Home / Knowledge / News / Apparel/Garments / AE's comp store sales flat in Q2, higher cotton costs may hit Q3
AE's comp store sales flat in Q2, higher cotton costs may hit Q3
30
Aug '11
American Eagle Outfitters Inc announced earnings for the second quarter ended July 30, 2011 of $0.10 per diluted share, compared to income from continuing operations of $0.13 per diluted share last year.

Jim O'Donnell, chief executive officer, said, “During the quarter, we achieved improved performance on the top line and EPS within our range of expectations. We managed our business prudently and made significant strides on our longer-term initiatives which are laying the foundation for future growth. Importantly, a renewed focus on our key item businesses and improved merchandising are delivering positive results, with the back-to-school season off to an encouraging start.”

Second Quarter Results – Continuing Operations
Total sales for the quarter increased 4% to $676 million, compared to $652 million last year. Second quarter comparable store sales were flat, compared to a 1% decrease last year. For additional comparable store sales information for the period, see the accompanying table.

Gross profit was $232 million, or 34.3% as a rate to sales, compared to $240 million, or 36.8% as a rate to sales, last year. Merchandise profit dollars increased slightly over last year due to lower markdowns. However, higher product costs caused a 150 basis point decline in merchandise margin. Buying, occupancy and warehousing costs increased 100 basis points as a rate to sales. This was primarily due to rent, reflecting the impact of new store openings, lease renewals and flat comparable store sales.

Selling, general and administrative expense increased 1% to $167 million, due to investments in new stores and higher sales levels, offset by continued expense saving initiatives. SG&A improved 70 basis points to 24.7% as a rate to sales, compared to 25.4% last year.

Operating income for the quarter was $29 million, compared to $38 million last year. The operating margin decreased to 4.3% from 5.9% last year.

Income from continuing operations for the quarter was $20 million, or $0.10 per diluted share, compared to $26 million, or $0.13 per diluted share, last year. As a rate to sales, income from continuing operations decreased to 2.9% from 4.0% last year.

AEO Direct
The company's direct-to-consumer business includes ae.com, aerie.com and 77kids.com. In the second quarter, sales increased 16% due to higher transactions driven by improved traffic and conversion.

Inventory
Total merchandise inventories at the end of the second quarter were $470 million, an increase of $121 million, or 30% on a cost per foot basis, compared to last year. Second quarter ending inventories reflected increased cotton costs related to fall product receipts. As the company previously indicated, inventory investments support a year-round key item strategy and the expansion of the accessory business, which will grow to 400 unique shop-in-shop locations during the second half of this year. Units per foot increased 15%, including our unit-intensive accessory expansion.


Must ReadView All

Robert Lighthizer speaking at the opening of the ministerial plenary of the 16th Forum of AGOA, in Lome. Courtesy: US Embassy in Togo

Textiles | On 17th Aug 2017

US committed to Africa, Lighthizer tells AGOA forum

The United States and Africa can jointly create a better business...

Textiles | On 17th Aug 2017

Sri Lankan textile exports down 4.1% in May 2017

After showing positive trend for two consecutive months, Sri Lankan...

Courtesy: CBEC

Textiles | On 17th Aug 2017

E-commerce firms need to file monthly statements: CBEC

India’s Central Board of Excise and Customs (CBEC) has clarified that ...

Interviews View All

Stefan Warnaar
Peak to Plateau

People are willing to pay for quality and performance

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Subhashini Srinivasan
The S Studio

Ethnicwear market will see an upward trend if uniqueness and quality are...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

August 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.0%
No
17.2%
Skip
13.8%

Total Votes: 29

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
41.4%
No
37.9%
Skip
20.7%

Total Votes: 29

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
82.8%
No
6.9%
Skip
10.3%

Total Votes: 29

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
58.6%
No
10.3%
Skip
31.0%

Total Votes: 29


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X