American Eagle Outfitters, the US-based clothing and accessories retailer, beat fourth-quarter market estimates. This was a result of consumers snapping up apparel and accessories while heading back to work and to social events, despite persistent high inflation.
Demand for dresses, sportswear and cargo pants in the US have remained steady, even as the country faces once-in-a-generation levels of inflation. This trend has benefitted apparel makers like American Eagle, which, in order to get rid of excess stock have also offered higher discounts to shoppers.
Gaining a benefit from its decision to right-size inventories and a better-than-expected performance, American Eagle had said in January that its fourth-quarter sales and profit margins were tracking at high end of its forecasts.
Despite the company seeing good trends in February, finance chief Michael Mathias said that even with the favourable response to new merchandise, ‘the environment remains choppy’.
American Eagle’s comment echoed rival Abercrombie & Fitch, which earlier said it was ‘cautiously optimistic’ about consumer demand, after it forecast upbeat full-year sales.
“Guidance for the year is better than many of its peers,” said Zachary Warring, senior equity analyst at CFRA Research.
The company’s net revenue fell 1 per cent to US $ 1.5 billion in the fourth quarter ended Jan. 28, while analysts had expected revenue of US $ 1.48 billion.
“Revenue declined only modestly which is something of a win for the company,” said Neil Saunders, managing director of GlobalData.
