the company expects operating income to be in the range of $120 to $125 million. This reflects approximately $20 million of profit that shifted into the second quarter from the third quarter, due to the retail calendar. The company expects comparable sales to increase in the range of 3% to 4%, with total revenue flat to up slightly, also reflecting the impact from the retail calendar. SG&A is expected to leverage, with dollars down slightly, driven by efficiencies across key focus areas.
For the year, the company is updating its operating income outlook to $455 to $465 million, the high end of prior guidance. The company expects comparable sales to increase approximately 4%, with total revenue up 2% to 3%, including the impact from one less selling week, as previously discussed.
Webcast and Supplemental Financial Information Management will host a conference call and real time webcast today at 11:00 am Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 or go to http://www.aeo-inc.com to access the webcast and audio replay. Additionally, a financial results presentation is posted on the company’s website.
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 approximately 80 countries worldwide through its websites. American Eagle and Aerie merchandise also is available at more than 300 international locations operated by licensees in approximately 30 countries. To learn more about AEO and the company’s commitment to Planet, People and Practices, please visit http://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 management’s expectations or beliefs concerning future events, including, without limitation, third fiscal quarter and annual fiscal 2024 results. Words such as “outlook,” “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “may,” “potential,” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements made by the company are inherently uncertain because they are based on assumptions and expectations concerning future events and are subject to change based on many important factors, some of which may be beyond the company’s control. 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 February 3, 2024 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 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 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.
The use of the “company,” “AEO,” “we,” “us,” and “our” in this release refers to American Eagle Outfitters, Inc.
Business of Fashion: Why Fashion Loves the Next Generation of Tennis Stars
American Eagle’s marketing team has a simple checklist when it comes to collections with celebrity partners: limited edition, a tight product range and precisely timed to a major event, like a movie premiere.
The brand’s latest launch — a tie-up with tennis star Coco Gauff that features denim corsets and skirts — was released this month just days ahead of the US Open. It met all the usual criteria but added what’s becoming a new prerequisite among fashion brands: it had to be fronted by a buzzy sports star.
American Eagle prides itself on being an early adopter of courting athlete ambassadors. It was among the first fashion retailers to sign a name, image and likeness contract in 2021 when new rules allowed student athletes to sign endorsement deals and earn money off their personal brands. Within a year, American Eagle had inked deals with softball player Maya Brady and gymnast Oliva Dunne.
But fashion’s newest frontier might just be tennis — again.
The sport’s biggest names, Serena Williams and Roger Federer, have retired in recent seasons, and others like Rafael Nadal are likely to soon follow suit, paving the way for a new generation of stars to front their own fashion campaigns. Naomi Osaka ushered in this new chapter when she defeated Williams at the 2018 US Open, and at the forefront of the pack today is 21-year-old Carlos Alcaraz, widely considered the highest-paid tennis player in 2024 and an ambassador for LVMH, Rolex and Calvin Klein.
Seven out of the 10 highest-paid tennis players this year, according to Sportico, are Gen-Z, or 27 and younger. They include Gauff, Jannik Sinner, Iga Swiatek and Emma Raducanu.
Interest in tennis right now is also driven by a confluence of cultural factors, from the growing popularity of sister sports such as pickleball and padel to the revival of retro trends that evoke a “vintage athletic country club” aesthetic, according to Craig Brommers, American Eagle’s chief marketing officer.
“Tennis has certainly cut through culture,” Brommers said. “Coco does have a big part of it.”
Capitalising on the sport’s surging popularity presents an attractive opportunity for fashion brands, but they’ll need to get creative in identifying the right rising star — who won’t have the same safe-bet cachet as the sport’s most internationally recognised and now-retired figureheads. Gauff, for instance, has 1.8 million Instagram followers, compared to Serena Williams’ 17.3 million; rising men’s tennis star Taylor Fritz has 632,000 Instagram followers, compared to Federer’s 12.7 million.
That this new class of tennis stars doesn’t yet have the widespread acclaim of their predecessors isn’t necessarily a setback. In fact, it could be part of their appeal. The next generation of tennis talent presents a fresh canvas for brands like American Eagle, Rolex (which signed Ben Shelton in January) and New Balance (Gauff’s footwear and apparel partner) to connect with a younger, more diverse, and digitally-savvy audience.
Reaching a New Base
Most crucially, the new class of tennis stars offer brands malleability. In other words, having a smaller following means players like Gauff and Fritz haven’t seen their images so firmly established in the minds of audiences, which affords them broader appeal beyond performance wear to potentially extend into fashion and beauty.
