American Eagle Outfitters ((AEO)) has held its Q4 earnings call. Read on for the main highlights of the call.
American Eagle Outfitters recently held its earnings call, revealing a strong financial performance for 2024, marked by record revenue and profit growth. Despite these achievements, the company acknowledged challenges at the onset of 2025, including a softer consumer environment and currency impacts. Nevertheless, American Eagle Outfitters remains confident in its long-term growth strategies.
Record Revenue Achievement
American Eagle Outfitters reported a record revenue of $5.3 billion, driven by a 4% increase in comparable sales. The company experienced robust performances across its brands and channels, contributing to this significant milestone.
Strong Operating Profit and Margin Expansion
The company achieved an adjusted operating profit of $445 million, reflecting a 19% increase from the previous year. This was accompanied by an operating margin expansion of 120 basis points, reaching 8.3%.
Aerie’s Continued Growth
Aerie, a key brand under American Eagle Outfitters, saw its revenue surpass $1.7 billion, with a 5% increase in comparable sales. This growth was fueled by double-digit gains in soft apparel and activewear.
Successful Shareholder Returns
American Eagle Outfitters returned over $280 million to shareholders through buybacks and dividends. The company also announced plans to increase share repurchase authorization, further enhancing shareholder value.
Denim Market Leadership
The company maintained its leadership position in the denim market, achieving mid-single-digit growth. This success was largely attributed to strong traction in women’s fashion.
Soft Start to 2025
The beginning of 2025 presented challenges, with first-quarter sales impacted by a less robust consumer environment and cold weather conditions, leading to a softer than anticipated start.
Challenges in Intimates and Swimwear
Aerie faced difficulties in the intimates and swimwear segments, with industry-wide declines affecting performance. Despite these challenges, the brand managed to gain some market share.
Currency and Tariff Impact
The strengthening U.S. dollar and tariffs posed significant headwinds, resulting in a $20 million adverse effect on operating income for 2025.
Store Traffic Decline
A noticeable decline in mall traffic negatively impacted store sales. However, digital channels performed better, partially offsetting the decline in physical store traffic.
Forward-Looking Guidance
Looking ahead, American Eagle Outfitters provided guidance for the upcoming fiscal year. The company anticipates a decline in full-year revenue and operating income due to a softer consumer environment and adverse weather. Proactive measures are being implemented to drive expense savings and improve performance, with a focus on brand amplification and operational optimization. Revenue for the first quarter is projected to decline mid-single digits, with operating income expected between $20 million and $25 million. For the full year, revenue is expected to decrease in the low-single-digits, with operating income ranging from $360 million to $375 million.
In summary, American Eagle Outfitters reported a strong financial performance for 2024, with record revenue and profit growth. However, the company faces challenges at the start of 2025, including a softer consumer environment and currency impacts. Despite these hurdles, American Eagle Outfitters remains confident in its long-term growth strategies and is taking proactive measures to navigate the current market conditions.