AEO explained that due to an increase in demand with collections resonating well with customers during June and July, its second-quarter revenue and operating profits “exceeded expectations.”
Its brands, Aerie reported an “all-time-high” $380m rise in revenue, 2% more than the prior year whilst American Eagle’s revenue declined to $767m.
“It’s encouraging to see positive momentum continue into the third quarter, across brands and channels,” commented Jay Schottenstein, AEO’s executive chairman of the board and CEO.
Key highlights from AEO Q2 results:
- Total net revenue of $1.2bn was up slightly in the second quarter of 2022
- Operating income was $65m, reflecting a 5.4% margin
- Net income was $48.6m in the second quarter from a loss of $42.5m in the prior year
AEO raises its FY outlook
“Looking to the second half, we are excited about future product arrivals, leveraging the positive response to early fall goods and delivering innovative customer connections,” continued Schottenstein.
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However, he notes the company is planning to keep a “sharp eye on the consumer environment and planning appropriately”.
He added: “We are taking action to position the business for improved profit, with preliminary initiatives included in our increased 2023 outlook. As we continue to optimise our operations, I am confident in our ability to strengthen profitability longer-term.”
AEO is now anticipating operating income ranging from $325m to $350m, which marks an upward revision from the earlier guidance of $250m to $270m.
The company has adjusted its full-year revenue forecast to be up low single digits to last year, compared to prior guidance for revenue in the range of flat to down low single digits.