(Filed Under Financial and General Interest News). Aerie lingerie total brand comparable sales in the fourth quarter of 2017 jumped 34%, a stunning increase particularly since comparable sales for the brand were also up 17% in the fourth quarter of 2016.
This is the 15th consecutive quarter of positive comps for the company, and will lead to “35 to 40 new Aerie store openings in 2018 with roughly 70% in under penetrated markets,” according to Jen Foyle, global brand president of the lingerie division of American Eagle Outfitters (AEO).
Of the new Aerie stores, 10 to 15 will be standalone, the rest side-by-side Aerie locations.
For the entire fiscal year, ended February 3, 2018, comparable sales for the Aerie brand jumped 27% after rising 23% in the year ended January 28, 2017.
In the conference call with analysts to discuss the quarter, Foyle said “I’m extremely proud of the consistent growth we experienced throughout 2017. In fact, even a key milestone using $500 million of sales.” She continued, “Our next target of $1 billion is in place, and we can’t wait to get there. In the fourth quarter, we saw a terrific growth in both our brick-and-mortar stores and in our digital business. We strategically capitalized on the key holiday weeks with a powerful gifting strategy and distortions in the big product categories.”
In the fiscal fourth quarter ended February 3, 2018, American Eagle itself, which also sells a variety of men’s and women’s apparel other than lingerie, earned $93.957 million on sales of $1.229 billion, compared to $54.622 million on sales of $1.097 billion in the quarter ended January 28, 2017.
Foyle explained that there was “excellent growth” in Aerie’s “signature active line as well as our leggings, fleece, swim and accessories. With bras and undies at the core of our brand DNA, we see potential to expand our offerings and more broadly address our lifestyle needs.”
“In 2017, we generated over 8.5 billion media impressions and a 28% increase in social media followers. And we consistently expanded our customer base at a double-digit pace throughout the year.”
Foyle noted that a “strategic focus in 2018” will be to get more American Eagle apparel shoppers to buy Aerie lingerie. “Today, only 50% of women who shop our AE brand shop Aerie. This represents a tremendous opportunity to introduce new customers to the Aerie brand.” Speaking about new stores she added, “we have had an incredible opportunity to expand our brand presence across the country. Customers love our new store design, which debuted last fall in Miami. And recently, we opened in a mall location with terrific results so far.”
During the call, Bob Madore, American Eagle’s CFO revealed “total gross square footage declined slightly in the year as we continue to close under performing stores, including 25 AE stores and eight old format Aerie stores. We opened 15 AE stores, 15 Aerie standalone stores and 28 Aerie side-by-side stores in 2017.” As of February 3, 2018 there were 91 U.S. and 18 Canadian stand alone Aerie stores. As of that date there were also many Aerie “side by side” stores, which are “part of AE mainline or factory stores.” 90 of these were in the U.S., 13 in Canada and 13 in Mexico.
$1 billion in sales is not the only goal for Aerie. Jay Schottenstein, American Eagle’s executive chairman and CEO noted that with the brand “it took us the last 7, 8 years to get to $500 million. I believe in the next two years, we can achieve over $1 billion. And when I look at Aerie, I look at the American Eagle and I see the progress that’s being made in Aerie. And with the experience we have, I think this could become, in the next few years, a $2 billion, $3 billion brand.”
By comparison, L Brands’ Victoria’s Secret and Pink store and direct business generated $7.387 billion in sales in the U.S. and Canada in fiscal 2017. — NM
The complete conference call can be found here: https://seekingalpha.com/article/4154803-american-eagles-aeo-ceo-jay-schottenstein-q4-2017-results-earnings-call-transcript?page=1
NOTE: Your Email will not be displayed.