With shoppers adjusting their spending to manage higher living costs, American Eagle Outfitters continues to grapple with subdued demand. This year, the company registered a 9 per cent rise in inventory to $681 million as the stock for end-of-season merchandise increased.
Cautious spending by consumers due to rising economic pressures, especially in the apparel category, led to the company missing its revenue targets this year, says Rachel Wolff, Analyst, Emarketer.
The company’s performance lagged behind competitors Abercrombie & Fitch and Dick's Sporting Goods, both of which raised their annual sales forecasts earlier in the day due to strong demand for trendy clothing and footwear.
Maintaining its targets for the fiscal 2024, American Eagle expects revenues to rise by 2 per cent -4 per cent from last year. The increase in shopping during the spring season has boosted the store’s revenues by 4 per cent with digital revenue growing by 12 per cent.
Data from LSEG shows, the company’s net revenues for the quarter ended May 4 rose by 6 per cent to $1.14 billion, slightly below analysts' average estimate of a 6.4 per cent increase to $1.15 billion, according to LSEG data. First-quarter profit per share was 34 cents, exceeding analysts' expectations of 28 cents.
