American Eagle Outfitters (AEO) - Get American Eagle Outfitters Inc. Report said Thursday it expects fourth-quarter revenue to drop in the low single-digit percentages due to weak in-store traffic and store closures caused by the pandemic. But it outlined a plan for improved growth and profitability by fiscal 2023.
Shares of American Eagle Outfitters rose 3.65% to $23.55 on Thursday.
The Pittsburgh, Penn.-based company said it expects its Aerie brand of intimate women's apparel to report strong online sales and revenue growth of more than 20% in the fourth quarter. But revenue at its American Eagle flagship brand will decline in the low double-digit percentages as a result of its higher store penetration.
“I’m extremely proud of our performance during the fourth quarter, which demonstrated strong growth to last year and continued quarterly sequential improvement," said Executive Chairman and Chief Executive Jay Schottenstein, in a statement.
"Compelling holiday product and marketing, combined with a disciplined approach to promotional activity drove very strong margin results. The team continues to instill strong inventory and expense management, and I believe we are well-positioned as we head into 2021," Schottenstein added.
In a separate release, also shared on Thursday, the retailer said it expects to clock revenue of $5.5 billion in fiscal 2023, with revenue from Aerie contributing roughly $2 billion. American Eagle's revenue is expected to remain roughly flat to fiscal 2019 at approximately $3.5 billion, although with improved profitability, the company said.
Going forward, the retailer said it will report sales of Aerie and American Eagle separately.
American Eagle Outfitters will release fourth quarter and fiscal 2020 results on March 3, 2021.