As customers return to stores, American Eagle’s second quarter online sales plummet
Suppressed demand and increased in-store traffic helped push American Eagle Outfitters to Q2 Net sales up 35% year-over-year to $ 1.19 billion. By brand over the period, American Eagle’s revenue increased 35% to $ 846 million and Aerie’s revenue increased 34% to $ 336 million.
Store revenues grew 73% year-over-year, which helped push e-commerce down 5%, according to a press release. Compared to 2019, store turnover increased by 4% and digital by 66%. Thanks to the growth in margins, the company reached a net profit of $ 121.5 million compared to its loss of $ 13.8 million a year ago.
During a call with analysts, the clothing retailer revealed that it has purchased e-commerce logistics provider AirTerra and is looking to make other similar acquisitions.
American Eagle is joining other retailers, including Walmart, Target, and Amazon, in seizing power over its logistics by managing certain things itself.
“We realized we had to control as much as possible, ”CEO Jay Schottenstein said on the call.
In addition, AirTerra will not only help smooth the supply chain for American Eagle, Aerie and the company’s other brands, but will also continue to offer its services to third parties, providing the company with an ancillary revenue stream, as well. said the leaders.
Walmart announced last month that it would provide last mile delivery to other companies, having previously opened up its omnichannel services to other companies. In 2017, Target acquired white glove delivery company Shipt, which provides nationwide fulfillment and delivery for Target as well as other retailers.
So far this year, American Eagle has closed seven American Eagle stores and opened 17 stand-alone Aerie stores. Five Aerie side-by-side stores (featuring a connector to a namesake American Eagle store) also opened this year, according to its release.
As the retailer missed expectations for its revenue in the quarter, margins helped fuel profits. Higher full-price sales, weaker promotions, inventory control and rents all helped, the company said. Inventories at the end of the quarter were up 20%, compared to a 21% decline a year ago. “Inventories increased for both brands, positioned in key fall categories, but remained below revenue growth, which is consistent with our focus on inventory optimization,” the company said.
Gross margin increased 1210 basis points year over year to 42.1%, driven by merchandise margin expansion between brands. In comments emailed Thursday, BMO Capital Markets Managing Director Simeon Siegel called the 540 basis point two-year expansion in the quarter’s gross margin result “impressive.”