Despite aggressively planning its Q1 merchandise, clothing retail giant American Eagle Outfitters (AEO) has exceeded its demand and ended up with a pile of inventory.
The retailer’s Q1 total inventory at cost shot up by a massive 46 per cent to US $ 682 million on a year-on-year basis.
Higher costs were instrumental in causing half of the surge, with brands Aerie and American Eagle driving half of the increase.
However, here it is important to mention that both brands still remained solid, with Aerie’s Q1 revenue rising by 8 per cent to US $ 322 million. American Eagle too, reportedly, remained profitable.
Notably, total units went up by 24 per cent owing to high-in-transit and on-hand inventory.
Consequently, the retailer will have to reset its inventory base during the second quarter.
Substantiating more on taking swift measures to reset, Jay Schottenstein, CEO, AEO, said that the Group is focused on clearing through spring goods in Q2 and will be in better position for the second half of the year.
Meanwhile, the retailer’s total revenue for the quarter ended 30 April grew by 2 per cent to US $ 1.06 billion.
