American Eagle Surges as Jeans and Lingerie Fuel Sales Growth

(Bloomberg) -- American Eagle Outfitters Inc. rose the most in more than five months as sales far outpaced analysts’ estimates, showing that its denim and Aerie lingerie lines continue to be the backbone of the company’s growth.

• Same-store sales, an important measure for retailers, grew 6% companywide in the first quarter, about double the average projection, according to Consensus Metrix.

Key Insights

• American Eagle’s denim helped anchor the company last quarter, driving a 4% increase in comparable sales for the namesake brand. The retailer has focused on stretch technology and distressed treatments and remains a leader in a sector still grappling with the rise of athleisure. Last year, the company hit $1 billion in annual sales for its jeans.
• Aerie, the company’s lingerie and swimwear line, continued to post double-digit same-store sales growth, climbing 14%. Its current marketing campaign using young people of different races, gender identities and body sizes has resonated with consumers, and executives have said they plan to open as many as 75 additional stores this year.
• Like other apparel retailers, the threat of tariffs on Chinese goods is a big concern for American Eagle. Chief Financial Officer Bob Madore said on a conference call Wednesday that such levies would have an adverse impact on the business.

Market Reaction

• The shares rose as much as 7.5% in New York Wednesday, the biggest intraday gain since late December. They had declined 4.2% this year through Tuesday’s close, trailing the advance in the Standard & Poor’s 500 Index.

Related Story: It Seems Implausible, But American Eagle Is Thriving at the Mall

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• For more details on the report, click here.
• For the company statement, click here.

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