US retailer AEO's revenue climbs 17% to $1.51 billion in Q4FY21

In the fourth quarter of fiscal 2021, gross profit of $489 million rose 11 per cent from $440 million in the fourth quarter of 2020 and reflected a gross margin rate of 32.4 per cent compared to 34.0 per cent last year. Elevated freight costs amounted to $80 million headwind in the quarter. Approximately $60 million was air freight specific to Vietnam factory closings, which was an approximately 400 basis point headwind to the gross margin rate. This was partially offset by strong product demand, customer delivery efficiencies, higher full-priced sales, lower promotions and inventory optimisation initiatives, AEO said in a press release.

“2021 was a milestone year for AEO. We crossed $5 billion in revenue for the first time in company history, grew our active customer file to record highs and achieved our strongest profit result in well over a decade. We leveraged our healthy cash position to fuel Aerie’s growth and made key acquisitions, creating an industry-leading supply chain platform with significant long-term growth and profit potential. I’m incredibly proud of our associates and their outstanding performance in 2021, especially amidst ongoing macro challenges,” Jay Schottenstein, AEO’s executive chairman of the board and chief executive officer, said.

“We entered 2022 a stronger company, supported by our powerful brands, a proven strategy, improved discipline and strategically advantaged operations. While the macro environment remains challenging and we are taking this into account in our plans for the year, we expect our results to still reflect meaningful progress versus prior years, setting a new base-line for profitability. As I look further out, I couldn’t be more excited as we build on our success and deliver returns to shareholders,” Schottenstein continued.

“We are extremely confident in the strength of our brands and pleased with early performance of spring collections. Based on a number of macro uncertainties, however, we are taking a cautious view of 2022. For the year, we expect operating profit to be in the range of $550 to $600 million, compared to adjusted operating profit of $603 million in 2021. Our 2022 guidance reflects structural improvements to our business and significant growth from pre pandemic 2019, which posted adjusted operating profit of $314 million,” the release added.

Due largely to stimulus in the first half of 2021, which contributed to an extraordinary spring season, combined with continued freight pressures, AEO is forecasting an earnings decline in the first half, followed by a recovery in the second half as we lap elevated air freight due to factory closures and inventory flow challenges last year.

Fibre2Fashion News Desk (RR)