Pittsburgh — The Pittsburgh-based company’s chief financial officer, Michael Mathias, announced plans to close 200 to 225 of the company’s 880 existing American Eagle locations over the next 2 to 3 years during a virtual investor meeting held Jan. 21.
“Our primary focus for the next few years with American Eagle will be to build on our large cash-flow base by focusing on inventory efficiency, improving merchandise margins, managing expenses and closing stores to strengthen profit flow-through,” says Mathias.The company’s American Eagle banner anticipates roughly flat growth compared to 2019, with an expected revenue of approximately $3.5 billion.
By contrast, Aerie revenue is anticipated to grow at a mid-20% compounded annual growth rate. The company hopes to open 60 to 75 brick-and-mortar Aerie locations each of the next several years, with Houston and Los Angeles listed as targeted growth markets.
“Plans for the Aerie brand through 2023 include doubling revenue to $2 billion, assuming comparable sales growth in the high teens led by digital and new market expansion,” notes Mathias.
In total, American Eagle Outfitters is targeting a revenue of $5.5 billion and an operating income of $550 million by fiscal year 2023, with its operating margin expanding to 10%. Investors reacted positively to the Jan. 21 call, as the company’s stock price rose from $22.72 per share on Wednesday to a peak of $24.74 per share on Thursday. The stock price was $14.29 per share one year ago.
— Katie Sloan