In the fiscal first quarter, American Eagle's namesake brand experienced a 2% decline in comparable sales, falling short of the expected 3.1% growth, while Aerie saw a remarkable 25% increase, surpassing the anticipated 19.1%. This disparity contributed to a more than 10% drop in American Eagle's shares in after-hours trading.
The retailer reported net revenue of $678.4 million for the American Eagle brand, down 2%, while Aerie's revenue surged approximately 34% to $480.83 million. Overall, combined comparable sales grew 8%, slightly below the expected 8.6%.
CEO Jay Schottenstein acknowledged the challenges faced by the American Eagle brand and emphasized the company's commitment to improving women's business and brand positioning. Despite ongoing consumer and macroeconomic uncertainties, he expressed confidence in navigating these challenges.
The company maintained its full-year guidance, projecting mid-single-digit comparable sales growth and a gross margin increase, while anticipating a mid-to-high single-digit rise in comparable sales for the second quarter, compared to estimates of 6.5% growth.
American Eagle's marketing efforts, including a campaign featuring actress Sydney Sweeney, have not yet translated into significant sales increases for the namesake brand, highlighting the need for strategic adjustments moving forward