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HomeMarketAmerican Eagle Tops Profit Forecasts, Says It Sharply Reduced Inventory Levels

American Eagle Tops Profit Forecasts, Says It Sharply Reduced Inventory Levels

American Eagle posted third-quarter operating income of $118 million.

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Gabby Jones/Bloomberg

American Eagle
stock was rising Tuesday after the clothing company posted a third-quarter earnings beat and said it reduced inventory levels.

American Eagle
(ticker: AEO) reported adjusted profit of 42 cents a share in the period, while analysts had penciled in 22 cents. The company posted operating income of $118 million, which it said exceeded pre-pandemic 2019 levels.

Net revenue dipped 3% year over year to $1.24 billion, but slightly beat analysts’ expectations. For its fourth quarter, the company “is guiding brand revenue down in the mid single digits” and forecast gross margin in the range of 32% to 33%, at the higher end of previous guidance. 

American Eagle said its Aerie division, known for leggings and lingerie, posted “all-time high third-quarter revenue” of $350 million, an increase of 11% year over year.

“Bold actions to rationalize inventory and reduce expenses are paying off. Our inventory is in good shape, up 8% to last year, with progress continuing into the fourth quarter,” said CEO Jay Schottenstein. That compared with an inventory increase of 36% in the last quarter.

“Inventory is current for the holiday season,” the company said, adding it “continues to expect fourth-quarter-ending inventory to be down to last year.”

American Eagle Outfitters was selected as a Barron’s stock pick earlier this year.

The stock rose 8% on Tuesday. It has fallen about 49% this year.

Write to Emily Dattilo at


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