Aerie Q1 Sales -4%

Aerie complained it had “product misses in our spring and summer floor sets.” Pictured above, the “Superchill Floral Seamless Cap Sleeve Top” (now $27.96) and “Sun-Lover Metallic Bikini Top” ($22.17).

Aerie comparable sales decreased 4% in the first quarter, as total net revenue for the intimate apparel brand declined 3.5% to $359.79 million from $372.65 million in the three months that ended May 4, 2024. Parent company American Eagle Outfitters (AEO), which offers other types of apparel,  reported a loss of $64.9 million on total revenue of $1.09 billion, compared to a profit of $67.8 million on revenue of $1.14 billion for same the period last year.

During the conference call, AEO CEO Jay Schottenstein explained, “while the broader macro environment and cold spring weather presented challenges, we did not execute to our potential. We had some product misses in our spring and summer floor sets. At Aerie in particular, merchandise came in with higher design and transportation costs, and we were not able to realize pricing to support a healthy margin. Altogether, this resulted in higher-than-expected promotions and the inventory write-down we took on spring and summer merchandise.”

Jen Foyle. president, executive creative director, American Eagle and Aerie, confirmed that for the latter brand, “issues were concentrated in soft apparel, particularly in lace tops and shorts, where some of our big fashion ideas for the season simply did not resonate with our customers. We also had higher product costs.” On the positive side, she added that “in addition to certain fashion categories, we saw intimates improve sequentially as we gained share. Newness in fabrication and design, as well as refresh marketing, emphasizing our unique value offering, is resonating well. Offline by Aerie demonstrated positive growth. This continues to be such an exciting opportunity for us. We are gaining market share, expanding customer awareness, and building a community around our truly unique take on activewear.”

“Despite the near-term challenges, I’m excited as ever about Aerie and Offline’s long-term growth opportunities,” she concluded.

At the end of the fiscal quarter, on May 3, there were a total of 321 Aerie  and Offline stand alone and side-by-side locations in operation. During the call, CFO Mike Mathias noted the company is “still looking at about 30” additional new Aerie and Offline stores in 2025. Full AEO earnings transcript can be found here: https://seekingalpha.com/article/4791060-american-eagle-outfitters-inc-aeo-q1-2025-earnings-call-transcript?utm_campaign=%7Clogin_now_link&utm_medium=email&utm_source=seeking_alpha