American Eagle Outfitters, Inc (AEO) is anticipating income to say no within the mid-single digits, with gross margin down year-over-year (YoY) within the first quarter (Q1) of fiscal 2025 (FY25). Promoting, basic, and administrative (SG&A) bills are projected to stay flat, whereas working revenue is anticipated to vary between $20 million and $25 million.
The income is forecast to say no within the low-single digits in full fiscal 2025, with gross margin additionally down YoY. The corporate’s outlook displays near-term challenges within the shopper and macroeconomic surroundings, balanced by proactive measures to strengthen income and scale back bills. SG&A bills for FY25 are anticipated to say no within the low-single digits, whereas depreciation and amortisation (D&A) is projected at roughly $230 million.
American Eagle Outfitters is anticipating a mid-single-digit income decline in Q1 FY25 and a low-single-digit decline for the total yr, with gross margin down YoY.
FY24 income rose 1 per cent to $5.3 billion, with a 4 per cent enhance in comparable gross sales.
This fall FY24 noticed a 3 per cent rise in comparable gross sales however a 4 per cent income decline.
CEO Jay Schottenstein highlighted strategic focus amid challenges.
The working revenue of the corporate is estimated between $360 million and $375 million, with a tax price of roughly 25 per cent. The weighted common share rely is anticipated to be within the low 190 million vary, and capital expenditures are projected at roughly $300 million, AEO mentioned in a press launch.
“Entering 2025, the first quarter is off to a slower start than expected, reflecting less robust demand and colder weather. While we anticipate improvement as the Spring season gets underway, we are also taking proactive steps to strengthen the top-line, manage inventory and reduce expenses. As we navigate through an uncertain consumer and operating landscape, we will also remain focused on our long-term strategic priorities,” mentioned Jay Schottenstein, government chairman of the board and chief government officer at AEO.
Monetary overview of FY24
AEO’s internet income rose by 1 per cent to $5.3 billion, regardless of a $60 million hostile affect from one much less promoting week in full fiscal 2024, ended February 1, 2025. The whole comparable gross sales elevated by 4 per cent. The gross revenue of the corporate rose by 3 per cent to $2.1 billion, with gross margin increasing to 39.2 per cent, pushed by decrease lease, utilities, and supply prices, partially offset by increased markdowns.
Promoting, basic, and administrative (SG&A) bills remained largely consistent with final yr at $1.4 billion, leveraging 30 foundation factors (bps) as a result of decrease compensation and incentive prices, partially offset by elevated promoting bills.
Model-wise, Aerie’s comparable gross sales grew by 5 per cent, constructing on 8 per cent progress final yr, whereas American Eagle’s comparable gross sales elevated by 3 per cent, following 1 per cent progress.
GAAP working revenue reached $427 million, whereas adjusted working revenue stood at $445 million, reflecting an working margin of 8.3 per cent. GAAP diluted earnings per share (EPS) was $1.68, with adjusted diluted EPS at $1.74, based mostly on a median diluted share rely of 196 million.
“2024 demonstrated significant progress on our powering profitable growth plan. The team delivered strong operating profit growth with positive momentum across our brands and channels as well as disciplined expense management and operating efficiencies,” added Schottenstein.
Within the fourth quarter (This fall) of FY24, AEO reported a 3 per cent enhance in whole comparable gross sales, following 8 per cent progress in the identical interval final yr. Nevertheless, whole internet income declined by 4 per cent to $1.6 billion, impacted by roughly $85 million as a result of one much less promoting week and the retail calendar shift. Aerie’s comparable gross sales grew by 6 per cent, constructing on a 13 per cent enhance final yr, whereas American Eagle’s comparable gross sales rose by 1 per cent, following 6 per cent progress within the prior yr.
