Fourth Quarter Performance Revealed by American Eagle Outfitters

American Eagle Outfitters, Inc. (NYSE: AEO) disclosed its financial outcomes for the fourth quarter and full fiscal year 2023, concluding on February 3, 2024. Simultaneously, the company introduced its new long-term strategy, “Powering Profitable Growth,” aimed at achieving $5.7 to $6.0 billion in revenue and an approximate 10% operating margin by the end of Fiscal 2026. This strategy implies a compounded annual growth rate of mid-to-high teens for operating income and 3-5% for revenue growth.

Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer, expressed pride in the fourth-quarter team execution, citing a significant improvement in business. He highlighted the success of profit improvement initiatives, emphasizing the positive response from customers to strong merchandise collections across brands and channels.

Comparing fourth quarter 2023 results to the same period in 2022:

  • Total net revenue reached $1.7 billion, reflecting a 12% increase, with the 53rd week contributing approximately four points to revenue growth.
  • Store revenue experienced a 10% rise, while total digital revenue surged by 19%.
  • Aerie revenue increased by 16%, reaching $538 million, with comp sales up by 13%. American Eagle revenue rose by 11%, reaching $1.1 billion, and comp sales grew by 6%.
  • GAAP Gross profit amounted to $615 million, while adjusted gross profit increased by 23% to $626 million, with an expanded adjusted gross margin rate of 37.3%.
  • Selling, general, and administrative expense increased by 22% to $427 million, aligning with strong business performance and reflecting factors such as incentive compensation and the 53rd week.
  • GAAP Operating income reached $9 million, and adjusted operating income amounted to $141 million, with an adjusted operating margin of 8.4%, expanding by 200 basis points from the previous year.
  • GAAP diluted earnings per share were $0.03, and adjusted diluted earnings per share reached $0.61, with an average diluted shares outstanding of 200 million.

Comparing fiscal year 2023 results to fiscal year 2022:

  • Total net revenue for the fiscal year reached $5.3 billion, reflecting a 5% increase, with the 53rd week contributing approximately one point to revenue growth.
  • Store revenue and total digital revenue both rose by 6%.
  • Aerie revenue increased by 11%, reaching $1.7 billion, with comp sales up by 8%. American Eagle revenue rose by 3%, reaching $3.4 billion, and comp sales grew by 1%

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