(Filed Under wholesale Lingerie News). Aerie sales rose 11.6% while operating income jumped 31.4% in the first quarter of 2023, led by sports bras, activewear.
The intimate apparel division of parent company American Eagle Outfitters (AEO) reported operating income of $56,604,000 on revenue of $359,082,000 in the three months ended April 29, compared to operating income of $43,073,000 on revenue of $321,712,000 in the same period last year.
During the earnings call to discuss the results, AEO president Jenn Foyle, acknowledged Aerie’s “strong quarter with double-digit revenue growth and positive comp growth,” adding “demand for our activewear extension Offline by Aerie also remained healthy with strength in tops, sports bras, active shorts and fashion items.” She pointed out, however, that “swim and intimates were soft this quarter, consistent with trends we’ve seen in recent periods as our customers focus on other categories.”
Later in the call Foyle explained, “We held our ground on bras for sure,” but admitted “there has been some shifts in silhouettes.” She revealed: “Look, the whole category has shifted. Girls are wearing bra tops out. So there’s no need for bras, and we’re focused on that and how she’s wearing her intimates. So, I think there’s going to be a lot more exciting things to come here.” Foyle added, “Offline is certainly an exciting category for us. And sports bras are really accelerating.”
She concluded, “Aerie since 2019 has grown 129%. And I believe that’s better than any near-end competitors. So, this team just is an engine, and we have so much opportunity in front of us. And we’re going to keep on looking for our golden nuggets and driving it.”
At the end of the quarter Aerie was operating 297 stand alone shops, which it defines as a combination of “Aerie stand alone locations, Offline stand alone locations, and Aerie/Offline side-by-side locations.” There is also an undisclosed number of additional Aerie and Offline sales locations, but they are not counted separately because they are “side by side” American Eagle apparel shops, of which there are 867 in total.
CFO Mike Mathias noted “We continue to expect our consolidated store count in 2023 to be roughly flat to last year reflecting approximately 25 new Aerie store openings, offset by approximately 25 net closures for the AE brand.”
COO Michael Rempell said that for the company overall, “In the first quarter, store revenue increased 5% as customers returned to in-person shopping and new Aerie stores continued to ramp up,” adding that “On the digital side, revenue declined 4% as customers returned to in-person shopping “
AEO as a whole reported net income of $18.5 million on sales of $1.08 billion for the three months ended April 29, compared to a profit of $31.7 million on sales of $1.06 billion in the three months ended April 30 last year. — NM
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