The US clothing retailer American Eagle Outfitters Inc. (AEO) felt the effects of the adverse market conditions in the second quarter of the 2022/23 financial year. On Wednesday evening, the group reported stagnant sales and red figures.
“We are experiencing an unprecedented time for retail,” admitted CEO Jay Schottenstein in a statement, referring to the “more difficult macroeconomic environment” that has recently been increasingly shaping customer buying behavior. In view of the recent development, the company announced that it would tighten its austerity measures. Nevertheless, the share price collapsed by 14 percent immediately after the publication of the current figures.
In the 13 weeks ended July 30, group sales were $1.20 billion. It was only marginally above the level of the same quarter of the previous year (+0.3 percent). The label Aerie, which is geared towards a young target group, was able to increase its sales thanks to numerous new branches by eleven percent to 371.7 million US dollars. The core American Eagle brand, on the other hand, had to accept an eight percent drop in sales to USD 777.8 million.
Higher discounts and increased freight and warehousing costs as well as losses from the logistics division Quiet Platforms, which was acquired last year, weighed on the result. The operating profit, which had been 168.0 million US dollars in the same quarter of the previous year, fell to 14.0 million US dollars. Because refinancing measures caused high one-off charges, the bottom line was a net loss of 42.5 million US dollars (42.4 million euros). In the same period last year, the group had achieved a surplus of 121.5 million US dollars.