As American Eagle Outfitters prepares to close out the year, it continues to lean on the rapid growth and success of its intimate apparel brand Aerie, using it as a model for tactics like in-store experimentation with the American Eagle brand.
In the earnings call to investors for the third quarter of 2017 on Wednesday morning, executives said that while the company’s net profit decreased by 16 percent, comparable sales were positive, with a 1 percent increase for American Eagle and a 19 percent increase for Aerie. American Eagle CEO Jay Schottenstein said the decrease in profit from $378 million last year to $375 million in 2017 can be attributed to widespread promotions, including transitioning 10 outlet locations into full discount stores for liquidation purposes and higher shipping costs tied to increased digital sales.
“I’m very pleased to see strong momentum continue into the fourth quarter, positioning us well for the next few critical weeks of the holiday season,” Schottenstein said.
Aerie continues to be a pivotal sales contributor. Jennifer Foyle, global brand president of Aerie, said digital sales and loyalty program efforts have been particularly successful this quarter, as has expanding product inventory in areas like swimwear. On the call, Foyle announced that the brand is tapping Olympic gymnast Aly Raisman for a campaign in early 2018 to continue to bolster the brand’s message of body positivity and inclusivity.
“It’s extremely gratifying to see our customers responding to a broad range of merchandise that reflects the lifestyle,” she said. “We’re extremely proud of what our team is doing at Aerie to build strong brand equity.”
Despite the dip in profit across the board, executives and investors were pleased with the performance across the company, which is approaching nearly three years of consecutive quarterly comparable growth. E-commerce has been a major effort moving into the fourth quarter of 2017, and Schottenstein said Cyber Monday was the highest performing online sales day to date for the brand, with a 30 percent increase in comparable sales from last year.
Chad Kessler, global brand president of American Eagle, said denim remains a significant leader in sales across both the men’s and women’s collections. Enhancing menswear has been a major effort for the company this year, and an area it plans to continue moving into in 2018, he said on the call.
Kessler also cited American Eagle’s efforts around concept stores, including the recently opened AE Studio in Union Square. The store, which debuted in November, is focused largely on denim and, similar to the Aerie pop-up in Soho, is intended to test new retail concepts, with the intention of adopting the most successful tactics across all locations.