While flagship brand American Eagle sees fourth-quarter sales slump, lingerie brand Aerie is gaining momentum.
The retailer says it expects sales to drop for the fourth quarter of fiscal 2020 due to declining mall traffic. Even pre-New Year sales didn't improve the situation, shoppers weren't rushing to the malls for holiday shopping, even as the retailer focused on expanding the range of comfortable homewear that became so popular during the pandemic.
The exact percentage of the fall is not reported (official results will be published on March 3, 2021), but it is indicated that it will be expressed in single digits. At the same time, online sales for both brands of the company - american eagle and Aerie show much better results. It is assumed that they will continue to grow, and growth will be expressed in double digits.
At the same time, Aerie, a teen underwear brand, is doing better than the company's main brand. According to preliminary calculations, its sales profit will increase to 20% in the fourth quarter, while the same figure for American Eagle will show a decline.
The company also shared its plans for the development of the Aerie brand. In the long term, the brand that sells underwear, sportswear, swimwear and other products, popular among the youth audience, is planned to be turned into a $2 billion brand. Such a goal is assessed by experts as quite achievable, since the brand has shown one of the highest growth rates in the retail market.
After the announcement of preliminary results for the fourth quarter of 2020, American Eagle shares rose by 1.2%. At the same time, the company's shares over the past 12 months have shown an increase of approximately 54%.
