American Eagle sees holiday-quarter sales dropping low-single digits amid weak mall traffic

A consumer sporting a protecting masks walks previous a sale signal at an American Eagle Outfitters Inc. clothes retailer at Westfield San Francisco Centre in San Francisco, California, U.S., on Thursday, June 18, 2020.

Michael Short | Bloomberg | Getty Images

American Eagle forward of a digital assembly with traders Thursday stated it expects fourth-quarter income to lower within the low-single digits, pushed by a drop in brick-and-mortar retailer sales on account of weak mall traffic throughout the Covid pandemic.

The attire retailer stated it expects momentum to proceed on-line, with digital sales at each of its manufacturers rising double digits. Its lingerie model for teenagers, Aerie, is forecast to develop fourth-quarter income within the high-20% vary, the corporate stated, whereas its namesake American Eagle model is forecast to see sales drop within the low double-digit vary.

American Eagle shares had been falling greater than 3% in premarket buying and selling. The inventory is up about 54% over the previous 12 months.

“Compelling holiday product and marketing, combined with a disciplined approach to promotional activity drove very strong margin results,” Chief Executive Jay Schottenstein stated in a press release. “I believe we are well-positioned as we head into 2021.”

The retailer is anticipated to report its fourth-quarter and monetary 2020 outcomes on March 3.

In a separate press launch Thursday, American Eagle laid out longer-term monetary targets, aiming to develop its Aerie enterprise to $2 billion, whereas it really works on enhancing earnings at its namesake banner.

“Aerie has been posting among the best growth in retail, and therefore $2 billion seems a reasonable target to present,” BMO Capital Markets senior analyst Simeon Siegel stated in an interview. “But it also seems fair investors may have been looking for more.”

The speedy progress of the Aerie model, which sells all the things from bras and underwear to swimsuits and sweatpants, is making it a a lot stronger competitor to L Brands‘ Victoria’s Secret enterprise, he added.

Overall, American Eagle stated it’s focusing on income of $5.5 billion, and working revenue of $550 million, in fiscal 2023.

Read the press releases right here.

This story is growing. Please verify again for updates.

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