American Eagle (AEO) Q2 2021 earnings

A shopper walks past an American Eagle store in the mall.

Tim Boyle | Getty Images News | Getty Images

american eagle The stock slumped Thursday after the company reported sales below analyst estimates in the second quarter as its e-commerce business slowed year over year.

Management also noted that back-to-school purchases were made later in the season, shifting from the final quarter to August. Abercrombie & Fitch A similar trend has recently been noted as teenagers and their parents hold back from buying all-new wardrobes before summer is over.

Its stocks lost around 9% in early news trading.

However, American Eagle’s profit was above expectations. The company, which also owns lingerie brand Aerie, said reduced promotions and controlled costs increased its profitability over the summer months.

“We have learned that you can still move a lot of goods without a discount,” said CEO Jay Schottenstein in a telephone interview. “Our businesses are very productive.”

Here’s how American Eagle performed for the quarter ended July 31st compared to Wall Street’s expectations using refinitive estimates:

  • Earnings per share: 60 cents adjusted vs. 55 cents expected
  • Revenue: $ 1.19 billion versus an expected $ 1.23 billion

American Eagle’s net income rose to $ 121.5 million, or 58 cents per share, from a loss of $ 13.8 million, or 8 cents per share, last year. Without one-off effects, it made 60 cents per share, up from the 55 cents analysts had been looking for.

Revenue increased 35% to $ 1.19 billion from $ 883.5 million in the same period last year. That fell short of the analyst forecast of $ 1.23 billion.

Aerie sales were $ 336 million, up 34% year-over-year. American Eagle’s sales increased 35% to $ 846 million over the same period.

Digital sales were 5% lower than in 2020. Last summer, due to the Covid pandemic, many consumers chose to shop online rather than visit stores. According to American Eagle, digital sales increased 66% on a two-year basis.

Other retailers including gap and Macys, have seen their online sales growth slow in recent months as consumers return to stores. But many are still reporting ecommerce gains above pre-pandemic levels.

American Eagle has not given an outlook for the coming quarter or the year. It was said, however, that it is so remains on track to meet the three-year targets so far. Until fiscal year 2023, the retailer expects sales of $ 5.5 billion and Aerie to grow to a mark of $ 2 billion.

American Eagle announced that it will hold another Investor Day event in January to discuss the post-holiday prospects in more depth.

BMO Capital Markets analyst Simeon Siegel said investors are focusing on future trends as companies face pent-up demand and supply chain backlogs.

American Eagle is in the middle of the back-to-school season, and production and shipping restrictions have been a cloud over the industry. Rival Abercrombie & Fitch reported late last month Quarterly revenue that fell short of analysts’ expectationsas there were shipping delays resulting in inventory backlogs and barren shelves in some stores.

Schottenstein said American Eagle has invested in its supply chain for years to be more agile and less dependent on factories overseas. The company has also reserved additional air freight to ensure it can ship supplies to warehouse stores over the holidays, he told analysts during a conference call on the results.

“We know there are problems out there, but we believe our investments will differentiate us in the coming second half of the year,” said the CEO.

At the close of trading on Wednesday, American Eagle’s shares were up nearly 50% year-to-date. The company’s market capitalization is $ 5.04 billion.