American Eagle Outfitters Reports 1% Revenue Decline in Q3 Fiscal 2024

American Eagle Outfitters, Inc. reported its financial results for the third quarter of fiscal 2024, revealing a slight decline in total net revenue to $1.289 billion, down 1% from $1.301 billion in the same period last year. The company attributed this decrease to a shift in the retail calendar, which negatively impacted revenue by approximately $45 million. Despite the overall revenue decline, comparable sales increased by 3%, driven by a 6% rise in digital revenue, while store revenue fell by 4%. For the 39 weeks ended November 2, 2024, total net revenue increased by 4% to $3.724 billion, compared to $3.583 billion in the prior year.

The company's operating income for the third quarter decreased by 15% to $106.1 million, down from $125.4 million a year earlier. This decline was influenced by a $17 million reduction in gross profit, primarily due to increased markdowns and the aforementioned retail calendar shift. The company recorded impairment, restructuring, and other charges of $17.6 million during the quarter, which included $10.7 million related to corporate restructuring and $6.8 million for the impairment of its Hong Kong retail operations. Net income for the quarter was $80 million, or $0.41 per diluted share, compared to $96.7 million, or $0.49 per diluted share, in the prior year.

In terms of operational developments, American Eagle Outfitters continues to focus on its "Powering Profitable Growth" initiative, which aims to enhance profitability through cost structure reviews and operational efficiencies. The company plans to open approximately five to 15 new American Eagle stores and 25 to 40 Aerie and OFFLINE stores during fiscal 2024, alongside remodeling 80 to 90 existing locations. As of November 2, 2024, the company operated 1,186 stores, a slight decrease from 1,199 stores a year earlier.

The company’s cash and cash equivalents stood at $160.2 million as of November 2, 2024, a decrease from $240.9 million at the end of the previous fiscal year. American Eagle Outfitters has maintained a revolving credit facility of up to $700 million, with no outstanding borrowings as of the latest reporting date. The company expects to fund its future cash requirements through current cash holdings and available liquidity, while also planning capital expenditures in the range of $225 million to $245 million for ongoing expansion and technology upgrades.

Looking ahead, American Eagle Outfitters remains cautious about macroeconomic conditions and inflationary pressures that could impact consumer spending. The company is focused on improving its financial performance through strategic initiatives and operational efficiencies, while also navigating the challenges posed by the evolving retail landscape.