A few days ahead of the US Open, Gauff held court at an American-Eagle sponsored dinner in New York City where she mingled with influencer Paige Lorenze and actresses Lola Tung and Bailey Bass. Photos of Gauff donning her American Eagle jean jacket appeared across social media and in publications such as People magazine and US Weekly, which dubbed Gauff “the queen of denim.”
Gauff’s ability to transition from Grand Slam champion to denim tastemaker is the kind of appeal that brands like American Eagle are eager to harness, said Brommers. “Coco is such a … great representation of Gen Z,” he said. “They’re not defined by one part of their life. They are multi-hyphenate.”
Young Black athletes like Gauff, basketball player Angel Reese, and gymnast Jordan Chiles also help brands connect with an increasingly diverse consumer base. While the demographic’s share of the population is growing, representation in fashion campaigns and on runways has yet to catch up.
“The people that we use, not only in the big campaigns, but even on our site, should reflect what Gen Z looks like, which is the most diverse generation in the history of this planet,” Brommers said.
The Lifestyle Effect
Sports brands like New Balance and Nike as well as luxury labels already associated with the sport, such as Boss and Rolex, also see fresh opportunities in today’s rising stars.
For running brand On, Shelton lends credibility to its continued foray into the tennis world since Federer, an investor and face of On’s tennis collection, is now retired.
New Balance signed Gauff on as an ambassador in 2018, creating a signature shoe that she helped design, when the tennis player was only 14. To date, she’s the only active tennis player with a signature shoe.
The decision to sign Gauff was an investment in her future — and by extension, that of New Balance, the company said. The hope, said Evan Zeder, director of global marketing for tennis at the brand, was that Gauff would eventually become a world-renowned athlete at the calibre of a Williams or a Federer.
Young tennis players tend to be more engaging on social media, according to Nadia Kokni, Hugo Boss’ senior vice president of global marketing. Osaka, for instance, is known for her openness in talking about mental health issues. In an Instagram post earlier this month, she shared her struggles with feeling not attuned with her body postpartum as she prepared for her return to the US Open.
Increasingly, players’ romantic partners like Morgan Riddle, an influencer and Fritz’s girlfriend, as well as Paige Lorenze, Tommy Paul’s partner, are growing their own audiences by offering their followers a behind-the-scenes look at life on a tennis tour.
By tapping into these players’ personal lives, brands like Boss receive additional exposure beyond a big campaign or winning moment on the courts.
“Fifty years ago, there wasn’t social media, so you may have someone in your clothes in big branding at an event or a dinner, and you’d maybe get a news article,” said Kokni. “[Today,] we’re a 24/7 lifestyle brand.”
WWD: Coco Gauff Celebrates Exclusive Collaboration With American Eagle in Custom Denim Jacket Featuring Her U.S. Open 2023 Victory Speech
The Coco Gauff x American Eagle limited-edition collection is available now.
Coco Gauff celebrated the launch of her collection and collaboration with American Eagle in New York City on Wednesday with an intimate dinner. The Grand Slam tennis champion was joined by Dairy Boy founder Paige Lorenze, actress Lola Tung and more.
For the occasion, Gauff opted for a triple denim look, wearing pieces from her collection with the clothing and accessories retailer. The 2023 U.S. Open Women’s Singles champion wore a cropped denim corset, stretch high-waisted crossover stovepipe jeans, and the oversize denim jacket, which featured a callback to Gauff’s U.S. Open win.
On the back of the denim jacket was a quote from Gauff’s speech after she won her first Grand Slam title in New York City on Sept. 9, 2023. “Thank you to the people who didn’t believe in me,” Gauff said. The quote is embossed on the jacket with variations in font and includes butterflies designed around the words.
Guaff’s limited-edition collection with American Eagle features designs created in collaboration with the tennis star. Along with the pieces Gauff wore to the celebration event on Wednesday, other pieces from the collaboration include a pleated denim cargo miniskirt, V-neck sweater tank top and sweater corset tank top.
Along with her own collection with American Eagle, Gauff stars in the retailer’s fall campaign and new brand platform, Live Your Life. While the phrase was introduced by AE roughly 20 years ago, the company felt the sentiment behind the phrase resonates with contemporary consumers, with Gauff as a representative for her generation.
“Coco Gauff, already a tennis icon, is someone who exemplifies that entrepreneurial hustle of Gen Z, with her business interests, with her community impact and her sense of style as well. Coco will be featured in all aspects of the campaign — video, still, outdoor, activations,” Craig Brommers, chief marketing officer of American Eagle, said in an interview.
Gauff signed her first multiyear contract with New Balance in 2018 and has worn several of the brand’s tennis kit designs and shoes for her on-court appearances at Women’s Tennis Association tournaments and Grand Slam events. The tennis player will play to defend her title at the 2024 U.S. Open, which begins Monday and concludes on Sept. 8.
