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

Courtesy: American Silk Mills

Textiles | On 18th Oct 2017

Sutlej Textiles adds American Silk Mills to its portfolio

Sutlej Textiles and Industries Ltd (STIL) has announced the...

Arvind Limited executive directors Punit Lalbhai (left) and Kulin Lalbhai explaining the project to Gujarat chief minister Vijay Rupani. Courtesy: Arvind Ltd

Apparel/Garments | On 18th Oct 2017

Arvind to set up mega apparel facility in Gujarat

Arvind Limited, one of India’s largest textile to retail...

Cotton stocks accumulating everywhere outside of China

Textiles | On 18th Oct 2017

Cotton stocks accumulating everywhere outside of China

Global cotton stocks outside of China are expected to rise by nearly...

Interviews View All

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Manuj Terapanthi
Texaura

Transparent supply chain and fair trade will boost sustainable market

Shiladitya K Joshi
Truetzschler India Private Limited

India ITME provides a platform to interact with our stakeholders

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Steve Cole
Xerium Technologies

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

Giorgio Mantovani
Corman S.p.A

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

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

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

October 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
77.3%
No
13.6%
Skip
9.1%

Total Votes: 66

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
60.6%
No
28.8%
Skip
10.6%

Total Votes: 66

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
84.8%
No
10.6%
Skip
4.5%

Total Votes: 66

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
74.2%
No
12.1%
Skip
13.6%

Total Votes: 66


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