American Eagle Outfitters proudly reports a substantial 5% surge in total net revenue for the third quarter of fiscal 2023, concluding on October 28, reaching a significant milestone of $1.3 billion. This commendable growth is evident across key sectors, with a 3% upswing in store revenue and a remarkable 10% boost in digital revenue.
Aerie, a standout performer in this quarter, achieved an outstanding 12% revenue increase, reaching $393 million, accompanied by a corresponding 12% rise in comparable sales. Simultaneously, American Eagle’s revenue demonstrated a noteworthy 2% uptick, totaling $857 million, aligning with the upward trend in comparable sales.
The gross profit for this period reached an impressive $544 million, marking a remarkable 13% improvement. This success is attributed to heightened demand, streamlined product and freight costs, and efficiency gains from profit improvement measures. As a result, the gross margin rate reached an impressive 41.8%, indicating a substantial 310 basis points increase.
Operating expenses, in line with the company’s guidance and strong performance, experienced a 16% rise to $362 million. This increase is primarily attributed to incentive compensations and higher store payroll due to increased wages. Operating income stood at $125 million, reflecting a commendable 9.6% margin. Diluted earnings per share also saw a substantial increase of 17%, reaching $0.49.
In terms of inventory management, the company showcased a disciplined approach with a 4% decline to $769 million. Capital expenditures for the third quarter amounted to $43 million, contributing to a year-to-date total of $135 million.
Looking forward, American Eagle Outfitters remains dedicated to optimizing its cost structure, anticipating these initiatives to drive gross margins and operational efficiency in 2024. For Fiscal 2023, the company projects mid-single-digit revenue growth, with operating income expected to reach the higher end of the $340 to $350 million range. The fourth-quarter outlook is optimistic, with anticipated high-single-digit revenue growth and operating income ranging between $105 to $115 million.
Jay Schottenstein, AEO’s Executive Chairman of the Board of Directors and Chief Executive Officer, expressed satisfaction with the third-quarter results, emphasizing the strength of the brands and the ongoing progress in growth and profit improvement initiatives. The company’s strategic priorities, rooted in a customer-first focus and commitment to operational excellence, continue to propel American Eagle Outfitters forward.
